<PAGE> 1
As filed with the Securities and Exchange Commission on February 24, 2000
Registration No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CYBEROAD.COM CORPORATION
(Name of Small Business Issuer in Its Charter)
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FLORIDA 7372 65-0916440
(State or Other Jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Incorporation or Organization) Classification Code Number) Identification No.)
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OFICENTRO SABANA SUR
EDIFICIO 7, 5 PISO
SAN JOSE, COSTA RICA
506-296-6335
(Address and Telephone Number of Principal Executive Offices)
OFICENTRO SABANA SUR
EDIFICIO 7, 5 PISO
SAN JOSE, COSTA RICA
(Address of Principal Place of Business or Intended Principal Place of Business)
INTRASTATE REGISTERED AGENT
701 BRICKELL AVENUE, SUITE 3000
MIAMI, FLORIDA 33133
305-789-7770
(Name, Address and Telephone Number of Agent for Service)
COPIES TO:
Corporate Secretary
cyberoad.com Corporation, Oficentro Sabana Sur
Edificio 7,5 Piso
San Jose, Costa Rica
and to
Julie Kaufer, Esq.
Troop Steuber Pasich Reddick & Tobey, LLP
2029 Century Park East
Los Angeles, California 90067
(310) 728-3200
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If any of the securities being registered on this form are being offered
on a delayed or continuous basis pursuant to Rule 145 under the Securities Act
of 1933, other than securities being offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If the delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED(1) PER UNIT(2) OFFERING PRICE FEE
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<S> <C> <C> <C> <C>
Common Stock,
par value $.00001 per share 4,713,745 $3.25 $15,319,671 $4,044
=======================================================================================================
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(1) In the event of a stock split, stock dividend, or similar transaction
involving the Registrant's common stock, in order to prevent dilution, the
number of shares registered shall automatically be increased to cover the
additional shares in accordance with Rule 416(a) under the Securities Act.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(a).
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE TIME UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION - February 24, 2000
4,713,745 Shares PROSPECTUS
CYBEROAD.COM CORPORATION
Common Stock
This prospectus may be used only in connection with the resale by the
parties listed below or their assigns of shares of the common stock of
cyberoad.com Corporation as follows:
- Up to 2,048,859 shares of common stock that were issued by us to
certain selling stockholders under securities purchase
agreements.
- Up to 264,886 shares of common stock that underlie options that
were issued by us to Thomson Kernaghan as a placement agent
commission fee under the placement agency agreement.
- Up to 50,000 shares of common stock that were issued by us to a
selling stockholder as compensation for services rendered.
- Up to 850,000 shares of common stock issued and held in escrow
pursuant to the securities purchase agreements.
- Up to 1,500,000 shares of common stock issued to selling
stockholders in connection with the purchase by Cyberoad.com
(Isle of Man) Limited, a corporation existing under the laws of
Isle of Man, of the issued and outstanding shares of Ecomm
Relationship Technologies (IOM) Limited.
The selling security holders may offer their shares through public or
private transactions, on or off the Over The Counter market, at prevailing
market prices or at privately negotiated prices. cyberoad.com will not receive
any proceeds from this offering.
cyberoad.com's common stock is publicly traded on the Over The Counter
market under the symbol "FUNN." Our common stock was trading on the Over The
Counter Bulletin Board until January 19, 2000. At that date, the shares of
cyberoad.com were removed from the Over The Counter market for failing to timely
comply with the Eligibility Rule promulgated by the OTC Bulletin Board.
Immediately following the effectiveness of this Registration Statement, we
intend to apply for listing of our shares of common stock on the Over the
Counter Bulletin Board. On January 19, 2000 the closing bid price for the common
stock on the OTC:BB was $3.63.
AN INVESTMENT IN THESE SECURITIES IS RISKY. YOU SHOULD ONLY PURCHASE
THESE SHARES IF YOU CAN AFFORD TO LOSE YOUR ENTIRE INVESTMENT. SEE "RISK
FACTORS" BEGINNING ON PAGE 5 FOR A DISCUSSION OF CERTAIN FACTORS THAT YOU SHOULD
CONSIDER BEFORE YOU INVEST IN THE COMMON STOCK BEING SOLD WITH THIS PROSPECTUS.
The information in this prospectus is not complete and may be changed.
The selling stockholders may not sell these securities until the registration
statement filed with the SEC is effective. This prospectus is not an offer to
sell these securities and it is not soliciting an offer to buy these securities
in any state where the offer or sale is not permitted.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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This prospectus is dated February ___, 2000
<PAGE> 3
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information and financial statements and the notes to those statements appearing
elsewhere in this prospectus.
ABOUT CYBEROAD.COM CORPORATION
GENERAL
cyberoad.com is an Internet technology company that develops, markets
and licenses online turnkey betting systems to operators of Internet sportsbook
and casino websites. In November 1999, cyberoad.com released its Netbook Version
2 sports betting software system, which is a browser-based, no downloads system,
and allows sports enthusiasts to bet on a wide variety of sports on most any
computer system from around the world. cyberoad.com also provides numerous
browser-based virtual casino games, such as blackjack, roulette and slots, as
well as its own proprietary electronic transaction software that enables secure
Internet commerce and information transmission. As part of cyberoad.com's
turnkey system, clients receive network hosting, technical and customer support,
and complete marketing and management services.
OUR BUSINESS STRATEGY
Our objective is to secure a position as a leading provider of Internet
gaming technologies. We intend to accomplish our goal by:
- developing cyberoad.com into a global brand name through the marketing
of its licensees' gaming systems, and the development and marketing of
a sports and entertainment portal;
- upgrading existing gaming systems by developing and implementing new
technology, and adding new sports and bet types;
- adding new licensees;
- expanding into other Internet cultural markets by adding servers in
attractive international locations, and establishing
points-of-presence overseas;
- developing new gaming systems in a cost-effective and timely manner;
and
- establishing key business alliances and strategic partnerships.
A key component to achieve our objective is a strong Internet marketing
program. We have leveraged off our existing gaming and technical expertise to
develop proprietary marketing-based software products that help extend our
market reach while helping to build our licensees' client base. Further, we have
developed comprehensive web tracking systems for our licensees' various
marketing programs through the use of data mining tools and our data warehousing
system. These web tracking systems identify which marketing programs help us
provide the highest return on investment.
CORPORATE INFORMATION
cyberoad.com, a Florida corporation, was incorporated in June 1988. Its
primary operating subsidiary is located in the Isle of Man. Our principal
corporate office is located at Officentro Sabana Sur, Edificio 7, 5 Piso, San
Jose, Costa Rica, and our telephone number is 506-296-6335. Information on our
website at www.cyberoad.com does not constitute part of this prospectus.
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ABOUT THE OFFERING
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Shares offered by the Selling Stockholders ........ Up to 4,713,745 shares.
Offering Price..................................... Determined at the time of sale by the selling
stockholder.
Total Shares outstanding as of December 31, 1999... 14,159,009 shares.
Use of proceeds by cyberoad.com ................... cyberoad.com will not receive any proceeds from
the sale of shares by the selling stockholders
in this offering. The proceeds we received from
the sale of common stock under the securities
purchase agreements will be used for working
capital and general corporate purposes.
Dividend Policy.................................... cyberoad.com currently intends to retain any
future earnings to fund the development and
growth of our business. Therefore, cyberoad.com
currently does not anticipate paying dividends.
See "Dividend Policy."
Over The Counter Symbol............................ FUNN
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The total shares outstanding as of December 31, 1999 identified above do
not include the following shares that will dilute your investment if and when
they are issued:
- 264,886 shares of common stock issuable upon exercise of the options
issued to Thomson Kernaghan & Co. Ltd.; and
- 2,199,500 shares of common stock issuable upon exercise of options
granted or available for future grant under our 1999 Stock Option
Plan.
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SUMMARY CONSOLIDATED FINANCIAL INFORMATION
The following summary financial data is derived from our financial
statements and related notes appearing elsewhere in this prospectus. You should
read the following summary financial data in conjunction with those financial
statements and notes. cyberoad.com was incorporated in June 1988 and conducted
no material operations prior to May 1, 1999. On May 1, 1999, cyberoad.com
Corporation purchased all of the stock of Cyberoad.com (Isle of
Man) Ltd., a corporation existing under the laws of the Isle of Man. Immediately
thereafter, Cyberoad.com (Isle of Man) Ltd. purchased all of
the assets of Cyberoad Gaming Corporation which relate to the online turnkey
betting technology. Prior thereto, Cyberoad.com (Isle of Man) Ltd. had no
material operations. On May 1, 1999, Ecomm Relationship Technologies (IOM)
Limited, a corporation existing under the laws of the Isle of Man, purchased all
of the assets of Cyberoad Gaming Corporation which relate to financial
transaction processing technology. On November 11, 1999, Cyberoad.com (Isle of
Man) Ltd. purchased all of the outstanding shares of Ecomm Relationship
Technologies (IOM) Limited. The following summary financial data for the year
ended July 31, 1998 and the nine months ended April 30, 1999 reflects financial
data for Cyberoad Gaming Corporation. The following summary financial data for
the nine months ended September 30, 1999 reflects financial data for
cyberoad.com.
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NINE MONTHS
YEAR ENDED ENDED NINE MONTHS ENDED
JULY 31, APRIL 30, SEPTEMBER 30,
1998 1999 1999
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(in thousands, except per share data)
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STATEMENT OF OPERATIONS DATA:
Total revenues $ 801 $ 1,223 $ 803
Gross profit (loss) 801 1,223 174
Loss from operations (1,846) (1,585) (832)
Net loss (1,045) (362) (832)
Basic and diluted net loss per share $ (0.19) $ (0.05) $ (0.10)
Weighted average number of shares
Used in computing basic and
Diluted net loss per share 5,480 6,763 8,438
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AT SEPTEMBER 30, 1999
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BALANCE SHEET DATA: (in thousands)
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Cash and cash equivalents $2,534
Total current assets 3,107
Total assets 4,759
Total current liabilities 976
Total stockholders' equity 3,246
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RISK FACTORS
You should carefully consider the following risks before you decide to
buy our common stock. The risks and uncertainties described below are the
material ones facing our company. If any of the following risks actually occur,
our business, revenues, financial condition or results of operations would
likely suffer. If this occurs, the trading price of our common stock could
decline, and you may lose all or part of the money you paid to buy our common
stock.
WE HAVE AN IMMEDIATE NEED FOR ADDITIONAL CAPITAL
Our capital requirements are and will continue to be significant. We
cannot assure you that we will be able to operate on a profitable basis or that
cash flow from operations will be sufficient to pay our operating cost. We
anticipate that our current cash resources will be sufficient to fund operations
through the end of March 2000. We will need to raise additional capital to
finance our operations. We anticipate seeking additional financing through debt
or equity financings. We cannot assure you that additional financing will be
available to us, or that, if available, the financing will be on terms
acceptable or favorable to us. We cannot assure you that our estimate of our
anticipated capital needs is accurate or that new business developments or other
unforeseen events will not occur that will result in the need to raise
additional funds. If we cannot immediately raise additional funds, further
development of our technology and upgrades to our existing products may be
delayed and we otherwise may not be able to execute our business plan, all of
which may have a material adverse effect on our operations and financial
condition.
WE HAVE A LIMITED OPERATING HISTORY UPON WHICH YOU MAY EVALUATE US
We had no material operations prior to May 1, 1999. In November 1999 we
executed our first license agreement. Accordingly, we have a very limited
operating history upon which you may evaluate us. To date we have generated
limited revenue. In addition, our revenue model is evolving. Under our model, we
expect to generate a substantial portion of our revenues from our licensing
agreements with our licensees. We provide that we receive a percentage of the
net gaming revenue on a licensee's site. However, we may not be able to generate
revenues through these agreements or other sources. We cannot guaranty or
accurately predict our future results of operations. If we do not generate
revenue, our business, financial condition and operating results will be
materially adversely affected.
WE HAVE A HISTORY OF LOSSES
We have not achieved profitability and expect to continue to incur
significant operating losses and to generate negative cash flow from operating
activities for the foreseeable future. We incurred net losses of $832,011 for
the nine months ended September 30, 1999. As of September 30, 1999, our
accumulated deficit was $838,845. Even if we achieve profitability, we may not
sustain or increase profitability on a quarterly or annual basis in the future.
If revenues grow slower than we anticipate, or if operating expenses exceed our
expectations or cannot be adjusted accordingly, our business, revenues, results
of operations and financial condition will be adversely affected.
WE ANTICIPATE WE WILL CONTINUE TO INCUR LOSSES
We commenced operations in May 1999 and to date, we have not been
profitable. We may never be profitable, or, if we become profitable, we may be
unable to sustain profitability. Our limited operating history makes predicting
our future operating results difficult. An investor in our securities must
consider the risks and difficulties frequently encountered by early stage
companies in new and rapidly evolving markets, particularly those involved in
the Internet and electronic commerce. These risks include:
- the level of use of the Internet and online services and consumer
acceptance of the Internet and other online services;
- our inability to generate significant licensing revenue, as well as
revenue from advertising and e-commerce;
- the inability of our licensees to maintain and increase levels of
traffic on their respective web sites;
- our failure to anticipate and adapt to a developing market;
- our inability to upgrade and develop our systems and infrastructure
and attract new personnel in a timely and effective manner;
- the failure of our licensees' servers and networking systems to
efficiently handle web traffic; and
- our inability to effectively manage rapidly expanding operations.
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WE EXPECT OUR QUARTERLY RESULTS TO FLUCTUATE
We expect that our quarterly operating results will fluctuate
significantly due to many factors, including:
- our ability to attract and retain licensees;
- pending or to be proposed government regulation of the gaming
industry;
- new Internet sites, services or products introduced by us or our
competitors;
- uncertain acceptance of our Internet gaming software;
- management of our growth; and
- risks associated with potential acquisitions.
Many of these factors are beyond our control. Due to the limited history
of businesses relying on the Internet as a commercial medium, we believe that
period-to-period comparisons of our operating results are not meaningful.
WE MUST ESTABLISH, MAINTAIN AND STRENGTHEN OUR BRAND NAME IN ORDER TO ATTRACT
ADDITIONAL LICENSEES OF OUR PRODUCTS
In order to expand our licensee base, solidify our business
relationships and successfully implement our business strategy, we must
establish, maintain and strengthen our brand name. For us to be successful in
establishing our brand name, potential licensees must perceive us as a reliable
source of sophisticated and scalable gaming software. We expect that we will
need to increase substantially our marketing budget in our efforts to establish
brand name recognition and brand loyalty. Our business could be materially
adversely affected if our marketing efforts are not productive or if we cannot
strengthen our brand name. If we have licensee and customer complaints, our
reputation may be significantly damaged, which could have an adverse effect on
our business, results of operations and financial condition. If our licensees do
not perceive our existing technologies, products and services to be of high
quality or if we alter or modify our brand image, introduce new services or
enter into new business ventures that are not favorably received, the value of
our brand could be diminished, which could decrease the attractiveness of our
technologies, products and services to potential licensees.
INTERNET GAMING SOFTWARE MAY NOT BE COMMERCIALLY ACCEPTED
Our success will depend in large part on widespread licensee and
consumer acceptance of Internet gaming software. The development of an online
market for Internet gaming software has only recently begun, is rapidly evolving
and likely will be characterized by an increasing number of market entrants. Our
future growth, if any, will depend on the following critical factors:
- the growth of the Internet as a commerce medium generally, and as a
market for Internet gaming software and services specifically;
- our ability to successfully and cost-effectively market our services
to a sufficiently large number of licensees and customers; and
- our ability to overcome a perception among many potential licensees
and consumers that using Internet gaming software is risky.
We cannot assure you that the market for our technologies, products and
services will develop, that our technologies, products and services will be
adopted or that licensees and consumers will significantly increase their use of
the Internet for gaming software. If the online market for Internet gaming
software fails to develop, or develops more slowly than expected, or if our
technologies, products and services do not achieve widespread market acceptance,
our business, results of operations and financial condition would be adversely
affected.
OUR PRODUCTS MAY NOT BE COMMERCIALLY ACCEPTED
The first version of our gaming software was released in April 1998 by
Cyberoad Gaming Corporation, a company from whom we indirectly purchased all of
its assets. Since that time, we have entered into license agreements with three
licensees. We cannot assure you that we will be able to attract additional
licensees. In addition, substantial additional efforts and expenditures are
required to enhance the capabilities of our technologies and products. If we are
unable to enhance our initial products or develop new products, we may not be
able to maintain or increase our licensee base, which will have a material
adverse effect on our business, results of operations and financial condition.
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WE DEPEND SUBSTANTIALLY UPON THIRD PARTIES
We are in an early stage of development and have yet to establish
substantial internal management, personnel and other resources. We depend
substantially upon third parties for several critical elements of our business,
including among others, promotion and marketing, technology and infrastructure
development and distribution activities. The services of all of our senior
management, except Mr. Coffey our President, and our expert consultants are
provided through a Services Agreement with Kazootek.com Technologies Inc., a
related party, which is terminable upon thirty days notice from either party. If
we are unable to maintain our relationship with Kazootek or with these other
third parties, our business, revenues, results of operations and financial
condition will be materially and adversely affected.
THE REGULATORY ENVIRONMENT OF INTERNET GAMING IS UNCERTAIN
We are subject to applicable laws in the jurisdictions in which we
operate and our licensees are subject to applicable laws in the jurisdictions in
which they operate. Many jurisdictions have attempted to restrict or prohibit
Internet gaming. As companies and consumers involved in Internet gaming are
located around the world, there is uncertainty regarding exactly which
government has jurisdiction or authority to regulate or legislate with respect
to various aspects of the industry. Furthermore, it may be difficult to identify
or differentiate gaming-related transactions from other Internet activities and
link these transmissions to specific users, in turn making enforcement of
legislation aimed at restricting Internet gaming activities difficult. If
existing regulations are interpreted to prohibit or restrict Internet gambling
and are enforced, or if new regulations are enacted which are designed to
prohibit Internet gambling, our licensees may be found to violate these
regulations and may be required to cease operations of their sites. Moreover, if
existing regulations are interpreted to apply to suppliers of gaming software,
or if our operations are interpreted to extend beyond software development, we
may be required to cease or restrict our development, marketing and licensing
activities. The uncertainty surrounding the regulation of Internet gaming and
any adverse interpretation and subsequent enforcement of existing or new laws
relating to Internet gambling could have a material adverse effect on our
business, revenues, operating results and financial condition.
PENDING UNITED STATES LEGISLATION AND OTHER EXISTING LAWS MAY RESTRICT INTERNET
GAMING
Governments in the United States and other jurisdictions may in the
future adopt legislation that restricts or prohibits Internet gaming. After
previous similar bills failed to pass in 1998, in 1999, Senator Jon Kyl of the
United States Senate introduced a revised bill intended to prohibit and
criminalize Internet gambling. On November 19, 1999, the Senate passed this
bill. The companion bill in the House of Representatives was not brought to the
floor for debate before the end of the legislative session. We cannot assure
you whether the Kyl bill or any similar bill will become law.
In addition, existing United States federal statutes and state laws
could be construed to prohibit or restrict gaming through the use of the
Internet. To date, we offer technologies, products and support services to
non-U.S. based licensees. Governmental authorities may view us and/or our
licensees as having violated these statutes or laws. Several state Attorney
Generals and court decisions have upheld the application of state anti-gambling
laws to Internet casino companies.
United States or other jurisdictions may initiate criminal or civil
proceedings against us and/or our licensees, and these proceedings could involve
substantial litigation expense, penalties and fines. In addition, these
proceedings may divert the attention of our key executives, and may result in
injunctions or other prohibitions against us and/or our licensees. These
proceedings could have a material adverse effect on our business, revenues,
operating results and financial condition.
In addition, as electronic commerce further develops, it may generally
be the subject of government regulation. Current laws, which pre-date or are
incompatible with Internet electronic commerce, may be enforced in a manner that
restricts the electronic commerce market. These developments could have a
material adverse effect on our business, revenues, operating results and
financial condition.
COMPETITION IN THE INTERNET GAMING SOFTWARE INDUSTRY IS INTENSE
Gaming services over the Internet is a relatively new industry, and
licensees of our software will compete with existing and more established
recreational services and products, in addition to certain other forms of
entertainment. Our success will depend upon, among other things, our ability to
enhance our products and to develop and introduce new products and services that
keep pace with technological developments, respond to evolving licensee and
customer requirements and achieve continued market acceptance. We compete with
several public and private companies that provide electronic commerce and/or
Internet gaming software. Any failure by us to anticipate or respond adequately
to technological development and licensee and customer requirements or any
significant delays in product development or introductions could result in a
loss of market share or revenues.
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We cannot assure you that other companies with greater financial and
technological resources will not develop electronic commerce software or gaming
software for the Internet with better capabilities than our products, or that we
will be able to compete successfully against existing competitors or future
entrants into the market. In addition to our known competitors, it is likely
that several new competitors may emerge in the near future, in particular in the
electronic commerce software market as the market for electronic commerce
develops.
INTERNET COMPETITION IS INTENSE
The market for Internet products and services is highly competitive and
there are no substantial barriers to entry. We expect that competition will
continue to intensify. Many of our Internet competitors have more experience
online and have greater brand recognition. We may not be able to successfully
compete in the Internet services market, which would prevent us from effectively
executing our business strategy. In addition, the market for Internet products
and services is characterized by rapid technological developments, evolving
industry standards, and frequent new products and enhancements. If faster
Internet access becomes more widely available through cable modems or other
technologies, we may be required to make significant changes to the design and
content of our technologies and products to compete effectively. As the number
of Web pages and users increase, we will need to modify our Internet
infrastructure and technologies and products to accommodate increased traffic to
our licensees' sites. If we cannot modify our technologies and products, users
may experience:
- system disruptions;
- slower response times;
- impaired quality and speed of processing.
If we fail to effectively adapt to increased usage of the Internet or new
technological developments, we will be unable to successfully compete online and
our results of operations and financial condition will be materially adversely
affected.
WE FACE TECHNOLOGICAL RISKS ASSOCIATED WITH OUR BUSINESS
Our technology and products may become obsolete. Our competitors may
develop related technologies and products, using similar processes and marketing
strategies, prior to us, or they might develop technologies and products that
are more effective than ours. Accordingly, our ability to compete will depend on
the timely enhancement and development of our technologies and products, as well
as the development and enhancement of future products. We cannot assure you that
we will be able to keep pace with technological developments or that our
technologies and products will not become obsolete.
WE FACE HARDWARE SYSTEMS RISKS FROM NATURAL DISASTERS AND THIRD PARTIES
Our business model depends on the ability of our licensees to engage in
global communications services, and is dependent upon third parties to deliver
these services. Our results of operations and financial condition will be
materially adversely affected if our licensees suffer disruptions in service.
Fires, floods, earthquakes, power losses, telecommunications failures,
break-ins, civil disturbances, acts of terrorism, strikes, and similar events
could damage our communications systems. Computer viruses, electronic break-ins
or other similar disruptive problems may also occur. Our business would be
adversely affected if our systems or the systems of our licensees were affected
by any of these occurrences. Our insurance policies may not adequately
compensate us for any losses that may occur due to any failures or interruptions
in our systems.
THE MARKET FOR OUR TECHNOLOGIES AND PRODUCTS IS NEW AND EVOLVING
The market for our technologies and products has only recently
developed. Demand and market acceptance for recently introduced products and
services generally are subject to a high level of uncertainty and risk. Because
the markets for our technologies and products are new and evolving, it is
difficult to predict the future growth rate, if any, of this market. We cannot
assure you that the markets for our technologies and products will stabilize or
become sustainable. If the markets fail to develop, develop slower than
expected, become saturated with competitors, or if our technologies and products
do not achieve or sustain market acceptance, then our business, revenues,
results of operations and financial condition will be materially and adversely
affected.
THERE ARE LEGAL UNCERTAINTIES ASSOCIATED WITH THE INTERNET
The adoption of new laws or the strict application of existing laws may
decrease the use of the Internet in general, which would decrease the demand for
our services and might increase our cost of doing business. Several legislative
and
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regulatory proposals under consideration by federal, state, local and foreign
governmental organizations may lead to laws or regulations concerning various
aspects of the Internet, including:
- online content;
- user privacy;
- taxation;
- access charges;
- liability for third-party activities; and
- jurisdiction.
If proposals are adopted that increase the costs of communicating on the
Internet, this could decrease demand for our products and services which would
have a material adverse affect on our results of operations and financial
condition.
THE QUALITY OF ONLINE SERVICE IS CRITICAL TO OUR SUCCESS
Our licensees and their customers depend on Internet service providers,
online service providers and other website operators for access to our
technologies and products. Many of these users have experienced significant
outages in the past, and could experience outages, delays and other difficulties
due to system failures unrelated to our technologies or products. Additionally,
the Internet infrastructure may not be able to support continued growth in its
use. Any of these problems could result in a decrease demand for our products
and a decreased usage of our licensee's sites which would have a material
adverse affect on our business.
CONSUMER ACCEPTANCE OF THE INTERNET FOR COMMERCIAL TRANSACTIONS IS UNCERTAIN
Our growth and operating results depend in part on widespread consumer
acceptance and use of the Internet as a way to transact business. This consumer
practice is at an early stage of development, and demand and continued market
acceptance is uncertain. We cannot predict the number of consumers that will be
willing to transact business over the Internet, rather than through traditional
outlets. The Internet may not become a viable commercial marketplace due to
inadequate development of network infrastructure and enabling technologies that
address consumer concerns about:
- network performance;
- security;
- speed of access;
- ease of use; and
- bandwidth availability.
In addition, the Internet's viability as a commercial marketplace could
be adversely affected by increased government regulation. Changes in or
insufficient availability of telecommunications or other services to support the
Internet could also result in slower response times and adversely affect general
usage of the Internet. Also, negative publicity and consumer concern about the
security of transactions conducted on the Internet and the privacy of users may
also inhibit the growth of commerce on the Internet.
SECURITY AND PRIVACY OF OUR LICENSEES' CUSTOMERS' FINANCIAL DATA IS CRITICAL TO
OUR SUCCESS
Internet usage could decline if any compromise of security occurs. We
may incur significant costs to protect against the threat of security breaches
or to alleviate problems caused by any breaches that occur. Our licensees may
retain on their premises personal financial documents that they receive from
customers in connection with their use of the licensees' websites. These
documents may be highly sensitive and if a third party were to misappropriate
our licensees' customers' personal information, the customers could possibly
bring legal claims against our licensees. In addition, if third parties were
able to penetrate the network systems of our licensees and misappropriate their
clients' personal information or credit card information, we could be subject to
liability. These could include claims for unauthorized purchases with credit
card information, impersonation or other similar fraud claims. They could also
include claims for other measures of personal information, such as for
unauthorized marketing purposes. A legal claim brought against us or our
licensees could have an adverse effect on our business. We cannot assure you
that our licensees' privacy policy will be deemed sufficient by prospective
customers or any federal or state laws governing privacy that may be adopted in
the future.
9
<PAGE> 11
THERE ARE RISKS ASSOCIATED WITH OUR ENCRYPTION TECHNOLOGY
A significant barrier to electronic commerce is the secure exchange of
value over public networks. We rely on encryption and authentication technology
to provide the security and authentication necessary to effect the secure
exchange of value, including public key cryptography technology licensed from
VeriSign Inc. and private key Data Encryption Standard, or DES, cryptography.
Advances in computer capabilities, new discoveries in the field of cryptography
or other events or developments may result in a compromise or breach of the
VeriSign Inc. technology, DES or other algorithms we use to protect customer
transaction data. These developments could have a material adverse effect on our
business, revenues, financial condition or operating results.
ANY DISRUPTION IN OUR LICENSEES' FINANCIAL TRANSACTION PROCESSING COULD
ADVERSELY AFFECT OUR OPERATIONS
Our business model is predicated on our licensees being able to
successfully provide online financial transaction processing for their clients.
We cannot assure you that international financial institutions and banks will
continue to process the transactions of our licensees' clients in the future.
Any disruption in the processing of these transactions would result in a
disruption to the licensee's business, and would have an adverse effect on our
business.
ANY FUTURE ACQUISITIONS WE MAKE OF COMPANIES OR TECHNOLOGIES MAY RESULT IN
DISRUPTIONS TO OUR BUSINESS
We may acquire or make investments in complementary businesses,
technologies, services or products. These acquisitions and investments could
disrupt our ongoing business, distract our management and employees and increase
our expenses. If we acquire a company, we could have difficulty in integrating
that company's personnel, operations, technology and software into ours. In
addition, the key personnel of the acquired company may decide not to work for
us. We could also have difficulty in integrating the acquired products, services
or technologies into our operations and we may incur indebtedness or issue
equity securities to pay for any future acquisitions. The issuance of securities
could be dilutive to our existing stockholders.
WE DEPEND ON SENIOR MANAGEMENT AND EXPERT CONSULTANTS WHO HAVE LIMITED
EXPERIENCE IN OUR INDUSTRY
Our success will depend largely upon the personal efforts of members of
management and expert consultants including Mr. John Coffey, President, Mr.
Brent Corobotuic, Director, Mr. Carl Schmidt, Chief Information Officer, Mr.
Joseph Chin, Network Systems Manager and Mr. Calvin Ayre, Internet Business
Model and Product Consultant. None of our senior management has any direct
experience in founding other companies or developing other technologies and
products similar to ours. We cannot assure you that our senior management or
consultants will be successful in efficiently executing our business strategy
or in recruiting and relying upon a senior group of experienced executives,
consultants and personnel as rapidly as other experienced management, and
additional personnel may prove to be required.
OUR ABILITY TO RECRUIT AND RETAIN PERSONNEL IS ESSENTIAL TO THE EXECUTION OF OUR
BUSINESS PLAN
Competition for personnel throughout our industry is intense. We may be
unable to retain our key employees or to attract, integrate or retain other
highly qualified employees in the future. Our success depends on our continuing
ability to attract, retain and motivate highly skilled employees, particularly
with respect to our technology development and support. Competition for
qualified technical and support personnel is intense, and we may not be able to
hire and retain sufficient numbers of qualified technical and support personnel.
We expect to experience difficulty in hiring and retaining employees with
appropriate qualifications. If we do not succeed in attracting new personnel or
retaining and motivating our current personnel, our business will be adversely
affected.
OUR BUSINESS MODEL DEPENDS ON OUR ABILITY TO DEVELOP A COMPLEX GLOBAL MARKETING
AND SALES PROGRAM
Our business requires marketing, brand development and sales on a global
basis. We cannot assure you that we will succeed in developing and managing a
complex marketing and sales strategy resulting in reasonable penetration of our
technologies into our target markets on a timely basis. If we do not effectively
manage our strategy of marketing, brand development and sales, our business,
revenues, results of operations and financial condition will be materially and
adversely affected.
WE NEED TO DEVELOP FUTURE STRATEGIC PARTNERSHIPS
Our business requires that we form strategic partnerships globally,
nationally and regionally to assist in a focused marketing effort, and to
provide financial strength. We cannot assure you that we will develop these
strategic partnerships on a timely basis or develop an adequate number of
strategic partnerships to successfully market our technologies and products
globally.
10
<PAGE> 12
WE DEPEND ON CERTAIN KEY LICENSEES FOR A SUBSTANTIAL PORTION OF OUR REVENUE
A substantial portion of our revenue is derived from our current three
key licensees. The loss of one or more of these licensees could have a material
adverse effect on our business, revenues, operating results and financial
condition.
ANY FAILURE OR INABILITY TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS COULD
ADVERSELY AFFECT OUR BUSINESS
Our success depends substantially upon our ability to enforce
intellectual property protection of our technologies in both the United States
and other countries. Furthermore, the possibility exists that we could be found
to infringe on patents, service marks, trademarks or copyrights held by others.
Our use of trademarks, service marks, tradenames, slogans, phrases and other
expressions in the course of business may be the subject of dispute and possible
litigation. We cannot assure you that we will be able to use our current
tradename and marks. Any change in our tradename or marks could result in
confusion to potential licensees and customers, and negatively affect our
business.
WE DO NOT EXPECT TO PAY DIVIDENDS
We have never paid dividends on our common stock and we do not
anticipate paying any dividends on our common stock in the foreseeable future.
The declaration and payment of dividends are subject to the discretion of our
Board of Directors. Any determination to pay dividends in the future will depend
upon results of operations, capital requirements, restrictions in loan
agreements, if any, and other factors as the Board of Directors may deem
relevant.
CAUTIONARY NOTICE ABOUT FORWARD-LOOKING STATEMENTS
This prospectus contains statements that constitute forward-looking
statements within the meaning of Section 21E of the Exchange Act of 1934 and
Section 27A of the Securities Act of 1933. The words "expect," "estimate,"
"anticipate," "predict," "believe" and similar expressions and variations of
these words are intended to identify forward-looking statements. These forward
looking statements appear in a number of places in this prospectus and include
statements regarding:
- our intent or current expectations regarding our strategies, plans
and objectives;
- our product release schedules;
- our ability to design, develop and market products;
- the ability of our products to achieve or maintain commercial
acceptance.
Any forward-looking statements are not guarantees of future performance
and involve risks and uncertainties. Actual results may differ materially from
those projected in this prospectus, for the reasons, among others, described in
the Risk Factors section beginning on page 5. You should read the Risk Factors
section carefully, and should not place undue reliance on any forward-looking
statements, which speak only as of the date of this prospectus. We undertake no
obligation to release publicly any updated information about forward-looking
statements to reflect events or circumstances occurring after the date of this
prospectus or to reflect the occurrence of unanticipated events.
USE OF PROCEEDS
cyberoad.com will not receive any proceeds from the sale of the shares
of common stock offered by the selling stockholders under this prospectus.
DIVIDEND POLICY
cyberoad.com has never paid any dividends on its common stock.
cyberoad.com intends to retain earnings for use in its business and does not
intend to pay any dividends on its common stock in the foreseeable future.
DETERMINATION OF THE OFFERING PRICE
The selling stockholders may from time to time sell all or a portion of
the shares of common stock offered by them under this prospectus in routine
brokerage transactions on the Over the Counter Bulletin Board, if we resume
trading on that system, in negotiated transactions, or otherwise, at fixed
prices which may be changed, at market prices prevailing at the time of sale, at
prices related to the stock market's closing prices or at negotiated prices. The
selling stockholders also may make private sales directly or through brokers.
Because of this, the offering price cannot be determined as of the date of this
prospectus. See "Plan of Distribution."
11
<PAGE> 13
PRICE RANGE OF COMMON STOCK
The common stock of cyberoad.com was approved for quotation on the Over
The Counter Bulletin Board on September 14, 1998. The common stock began trading
on the Over The Counter Bulletin Board in March 1999. On January 19, 2000, the
shares of cyberoad.com were removed from the Over the Counter market for failing
to timely comply with the Eligibility Rule promulgated by the OTC Bulletin
Board. The following table sets forth, for the periods indicated, the high and
low prices bid information for our common stock as reported by the Over the
Counter Bulletin Board. These quotations reflect inter-dealer prices.
<TABLE>
<CAPTION>
HIGH LOW
------ ------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1999
First Quarter ........................... 6.00 0
Second Quarter .......................... 6.25 0.875
Third Quarter ........................... 6.00 4.00
Fourth Quarter .......................... 5.25 2.00
YEAR ENDED DECEMBER 31, 2000
First Quarter........................... 4.75 3.125
(through January 19,2000)
</TABLE>
On January 19, 2000, the closing bid price of the common stock as
reported on the Over the Counter Bulletin Board was $3.63 per share. As of
January 19, 2000, there were 57 holders of record of our common stock.
CAPITALIZATION
The following table sets forth cyberoad.com's capitalization as of
September 30, 1999. This table should be read in conjunction with cyberoad.com's
financial statements, the notes to cyberoad.com's financial statements, and with
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" appearing elsewhere in this prospectus. The number of issued and
outstanding shares in the following table excludes the following shares that
could further dilute your investment:
- 648,859 shares of common stock that were issued by us to certain
selling stockholders under the securities purchase agreements;
- 850,000 shares of common stock that are issued and held in escrow
pursuant to the terms of the securities purchase agreements;
- 264,886 shares of common stock issuable upon exercise of options
issued to Thomson Kernaghan;
- 2,199,500 shares of common stock issuable upon exercise of options
granted or available for future grant under our 1999 Stock Option
Plan; and
- 50,000 shares of common stock issuable as compensation for services.
<TABLE>
<CAPTION>
SEPTEMBER 30,
1999
--------------
(in thousands)
Actual
--------
<S> <C>
Stockholders' equity:
Common Stock, $0.00001 par value; Shares Authorized 500,000,000
shares Issued and Outstanding at September 30, 1999: 11,109,650 .... --
Additional paid-in capital .............................................. 4,085
Accumulated deficit ..................................................... (838)
Total stockholders' equity .................................................. 3,246
Total capitalization ............................................... $ 3,246
</TABLE>
12
<PAGE> 14
SELECTED CONSOLIDATED FINANCIAL DATA
The following tables set forth selected financial data of our business
for the periods indicated. The statement of operations data with respect to the
year ended July 31, 1998 and the nine months ended April 30, 1999, as well as
the balance sheet data as of July 31, 1998 and April 30, 1999 are derived from
the audited consolidated financial statements of Cyberoad Gaming Corporation
and the notes to these financial statements appearing elsewhere in this
prospectus. The statement of operations data for the nine months ended
September 30, 1999, and the balance sheet data as of September 30, 1999 are
derived from our audited consolidated financial statements appearing elsewhere
in this prospectus. The following data should be read along with our financial
statements, the notes to our financial statements, and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
appearing elsewhere in this prospectus.
<TABLE>
<CAPTION>
YEAR ENDED NINE MONTHS ENDED
JULY 31, APRIL 30,
1998 1999
---------- -----------------
(in thousands, except
per share data)
<S> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Revenue Sharing $ 0 $ 624
Processing Fees 0 336
Marketing 0 167
Software Licensing 492 66
Systems Maintenance and Other 309 30
Total revenues 801 1,223
Operating Expenses:
Wages and Employee Benefits 352 403
Consulting and Management Fees 669 225
Total operating expenses (1,846) 1,585
Income (loss) from operations (1,045) (362)
Net income (loss) $ (1,045) $ (362)
Basic and diluted net income (loss) per
Share $ (0.19) $ (0.05)
Weighted average number of shares used
in computing basic and diluted net income
(loss) per share 5,480 6,763
</TABLE>
<TABLE>
<CAPTION>
AT JULY 31, AT APRIL 30,
1998 1999
----------- ------------
<S> <C> <C>
BALANCE SHEET DATA:
Cash $ 151 $ 220
Total assets 445 1,178
Total current liabilities 1,012 1,605
Total stockholders' equity (deficit) (567) (774)
</TABLE>
13
<PAGE> 15
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30, 1999
------------------
(in thousands, except
per share data)
<S> <C>
STATEMENT OF OPERATIONS DATA:
Revenues:
Data Processing 258
Transaction Processing 236
Systems Support and Maintenance 209
Marketing 87
Other 13
Total revenues 803
Cost of revenues 629
Gross profit (loss) 174
Operating expenses:
Development 169
General and administrative 838
Total operating expenses 1,007
Income (loss) from operations (832)
Net income (loss) $ (832)
Basic and diluted net income (loss) per
share $ (0.10)
Weighted average number of shares used
in computing basic and diluted net income
(loss) per share 8,438
</TABLE>
<TABLE>
<CAPTION>
AT SEPTEMBER 30, 1999
---------------------
<S> <C>
BALANCE SHEET DATA:
Cash and cash equivalents $ 2,534
Total current assets 3,107
Total assets 4,759
Total current liabilities 976
Total stockholders' equity (deficit) 3,246
</TABLE>
14
<PAGE> 16
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read together with the
consolidated financial statements of cyberoad.com and Cyberoad Gaming
Corporation and the notes to those consolidated financial statements included
elsewhere in this prospectus. This discussion summarizes the significant factors
affecting the consolidated operating results, financial condition and liquidity
and cash flows of Cyberoad Gaming Corporation for the nine months ended
April 30, 1999 and the fiscal year ended July 31, 1998 and of cyberoad.com for
the nine months ended September 30, 1999 and the fiscal years ended December 31,
1998 and December 31, 1997. Except for historical information, the matters
discussed in this Management's Discussion and Analysis of Financial Condition
and Results of Operations are forward looking statements that involve risks and
uncertainties and are based upon judgments concerning various factors that are
beyond our control. Actual results could differ materially from those projected
in the forward looking statements as a result of, among other things, the
factors described in "Risk Factors" included elsewhere in this prospectus.
OVERVIEW
cyberoad.com was incorporated in June 1988 and conducted no material
operations prior to May 1, 1999. On May 1, 1999, cyberoad.com Corporation
purchased all of the stock of Cyberoad.com (Isle of Man) Ltd., a
corporation existing under the laws of the Isle of Man. Immediately thereafter,
Cyberoad.com (Isle of Man) Ltd. purchased all of the assets of Cyberoad Gaming
Corporation which relate to the online turnkey betting technology. Prior
thereto, Cyberoad.com (Isle of Man) Ltd. had no material operations. On
May 1, 1999, Ecomm Relationship Technologies (IOM) Limited, a corporation
existing under the laws of the Isle of Man, purchased all of the assets of
Cyberoad Gaming Corporation which relate to financial transaction processing
technology. On November 11, 1999, Cyberoad.com (Isle of Man) Ltd. purchased all
of the outstanding shares of Ecomm Relationship Technologies (IOM) Limited.
Our revenues are generated from data processing, transaction processing,
systems support and maintenance, marketing and other. All revenue streams are
recognized at the time services are provided except for systems support and
maintenance. Systems support and maintenance is derived from actual wagering
activity, and is recognized after verifiable events conclude. Direct costs
consist of actual costs incurred to generate revenues and consist primarily of
maintenance charges associated with the operations infrastructure,
telecommunications conductivity and office space of the call centers, e-commerce
transaction costs, direct marketing costs incurred, and third party software
licensing royalties.
Our annual and quarterly revenue will depend in large part upon the
successful development and market acceptance of our internet/intranet sportsbook
management software, Netbook Version 2, and our eBanx.com ecash system. If
accepted, we believe that revenues attributable to system support and
maintenance as well as licensing fees resulting from the sale of additional
licenses to third parties to set up and maintain sportsbook websites will
increase. Accordingly our annual and quarterly revenues are, and will continue
to be, extremely difficult to forecast.
RESULTS OF OPERATIONS
Nine Months Ended September 30, 1999
Revenues
Revenues are generated from four main sources: data processing,
transaction processing, systems support and maintenance, and marketing. All
revenues are recognized on an accrual basis as services are rendered, except for
systems support and maintenance, which is recognized as events conclude.
For the nine months ended September 30, 1999, revenues were $803,024. Of
this amount, we generated $257,617 from fees from our licensees for providing
the operations infrastructure, telecommunications conductivity and related items
for the call centers. Fees are billed on a monthly basis as services are
rendered. We generated transaction processing revenue of $235,798 as a result of
processing e-commerce transactions. Fees are billed on a monthly basis based on
actual transactions processed. We generated systems support and maintenance
revenue of $209,410, which is recognized as a result of developing, maintaining
and supporting licensees' websites. Fees attributable to systems support and
maintenance revenue consist of a percentage of the net gaming revenue based on
wagering activity on a licensee's site and is recognized and retained as events
conclude. We generated marketing revenue of $86,731 based on direct marketing
efforts performed on behalf of licensees to promote their respective websites.
15
<PAGE> 17
Direct Costs
For the nine months ended September 30, 1999, we incurred $628,813 in
direct costs. Direct costs consisting of actual costs incurred for the
maintenance of a call center in which "live lines / live odds" are supported and
various sportsbooks are managed totaled $111,291. Direct costs consisting of
actual costs incurred in performing all e-commerce transaction processing
totaled $134,869. Marketing costs consisting of traditional media buy and unique
Internet promotional tools totaled $368,457. Other direct costs of $14,196 were
incurred for royalty fees for the licensing of third party casino software.
Development Expenses
For the nine months ended September 30, 1999, we incurred $168,597 in
development costs. Development costs include equipment, salaries and benefits
and other labor costs incurred for the research and development of Netbook and
eBanx proprietary software. All development costs incurred have been expensed in
the period incurred. As the development, upgrade, and improvement of Netbook and
eBanx software is ongoing, we expect to continue to incur development costs.
Operating Expenses
For the nine months ended September 30, 1999, we incurred total
operating costs of $837,625. Operating expenses consist of wages and employee
benefits of $229,636, consulting and management fees of $206,642, and
professional fees of $68,293. Other significant operating costs incurred were
equipment rental and maintenance, rent, office and miscellaneous, stock options
benefits, and advertising and promotion.
Amortization and Depreciation
For the nine months ended September 30, 1999, we incurred $44,941 in
amortization and depreciation which was attributable to depreciable assets of
computer software and equipment, furniture and fixtures, leasehold improvements,
software licenses, and goodwill acquired during the nine months ended September
30, 1999.
Fiscal Years Ended December 31, 1998 as Compared to Fiscal Year Ended December
31, 1997
There were no significant activities performed by cyberoad.com in the
fiscal years ended December 31, 1998 and 1997.
RESULTS OF OPERATIONS OF CYBEROAD GAMING CORPORATION
Nine Months Ended April 30, 1999 as Compared to Year Ended July 31, 1998
Revenues
Revenues of Cyberoad Gaming Corporation were generated from revenue
sharing, processing fees, marketing, software licensing, and system maintenance.
Revenue sharing revenue was recognized when various events concluded. Processing
fee revenue, marketing, and system maintenance was recognized at the time
services were provided. Software licensing revenue was recognized upon the
finalization of licensing agreements.
Cyberoad Gaming generated $623,847 in revenue sharing for the nine
months ended April 30, 1999 as a result of the launch in August and September
1998 of certain commercial web sites which utilize our proprietary software we
licensed to third parties. For the year ended July 31, 1998, no commercial
activity had commenced from the implementation of the web sites and therefore no
revenue sharing revenue was recognized.
For the nine months ended April 30, 1999 Cyberoad Gaming generated
$336,197 in processing fees as a result of processing e-commerce transactions.
For the year ended July 31, 1998, no e-commerce processing activities were
performed, and accordingly, no revenue was generated from this source.
For the nine months ended April 30, 1999, Cyberoad Gaming generated
$166,955 in marketing fees from direct marketing efforts performed on behalf of
licensees whose commercial activities commenced in August and September of 1998.
For the year ended July 31, 1998, no direct marketing activities were performed
on behalf of licensees, and as such no revenue was generated from this source.
Software licensing fees decreased $426,012, or 86.6%, from $492,104 for
the year ended July 31, 1998 to $66,092 for the nine months ended April 30,
1999. Software licensing fees for the nine months ended April 30, 1999 consisted
of the sale of one software license, while for the year ended July 31, 1998,
revenue was generated from the sale of three software licenses.
16
<PAGE> 18
Systems maintenance and other revenue decreased $279,090, or 90.3%, from
$309,126 for the year ended July 31, 1998 to $30,036 for the nine months ended
April 30, 1999. Systems maintenance revenue consisted of fees charged to
licensees for the development, design, and set-up of various commercial web
sites. Once these web sites commenced commercial operations, this revenue stream
is no longer generated (see revenue sharing above). The decrease was also
attributable to the termination of a licensing agreement entered into in the
year ended July 1997.
Operating Expenses
Operating expenses consist primarily of wages and benefits of
management, administrative, research and development, marketing, and e-commerce
processing personnel, consulting and management fees, marketing, data
processing, and rent. Operating expenses of Cyberoad Gaming Corporation
decreased by $327,755, or 17.8%, from $1,846,137 for the year ended July 31,
1998 to $1,518,382 for the nine months ended April 30, 1999. The decrease in
operating expenses is largely attributable to a decrease in consulting and
management fees of $443,283 due to the expiration of certain consulting
contracts with parties assisting in the initial development of Cyberoad Gaming
Corporation and initial marketing of its gaming product. Marketing costs
increased by $205,724, or 100%, from $0 for the year ended July 31, 1998 to
$205,724 for the nine months ended April 30, 1999, as a result of direct
marketing services provided to software licensees in order to promote their
commercial web sites. Data processing fees were $214,991 as the result of
conducting and processing e-commerce transaction to third party licensees. There
were no processing activities performed for the year ended July 31, 1998, and
therefore no costs associated therewith.
Fiscal Year Ended July 31, 1998 as Compared to Fiscal Year Ended July 31, 1997
Revenues
Software licensing revenue increased $392,524, or 394.2%, from $99,580
for the year ended July 31, 1997 to $492,104 for the year ended July 31, 1998.
The increase resulted from the sale of three software licenses in 1998 as
compared to the sale of one license in 1997.
Systems maintenance revenues increased by $300,832, or 3,627.1%, from
$8,294 for the year ended July 31, 1997 to $309,126 for the year ended July 31,
1998. The increase was due to fees generated as a result of four license
agreements to develop, design, and set-up commercial web-sites in fiscal 1998 as
compared to fiscal 1997 during which one maintenance contract was executed in
July 1997, thus representing only one month's revenue.
Operating Expenses
Operating expenses increased $1,250,557, or 210%, from $595,580 for the
year ended July 31, 1997 to $1,846,137 for the year ended July 31, 1998. The
increase is primarily attributable to increased employment costs associated with
the development of internal management, and the addition of personnel conducting
research and development, marketing and administrative duties. The increase also
resulted from additional administrative costs such as rent, office and
miscellaneous, telecommunications, and repairs and maintenance.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, cyberoad.com's principal source of liquidity
was approximately $1,031,705 in cash, which was primarily raised through equity
financing.
On July 3, 1999, cyberoad.com closed a private placement of 1,400,000
shares of common stock, which were issued to investors at $1.43 per share. The
private placement raised net proceeds of $1,865,019. On August 18, 1999, we
received $499,999.50 as an advance on proceeds to be received upon closing of a
subsequent offering. On November 11, 1999, cyberoad.com issued an aggregate of
648,859 shares of common stock in an offering under Regulation S of the
Securities Act of 1933, as amended. The shares were issued to non U.S. Persons,
as defined in Regulation S, at $3.50 per share, for aggregate net proceeds of
$2,039,996.
Net cash used in operating activities during the nine months ended
September 30, 1999 was $698,244. Cash used in the operating activities was
primarily due to the start up of Ecomm Relationship Technologies (IOM) Limited
and the development of Netbook Version 2 software. The cost of the start up and
development of software has been offset by cash deposits received from Ecomm
Relationship Technologies (IOM) Limited customers. Net cash used in investing
activities was $812,822, and was primarily due to the purchase of computer
hardware and software and office furniture. Net cash provided by financing
activities was approximately $2,542,771, which was primarily provided from the
issuance of capital stock pursuant to private placement offering.
17
<PAGE> 19
As of December 10, 1999, cyberoad.com entered into a revolving line of
credit agreement with El Moro Finance Ltd, a company existing under the laws of
the British Virgin Islands. The agreement provides for a revolving line of
credit available to cyberoad.com in the amount of $500,000. In the event that
funds are advanced under the revolving line of credit, cyberoad.com is obligated
to make interest payments on the first day of every month. The interest payments
will be either a compounded annual rate of 10% of the funds advanced per annum
only, or compound annual interest payments of prime (Switzerland) plus 2% of the
funds advanced, per annum only, for the first year of instatement of the
revolving line of credit. If funds are advanced, cyberoad.com agrees to furnish
to El Moro an unrestricted open source code license to all software developed by
cyberoad.com for up to two years after the revolving line of credit is converted
or repaid in full. To date, no funds have been advanced under the line of
credit.
We have minimal commitments for capital expenditures. Pursuant to our
Services Agreement with Kazootek.com Technologies, Inc., we are financially
obligated on a month to month basis and payments are in an amount equal to the
cost of the services provided plus 10%. Please refer to "Certain Relationships
and Related Transactions" for a discussion of our Services Agreement with
Kazootek.com. In addition, we lease property in Costa Rica on a month to month
basis and our monthly rental payments are $3,362.
We continually evaluate various financing strategies to be utilized in
expanding our business and to fund future growth or acquisitions. Our future
capital requirements will depend, however, on many factors, including but not
limited to, results of operations, the size and timing of future acquisitions,
if any, and the availability of additional financing. To the extent that
existing resources and future earnings are insufficient to fund our activities,
we may need to raise additional funds through debt or equity financings. We
cannot assure you that such additional financing will be available or that, if
available, it can be obtained on terms favorable to us and our stockholders. In
addition, any equity financing could result in dilution to our stockholders. Our
inability to obtain adequate funds would adversely affect our operations and
ability to implement our strategy.
Management anticipates that the net proceeds from its July 3 and
November 11 offerings, combined with cash flow from operations, and its bank
line of credit will provide adequate liquidity to fund its business growth plans
and its operations until the end of March 2000.
18
<PAGE> 20
BUSINESS
OUR COMPANY
cyberoad.com is an Internet technology company that develops, markets
and licenses online turnkey betting systems to operators of Internet sportsbook
and casino websites. As part of our turnkey system, we develop and manage
distributed wide area network (WAN) gaming (sportsbook and casino) and
e-commerce systems. We provide systems development, network management and
hosting (all of our web servers and databases are located outside of the United
States), ongoing technical support and marketing services for our licensees. In
November 1999, we released Version 2 of our sportsbook system, consisting of a
highly scalable and flexible platform that enables us to more easily add new
sports and bet types product offerings and allows service to a greater number of
users at any one time.
We also have developed a proprietary technology, through Ecomm
Relationship Technologies (IOM) Limited, that provides financial transaction
processing for our licensees' (currently, The Big Book & Casino, Grand Prix
Sportsbook & Casino, and Mayan Sportsbook) gaming systems. These licensees in
turn are able to provide secure financial transaction processing for their
clients, the end user. Currently, Ecomm Relationship Technologies (IOM) Limited
primary use for its e-commerce platform is as an online stored value system and
an economic relationship management system. The online stored value system
allows customers to purchase digital cash that the customer can use at any time
when purchasing the services of our licensee's gaming web sites. The economic
relationship management system primarily serves to manage the financial accounts
of customers that use our licensee's web sites.
cyberoad.com was incorporated in June 1988 under the name Sunshine
Equities Corporation. The name was changed to LAL Ventures in August 1998, and
subsequently to cyberoad.com Corporation in May 1999. cyberoad.com conducted no
material operations prior to May 1, 1999. On May 1, 1999, cyberoad.com
Corporation purchased all of the stock of Cyberoad.com (Isle of Man) Ltd., a
corporation existing under the laws of the Isle of Man. Immediately thereafter,
Cyberoad.com (Isle of Man) Ltd. purchased all of the assets of Cyberoad Gaming
Corporation which relate to the online turnkey betting technology. Prior
thereto, Cyberoad.com (Isle of Man) Ltd. had no material operations. On May 1,
1999, Ecomm Relationship Technologies (IOM) Limited, a corporation existing
under the laws of the Isle of Man, purchased all of the assets of Cyberoad
Gaming Corporation which relate to financial transaction processing technology.
On November 11, 1999, Cyberoad.com (Isle of Man) Ltd. purchased all of the
outstanding shares of Ecomm Relationship Technologies (IOM) Limited.
We have five direct or indirect wholly owned subsidiaries including (i)
Cyberoad.com (Isle of Man) Ltd. (ii) Sistemas de Informacion Tecnologica, a
corporation existing under the laws of Costa Rica, (iii) Informacion y
Tecnologia Canadiense, a corporation existing under the laws of Costa Rica, (iv)
Ebanx Limited, a Nevada corporation, and (v) Ecomm Relationship Technologies
(IOM) Limited, a corporation existing under the laws of Isle of Man.
A GAMING INDUSTRY OVERVIEW
The projections discussed in this Industry Overview section are industry
projections, and any growth rates discussed are industry growth rates and may
not reflect our growth rates over the same period.
THE INTERNET AND E-COMMERCE
The Internet is an increasingly significant global medium for
communication, entertainment and commerce. Internet use is growing rapidly.
Jupiter Communications estimates that the number of Web users in the U.S. alone
is expected to grow from approximately 100 million in 1999 to approximately 160
million by 2003. E-commerce has become the new wave of buying and selling goods
over the Internet. E-commerce consists of the purchase of goods by some form of
virtual cash or credit. This new marketplace, which began with only a few
powerful brand names offering consumer goods over the Internet, has now grown to
include many distinct types of goods and services.
The rapid growth of the Internet as a tool for communication,
entertainment and e-commerce has resulted in a proliferation of Web sites
dealing with diverse topics, products and services. Web sites such as America
Online and Yahoo! developed in response to Internet users' need for a simple
means of navigating the Internet. As the number of Internet users has increased,
discrete user groups have developed that share the same interests, such as
people searching for gaming services. These groups have, in turn, created a
demand for more focused subject-specific Web sites. These subject-specific Web
sites are a growing segment of the Internet. Among the most popular of these
types of Web sites are those involved in Internet gaming, which involves the
placing of wagers via the Internet.
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THE INTERNET GAMING INDUSTRY
The global gaming industry began to capitalize on the rising popularity
of e-commerce in 1997. At that time, there were only 40 gambling Web sites
worldwide. An industry report recently published by Bear Stearns estimates that
there are 250 companies involved in operating or providing services to nearly
650 Internet gaming Web sites. On the Internet today, some gaming sites are
dedicated to casino-style gambling exclusively, while other sites offer sports
books, lotteries, bingo, and thoroughbred wagering. The companies involved in
Internet gaming Web sites can be classified as either owner/operators or
software suppliers.
INTERNET GAMING SOFTWARE SUPPLIERS
Most Internet gaming Web sites do not create the software that Web users
interface with on the site. Instead, owner/operators purchase the software, and
oftentimes complete "turnkey" support systems, from a software supplier, which
produces and licenses the software. The Bear Stearns report states that
approximately twenty companies consider themselves turnkey software suppliers.
These turnkey software suppliers license their software and support systems to
owner/operators of the Internet gaming Web sites.
OUR BUSINESS STRATEGY
Our objective is to secure a position as a leading provider of Internet
gaming technologies. We intend to accomplish our goal by: (1) developing
cyberoad.com into a global brand name through the marketing of its licensees'
gaming systems, and the development and marketing of a sports and entertainment
portal; (2) upgrading existing gaming systems by developing and implementing new
technology, and adding new sports and bet types; (3) adding new licensees; (4)
expanding into other Internet cultural markets by adding servers in attractive
international locations, and establishing points-of-presence, or POPs, overseas;
(5) developing new gaming systems in a cost-effective and timely manner; and (6)
establishing key business alliances and strategic partnerships.
OUR PRODUCTS AND SERVICES
GENERAL.
Initially, we chose to focus on the development of sports wagering
(verifiable events) systems rather than casino wagering (random number outcome)
systems because of the built-in credibility of sports wagering: results of games
are common knowledge and immediately known. Our turnkey sportsbook wagering
system is built on a foundation of wagering and e-commerce software, a scalable
network coupled with management infrastructure located in San Jose, Costa Rica
and British Columbia, Canada. Our wagering software system is called Netbook,
the e-commerce is provided by Ecomm Relationship Technology (IOM) Limited's
secure transaction settlement software, and the high-speed network integrates a
satellite and frame relay system through both a virtual private network (VPN)
and the Internet. We believe that our sports wagering system is distinguishable
from our competitors' systems primarily as a result of the Netbook wagering
system. Following initial market acceptance of our sports wagering system, we
added casino games to our product line.
We identified three fundamental elements as the primary factors we
believe are necessary to successfully operate an international online
sportsbook:
- Scalable network system that provides fast, secure and cost-effective
international networking for the delivery of multimedia content to a
large number of international Internet customers;
- Secure financial transaction system that is fully encrypted and which
settles all financial transactions cost-effectively.
- Dynamic, browser-based content enabling players to use unique, fast and
user-friendly software systems that provide both high volume gaming
transactions and extensive sports and casino information.
NETBOOK
Netbook is an Internet/Intranet sophisticated turnkey sportsbook
management system that incorporates proprietary software and a distributed
network design to allow sports enthusiasts to bet on a wide variety of sports on
any computer system from anywhere in the world with Internet access. Netbook is
designed to process wagers online and manage a high-volume sportsbook. Users can
access the Netbook through the Internet or a telephone call center. Netbook
provides a secure, encrypted means to place bets, protect the book and verify
the identity of the bettor.
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Unlike many other sportsbook software systems that require a download,
Netbook is a web browser-based application. This type of application allows for
full platform portability and player account mobility, which means the player is
able to use platforms ranging from Microsoft Windows and AOL to Macintosh and
WebTV. Players also are able to access their accounts and place wagers from any
computer, as they do not have to download a specific software system. We believe
a downloadable software system provides a barrier to entry for many potential
players.
The Netbook system is inexpensive to install and administer, as
operators and managers in the call center can access Netbook via a web browser.
This browser-based architecture runs on most existing personal computers and is
designed to take advantage of the new Network Computers, such as Windows
Terminals and Sun's Java Station. The system can be monitored and managed, both
technically and financially from anywhere in the world.
In November 1999, we launched the Netbook Version 2 sports betting
system. Using a new Java-based architecture and an Object database management
system, Netbook Version 2 provides a flexible platform with high-volume
scalability. We developed Netbook Version 2 using the Java programming language
incorporating many components of the Java 2 Platform Enterprise Edition,
including Enterprise JavaBeans, JavaServer Pages and Java Servlets. Java is well
suited for Internet and e-commerce applications because it includes specific
facilities for network access, database access and web server programming that
are usually add-ons, and is the only programming language that allows us to run
our software on different computing platforms without significant modification.
Moreover, because Java is very portable, potential licensees of cyberoad.com do
not need to purchase large volumes of expensive computer equipment. These
potential licensees may commence business running on inexpensive computer
systems, and thereafter move to more powerful hardware when their client base
and transaction volume increase.
Netbook Version 2 uses the Versant Object Database, a high performance,
fully object-oriented database which we believe will enhance our ability to add
new product features and significantly increase the speed of our software
development efforts. Versant eliminates the necessity of writing "translation"
software, which in turn removes a significant amount of work from our
development cycle.
We believe that Netbook Version 2 provides cyberoad.com with significant
competitive advantages over our competitors primarily in the following areas:
LICENSEE BENEFITS
- Scalability. A scalable system is one that continues to work
efficiently during periods of high traffic. Netbook Version 2 has
been designed to enable sportsbooks to service a minimum of 10,000
players placing bets and accessing the odds lines simultaneously,
without any detectable change in delivery speed. Also, Notebook
Version 2 has been developed to allow the addition of more server
hardware (clustering), rather than incurring additional cost by
replacing old servers through upgrades to new, faster systems.
- Sportsbook Management Features. This software package is used by the
odds or line managers, which can make or break the profit margin for
each licensee. This exposure management system allows for a clear
display of payout and hold exposure on each event the sportsbook has
listed. Also, the Netbook Version 2 software package has flexible
game setup where you can define custom event types and line types,
complete auditing, flexible min/max wager enforcement, easily
adjusted payout rules, full odds import capabilities, and ability to
use and display all odd formats.
- Flexibility - It is critical to have a platform that allows the
addition of new products and features very quickly. Maximum
flexibility is a critical component of Netbook Version 2, which
allows us to add or change new betting and gaming features easily and
with minimal disruption to the licensee's service.
PLAYER BENEFITS
- Betting Cart. Our new "Bet Cart" uses a shopping cart-style interface
to provide greater flexibility in placing bets. Players are able to
select games from various sports they want to bet on and place them
in their shopping cart, or Bet Cart. From the Bet Cart, the player
can select what games to play as single bets, and what games to play
as parlays or teasers. Once the games are in the Bet Cart, the player
never need return to the odds page.
- Open Bets - With Open Bets, the player can review a list of open bets
placed, eliminating the risk of placing the same bet twice. All open
bets will remain in the list until either the complete wager has won,
or one segment of the wager has been graded as a loss. Open Bets
allows an easy and convenient means for players to view their wagers
on various bets they have placed which have not been completed.
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- New Bets - Several new bet types have been added in Netbook Version
2, including cross-sport parlays, cross-sport teasers, and buy points
within a parlay.
- New Sports - Our list of available sports continues to grow: major
league baseball; NFL and NCAA football; NBA and NCAA basketball; NHL
hockey; international soccer from leagues in England, Italy, Germany,
Spain and more; PGA and international golf; auto racing (NASCAR and
Formula One); pro tennis; and professional boxing.
- Seamless Gaming Experience - Netbook Version 2 is a "scalable" system
that can accommodate up to 10,000 user requests simultaneously, as
compared to the current industry standard which appears to
accommodate approximately 300 user requests simultaneously.
Accordingly, it is less likely that a player will experience delays
in their gaming experience with Netbook Version 2.
- Accessibility - Players can access their accounts and place wagers
from any computer (PC or Mac) on any browser system from any location
(home, office, local web-cafe) without having to download any
software system. The use of a browser-based, no download system is
extremely valuable in that it eliminates most technological barriers
to participation and permits the maximum potential use by players.
LIVE LINES/LIVE ODDS
Live Lines is a proprietary software system using XML and XSL source
code that allows "real time" lines on all major sporting events to be
dynamically linked to any web site. Supplied by cyberoad.com licensee The Big
Book, Live Lines adds valuable content to sports and gaming related web sites.
Moreover, Live Lines is intended to increase revenue for these web sites by
adding more pages that banner ads can be sold.
CYBEROAD.COM PORTAL
A portal is a website that gathers resources in one location, and is
designed to be the first page that loads into the web user's browser. Vertical
portals are thematic portals that provide targeted, customizable content, and an
e-commerce transaction system. cyberoad.com intends to become a
sports-and-entertainment vertical portal, further differentiating itself from
other gaming software vendors. This strategy is designed to provide cyberoad.com
with two streams of revenue:
- increased revenues from its gaming license agreements;
- advertising and co-branding revenues from portal website traffic
volume.
Also, as part of the portal, cyberoad.com expects to offer sports
information, free play sportsbook and casino contests, bulletin boards and a
stock information channel. We believe that the free play sportsbook and casino
contests are a key element of our strategy. A free play website has all
functional components of the "live" revenue generating website. Therefore, we
intend to have a signup function, an accounting function and an interactive
betting display function built into the system. Offering both a free play
sportsbook and a free play casino provides cyberoad.com with two advantages:
- true test environment for introducing game software and new graphic
user interface, or GUI, developments;
- the ability to develop a database of potential clients for its
revenue-generating websites.
ECOMM RELATIONSHIP TECHNOLOGIES (IOM) LIMITED
Ecomm Relationship Technologies (IOM) Limited owns an Internet
stored-value system, that provides Internet-based, micro-payment financial
services for our licensees (currently, The Big Book & Casino, Grand Prix
Sportsbook & Casino, and Mayan Sportsbook) and Ecomm Relationship Technologies
(IOM) Limited account holders, through its transaction clearinghouse services
with acquiring and issuing banks. Consumers are able to open a secure Ecomm
Relationship Technologies (IOM) Limited account, purchase eCash, then purchase
goods and services from any Ecomm Relationship Technologies (IOM) Limited
merchant. To date, Ecomm Relationship Technologies (IOM) Limited merchants
consist of our three licensees. Consumers can purchase eCash with major credit
cards, an online debit card system, Western Union, bank wire, money orders or
personal cheques. Ecomm Relationship Technologies (IOM) Limited maintains
accounts for all its account holders, and acts as a third party service
provider. The eCash system also provides certain fraud management services,
complete accounting and transaction documentation, and customer service.
CASINOS
cyberoad.com licenses the software code that resides on the application
and database servers of its casino system from third parties, and integrates
these systems into the eCash framework. Integrating the casino system
into the
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eCash framework allows for transaction processing for our two casino licensees.
As with cyberoad.com's other products, players are not required to download any
software in order to play. The only requirement is a browser that supports Java.
cyberoad.com's casino software system allows players to play their favorite
casino games - blackjack, poker, slots, roulette, and craps - for real money,
from virtually any computer on any Internet browser system.
cyberoad.com's browser-based system offers a competitive advantage over
most other competitive virtual casino systems, whose products require the player
to use software that can take up to 50 minutes to download. Browser-based
products generally are easier to use and attract web users who refuse to
download software over the Internet. To date, a substantial majority of casino
systems operate with downloadable products. With cyberoad.com's browser-based
system, casino games load quickly (less than one minute on a 56 KBps dialup
link) and the graphics and sound are comparable to many download-based systems.
Licensees can adjust game configurations in a variety of ways using the
Java-based casino management system, allowing the licensee to set its hold
(revenue) percentages in line with the industry standards of Las Vegas and
Atlantic City.
To date, cyberoad.com has two casino licensees: The Big Casino and Grand
Prix Casino. Each system operates with five games: blackjack, roulette, poker,
slots and craps. cyberoad.com expects to upgrade its casino systems by the end
of the third quarter of fiscal 2000 by adding more reporting capabilities, which
will help licensees market the system more effectively because of greater access
to its client's data. In the future, cyberoad.com also intends to add new casino
games, including but not limited to video poker, Pai Gow, Caribbean Stud poker,
and Progressive Slots.
OUR LICENSEES
To date, Cyberoad.com (Isle of Man) Ltd. has three licensees of its
turnkey software: The Big Book & Casino, Grand Prix Sportsbook & Casino, and
Mayan Sportsbook. The Big Book & Casino and Grand Prix Sportsbook are both owned
and operated by Asanol Management Corporation. Mayan Sportsbook is owned and
operated by Internet Wagering Systems Ltd. Cyberoad.com (Isle of Man) Ltd. has
license agreements and revenue sharing agreements with each of its licensees,
whereby Cyberoad.com (Isle of Man) Ltd. receives flat fees for systems use and
software licenses, as well as a percentage of the gross gaming revenue generated
by the licensees' web site. Our license with Internet Wagering Systems Ltd.
provides that we will receive 20% of the gross gaming revenue attributable to
the Internet and 10% of the gross gaming revenue attributable to the call
center. Our two licenses with Asanol Management Corporation each provide that we
will receive 50% of the gross gaming revenue attributable to the operations of
the Sportsbook and to each of the call center and the casino gaming.
SALES AND MARKETING
cyberoad.com's sales and marketing is provided through a contract with
Kazootek.com Technologies, Inc., a company organized under the laws of British
Columbia, Canada. As of December 31, 1999, the sales and marketing team provided
by Kazootek consisted of 17 web marketing professionals. cyberoad.com realizes
the need to fully utilize the power of the Internet, and has developed
proprietary software packages for marketing its products on the web.
Through its contractual agreements with its licensee's, cyberoad.com
provides marketing research, marketing plans, promotions, budgets and timelines,
project management, licensee specific branding, associative branding as part of
cyberoad.com, concept development, copy writing, graphic design, electronic art
production, illustration, website development, media services, and public
relations and corporate communications.
Internet marketing strategies include the cyberoad.com proprietary Live
Lines program, referral program (where users can earn bonus money for referring
friends to cyberoad.com licensee web sites and receive further bonuses for the
amount of wagering activity these referrals generate), Links (using links to
direct people to cyberoad.com licensee web sites), Banner (use of banners to
direct people to cyberoad.com licensee web sites), Direct email (use of email to
direct people to sign up with cyberoad.com licensees), Custom Content Programs
(provide custom content for various websites that help drive traffic back to
cyberoad.com licensee web sites), and search engine optimization program
(targeting specific search engines and using various tactics from meta tags and
naming conventions to increase the placement order). Traditional methods include
placing advertisements in magazines, newspapers, the radio, and TV.
cyberoad.com's gaming strategy includes expanding this platform into
international markets by building server POPs and service centers in strategic
locations. cyberoad.com also intends to deliver multi-language products,
marketing these internationally both on the Internet and through traditional
methods.
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RESEARCH AND DEVELOPMENT
We currently are developing a pari-mutuel system which we expect to be
launched in early 2001. A pari-mutuel system varies from traditional sportsbook
or casinos in that the monies are won from a "pool" of money, which contains
fixed percentages designating which persons win what amounts. Traditional
sportsbooks and casinos both have exposure, in that each could lose money to
those who are wagering. Companies running pari-mutuel systems do not have this
exposure in that these companies take a percentage of the monies wagered on an
event, with the remaining sum divided among the winners of that event. The new
pari-mutuel wagering system includes real-time wagering for horseracing.
Horseraces are ongoing every day of the year throughout the United States,
Canada, Europe and the rest of the world. By virtue of the Internet, the entire
global market can be opened to the individual racetracks.
cyberoad.com is involved in additional research and development programs
relating to sports pools and fantasy league betting systems which are all
pari-mutuel based systems. We do not yet have a projected release date for these
new programs.
We did not incur any research and development costs for the fiscal years
ended December 31, 1997 and 1998. For the fiscal year ended September 30, 1999,
we incurred a total of $168,597 in research and development costs.
OUR COMPETITION
INTERNET SPORTSBOOK PRODUCT
cyberoad.com conducted an extensive study of the global gaming industry,
focusing on companies that offer Internet-based sportsbook software systems. Of
all the sportsbook software developers, the industry leaders appear to
differentiate themselves with three core attributes:
- proprietary transaction software
- browser-based system
- distributed network architecture
Approximately 12 sportsbook software developers have implemented all three
of these core attributes. These developers can be divided further into two
groups:
- vendors (sell proprietary software systems)
- owner/operators (single user of its proprietary software system)
The companies classified as owner/operators include: Intertops Antigua,
International Gaming & Entertainment Ltd.; William Hill International; Coral
Technologies Inc.; Victor Chandler International; Interwetten Wein; TAB (run by
the government of New Zealand); and Total Bet, (which is owned by Sporting Life
Publications in Britain), each having developed sportsbook software systems for
their own use. The remaining five sportsbook software developers are examined in
the Direct Competition Matrix below.
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DIRECT COMPETITION MATRIX
<TABLE>
<CAPTION>
COMPANY VENDOR OPERATOR FREE PORTAL PUBLIC LISTING EXAMPLE WEBSITE
PLAY
SITE
<S> <C> <C> <C> <C> <C> <C>
cyberoad.com Corporation Y Y Y OTC:FUNN* www.thebigbook.com
Starnet Communications
International Inc. Y Y OTC BB:SNMM www.playersonly.com
Global Intertainment Group Y OTC BB:GGNC www.cyberbetz.com
VIP Sports Y Y www.vipsports.com
Total Entertainment Inc. Y OTCBB:TTLN www.theonlinecasino.com
</TABLE>
- ----------
* Our shares were removed from the OTC:BB effective January 19, 2000 for failure
timely to comply with the Eligibility Rule. Currently we trade on the pink
sheets. Immediately following the effectiveness of this Registration Statement,
we expect to apply for listing on the OTC:BB.
OUR COMPETITIVE ADVANTAGE
Free Play Websites:
A free play website is defined as having all functional components of
the "live" revenue generating website. Therefore, there must be a signup
function, an accounting function and an interactive betting display function
built into the system. A few sportsbook websites claim to have a free play
website, but actually only offer a single bet scenario with no membership
database building nor accounting system.
Having both a free play sportsbook and a free play casino (currently not
operational due to our implementation of an upgrade to the WiseGuy contest
scheduled to be completed March 1, 2000), hosted on the cyberoad.com sports
portal (www.cyberoad.com) by clicking on the WiseGuy contest icon, provides us
with two advantages:
- true test environment for introducing new software and graphic user
interface, or GUI, applications
- strong marketing system, whereby it develops a database of potential
clients for its revenue-generating websites
Portal:
A portal is a website that gathers resources in one location, and is
designed to be the first page that loads into the web user's browser. Vertical
portals are thematic portals that provide targeted, customizable content, and an
e-commerce transaction system. cyberoad.com intends to become a
sports-and-entertainment vertical portal, further differentiating itself from
other gaming software vendors. This strategy provides cyberoad.com with two
streams of revenue:
- increased revenues from its gaming license agreements;
- advertising and co-branding revenues from portal website traffic
volume.
Collecting email addresses and developing demographic profiling of
sports enthusiasts is one key strategy. cyberoad.com intends to use this
demographic information to implement multi-segmented email programs designed to
convert portal users into gaming website clients. Further, cyberoad.com expects
to benefit from its cross-over branding support strategy.
INTERNET CASINO PRODUCT
The Internet casino product development sector has far outstripped the
development of sportsbook systems. The key reason for this is that barriers to
entry into Internet casino system development are lower than sportsbook
development. Much like Internet sportsbooks, Internet casinos require game
system software, and an accounting system (e-commerce). But while Internet
casinos require nominal management and support staff, Internet sportsbook
systems are relatively complex to manage. Additional costs result from ongoing
management of day-to-day activities (line entry, line management, event grading,
and customer support) and infrastructure (call center and customer support
center).
Two of the primary casino system developers and vendors are Cryptologic
and Boss Media, yet to date neither have a commercially available Internet
sportsbook product. cyberoad.com, in maintaining a full complement of gaming
products, has licensed two casino websites (The Big Casino and Grand Prix
Casino), both of which are browser-based systems. The cyberoad.com
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casino system components are licensed from third parties and integrated into the
eCash framework for its licensees. Having a browser-based system is a
competitive advantage for cyberoad.com over systems such as Cryptologic, which
offers a download product. With a browser-based product, cyberoad.com provides a
feature that attracts many web users who are reluctant to download software over
the Internet. To date, most casino systems operate with a downloadable product.
INTELLECTUAL PROPERTY
cyberoad.com regards its copyrights, service marks, trademarks, trade
dress, trade secrets, proprietary technology and similar intellectual property
as critical to its success, and relies on trademark and copyright law, trade
secret protection and confidentiality and/or license agreements with its
employees, customers, independent contractors, partners and others to protect
its proprietary rights. cyberoad.com strategically pursues the registration of
its trademarks and service marks in the United States, and has applied for
registration in the United States for certain of its trademarks and service
marks, including "CYBEROAD". cyberoad.com also applied for Community Trade Mark
applications in Europe for certain of its trademarks and service marks.
Effective trademark, service mark, copyright and trade secret protection may not
be available in every country in which cyberoad.com's products and services are
made available.
cyberoad.com filed a trademark/service mark application for the mark
"CYBEROAD" on June 4, 1999.
cyberoad.com filed a trademark/service mark application for the mark
"eBanx" and design on June 4, 1999.
cyberoad.com mailed a trademark/service mark application to the United
States Patent and Trademark Office, instructed for filing of the mark
"LIVE LINES" on January 19, 2000.
cyberoad.com mailed a trademark/service mark application to the United
States Patent and Trademark Office, instructed for filing of the mark
"LIVE ODDS" on January 19, 2000.
cyberoad.com mailed a trademark/service mark application to the United
States Patent and Trademark Office, instructed for filing of the logo
"Walking Man" on January 19, 2000.
cyberoad.com filed a Community Trade Mark Application for the mark
EBANX.COM on May 7, 1999.
On January 31, 2000, cyberoad.com was assigned the rights to the
Community Trade Marks CYBEROAD and CYBEROAD.COM. Applications for both
of these marks were filed on May 7, 1999.
REGULATORY FRAMEWORK
As a supplier of software programs that are used on Internet gaming Web
sites, the regulatory framework that will most likely affect our business is the
framework designed to regulate Internet gaming.
Many countries currently are struggling with regulatory issues
surrounding wagering and gambling over the Internet. More specifically, they are
considering the merits, limitations and enforceability of prohibition,
regulation or taxation of wagering and gambling transactions over the Internet.
There is uncertainty regarding exactly which government has jurisdiction or
authority to regulate or legislate with respect to the Internet gaming industry.
Several Caribbean countries, Australia, and certain Native American territories
have taken the position that Internet gaming is legal and have adopted (or are
in the process of reviewing) legislation to regulate Internet gaming within
their jurisdictions.
A recently published industry report by Bear Stearns states that if a
government has made the determination that Internet gaming is illegal, then the
government may target six major groups in an effort to enforce its laws: (1) the
operators of the Internet gambling sites, (2) Internet Service Providers, (3)
index providers (for example, a search engine that allows a Web user to find
Internet sites whose descriptions match a word or phrase), (4) sites that accept
gambling advertising, (5) financial transaction providers, and (6) the home
users. The Bear Stearns report did not identify software suppliers as one of
these groups; however, if a software supplier's role be such that it could be
classified as a member of one of these six groups, the software supplier could
face potential enforcement actions.
On August 20, 1999, investigators from the British Columbia Coordinated
Law Enforcement Unit executed search warrants at the offices of Starnet
Communications International, Inc. and the homes of six of Starnet's officers
and directors. According to documents filed by the Coordinated Law Enforcement
Unit, Starnet is being investigated for, among other things, illegal betting and
bookmaking and making agreements for the purchase and sale of betting and gaming
privileges. We believe the investigation was the result of Starnet's casino
management and administration of third party gaming
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operations and the operation of their own gaming web site. As of November 30,
1999, we believe the investigations are still pending based on publicly
available information.
In the United States, the ownership and operation of land-based gaming
facilities has traditionally been regulated on a state by state basis. According
to the Bear Stearns report, the federal government's role in regulating gambling
appears to be changing. Increased federal interest may not result in new
regulations for traditional forms of gambling that are easily subject to the
police power of the individual states, but may result in a redefined role for
the federal government in dealing with Internet gaming. The U.S. Department of
Justice currently maintains that, technically, there are no specific U.S.
federal provisions against the placing of bets over the Internet. However, the
Justice Department also maintains that it is illegal to operate Internet gaming
Web sites and servers from within the United States. In light of this, many
Internet gaming sites are licensed and house servers located outside the United
States. According to the Justice Department, it is illegal for any Internet
gambling operation outside the U.S. to accept bets from U.S. citizens.
The United States Federal Wire Act contains provisions that make it a
crime for anyone engaged in the business of betting or wagering to knowingly use
a telephone line to transmit bets or wagers or information assisting in the
placing of bets or wagers on any sporting event, unless the wagering is legal in
the jurisdictions from which, and into which, the transmission is made. There
are other federal laws impacting gaming activities, including the Wagering
Paraphernalia Act, the Travel Act and the Organized Crime Control Act. However,
it remains unresolved whether these other laws apply to gaming conducted over
the Internet.
On November 19, 1999, the United States Congress passed the Kyl Bill,
which would prohibit or limit wagering activities in the United States. The
House of Representatives is also considering its own version of Internet
gambling legislation, which was not brought to the floor for debate before the
end of the 1999 session. The House bill must be approved and reconciled with the
Kyl Bill, and then signed by the President of the United States in order for the
bill to become law. Under the current proposal, the Kyl Bill would prohibit
Internet gaming in the United States and would likely be enforced by law
enforcement identifying Web sites that provide illegal gambling in the United
States. Should the Kyl Bill be passed in its present form, it would eliminate
most arguments that Internet gambling is legal in the United States, and in
order to avoid violation, would force owner/operators to provide a mechanism
whereby Internet gaming Web sites were inaccessible to citizens of the United
States.
OUR EMPLOYEES
As of December 31, 1999, cyberoad.com had two full-time employees. In
addition, at that date the services of 73 additional personnel were provided to
cyberoad.com pursuant to its Services Agreement with Kazootek.com.
OUR PROPERTIES
Our principal corporate offices, consisting of approximately 2,176
square feet, are located in San Jose, Costa Rica. The lease for this facility is
month to month. The current monthly rental under this lease is $3,362.
LEGAL PROCEEDINGS
We are not currently involved in any material litigation.
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<PAGE> 29
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
cyberoad.com's directors and executive officers, and their ages as of
December 31, 1999, are as follows:
<TABLE>
<CAPTION>
NAME AGE POSITION(S)
<S> <C> <C>
John Coffey 38 Director, President
Brent Corobotiuc 30 Director
Stig Lyren 44 Chief Financial Officer
Paul Mari 48 Chief Operating Officer
Krista Wilson 32 Secretary
</TABLE>
TERMS OF DIRECTORS
Messrs. Coffey and Corobotiuc each has served as a director of
cyberoad.com since April 1, 1999 and December 31, 1999, respectively. The
directors of cyberoad.com serve as such until the next annual meeting of
stockholders and until their successors are elected and qualified.
BUSINESS EXPERIENCE OF DIRECTORS AND EXECUTIVE OFFICERS
John Coffey has served as the President and a Director of cyberoad.com
since April 1999. John has a background in International Consulting, holding a
MSc in International Political Economy from the London School of Economics, a
MBA from Universite Laval, and a Bachelor of Mathematics degree from the
University of Waterloo. He is fluent in English, French, Japanese and Spanish.
John served as an Investment Consultant to Calvex International, Inc. in Ho Chi
Minh City, Vietnam from 1994 to 1995. John worked as Project Consultant to PTK
Consortium, Kuala Lumpur, Malaysia from 1995 to 1997. John has served as General
Manager of Sistemas de Informacion Technologica, in Costa Rica from 1997 to
present. John has been living in Costa Rica, overseeing the day to day
operations of cyberoad.com since May 1999.
Brent Corobotiuc has served as Director of cyberoad.com and Manager,
Netbook Functionality Design since December 1999. Brent joined cyberoad.com with
several years of experience, working for Seanix Technology Inc. in Business
Development from January 1995 to April 1999, combining his experience in the
high-tech sector with a knowledge of sports and the gaming industry. From June
1999 to December 1999, Brent served as Operations Manager of cyberoad.com,
assisting our President, John Coffey, in the daily operations of cyberoad.com.
Stig Lyren has served as Chief Financial Officer of cyberoad.com since
February 7, 2000. In 1999, Stig served as Controller of RSL Com Canada Inc. From
1998 to 1999, Stig was Controller of Overwaitea Food Group. From 1997 to 1998,
Stig served as Manager, Revenue Accounting and Corporate Reporting for BC Rail
Ltd., and from 1993 to 1997, he served as Manager, Financial Planning and
Analysis for the same company.
Paul Mari has served as the Chief Operating Officer of cyberoad.com
since December 1999. Paul brings to cyberoad.com over 25 years of Operations
Management experience. Paul has put his experience with integrating
administrative policies and procedures to use in creating our business model and
striving to ensure execution and delivery of our business plan. From 1984 to
1998, Paul worked for Future Shop Ltd., serving for the final eight years as
Group Product Manager, Appliance Division. From 1998 to 1999, Paul served as
Vice President of Operations for NTS Computer Systems Ltd.
Krista Wilson has served as the Secretary of cyberoad.com since June
1999, and has an extensive background in Corporate Law and Securities
Administration. Prior to joining cyberoad.com, from 1991 to 1998, Krista worked
as Administration Manager and Corporate Secretary for and held Directorships in
the NASDAQ listed Optima Petroleum Corporation, now Petroquest Energy Inc., and
the TSE listed High G. Minerals Corp., a group of publicly traded oil, gas,
mining, and resource based companies. Krista currently manages the Corporate
Finance and Securities Administration Department.
SIGNIFICANT EMPLOYEES
Carl Schmidt has served as Chief Information Officer since April 28,
1999. Carl is responsible for computer programming activities. For the past 11
years, his programming experience has revolved around a variety of challenging
Internet and network programming assignments. Carl is proficient in several
computer languages, including java, C and C++, as well as various network
systems. While finishing a Bachelor of Science Degree from Simon Fraser
University, from
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<PAGE> 30
May 1995 to December 1995 and from May 1996 to August 1996, Carl served as
Systems Analyst for ISM-BC. From December 1990 to April 1997 at various points,
Carl has undertaken projects as an independent consultant, including network
support and installation. Carl was employed as the Chief Information Officer of
Calvex International from 1997 to 1999.
Eric Chan has served as the Controller of cyberoad.com since July 1999,
managing our accounting systems and forensic audit cycles. Eric earned a
Bachelor of Commerce degree from the University of Alberta, and a Bachelor of
Science degree from the University of British Columbia. Eric became a fully
qualified Chartered Accountant in 1996. From April 1993 to June 1996, Eric
worked for Delloite & Touche as staff accountant, and from June 1996 to July
1999 Eric worked for Watson Dauphinee & Masuch, managing various audit
engagements in which he gained experience in companies involved with high-tech
research and development. From July 1999 to February 7, 2000, Eric also served
as cyberoad.com's Chief Financial Officer.
Joseph Chin has served as Network Systems Manager since April 28, 1999.
Joseph is responsible for the implementation and management of cyberoad.com's
computer systems and networks. He joined cyberoad.com with over 10 years
experience in the design, implementation and management of mission-critical
enterprise information systems and networks. In addition to his education in
Computer Science at Simon Fraser University, Joseph is a Sun-certified systems
engineer and a CCNA (Cisco Certified Network Associate). From 1992 to 1996
Joseph served as Network Systems Consultant for Prodigy technologies Corporation
in Vancouver, B.C. In 1997, Joseph served as Network Systems Manager for
International Bingonet Corporation, Burnaby, B.C., and Network Systems
Consultant for Unilogik Computer Systems, Vancouver, B.C. Joseph was employed as
the Network Systems Manager of Calvex International from 1997 to 1999.
Ross Carriere has served as cyberoad.com's Marketing Manager since
cyberoad.com's inception and is responsible for the research, design and
development of our marketing and promotion plans. Ross has over 20 years of
experience in sales, marketing and corporate communications, working with both
public and privately held companies in the high-tech sector, as well as
government agencies and institutions promoting new technology. Prior to joining
cyberoad.com, Ross engaged in freelance work, providing research, design and
development of marketing and promotion plans to a broad range of clients and
projects.
SIGNIFICANT CONSULTANTS
Calvin Ayre has served as Internet Business Model and Product Consultant
since November 15, 1999. Calvin is the founder and visionary of both
cyberoad.com and Ecomm Relationship Technologies (com) Limited. Calvin's
background is in business start-ups, software development, and network and
Internet technologies. He holds a Bachelor of Science degree from the University
of Waterloo, and a Master of Business Administration with a major in management
finance from City University in Seattle. From 1990 to 1997 Calvin was the owner
and President of HQ Vancouver, a privately held Canadian business incubation
company. During that time he also served as Chief Operating Officer of Calvex
International Inc., a Canadian based technology development company that
commenced development work for cyberoad.com. From 1996 to February 1999 Calvin
was Director of Cyberoad Gaming Corporation of St. Kitts, West Indies. From
February 1999 to November 1999, Calvin was employed as Chief Executive Officer
and Chief Operating Officer of Cyberoad.com (Isle of Man) Ltd.
FAMILY RELATIONSHIPS
There are no family relationships among directors and executive
officers.
COMPENSATION OF DIRECTORS
Directors of cyberoad.com do not receive any stated salary for their
services as directors. cyberoad.com issued options to purchase 75,000 shares of
common stock to Mr. Corobotiuc at an exercise price of $1.00 per share for his
services as a director. Directors of cyberoad.com may also serve cyberoad.com
in other capacities as an officer, agent or otherwise, and may receive
compensation for their services in such other capacity.
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<PAGE> 31
EXECUTIVE COMPENSATION
The following table sets forth, as to our four most highly compensated
executive officers whose compensation exceeded $100,000 during the last fiscal
year, information concerning all compensation paid for services to cyberoad.com
in all capacities during the last three fiscal years. For a description of
employment agreements between cyberoad.com and certain executive officers, see
"Employment Agreements with Executive Officers" below.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
----------------------------- -----------------------------
SECURITIES
FISCAL YEAR STOCK UNDERLYING
NAME AND PRINCIPAL POSITION ENDED SALARY AWARD OPTIONS
- --------------------------- ----------- --------- --------- -----------
<S> <C> <C> <C> <C>
John Coffey, President 1999 $ 108,000 1,882,150 300,000
</TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
The following table sets forth specified information regarding options
granted to each of the named executive officers during the year ended December
31, 1999.
<TABLE>
<CAPTION>
PERCENT OF TOTAL
SECURITIES OPTIONS GRANTED
UNDERLYING TO EMPLOYEES
OPTIONS IN FISCAL EXERCISE OR EXPIRATION
NAME GRANTED YEAR BASE PRICE DATE
- ---- ----------- ---------------- ----------- -------------
<S> <C> <C> <C> <C>
John Coffey 300,000 17.21% $ 1.00 April 1, 2009
</TABLE>
The percentage of total options granted to employees in 1999 shown in
the table above is based on options to purchase an aggregate of 1,743,625 shares
of common stock granted during the year ended December 31, 1999.
1999 YEAR-END OPTION VALUES
The following table sets forth certain information concerning the number
and value of unexercised options held by each of the named executive officers at
December 31, 1999. The value of the in-the-money options is based on a Closing
Sales Price of $3.375 per share on December 31, 1999, and an Exercise Price of
$1.00.
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS AT
OPTIONS AT DECEMBER 31, 1999 DECEMBER 31, 1999
------------------------------- -------------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
John Coffey 99,900 200,100 $237,263 $475,238
</TABLE>
EMPLOYMENT AGREEMENTS WITH EXECUTIVE OFFICERS
Pursuant to the Services Agreement between cyberoad.com and Kazootek.com
Technologies Inc., Kazootek provides cyberoad.com with the services of several
executive officers. Please refer to "Certain Relationships and Related
Transactions" for a discussion of the Services Agreement with Kazootek.com.
Eric Chan has executed an employment agreement with Kazootek.com dated
October 12, 1999, pursuant to which Mr. Chan is employed by Kazootek.com for a
period of one year to serve as Corporate Controller to cyberoad.com, in
30
<PAGE> 32
exchange for a base salary of $62,000 Cdn. per annum and options to purchase
60,000 shares of common stock of cyberoad.com at an exercise price of
$1.00 per share.
Paul Mari has executed an employment agreement with Kazootek.com dated
December 6, 1999, pursuant to which Mr. Mari is employed by Kazootek.com for a
period of six months to serve as Chief Operating Officer to cyberoad.com, in
exchange for a base salary of $90,000 Cdn. per annum, and options to purchase
100,000 shares of common stock of cyberoad.com at an exercise price of $1.00 per
share.
Krista Wilson has executed an employment agreement with Kazootek.com
dated September 23, 1999, pursuant to which Ms. Wilson is employed by
Kazootek.com for a period of one year to serve as Manager of Corporate
Securities & Administration to cyberoad.com, in exchange for a base salary of
$55,000 Cdn. per annum and options to purchase 60,000 shares of common stock of
cyberoad.com at an exercise price of $1.00 per share.
Stig Lyren has executed an employment agreement with Kazootek.com dated
February 7, 2000, pursuant to which Mr. Lyren is employed by Kazootek.com,
commencing with a probationary period of six months, to serve as Chief Financial
Officer of cyberoad.com, in exchange for a base salary of $80,000 Cdn. per annum
and options to purchase 20,000 shares of common stock of cyberoad.com that will
be issued following the expiration of the probationary period, exercisable at
the current market price as at time of issuance.
LIMITATION OF LIABILITY AND INDEMNIFICATION MATTERS
Our Articles of Incorporation, as amended, provide that in our Bylaws,
we shall have the power to indemnify our directors and executive officers and
any of our other officers, employees and agents against any contingency or
peril, as may be determined to be in the best interests of cyberoad.com. Our
Articles of Incorporation, as amended, also empower us to purchase insurance on
behalf of any person whom we are required or permitted to indemnify. To date,
cyberoad.com has not entered into indemnification agreements with any of its
directors, executive officers, or any other officer, employee or agent. In
addition, to date, cyberoad.com has not purchased insurance policies under these
indemnification provisions.
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<PAGE> 33
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
As of December 31, 1999, cyberoad.com entered into a services agreement
with Kazootek.com Technologies Inc., a company incorporated under the laws of
British Columbia, for the purposes of Kazootek.com providing cyberoad.com
certain services including but not limited to software development and
marketing, web development, network systems administration, human resources
administration, consulting, and corporate finance and securities administration.
The Services Agreement is effective for a period of one year, unless terminated
earlier by either party upon 30 days written notice to the other party. The
Services Agreement shall be automatically renewed for successive renewal periods
of one year each, on each anniversary of the effective date. In return for the
services provided for by Kazootek.com, cyberoad.com shall pay a fee equal to all
costs plus 10% Cdn., paid annually. Paul Mari is the President of Kazootek.com
and the Chief Operating Officer of cyberoad.com. Stig Lyren is the Chief
Financial Officer of both Kazootek.com and cyberoad.com. Eric Chan is the
Controller of both Kazootek.com and cyberoad.com. Krista Wilson is the Secretary
of both Kazootek.com and cyberoad.com.
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<PAGE> 34
PRINCIPAL AND SELLING STOCKHOLDERS
The following table presents information regarding the beneficial
ownership of our common stock as of January 15, 2000 for:
- each person who is known to us to be the beneficial owner of more
than 5% percent of the outstanding common stock;
- each of our directors;
- each of the Named Executive Officers;
- each of the selling stockholders named in this prospectus; and
- all of our directors and executive officers as a group.
The address of each person listed is in care of cyberoad.com,
Corporation, Oficentro Sabana Sur, Edifico 7, 5 Piso San Jose, Costa Rica,
unless otherwise provided below the person's name.
Shares of common stock that a person has the right to acquire under
options, warrants or other arrangements within 60 days of January 15, 2000 are
deemed outstanding for purposes of computing the percentage ownership of the
person who has the right to acquire the shares but are not deemed outstanding
for computing the percentage ownership of any other person. Except as provided
under applicable community property laws or as indicated in the footnotes to the
table, each stockholder identified in the table possesses sole voting and
investment power with respect to all shares of common stock shown as
beneficially owned by that stockholder.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING THE OFFERING
--------------------------- --------------------------
NUMBER OF
NAME AND ADDRESS NUMBER PERCENT SHARES OFFERED NUMBER PERCENT
- ---------------- ----------- --------- -------------- --------- ---------
<S> <C> <C> <C> <C> <C>
Thomson Kernaghan & Co. Ltd(1) ......... 527,403 3.7% 527,403 0 *
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Peter Legault .......................... 40,000 * 40,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Westover Investments Inc. .............. 31,000 * 31,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
David L.K. Bruce ....................... 31,000 * 31,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
AASIF S.A .............................. 71,428 * 71,428 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Atlantis Capital Fund Ltd. ............. 71,428 * 71,428 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
</TABLE>
33
<PAGE> 35
<TABLE>
<S> <C> <C> <C> <C> <C>
Brian Matheson ......................... 30,000 * 30,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
CALP II LP. ............................ 142,857 1.0% 142,857 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
779271 Ontario Ltd. .................... 87,500 * 87,500 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Thesis Group Inc. ...................... 140,000 * 140,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Striker Capital Ltd. ................... 717,483 5.1% 717,483 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Benitz and Partners Ltd. ............... 52,500 * 52,500 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
Colony Investments Ltd. ................ 140,000 * 140,000 0 *
c/o Thomson Kernaghan & Co. Ltd
365 Bay Street, 10th Floor
Toronto, Ontario M5H-2V2
El Moro Trust .......................... 600,000 4.2% 600,000 0 *
Larchwood Clay Head Road
Baldrive, Isle of Man
British Isles
Dhoon Glen Trust ....................... 500,000 3.5% 500,000 0 *
International House
Victoria Road
Douglas, Isle of Man
British Isles
Beru Establishment Ltd. ................ 400,000 2.8% 400,000 0 *
Pflugstrasse 10
PO Box 1623
FL-9490
Vaduz, Liechtenstein
Dal Brynelsen .......................... 50,000 * 50,000 0 *
John Coffey(2) ......................... 2,008,150 14.2% 0 2,008,150 14.2%
Brent Corobotiuc(3) .................... 30,000 * 0 30,000 *
Paul Mari .............................. 0 * 0 0 *
Krista Wilson(4) ....................... 45,200 * 0 45,200 *
Stig Lyren ............................. 0 * 0 0 *
</TABLE>
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<PAGE> 36
<TABLE>
<S> <C> <C> <C> <C> <C>
Directors and executive officers
as a group (5 persons)(5) ............ 2,083,350 14.3% 0 2,083,350 14.3%
</TABLE>
- ----------
* Less than one percent.
(1) Includes 264,886 shares of common stock underlying stock options which are
currently exercisable and which were issued as a placement agency
commission fee.
(2) Includes 126,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable or will become exercisable
on or before March 15, 2000
(3) Includes 30,000 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable or will become exercisable
on or before March 15, 2000.
(4) Includes 25,200 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable or will become exercisable
on or before March 15, 2000.
(5) Includes 181,200 shares of common stock reserved for issuance upon exercise
of stock options which currently are exercisable or will become exercisable
on or before March 15, 2000.
PLAN OF DISTRIBUTION
In July 1999 we completed the sale of up to 1,400,000 shares of our
common stock pursuant to an offering under Regulation S of the Securities Act of
1933, as amended, to investors that are not "U.S. Persons" as defined under
Regulation S. In that offering, we also granted a compensatory option to
purchase 200,000 shares of common stock at an exercise price of $1.00 to Thomson
Kernaghan for serving as placement agent in the offering. In November 1999 we
completed the sale of 648,859 shares of common stock pursuant to an offering
under Regulation S of the Securities Act of 1933, as amended, to investors that
are not "U.S. Persons" as defined under Regulation S. In that offering, we also
granted a compensatory option to purchase 64,886 shares of common stock at an
exercise price of $3.50 to Thomson Kernaghan for serving as placement agent in
the offering and issued into escrow 850,000 shares of our common stock that may
be issued to certain of the selling stockholders pursuant to the terms of the
offering. Effective November 11, 1999, we issued 1,500,000 shares of our common
stock to three selling security holders in exchange for all of the issued and
outstanding shares of Ecomm Relationship Technologies (IOM) Limited. In November
1999 we issued 50,000 shares of our common stock to a selling security holder as
compensation for services rendered.
Our gross proceeds from the offer and sale of our common stock in the
offering completed in July 1999 was $2,002,000 and our net proceeds were
approximately $1,865,019. Our gross proceeds from the offer and sale of our
common stock in the offering completed in November 1999 was $2,271,007 and our
net proceeds were approximately $2,030,996.
The Selling Security Holders have advised us that the sale or
distribution of the common stock may be effected directly to purchasers by the
Selling Security Holders as a principal or through one or more underwriters,
brokers, dealers or agents from time to time in one or more transactions (which
may involve crosses or block transactions) (i) in the over-the-counter market,
(ii) in transactions otherwise than in the over-the-counter market, or (iii)
through the writing of options (whether such options are listed on an options
exchange or otherwise) on, or settlement of short sales of, the Common Stock.
Any of such transactions may be effected at market prices prevailing at the time
of sale, at prices related to such prevailing market prices, at varying prices
determined at the time of sale or at negotiated or fixed prices, in each case as
determined by the Selling Security Holders or by agreements between the Selling
Security Holders and underwriters, brokers, dealers or agents or purchasers. If
the Selling Security Holders effect such transactions by selling common stock to
or through underwriters, brokers, dealers or agents, such underwriters, brokers,
dealers or agents may receive compensation in the form of discounts, concessions
or commissions from the Selling Security Holders or commissions from purchasers
of common stock for whom they may act as agent (which discounts, concessions or
commissions as to particular underwriters, brokers, dealers or agents may be in
excess of those customary in the types of transactions involved). The Selling
Security Holders and any brokers, dealers or agents that participate in the
distribution of the common stock may be deemed to be underwriters, and any
profit on the sale of common stock by them and any discounts, concessions or
commissions received by any such underwriters, brokers, dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
Because each of the Selling Security Holders may be deemed to be an
"underwriter" within the meaning of Section 2(11) of the Securities Act, the
Selling Security Holders will be subject to prospectus delivery requirements
under the Securities Act. Furthermore, in the event of a "distribution" of their
shares, the Selling Security Holders, any selling broker or dealer and any
"affiliated purchasers" may be subject to Regulation M under the Exchange Act
until its participation in the distribution is completed.
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<PAGE> 37
To comply with the securities laws of certain jurisdictions, if
applicable, the shares of common stock will be offered or sold in such
jurisdictions only through registered or licensed brokers or dealers. In
addition, in certain jurisdictions the shares of common stock may not be offered
or sold unless they have been registered or qualified for sale in such
jurisdictions or an exemption from registration or qualification is available
and is complied with. Upon request of certain Selling Security Holders, we will
make all applicable filings under state securities or blue sky laws.
The Selling Security Holders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of any of the shares of common stock by
the Selling Security Holders. The foregoing may affect the marketability of the
shares of common stock.
We will pay all expenses of the registration of the shares, including,
without limitation, SEC filing fees and expenses of compliance with state
securities or "blue sky" laws; provided, however, that the Selling Security
Holders will pay all underwriting discounts and selling commissions, if any.
DESCRIPTION OF CAPITAL STOCK
We are authorized to issue a total of 500,000,000 shares of common
stock, par value $0.00001 per share. As of December 31, 1999, 14,159,009 shares
of our common stock were issued and outstanding.
VOTING RIGHTS; DIVIDENDS; PREEMPTION; REDEMPTION; CONVERSION; LIQUIDATION
The holders of common stock (i) are entitled to one vote per outstanding
share on all matters requiring shareholder action, (ii) have no preemptive or
other rights and there are no redemption, sinking fund or conversion privileges
applicable thereto and (iii) are entitled to receive dividends as and when
declared by the board of directors out of funds legally available therefore.
Upon liquidation, dissolution or winding up of cyberoad.com, the holders of
common stock are entitled to share ratably in all assets remaining after payment
of liabilities.
COMPENSATION OPTIONS
Thomson Kernaghan & Co. Limited is the registered holder of options to
purchase 200,000 shares of common stock of cyberoad.com at an exercise price of
$1.00 per share. These options are exercisable at any time and from time to time
until June 30, 2001. Thomson Kernaghan & Co. Limited is the registered holder of
options to purchase 64,886 shares of common stock at an exercise price of $3.50
per share of cyberoad.com at any time and from time to time until November 11,
2001.
TRANSFER AGENT
cyberoad.com's transfer agent is Interwest Transfer Co., Inc.. The
transfer agent's mailing address is 1981 East 4800 South, Suite 100, Salt Lake
City, UT 84117.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Our Articles of Incorporation, as amended, provide that in our Bylaws,
we shall have the power to indemnify our directors and executive officers and
any of our other officers, employees and agents against any contingency or
peril, as may be determined to be in the best interests of cyberoad.com. Our
Articles of Incorporation, as amended, also empower us to purchase insurance on
behalf of any person whom we are required or permitted to indemnify.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers or persons controlling us pursuant
to the foregoing provisions, we have been informed that in the opinion of the
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable.
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<PAGE> 38
LEGAL MATTERS
The validity of the common stock subject to this offering will be passed
upon for us by Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles,
California, counsel to cyberoad.com Corporation.
EXPERTS
The financial statements of Cyberoad Gaming Corporation for the nine
months ended April 30, 1999 and for the fiscal year ended July 31, 1998, and the
financial statements of cyberoad.com for the nine months ended September 30,
1999 included in this prospectus have been so included in reliance on the report
of Pannell, Kerr, Forster, independent accountants, given on their authority as
experts in auditing and accounting.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the Securities and Exchange Commission in Washington,
D.C., a registration statement under the Securities Act covering the shares to
be sold using this prospectus. This prospectus does not contain all of the
information included in the registration statement and the exhibits to the
registration statement. Statements contained in this prospectus as to the
contents of any contract or any other document referred to are not necessarily
complete, and with respect to any contract or other document filed as an exhibit
to the registration statement, reference is made to the exhibit for a more
complete description of the matter involved. For further information about us
and the shares offered using this prospectus, please refer to the registration
statement and the exhibits to the registration statement. A copy of the
registration statement, including the exhibits, may be inspected without charge
at the Securities and Exchange Commission's principal office in Washington,
D.C., and copies of all or any part of the Registration Statement may be
obtained from the Public Reference Section of the Securities and Exchange
Commission at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, upon
payment of prescribed rates.
37
<PAGE> 39
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
CONSOLIDATED FINANCIAL STATEMENTS OF CYBEROAD.COM CORPORATION PAGE
<S> <C>
Report of Independent Chartered Accountants..........................................
Consolidated Balance Sheets as at September 30, 1999 and December 31, 1998...........
Consolidated Statements of Operations for the Nine Months Ended September 30, 1999
and for Year Ended December 31, 1998.................................................
Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 1999...
Notes to the Consolidated Financial Statements for the Nine Months Ended September
30, 1999.............................................................................
CONSOLIDATED FINANCIAL STATEMENTS OF CYBEROAD GAMING CORPORATION
Report of Independent Chartered Accountants..........................................
Consolidated Balance Sheets for the Periods Ended April 30, 1999, July 31, 1998,
and July 31, 1997....................................................................
Consolidated Statements of Operations for the Nine Months Ended April 30, 1999 and
Years Ended July 31, 1998 and July 31, 1997..........................................
Consolidated Statements of Stockholders' Equity (Deficit) for the Nine Months
Ended April 30, 1999 and Years Ended July 31, 1998 and July 31, 1997.................
Consolidated Statements of Cash Flows for the Nine Months Ended April 30, 1999 and
Years Ended July 31, 1998 and July 31, 1997..........................................
Notes to the Consolidated Financial Statements for the Nine Months Ended April 30,
1999 and Years Ended July 31, 1998 and July 31, 1997.................................
</TABLE>
38
<PAGE> 40
PANNELL KERR FORSTER
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF CYBEROAD.COM CORPORATION
We have audited the accompanying consolidated balance sheets of Cyberoad.com
Corporation as at September 30, 1999 and December 31, 1998 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the nine months ended September 30, 1999 and the year ended December
31, 1998. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as at September 30, 1999 and December 31, 1998 and the results of its
operations and its cash flows for each of the periods referred to above in
conformity with generally accepted accounting principles in the United States.
/s/ PANNELL KERR FORSTER
- --------------------------------
Pannell Kerr Forster
Chartered Accountants
Vancouver, Canada
December 22, 1999
[PANNELL KERR FORSTER LOGO]
<PAGE> 41
CYBEROAD.COM CORPORATION
CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1999 AND DECEMBER 31, 1998
(U.S. DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
ASSETS
CURRENT
Cash and term deposits $1,031,705 $ 0
Restricted cash (note 3) 1,502,494 0
Accounts receivable 238,118 0
Due from related parties (note 8) 26,355 0
Prepaid expenses 279,350 0
Stock subscriptions receivable (note 3) 28,508 0
---------- ----------
TOTAL CURRENT ASSETS 3,106,530 0
DEPOSITS (note 4) 389,723 0
PROPERTY AND EQUIPMENT (note 5) 1,017,219 0
OTHER (note 6) 245,042 0
---------- ----------
$4,758,514 $ 0
========== ==========
LIABILITIES
CURRENT
Accounts payable and accrued liabilities (note 7) $ 39,544 $ 1,834
Customer deposits 671,513 0
Due to related parties (note 8) 211,080 0
Current portion of capital lease obligations (note 9) 53,782 0
---------- ----------
TOTAL CURRENT LIABILITIES 975,919 1,834
DEPOSITS FROM MERCHANTS (note 10) 382,578 0
CAPITAL LEASE OBLIGATIONS (note 9) 153,873 0
---------- ----------
1,512,370 1,834
---------- ----------
STOCKHOLDERS' EQUITY (DEFICIT) (notes 3, 12, 13 and 14)
COMMON STOCK, $0.00001 par value; 500,000,000 shares
authorized, 13,258,509 shares issued and outstanding at
September 30, 1999 and 5,025,000 shares issued and outstanding
at December 31, 1998 132 50
ADDITIONAL PAID-IN CAPITAL 4,084,857 4,950
ACCUMULATED DEFICIT (838,845) (6,834)
---------- ----------
3,246,144 (1,834)
---------- ----------
$4,758,514 $ 0
========== ==========
</TABLE>
Commitments (note 11)
See notes to consolidated financial statements.
2
<PAGE> 42
CYBEROAD.COM CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1999 1998
------------- ------------
<S> <C> <C>
REVENUES
Data processing $ 257,617 $ 0
Transaction processing 235,798 0
Systems support and maintenance 209,410 0
Marketing 86,731 0
Other 13,468 0
------------- ------------
803,024 0
------------- ------------
DIRECT COSTS
Data processing 111,291 0
Transaction processing 134,869 0
Marketing 368,457 0
Royalties 14,196 0
------------- ------------
628,813 0
------------- ------------
GROSS MARGIN 174,211 0
------------- ------------
DEVELOPMENT EXPENSES
Equipment 15,193 0
Salaries 131,352 0
Other 22,052 0
------------- ------------
168,597 0
------------- ------------
OPERATING EXPENSES
Wages and employee benefits 229,636 0
Consulting and management fees (note 8) 206,642 0
Professional fees 68,293 0
Equipment rental and maintenance 57,920 0
Rent 55,763 0
Office and miscellaneous 35,109 1,834
Stock options benefits (note 12) 33,867 0
Advertising and promotion 33,639 0
Travel 25,484 0
Professional development 19,252 0
Telecommunications 16,881 0
Automobile 5,751 0
Bank charges and interest 4,447 0
Amortization and depreciation 44,941 0
------------- ------------
837,625 1,834
------------- ------------
NET LOSS $ (832,011) $ (1,834)
============= ============
NET LOSS PER SHARE -- BASIC AND DILUTED $ (0.10) $ (0.00)
============= ============
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 8,437,953 5,025,000
============= ============
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 43
CYBEROAD.COM CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
<TABLE>
<CAPTION>
ADDITIONAL TOTAL
COMMON STOCK PAID-IN ACCUMULATED STOCKHOLDERS'
NUMBER AMOUNT CAPITAL DEFICIT EQUITY (DEFICIT)
---------- ------ ---------- ----------- ----------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 5,025,000 $ 50 $ 4,950 $ (5,000) $ 0
Net loss for year 0 0 0 (1,834) (1,834)
---------- ----- ---------- ---------- -----------
Balance, December 31, 1998 5,025,000 50 4,950 (6,834) (1,834)
Cancellation of common stock (3,975,000) (40) 40 0 0
Issuance of common stock
For cash 1,400,000 14 2,001,986 0 2,002,000
For acquisition of a subsidiary* 8,659,650 87 0 0 87
Share issue cost 0 0 (136,967) 0 (136,967)
Stock subscriptions
For cash (note 3)** 648,859 6 2,271,001 0 2,271,007
For acquisition of a subsidiary*** 1,500,000 15 149,985 0 150,000
Share issue costs 0 0 (240,005) 0 (240,005)
Stock options benefits (note 12) 0 0 33,867) 0 33,867
Net loss for nine months 0 0 0 (832,011) (832,011)
---------- ----- ---------- ---------- -----------
Balance, September 30, 1999 13,258,509 $ 132 $4,084,857 $ (838,845) $ 3,246,144
========== ===== ========== ========== ===========
</TABLE>
* Cyberoad.com (Isle of Man) Ltd.
** During the period ended September 30, 1999, the Company agreed to issue up
to 1,000,000 shares of the Company at $3.50 per share. Net proceeds of
$28,508 not received to September 30, 1999 have been received subsequently.
*** During the period ended September 30, 1999, the Company agreed to issue
1,500,000 shares at $0.10 per share to acquire all of the shares of
eBanx.com (Isle of Man) Limited, a wholly owned subsidiary.
See notes to consolidated financial statements.
4
<PAGE> 44
CYBEROAD.COM CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
SEPTEMBER 30, DECEMBER 31,
1999 1998
- --------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $ (832,011) $ (1,834)
Adjustments to reconcile net loss to net cash
used by operating activities
Amortization and depreciation 44,941 0
Stock options benefits 33,867 0
Changes in operating assets and liabilities
Accounts receivable (264,473) 0
Prepaid expenses (279,350) 0
Deposits (389,723) 0
Other assets (103,296) 0
Accounts payable and accrued liabilities 37,710 1,834
Customer deposits 671,513 0
Deposits from merchants 382,578 0
- --------------------------------------------------------------------------------------------------------
NET CASH USED BY OPERATING ACTIVITIES (698,244) 0
- --------------------------------------------------------------------------------------------------------
NET CASH USED BY INVESTING ACTIVITY
Acquisition of property and equipment (812,822) 0
- --------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Issuance of common stock 4,244,499 0
Restricted cash held subject to escrowed closing (1,502,494) 0
Share issue costs (376,972) 0
Advances from and expenses paid
by related parties 211,080 0
Capital lease obligations (33,342) 0
- --------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,542,771 0
- --------------------------------------------------------------------------------------------------------
INCREASE IN CASH 1,031,705 0
CASH, BEGINNING OF PERIOD 0 0
- --------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 1,031,705 $ 0
========================================================================================================
SUPPLEMENTAL INFORMATION
Income taxes paid $ 0 $ 0
Interest paid 4,447 0
Non-cash investing activity
Equipment leasing 240,997 0
Shares used for subsidiary acquisitions 150,087 0
========================================================================================================
</TABLE>
See notes to consolidated financial statements. 5
<PAGE> 45
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
1. ORGANIZATION AND BUSINESS
Cyberoad.com Corporation ("the Company") was organized June 23, 1988 under
the laws of the State of Florida as Sunshine Equities Corp. The Company
changed its name to LAL Ventures Corp. and then to Cyberoad.com
Corporation on May 3, 1999. The Company commenced operations on May 1,
1999 when the subsidiaries acquired operating assets from a related
Company (note 2(a)).
The Company's principal business is the development of internet gaming
software, the licensing of the software to other companies and online
financial transactions processing facility through its wholly-owned
subsidiary, eBanx.com (Isle of Man) Ltd. The Company also operates an
internet data processing and call centre based in Costa Rica.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of consolidation and acquisitions
These consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, Cyberoad.com (Isle of Man)
Ltd., eBanx.com (Isle of Man) Ltd., Isle of Man Corporations, eBanx
Ltd., a Nevada Corporation and Sistemas de Informacion Technologia
("SIT"), Informacion y Technologia Canadiense ("ITC"), Costa Rica
Corporations. All significant intercompany balances and transactions
have been eliminated. Details of the acquisitions, which have been
accounted for using the purchase method, are set out below.
(i) The Company acquired all of the outstanding shares of
Cyberoad.com (Isle of Man) Ltd., for 8,659,650 shares of the
Company at a par value of $0.00001 per share. This subsidiary
had no assets or liabilities at acquisition date.
On May 1, 1999, Cyberoad.com (Isle of Man) Ltd. acquired all
the capital assets of a related company for consideration of $10.
6
<PAGE> 46
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(ii) The Company agreed to acquire all of the outstanding shares
of eBanx.com (Isle of Man) Ltd. (which has a Nevada
subsidiary, eBanx Ltd.), for 1,500,000 shares of the Company
at a price of $0.10 per share. These companies had a net
book value of $0 at agreement date resulting in goodwill of
$150,000 on consolidation.
On May 1, 1999, eBanx.com (Isle of Man) Ltd. acquired
certain assets and liabilities including the eBanx
trademark, domain name and other intellectual properties
from a related company for a consideration of $50,000.
Details of this purchase are as follows:
<TABLE>
<S> <C>
Total liabilities $ 655,445
Total assets (652,122)
Cash consideration 50,000
---------
Goodwill $ 53,323
=========
</TABLE>
(iii) On May 1, 1999, Cyberoad.com (Isle of Man) Ltd. acquired all
of the outstanding shares of SIT and ITC as well as the
license to the "CR Netbook" software from a related company
for consideration of $30,000 which is included in software
license (note 6).
(b) Financial Instruments
The Company's financial instruments consist of accounts receivable,
due from related parties, deposits, accounts payable and accrued
liabilities, customer deposits, due to related parties, deposits from
merchants and capital lease obligations. Unless otherwise noted, it is
management's opinion that the Company is not exposed to significant
interest, currency or credit risk arising from these financial
instruments. The fair value of these financial instruments approximate
their carrying values unless otherwise noted.
(c) Foreign operations and concentrations
The U.S. dollar is considered the functional currency for all
subsidiaries. Accordingly, the monetary assets and liabilities of
these entities have been remeasured using the current rates of
exchange and nonmonetary assets have been remeasured using the
appropriate historical rates of exchange. Gains and losses from this
translation practice have not been significant. Comprehensive loss
would be approximately the same as reported in these financial
statements which give effect to the translation of the financial
statements of these entities on the aforementioned basis.
7
<PAGE> 47
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- ------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Property and equipment and other costs
Property and equipment are carried at cost less accumulated
amortization and depreciation. Amortization and depreciation of
property and equipment are calculated at the following annual rates
(commencing when the assets are put into use):
Computer software - 50% Declining balance
Computer equipment - 30% Declining balance
Furniture, fixtures and equipment - 20% Declining balance
Leased equipment - 20% and 30% Declining balance
Leasehold improvements - 12.5% Straight-line
Goodwill - 5% Straight-line
Software license - 20% Straight-line
(e) Revenue recognition
The Company recognizes revenues from licensees and customers on an
accrual basis based on agreed terms of licenses and contracts as the
services are rendered. Allowances for non-collection of revenues are
made when collectibility becomes uncertain.
In May 1997 a Statement of Position "Software Revenue Recognition (SOP
97-2) was issued. SOP 97-2 as amended by SOP 98-9 provides revised and
expanded guidance on software revenue recognition and applies to all
entities that earn revenue from licensing, selling or otherwise
marketing computer software. SOP 97-2 is effective for transactions
entered into in fiscal years beginning after December 15, 1997. The
application of SOP 97-2 and SOP 98-9 has not had a material impact on
the Company's results of operations.
(f) Net loss per share
Net loss per share computations are based on the weighted average
number of common shares outstanding during the year. Diluted loss per
share has not been presented separately, as the outstanding stock
options and warrants are anti-dilutive for each of the periods
presented.
(g) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
8
<PAGE> 48
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- -------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Regulation risk
The Company intends to provide its services in jurisdictions that
do not prohibit gaming over the Internet. There can be no assurance
that the Company will be able to comply with future government
regulations that will affect gaming operations in a significant
number of international jurisdictions. Costa Rica has laws
prohibiting gaming offered to residents to Costa Rica. As a result,
the Company's Costa Rica based operations only offer to subscribers
outside of Costa Rica.
3. RESTRICTED CASH AND STOCK SUBSCRIPTIONS
Restricted cash of $1,502,494 represents funds for stock subscriptions
held in a lawyer's trust account. These funds are to be released subject
to an escrowed closing relating to the issue of 648,859 shares. The
closing occurred in November 1999 when stock subscribed was fully paid.
4. DEPOSITS
Deposits are comprised of funds that have been withheld by banks and
credit card processors.
5. PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------------
Accumulated
Amortization
and
Cost Depreciation Net Net
-------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Computer software $ 363,233 $ 8,711 $ 354,522 $ 0
Computer equipment 354,415 12,619 341,796 0
Furniture, fixtures
and equipment 40,160 3,487 36,673 0
Leased equipment 240,997 11,210 229,787 0
Leasehold
improvements 55,014 573 54,441 0
-------------------------------------------------------------------------
$1,053,819 $ 36,600 $1,017,219 $ 0
-------------------------------------------------------------------------
</TABLE>
9
<PAGE> 49
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
================================================================================
6. OTHER ASSETS
<TABLE>
<CAPTION>
==================================================================================
1999 1998
----------------------------------------------------------------------------------
<S> <S> <C>
Goodwill, net of accumulated amortization of $4,258 $200,125 $ 0
Software license, net of accumulated amortization of $4,083 44,917 0
----------------------------------------------------------------------------------
$245,042 $ 0
==================================================================================
</TABLE>
7. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>
==================================================================================
1999 1998
----------------------------------------------------------------------------------
<S> <S> <C>
Trade payables $28,907 $1,834
Accrued liabilities 9,088 0
Payroll and social security taxes 1,549 0
----------------------------------------------------------------------------------
$39,544 $1,834
==================================================================================
</TABLE>
8. RELATED PARTY TRANSACTIONS
(a) During the period ended September 30, 1999, the Company paid related
parties $78,316 (1998-Nil) in consulting fees.
The above transactions were completed in the normal course of
operations on normal market terms and were recorded at fair market
value as estimated by management.
(b) Amounts due from related parties represent advances to a director of
the Company and to a director of a related company.
(c) Amounts due to related parties are to a company related by common
management and to a director of certain subsidiaries.
10
<PAGE> 50
CYBEROAD.COM CORPORATION
Notes to Consolidated Financial Statements
Nine Months Ended September 30, 1999 and Year Ended December 31, 1998
(U.S. Dollars)
================================================================================
9. CAPITAL LEASE OBLIGATIONS
===========================================================================
1999 $ 19,131
2000 76,523
2001 76,523
2002 69,460
2003 9,556
Thereafter 5,176
---------------------------------------------------------------------------
Total minimum lease payments 256,369
Less: Amount representing interest 48,714
---------------------------------------------------------------------------
Present value of net minimum lease payments 207,655
Less: Current portion 53,782
---------------------------------------------------------------------------
$153,873
===========================================================================
10. DEPOSITS FROM MERCHANTS
Deposits from merchants are funds withheld by the Company to cover
potential chargebacks and losses.
11. COMMITMENTS
The Company is committed to the following rental payments for office
premises and equipment operating leases for fiscal years ending December
31:
===========================================================================
1999 $ 42,000
2000 188,000
2001 207,000
2002 141,000
2003 26,000
Thereafter 4,000
---------------------------------------------------------------------------
$608,000
===========================================================================
11
<PAGE> 51
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
12. STOCK OPTIONS
The Company granted stock options to directors and employees as follows:
<TABLE>
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EXERCISE NUMBER OF OPTIONS
EXPIRY DATE PRICE 1999 1998
<S> <C> <C> <C>
April 1, 2009 $1.50 1,428,625 0
July 26, 2009 $3.50 125,000 0
July 26, 2009 $5.00 75,000 0
-------------------------------------------------------------------------------------------------------------------------------
1,628,625 0
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The Company has elected to follow APB 25, "Accounting for Stock Issued to
Employees" and related interpretations in accounting for its stock options.
The exercise price of the April 1, 2009 stock options equals the market
price of the underlying stock on the date of grant, therefore, no
compensation expense is recognized for these options. The exercise prices
of the July 26, 2009 stock options were below the market price of the
underlying stock on the date of grant, therefore, compensation expense was
recorded under the intrinsic value method. Had compensation expense been
determined on the basis of the estimated fair values of the options granted
in accordance with SFAS No. 123 "Accounting for Stock-Based Compensation",
September 30, 1999 net loss would have been increased by $1,234,000 or
$0.15 per common share.
The Fair value of common share options granted in 1999 is $1,268,000. The
fair value of common share options granted is estimated as at the grant
date using the Black-Scholes option pricing model, using the following
weighted average assumptions:
Dividend yield 0%
Risk-free interest rate 6%
Expected life 2 years
Expected volatility 40%
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Weighted average options outstanding 1,006,734 0
-------------------------------------------------------------------------------------------------------------------------------
Weighted average exercise price of options $1.38 $0.00
-------------------------------------------------------------------------------------------------------------------------------
As of September 30, 1999, 312,000 options have been vested.
</TABLE>
13. WARRANTS
The Company has 200,000 (1998-Nil) warrants outstanding exercisable at $1
per warrant. Each warrant entitles the holder to purchase 1 share of common
stock. The warrants expire on June 1, 2001.
12
<PAGE> 52
CYBEROAD.COM CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999 AND YEAR ENDED DECEMBER 31, 1998
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
14. SUBSEQUENT EVENTS
Subsequent to the period-end, the Company:
(a) Granted stock options to employees as follows:
<TABLE>
-------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
EXERCISE NUMBER OF
EXPIRY DATE PRICE OPTIONS
-------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
October 1, 2009 $5.50 20,000
November 15, 2009 $4.50 60,000
December 16, 2009 $3.50 25,000
December 23, 2009 $3.50 10,000
-------------------------------------------------------------------------------------------------------------------------------
115,000
-------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(b) Issued 64,886 warrants exercisable at $3.50 per warrant. Each warrant
entitles the holder to purchase 1 share of common stock. The warrants
expire on November 1, 2001.
13
<PAGE> 53
Pannell Kerr Forster
REPORT OF INDEPENDENT CHARTERED ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND STOCKHOLDERS
OF CYBEROAD GAMING CORPORATION
We have audited the accompanying consolidated balance sheets of Cyberoad Gaming
Corporation as at April 30, 1999, July 31, 1998 and 1997 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for the nine months ended April 30, 1999 and for each of the years ended
July 31, 1999 and July 31, 1997. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards in the United States. Those standards require that we plan and
perform the audits to obtain reasonable assurance whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, these consolidated financial statements referred to above
present fairly, in all material respects, the financial position of the Company
as at April 30, 1999, July 31, 1998 and July 31, 1997 and the results of its
operations and its cash flows for each of the periods referred to above in
conformity with generally accepted accounting principles in the United States.
As described in note 14, subsequent to year-end, the Company entered into
agreements that will result in the Company having no ongoing operations.
/s/ Pannell Kerr Forster
Chartered Accountants
Vancouver, British Columbia
September 24, 1999
[PANNELL KERR LOGO]
<PAGE> 54
CYBEROAD GAMING CORPORATION
CONSOLIDATED BALANCE SHEETS
APRIL 30, 1999, JULY 31, 1998 AND 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
===============================================================================
April 30, July 31,
1999 1998 1997
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
CURRENT
Cash $ 219,809 $ 151,388 $ 31,871
Accounts receivable (note 3) 371,637 22,278 37,374
- -------------------------------------------------------------------------------
591,446 173,666 69,245
DEPOSITS (note 4) 365,481 5,762 3,767
FIXED (note 5) 220,770 265,593 40,732
- -------------------------------------------------------------------------------
$ 1,177,697 $ 445,021 $ 113,744
===============================================================================
LIABILITIES
CURRENT
Accounts payable and accrued
liabilities (note 6) $ 482,413 $ 387,505 $ 10,053
Customer deposits 340,914 29,058 0
Due to related company (note 10) 166,057 11,398 29,181
Due to shareholders 115,600 84,210 9,730
Convertible loan (note 7) 500,000 500,000 0
- -------------------------------------------------------------------------------
1,604,984 1,012,171 48,964
DEPOSITS FROM MERCHANTS (note 8) 346,368 0 0
- -------------------------------------------------------------------------------
1,951,352 1,012,171 48,964
- -------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY (DEFICIT)
COMMON STOCK, $0.01 par value;
40,000,000 shares authorized,
6,850,410, 6,760,410 and
5,425,000 shares issued and
outstanding at April 30, 1999,
July 31, 1998 and 1997,
respectively 68,504 67,604 54,250
ADDITIONAL PAID-IN CAPITAL 1,052,709 897,859 498,236
ACCUMULATED DEFICIT (1,894,868) (1,532,613) (487,706)
- -------------------------------------------------------------------------------
(773,655) (567,150) 64,780
- -------------------------------------------------------------------------------
$ 1,177,697 $ 445,021 $113,744
===============================================================================
</TABLE>
Commitments (note 9)
See notes to consolidated financial statements. 2
<PAGE> 55
CYBEROAD GAMING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------
April 30, July 31,
1999 1998 1997
- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REVENUES
Revenue sharing $ 623,847 $ 0 $ 0
Processing fees 336,197 0 0
Marketing 166,955 0 0
Software licensing 66,092 492,104 99,580
Systems maintenance and other 30,036 309,126 8,294
- ------------------------------------------------------------------------------------------
1,223,127 801,230 107,874
- ------------------------------------------------------------------------------------------
OPERATING EXPENSES
Wages and employee benefits 403,235 352,355 64,472
Consulting and managements fees 225,321 668,604 379,123
Marketing 313,950 108,226 0
Data processing 214,991 0 0
Rent 91,592 186,422 35,241
Financing fee 50,000 0 0
Office and miscellaneous 54,309 81,568 14,558
Travel 28,577 58,907 34,041
Telecommunications 27,297 53,981 11,415
Professional fees 17,160 40,523 23,829
Advertising and promotion 10,119 23,315 13,442
Repairs and maintenance 9,631 61,678 0
Bank charges and interest 6,140 5,138 2,685
Publications and subscriptions 3,975 4,526 3,934
Automobile 3,703 5,324 1,794
Insurance 1,758 3,827 865
Write-off receivable 0 29,900 0
Amortization and depreciation 123,534 161,843 10,181
- ------------------------------------------------------------------------------------------
1,585,382 1,846,137 595,580
- ------------------------------------------------------------------------------------------
NET LOSS $ (362,225) $(1,044,907) $(487,706)
==========================================================================================
NET LOSS PER SHARE - BASIC AND FULLY DILUTED $ (0.05) $(0.19) $(0.65)
==========================================================================================
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 6,762,957 5,479,880 754,041
==========================================================================================
</TABLE>
See notes to consolidated financial statements. 3
<PAGE> 56
CYBEROAD GAMING CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
<TABLE>
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION> ADDITIONAL TOTAL
COMMON SHARES PAID-IN ACCUMULATED STOCKHOLDERS'
NUMBER AMOUNT CAPITAL DEFICIT EQUITY (DEFICIT)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Issuance of common stock
For cash 4,883,264 $48,832 $425,055 $ 0 $ 473,887
For consulting services (note 10) 541,736 5,418 73,181 0 78,599
Net Loss 0 0 0 (487,706) (487,706)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, July 31, 1997 5,425,000 54,250 498,236 (487,706) 64,780
Issuance of common stock
For cash 25,000 250 24,750 0 25,000
For consulting services (note 10) 1,310,410 13,104 374,873 0 387,977
Net loss 0 0 0 (1,044,907) (1,044,907)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, July 31, 1998 6,760,410 67,604 897,859 (1,532,613) (567,150)
Issuance of common stock
For cash 40,000 400 105,350 0 105,750
For financing fee 50,000 500 49,500 0 50,000
Net loss 0 0 0 (362,255) (362,255)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance, April 30, 1999 6,850,410 $68,504 $1,052,709 $(1,894,868) $ (773,655)
====================================================================================================================================
</TABLE>
See notes to consolidated financial statements. 4
<PAGE> 57
CYBEROAD GAMING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
APRIL 30, JULY 31,
1999 1998 1997
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net Loss $(362,255) $(1,044,907) $(487,706)
Adjustments to reconcile net loss to net cash
used by operating activities
Amortization and Depreciation 123,534 161,843 10,181
Consulting fees paid with issuance of
common stock 0 387,977 78,599
Financing fee paid with issuance of
common stock 50,000 0 0
Changes in operating assets and liabilities
Accounts receivable (349,359) 15,096 (37,374)
Deposits (359,719) (1,995) (3,767)
Accounts payable and accrued liabilities 94,908 377,452 10,053
Customer deposits 311,856 29,058 0
Deposits from merchants 346,368 0 0
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED BY OPERATING ACTIVITIES (144,667) (75,476) (430,014)
- ----------------------------------------------------------------------------------------------------------------
NET CASH USED BY INVESTING ACTIVITY
Acquisition of fixed assets (52,865) (386,704) (50,913)
- ----------------------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Advances from related company 128,813 (17,783) 29,181
Advances from shareholders 31,390 74,480 9,730
Proceeds from convertible loan 0 500,000 0
Issuance of common stock 105,750 25,000 473,887
- ----------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 265,953 581,697 512,798
- ----------------------------------------------------------------------------------------------------------------
INCREASE IN CASH 68,421 119,517 31,871
CASH, BEGINNING OF PERIOD 151,388 31,871 0
- ----------------------------------------------------------------------------------------------------------------
CASH, END OF PERIOD $ 219,809 $ 151,388 $ 31,871
- ----------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL INFORMATION
Income taxes paid $ 0 $ 0 $ 0
Interest paid 0 0 0
Non-cash investing activity
equipment leasing 25,846 0 0
===============================================================================================================
</TABLE>
See notes to consolidated financial statements. 5
<PAGE> 58
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- -------------------------------------------------------------------------------
1. ORGANIZATION AND BUSINESS
Cyberoad Gaming Corporation ("the Company") was incorporated under the
International Business Companies Act of the Laws of St. Kitts and Nevis on
June 11, 1997.
The Company's principal business is the development of internet gaming
software, the licensing of the software to other companies and online
financial transactions processing facility through its wholly-owned
subsidiary, eBanx Ltd. During the period ended April 30, 1999, the Company
also began to operate an internet data processing and call centre based in
Costa Rica.
Effective May 1, 1999 the Company's revenues from these sources has been
eliminated as a result of assignment and sale agreements outlined in note
14 below.
2. SIGNIFICANT ACCOUNTING POLICIES
(a) Principles of consolidation
These financial statements include the accounts of the Company and its
wholly-owned subsidiaries, Sistemas de Informacion Technologia
("SIT"), Informacion y Technologia Canadiense ("ITC"), Costa Rica
Corporations, and eBanx Ltd. ("eBanx"), a Nevada Corporation. All
significant intercompany balances and transactions have been
eliminated.
(b) Financial instruments
The Company's financial instruments consist of accounts receivable,
deposits, accounts payable and accrued liabilities, customer deposits,
deposits from merchants, convertible loan and due to shareholders.
Unless otherwise noted, it is management's opinion that the Company is
not exposed to significant interest, currency or credit risks arising
from these financial instruments. The fair values of these financial
instruments approximate their carrying values unless otherwise noted.
(c) Foreign operations and concentrations
The U.S. dollar is considered the functional currency for SIT, ITC and
eBanx. Accordingly, the monetary assets and liabilities of these
entities have been remeasured using the current rates of exchange and
nonmonetary assets have been remeasured using the appropriate
historical rates of exchange. Gains and losses from this translation
practice have not been significant and have been accounted for in the
statement of operations. Comprehensive loss would be approximately
the same as reported in these financial statements which give effect
to the translation of the financial statements of these entities on
the aforementioned basis.
6
<PAGE> 59
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- ------------------------------------------------------------------------------
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(d) Fixed assets
Fixed assets are carried at cost less accumulated amortization and
depreciation. Amortization and depreciation of fixed assets are
calculated at the following annual rates (commencing when the assets
are put into use):
<TABLE>
<CAPTION>
<S> <C>
Computer software and license - 50% Straight-line
Computer equipment - 30% Declining balance
Furniture, fixtures and equipment - 30% Declining balance
Leased equipment - 30% Declining balance
</TABLE>
(e) Revenue recognition
Gross gaming revenue is recognized when the sports games being wagered
on have been completed. Software licensing revenue is recognized upon
the finalization of licensing agreements. Systems maintenance revenue
is recognized when services have been rendered.
In May 1997 a Statement of Position "Software Revenue Recognition (SOP
97-2) was issued. SOP 97-2 provides revised and expanded guidance on
software revenue recognition and applies to all entities that earn
revenue from licensing, selling or otherwise marketing computer
software. SOP 97-2 is effective for transactions entered into in
fiscal years beginning after December 15, 1997. The application of SOP
97-2 has not had a material impact on the Company's results of
operations.
(f) Net loss per share
Net loss per share computations are based on the weighted average
number of common shares outstanding during the year. Diluted loss per
share has not been presented separately, as the outstanding stock
options, warrants and shares issuable on convertible debt are
anti-dilutive for each of the periods presented.
(g) Use of estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the
date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
7
<PAGE> 60
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
================================================================================
2. SIGNIFICANT ACCOUNTING POLICIES (Continued)
(h) Regulation risk
The Company intends to provide its services in jurisdiction that
do not prohibit gaming over the Internet. There can be no
assurance that the Company will be able to comply with future
government regulations that will affect gaming operations in a
significant number of international jurisdictions. Costa Rica has
laws prohibiting gaming offered to residents of Costa Rica. As a
result, the Company's Costa Rica based operations only offer to
subscribers outside of Costa Rica.
3. ACCOUNTS RECEIVABLE
Accounts receivable includes $14,692 due from a shareholder at April 30,
1999 ($20,634 July 31, 1998; nil at July 31, 1997) and $18,995 due from a
related company at April 30, 1999 (nil at July 31, 1998 and 1997).
4. DEPOSITS
Deposits are comprised of funds that have been withheld by banks and
credit card processors.
5. FIXED ASSETS
<TABLE>
<CAPTION>
===========================================================================
1999
---------------------------------------------------------------------------
Accumulated
Amortization
and
Cost Depreciation Net
---------------------------------------------------------------------------
<S> <C> <C> <C>
Computer software and license $181,059 $151,924 $ 29,135
Computer equipment 241,175 105,295 135,880
Furniture, fixtures and equipment 68,248 32,523 35,725
Leased equipment (note 10) 25,846 5,816 20,030
---------------------------------------------------------------------------
$516,328 $295,558 $220,770
===========================================================================
</TABLE>
<TABLE>
<CAPTION>
===========================================================================
1998
---------------------------------------------------------------------------
Accumulated
Cost Depreciation Net
---------------------------------------------------------------------------
<S> <C> <C> <C>
Computer software $168,053 $ 84,027 $ 84,026
Computer equipment 204,085 65,846 138,239
Furniture, fixtures and equipment 65,479 22,151 43,328
---------------------------------------------------------------------------
$437,617 $172,024 $265,593
===========================================================================
</TABLE>
8
<PAGE> 61
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
5. FIXED ASSETS (Continued)
<TABLE>
<CAPTION>
==========================================================================================================================
1997
--------------------------------------------------------------------------------------------------------------------------
ACCUMULATED
COST DEPRECIATION NET
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Computer equipment $ 33,006 $ 6,600 $ 26,406
Furniture, fixtures and
equipment 17,907 3,581 14,326
--------------------------------------------------------------------------------------------------------------------------
$ 50,913 $ 10,181 $ 40,732
==========================================================================================================================
</TABLE>
6. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
<TABLE>
<CAPTION>
==========================================================================================================================
1999 1998 1997
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Trade payables $480,594 $ 387,505 $ 10,053
Payroll and social taxes 1,819 0 0
--------------------------------------------------------------------------------------------------------------------------
$482,413 $ 387,505 $ 10,053
==========================================================================================================================
</TABLE>
7. CONVERTIBLE LOAN
The convertible loan is non-interest bearing and is payable upon demand
within ten business days.
As consideration for the loan, the lender received options to purchase
500,000 of the Company's common shares. Each option entitles the holder to
purchase one common share at a price of $1 per share.
In addition to the options issued, the loan has a convertible feature
essentially allowing the lender to convert the loan into common shares of
the Company if the Company decides to repay the loan.
8. DEPOSITS FROM MERCHANTS
Deposits from merchants are funds withheld by the Company to cover
potential chargebacks and losses.
9
<PAGE> 62
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
================================================================================
9. COMMITMENTS
(a) The Company is committed to the following rental payments for office
premises for fiscal years ending July 31:
<TABLE>
<CAPTION>
====================================================================
<S> <C>
1999 $ 28,000
2000 97,000
2001 133,000
2002 133,000
2003 37,000
--------------------------------------------------------------------
$ 428,000
====================================================================
</TABLE>
(b) The Company is required to pay 5% royalty on net wins (as defined)
in respect to computer software under license to the Company.
(c) The Company has committed to fund any short fall of website
generated revenues which do not meet the costs of a marketing plan
for website revenue generation (note 14).
10. RELATED PARTY TRANSACTIONS
(a) The Company has entered into certain agreements effective May 1,
1999 with Cyberoad.com (Isle of Man) Limited ("IOM") detailed in
note 14. The parent of IOM is Cyberoad.Com Corporation, a Florida
corporation whose shares are publicly traded.
(b) Accounts receivable at April 30, 1999 includes $18,995 due from IOM.
(c) The Company paid related parties the following amounts:
<TABLE>
<CAPTION>
==========================================================================
1999 1998 1997
--------------------------------------------------------------------------
<S> <C> <C> <C>
Consulting and management fees
For cash $129,450 $118,344 $ 93,679
For shares 0 387,977 78,599
Rent 6,863 2,120 20,181
Professional fees 0 14,880 3,000
Telecommunications 0 0 7,007
--------------------------------------------------------------------------
$136,313 $523,321 $202,466
==========================================================================
</TABLE>
The above transactions were completed in the normal course of operations
on normal market terms and were recorded at fair market value as
estimated by management.
10
<PAGE> 63
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- -------------------------------------------------------------------------------
10. RELATED PARTY TRANSACTIONS (Continued)
(d) A related Company incurs expenditures and receives funds on behalf of
the Company. This included $25,846 in 1999 in respect to certain
computer equipment acquired by the related company under capital lease
arrangements with third party suppliers which has been capitalized as
leased equipment (note 5). The minimum lease payments under these
capital leases are as follows:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
<S> <C>
1999 $ 2,582
2000 10,328
2001 10,328
2002 7,645
---------------------------------------------------------------------------------
30,883
Less: Interest (8,665)
---------------------------------------------------------------------------------
Present value of minimum future obligations $ 22,218
---------------------------------------------------------------------------------
</TABLE>
11. DIRECTORS, OFFICERS AND EMPLOYEE STOCK OPTION PLAN
(a) The Company has granted stock options to several directors and
officers as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
EXPIRY DATE NUMBER OF COMMON SHARES
----------------------------------------------------------------------------------
EXERCISE
PRICE 1999 1998 1997
----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
February 1, 2002 $0.25 400,000 400,000 400,000
May 5, 2002 $1.00 100,000 100,000 100,000
September 3, 2002 $1.00 300,000 300,000 0
November 7, 2002 $1.00 500,000 500,000 0
No expiry date $0.25 400,000 400,000 400,000
----------------------------------------------------------------------------------
Total outstanding 1,700,000 1,700,000 900,000
----------------------------------------------------------------------------------
</TABLE>
(b) The Company has granted options to employees as follows:
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------
1999 1998 1997
OPTIONS OPTIONS OPTIONS
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding,
beginning of year 580,000 100,000 0
Granted 0 480,000 100,000
----------------------------------------------------------------------------------
Outstanding,
end of year 580,000 580,000 100,000
----------------------------------------------------------------------------------
Exercisable,
end of year 224,791 31,250 0
----------------------------------------------------------------------------------
</TABLE>
<PAGE> 64
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- --------------------------------------------------------------------------------
11. DIRECTORS, OFFICERS AND EMPLOYEE STOCK OPTION PLAN (Continued)
The above options granted are all exercisable at $1 per share upon
vesting of these options. In accordance with the stock option plan,
25% of the options granted to an employee becomes vested after the
completion of 1 year of service with the Company. The remaining 75%
becomes vested monthly until the end of the 36th month when all the
options become fully vested.
There are no specified expiration dates on the options. However, the
options become unexercisable after the employee's cessation of
service with the Company.
As at April 30, 1999, 580,000 options are outstanding with 224,791
options being vested. No options have been exercised since the
inception of the plan.
Pro-forma net loss per share has not been provided as the effect on
operations would not be significant using FASB 123.
12. WARRANTS
The Company has 12,500 (1998 - 12,500; 1997 - 12,500) warrants outstanding
exercisable at $1.50 per warrant. Each warrant entitles the holder to
purchase 2 common shares. The warrants expire on July 12, 2000.
13. YEAR 2000 ISSUE (Unaudited)
The Year 2000 Issue arises because many computerized systems use two
digits rather than four to identify a year. Date sensitive systems may
recognize the Year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed. In addition, similar
problems may arise in some systems which use certain dates in 1999 to
represent something other than a date. The effects of the Year 2000 issue
may be experienced before, on, or after January 1, 2000 and, if not
addressed, the impact on operations and financial reporting may range
from minor errors to significant systems failure which could affect an
entity's ability to conduct normal business operations. While the Company
has a plan to address the Year 2000 Issue, it is not possible to be
certain that all aspects of the issue affecting the Company, including
those related to the efforts of customers, suppliers, or other third
parties, will be fully resolved.
12
<PAGE> 65
CYBEROAD GAMING CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NINE MONTHS ENDED APRIL 30, 1999 AND YEARS ENDED JULY 31, 1998 AND 1997
(U.S. DOLLARS)
- -------------------------------------------------------------------------------
14. SUBSEQUENT EVENTS
By assignment agreement with Cyberoad.Com (Isle of Man) Limited effective
April 19, 1999 and amended to take effect May 1, 1999, the Company assigned
100% ownership of SIT and ITC and all of its rights, title and interest in
and to the software product known as "CR Netbook" including source code for
the software, worldwide copyrights, all software modules that make up the
"CR Netbook" system, all user documentation, and the trademark to the name
"CR Netbook." Consideration for the assignment is $30,000, the grant of a
two site licence by the Assignee, and the right to use the software "CR
Netbook".
By agreements effective April 19, 1999, the Company assigned all of its
rights, title and interest as well as its obligations and responsibilities
in two operating, revenue sharing and management agreements which had been
entered into with third parties in prior years. Consideration was $20,000.
The Company has also contracted for marketing and management services from
the assignee in the above two agreements, and a related party, relating to
the Company's Sportsbook and Casino website (www.thebigbook.com) known as
the Bigbook and Casino. This agreement is for five years and is renewable
annually thereafter. All initial costs of the marketing plan are the
responsibility of the service provider who may, in consideration thereof,
purchase the website and all rights thereto for $2000,000 during the
initial term of the agreement. All revenues generated from the website in
the initial five year term shall be applied to the marketing plan. Any
shortfall is to be contributed monthly by the Company when so advised.
By agreement effective July 8, 1999, the Company sold 100% of all rights of
ownership of the eBanx.com trademark, the domain name, intellectual
property including eBanx systems and software and eBanx operations
including assets and liabilities to eBanx.com (Isle of Man) Limited.
Consideration was $50,000.
As a result of the above agreements, the Company will have no ongoing
operations.
13
<PAGE> 66
TABLE OF CONTENTS
<TABLE>
<S> <C>
Prospectus Summary ................................. 2
Risk Factors ....................................... 5
Use of Proceeds .................................... 11
Dividend Policy .................................... 11
Determination of the Offering Price ................ 11
Price Range of Common Stock ........................ 13
Capitalization ..................................... 13
Selected Consolidated Financial Data ............... 14
Management's Discussion and Analysis
Of Financial Condition and Results of
Operations ......................................... 16
Business ........................................... 20
Management ......................................... 29
Certain Relationships and Related
Transactions ....................................... 33
Principal and Selling Stockholders ................. 34
Plan of Distribution ............................... 36
Description of Capital Stock ....................... 37
Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ........................................ 37
Legal Matters ...................................... 38
Experts ............................................ 38
Where You Can Find More Information ................ 38
Index to Consolidated Financial Statements ......... 39
</TABLE>
UNTIL ___________, 2000, ALL DEALERS THAT EFFECT TRANSACTIONS IN THESE
SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO DELIVER
A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD
ALLOTMENTS OR SUBSCRIPTIONS.
39
<PAGE> 67
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
cyberoad.com's Articles of Incorporation, as amended, provide that in our
Bylaws, we shall have the power to indemnify our directors and executive
officers and any of our other officers, employees and agents against any
contingency or peril, as may be determined to be in the best interests of
cyberoad.com. Our Articles of Incorporation, as amended, also empower us to
purchase insurance on behalf of any person whom we are required or permitted to
indemnify. To date, cyberoad.com has not entered into indemnification agreements
with any of its directors, executive officers, or any other officer, employee or
agent. In addition, to date, cyberoad.com has not purchased insurance policies
under these indemnification provisions.
Florida General Corporation Act section 607.014 states that:
A corporation shall have power to indemnify any person who was or is a party to
any proceeding (other than an action by, or in the right of, the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against liability incurred in connection with
any such proceeding, including any appeal thereof, if he acted in good faith and
in a manner he reasonably believed to be in, or not opposed to, the best
interests of the corporation and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
termination of any proceeding by judgment, order, settlement, or conviction or
upon a plea of nolo contendere or its equivalent shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in, or not opposed to, the best interests of the
corporation or, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
A corporation shall have power to indemnify any person, who was or is a party to
any proceeding by or in the right of the corporation to procure a judgment in
its favor by reason of the fact that he is or was a director, officer, employee,
or agent of the corporation or is or was serving at the request of the
corporation as a director, officer, employee, or agent of another corporation,
partnership, joint venture, trust, or other enterprise, against expenses and
amounts paid in settlement not exceeding, in the judgment of the board of
directors, the estimated expense of litigating the proceeding to conclusion,
actually and reasonably incurred in connection with the defense or settlement of
such proceeding including any appeal thereof. Such indemnification shall be
authorized if such person acted in good faith and in a manner he reasonably
believed to be in, or not opposed to the best interests of the corporation,
except that no indemnification shall be made under this subsection in respect of
any claim, issue or matter as to which such person shall have been adjudged to
be liable unless, and only to the extent that, the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine upon application that, despite the adjudication of liability but in
view of all circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
To the extent that a director, officer, employee, or agent of a corporation has
been successful on the merits or otherwise in defense of any proceeding referred
to above, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses actually and reasonably incurred by him in
connection therewith.
Any indemnification, unless pursuant to a determination by a court, shall be
made by the corporation only as authorized in the specific case upon a
determination that indemnification of the director, officer, employee, or agent
is proper in the circumstances because he has met the applicable standard of
conduct set forth above. Such determination shall be made by any of: majority
vote of a quorum of the board of directors (consisting of directors who were not
parties to such proceeding); by majority vote of a committee duly designated by
the board of directors consisting solely of two or more directors not at the
time parties to the proceeding; independent legal counsel; or the shareholders
by a majority vote of a quorum consisting of shareholders who were not parties
to such proceeding.
Evaluation of the reasonableness of expenses and authorization of
indemnification shall be made in the same manner as the determination that
indemnification is permissible.
Expenses incurred by an officer or director in defending a civil or criminal
proceeding may be paid by the corporation in advance of the final disposition of
such proceeding upon receipt of an undertaking by or on behalf of such director
or officer to repay such amount if he is ultimately found not to be entitled to
indemnification by the corporation.
The indemnification and advancement of expenses are not exclusive, and a
corporation may make any other further indemnification or advancement of
expenses of any of its directors, officers, employees, or agents, under any
bylaw,
40
<PAGE> 68
agreement, vote of shareholders or disinterested directors, or otherwise.
However, indemnification shall not be made to or on behalf of any director,
officer, employee, or agent if a judgment establishes that his actions, or
omissions to act, were material to the cause of action so adjudicated and
constitute any of: a violation of the criminal law; a transaction from which the
director, officer, employee, or agent derived an improper personal benefit; a
circumstance where the liability provisions of section 607.144 apply; or willful
misconduct or a conscious disregard for the best interests of the corporation.
Indemnification and advancement of expenses shall continue as to a person who
has ceased to be a director, officer, employee, or agent and shall inure to the
benefit of the heirs, executors, and administrators of such a person, unless
otherwise provided when authorized or ratified.
Unless the corporation's articles of incorporation provide otherwise,
notwithstanding the failure of a corporation to provide indemnification, and
despite any contrary determination of the board or of the shareholders in a
specific case, a director, officer, employee, or agent of the corporation who is
or was a party to a proceeding may apply for indemnification or advancement of
expenses, or both, to the court conducting the proceeding, to the circuit court,
or to another court of competent jurisdiction.
A corporation shall have power to purchase and maintain insurance on behalf of
any person who is or was a director, officer, employee, or agent of the
corporation or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
venture, trust, or other enterprise against any liability asserted against him
and incurred by him in any such capacity or arising out of his status as such,
whether or not the corporation would have the power to indemnify him against
such liability under the provisions of this section.
If any expenses or other amounts are paid by way of indemnification otherwise
than by court order or action by the shareholders or by an insurance carrier
pursuant to insurance maintained by the corporation, the corporation shall, not
later than the time of delivery to shareholders of written notice of the next
annual meeting of shareholders, unless such meeting is held within three months
from the date of such payment, and, in any event, within 15 months from the date
of such payment, deliver either personally or by mail to each shareholder of
record at the time entitled to vote for the election of directors a statement
specifying the persons paid, the amounts paid, and the nature and status at the
time of such payment of the litigation or threatened litigation.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the offering are as follows:
<TABLE>
<CAPTION>
Amount
-------
<S> <C>
Registration Fee Under Securities Act of 1933 .................. $ 4,044
NASD Filing Fee ................................................ $ *
Blue Sky Fees and Expenses ..................................... $10,000
Printing and Engraving Certificates ............................ $ *
Legal Fees and Expenses ........................................ $30,000
Accounting Fees and Expenses ................................... $18,000
Registrar and Transfer Agent Fees .............................. $ *
Miscellaneous Expenses ......................................... $ *
Total .................................................. $62,044
</TABLE>
- ----------
* Not applicable or none.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
41
<PAGE> 69
The Registrant has sold and issued the following securities since June
23, 1988 (inception):
Since April 1, 1999, we have granted options to purchase 1,743,625
shares of common stock to a total of 40 employees, consultants and non-employee
directors at weighted average exercise price of $1.545 per share pursuant to the
1999 Stock Option Plan. The sale of these securities was deemed to be exempt
from registration under the Securities Act in reliance on Rule 701 promulgated
under Section 3(b) of the Securities Act as transactions pursuant to
compensatory benefit plans and contracts relating to compensation as provided
under Rule 701.
On February 28, 1989, we issued an aggregate of 5,000,000 shares of
common stock to the sole stockholder and director of Registrant. The issuance of
these securities was exempt from the registration requirements of the Securities
Act of 1933, as amended, under Section 4(2) thereof.
On November 11, 1999 we issued 8,659,650 shares of common stock to
Cyberoad Ireland Ltd., a non "U.S. Person" as defined under Regulation S of the
Securities Act, in exchange for 100% of the issued and outstanding shares of
capital stock of Cyberoad.com (Isle of Man) Limited in compliance with
Regulation S.
On July 14, 1999, we issued 1,400,000 shares of Common Stock to eight
non "U.S. Persons" as defined in Regulation S promulgated under the Securities
Act of 1933, as amended, for a purchase price of $2,002,000. In connection with
this transaction, we issued to Thomson Kernaghan an option to purchase up to
200,000 shares of common stock at a per share exercise price equal to $1.00. The
issuance of these securities was made in compliance with Regulation S.
On November 11, 1999, we issued 648,859 shares of Common Stock to five
non "U.S. Persons" as defined in Regulation S promulgated under the Securities
Act of 1933, as amended, for a purchase price of $2,271,007. In connection with
this transaction, we issued to Thomson Kernaghan an option to purchase up to
64,886 shares of common stock at a per share exercise price equal to $3.50. The
issuance of these securities was made in compliance with Regulation S.
On November 11, 1999, we issued an aggregate of 1,500,000 shares of
common Stock to three non "U.S. Persons" as defined in Regulation S promulgated
under the Securities Act of 1933, as amended, in exchange for 100% of the
outstanding capital stock of Ecomm Relationship Technologies Limited, formally
known as Banx.com (Isle of Man) Limited. The issuance of these securities was
made in compliance with Regulation S of the Securities Act.
The recipients of securities in transactions exempt under Section 4(2)
of the Securities Act represented their intentions to acquire the securities for
investment only and not with a view to or for sale in connection with any
distribution thereof and appropriate legends were affixed to the instruments
representing such securities issued in such transactions. All recipients either
received adequate information about the Company or had adequate access, through
their relationships with the Company, to such information.
The securities issued in compliance with Regulation S were offered and
sold in an offshore transaction and there were no directed selling efforts made
within the United States by the Company, any distributor, any of their
affiliates or any other persons acting on their behalf, as those terms are
defined under Regulation S. The Registrant implemented offering restrictions in
connection with the issuance of the securities and to the knowledge of the
Registrant, the offer and sale of the securities was not made to a U.S. Person,
as defined under Regulation S.
ITEM 27. EXHIBITS
Exhibit Number Exhibit Description
3.1 Articles of Incorporation
3.2 By-laws
5.1 Opinion of Counsel*
10.1 Amended and Restated Nonexclusive License Agreement
effective as of March 5, 1998 by and between Internet
Wagering Systems and Cyberoad Gaming Company*
10.2 Amended and Restated Operating and Revenue Sharing
Management Services Agreement effective as of March 13,
1998 by and between Internet Wagering Systems and Cyberoad
Gaming Company*
10.3 Assignment Agreement dated April 19, 1999 between Cyberoad
Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.4 Amendment to the Assignment Agreement dated October 18,
1999 between Cyberoad Gaming Company and Cyberoad.com
(Isle of Man) Ltd.
10.5 Amended and Restated Operating, License, Revenue
Sharing and Management Services Agreement effective as of
May 5, 1998 by and between Asanol Management Corporation
and Cyberoad Gaming Company*
10.6 Assignment Agreement dated April 19, 1999 between Cyberoad
Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.7 Amendment to the Assignment Agreement dated October 18,
1999 between Cyberoad Gaming Company and Cyberoad.com
(Isle of Man) Ltd.
10.8 Termination to Amended Assignment Agreement dated
September 1, 1999 between Cyberoad Gaming Company and
Cyberoad.com (Isle of Man) Ltd.
10.9 Amendment to Schedule "A" of the Grand Prix Operating,
License, Revenue Sharing and Management Services Agreement
dated as of September 1, 1999, between Cyberoad Gaming
Corporation and Asanol Management Corporation*
10.10 Amendment to the Grand Prix Operating, License, Revenue
Sharing and Management Services Agreement dated as of
September 1, 1999, between Cyberoad Gaming Corporation and
Asanol Management Corporation*
10.11 Amended and Restated Software License Agreement effective
as of October 15, 1998 by and between Nordic Investment
Group and Cyberoad Gaming Corporation*
10.12 Assignment Agreement dated as of July 15, 1999 by and
between Cyberoad Gaming Company and Cyberoad.com (Isle of
Man) Ltd.
10.13 Amendment to the Assignment Agreement dated October 18,
1999 by and between Cyberoad Gaming Company and
Cyberoad.com (Isle of Man) Ltd.
10.14 Assignment Agreement and License dated April 19, 1999
between Cyberoad Gaming Company and Cyberoad.com (Isle of
Man) Ltd.
10.15 Amendment to Assignment Agreement and License dated June
11, 1999 between Cyberoad Gaming Company and Cyberoad.com
(Isle of Man) Ltd.
10.16 Revised Amendment to the Assignment Agreement and License
dated October 18, 1999 between Cyberoad Gaming Company and
Cyberoad.com (Isle of Man) Ltd.
10.17 Non-Exclusive License Agreement dated April 19, 1999 by
and between Cyberoad Gaming Company and Cyberoad.com (Isle
of Man) Ltd.
10.18 Amendment to the Non-Exclusive License Agreement dated
October 18, 1999 between Cyberoad Gaming Company and
Cyberoad.com (Isle of Man) Ltd.
10.19 Amended and Restated Operating and Revenue Sharing
Management Services Agreement effective as of April 19,
1999 by and between Cyberoad Gaming Company and
Cyberoad.com (Isle of Man) Ltd.*
10.20 Amendment to the Grand Prix Operating, License, Revenue
Sharing and Management Services Agreement dated as of
September 1, 1999, between Asanol Management Corporation
and Cyberoad Gaming Company*
10.21 Transfer Agreement dated September 1, 1999 between Asanol
Management Corporation and Cyberoad Gaming Company*
10.22 Website Marketing Agreement dated April 19, 1999 between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man)
Ltd.
10.23 Amendment to the Website Marketing Agreement dated October
18, 1999 between Cyberoad Gaming Company and Cyberoad.com
(Isle of Man) Ltd.
10.24 Software Support Agreement dated April 19, 1999 between
Cyberoad.com (Isle of Man) Ltd. and Calvex International
10.25 Amendment to the Software Support Agreement dated October
18, 1999 between Cyberoad.com (Isle of Man) Ltd. and
Calvex International
10.26 Sale of Rights Agreement dated May 1, 1999 between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man)
Ltd.
10.27 Sale of Rights Agreement dated July 8, 1999 between
Cyberoad Gaming Company and eBanx.com (Isle of Man)
Limited
10.28 Transfer Agreement dated May 20, 1999 between eBanx.com
(Isle of Man) Limited and Cyberoad Gaming Company
10.29 Services Agreement dated April 19, 1999 between
Cyberoad.com (Isle of Man) Ltd. and eBanx.com (Isle of
Man) Limited
10.30 Amendment to the Services Agreement dated October 18, 1999
between Cyberoad.com (Isle of Man) Ltd. and eBanx.com
(Isle of Man) Limited
10.31 Services Agreement dated as of December 31, 1999 between
the cyberoad.com Corporation and Kazootek Technologies
Inc.
10.32 Employment Agreement, dated as of December 6, 1999 between
Paul Mari and Kazootek.com Technologies Inc.
10.33 Employment Agreement, dated as of October 12, 1999 between
Eric Chan and Kazootek.com Technologies Inc.
10.34 Employment Agreement, dated as of September 23, 1999
between Krista Wilson and Kazootek.com Technologies Inc.
10.35 Consulting Agreement, dated as of November 15, 1999
between Cyberoad.com (Isle of Man) Ltd. and Calvin Ayre
10.36 Engagement Letter dated October 25, 1999 between
cyberoad.com Corporation and Intrastate Registered Agent
Corporation
10.37 Revolving Line of Credit Agreement dated as of December
10, 1999 between El Moro Finance Ltd, Cyberoad.com (Isle
of Man) Ltd., Ecomm Relationship Technologies Ltd,
cyberoad.com Corporation, and Kazootek.com Technologies
Inc.
10.38 cyberoad.com Corporation Stock Award Plan
10.39 Form of Non-Statutory Stock Option Agreement
10.40 Shares for Debt Settlement Agreement dated as of May 1,
1999 between Cyberoad Gaming Company, eBanx.com (Isle of
Man) Limited and Asanol Management Corporation
10.41 Assignment dated as of February 11, 2000, between
Cyberoad.com (Ireland) and CIOM, whereby Cyberoad.com
(Ireland) assigns to Cyberoad.com (Isle of Man) Ltd. all
rights and interests in the Community Trademark
Applications for CYBEROAD and CYBEROAD.COM
10.42 Letter of Employment dated February 7, 2000, between
Kazootek.com and Stig Lyren
10.43 Agency Agreement dated November 11, 1999 between
cyberoad.com Corporation and Thomson Kernaghan & Co.
Limited
10.44 Option to purchase common shares of cyberoad.com
Corporation dated November 11, 1999 issued to Thomson
Kernaghan & Co. Limited
10.45 Agency Agreement dated July 14, 1999 between cyberoad.com
Corporation and Thomson Kernaghan & Co. Limited*
10.46 Option to purchase common shares of cyberoad.com
Corporation dated June 30, 1999 issued to Thomson
Kernaghan & Co. Limited
10.47 Share Purchase Agreement effective as of November 11, 1999
between Cyberoad.com (Isle of Man) Ltd., cyberoad.com
Corporation, Aundyr Enmyn Limited, IFG International
(Nominees) Limited, Aundyr Trust Company Ltd. and
eBanx.com (Isle of Man) Ltd.*
10.48 Agreement for the Exchange of Common Stock dated April 15,
1999 by and among LAL Ventures Corp., Eric P. Littman, and
Cyberoad.com Limited, a corporation organized under the
laws of Ireland
10.49 Amendment to Agreement for the Exchange of Common Stock
executed as of October 28, 1999 between cyberoad.com
Corporation (formerly known as LAL Ventures Corp.) and
Cyberoad.com Limited, a corporation organized under the
laws of Ireland
21.1 Subsidiaries of the Registrant
23.1 Consent of Accountants
23.2 Consent of Attorneys*
24.1 Power of Attorney (included on signature page)
27.1 Financial Data Schedule
- -------------------
*To be filed by Amendment.
ITEM 28. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information in the registration statement.
(iii) Include any additional or changed material information on
the plan of distribution;
42
<PAGE> 70
(2) That, for the purposes of determining liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof;
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering; and
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of the appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
43
<PAGE> 71
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this registration
statement to be signed on its behalf by the undersigned, in SAN JOSE, COSTA
RICA, on February 21, 2000.
cyberoad.com Corporation
By: /s/ JOHN COFFEY
-------------------------------
John Coffey
President and Director
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints John
Coffey and Krista Wilson, and each of them as his true and lawful
attorneys-in-fact and agents with full power of substitution and resubstitution,
for him and his name, place and stead, in any and all capacities, to sign any or
all amendments (including post effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the foregoing, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or either of them, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates stated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ STIG LYREN Chief Financial Officer February 21, 2000
- ---------------------------------
Stig Lyren
/s/ JOHN COFFEY President and Director February 21, 2000
- ---------------------------------
John Coffey
/s/ BRENT COROBOTIUC Director February 21, 2000
- ---------------------------------
Brent Corobotiuc
</TABLE>
44
<PAGE> 72
EXHIBIT INDEX
3.1 Articles of Incorporation
3.2 By-laws
5.2 Opinion of Counsel*
10.1 Amended and Restated Nonexclusive License Agreement effective as of March
5, 1998 by and between Internet Wagering Systems and Cyberoad Gaming
Company*
10.2 Amended and Restated Operating and Revenue Sharing Management Services
Agreement effective as of March 13, 1998 by and between Internet Wagering
Systems and Cyberoad Gaming Company*
10.3 Assignment Agreement dated April 19, 1999 between Cyberoad Gaming Company
and Cyberoad.com (Isle of Man) Ltd.
10.4 Amendment to the Assignment Agreement dated October 18, 1999 between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.5 Amended and Restated Operating, License, Revenue Sharing and Management
Services Agreement effective as of May 5, 1998 by and between Asanol
Management Corporation and Cyberoad Gaming Company*
10.6 Assignment Agreement dated April 19, 1999 between Cyberoad Gaming Company
and Cyberoad.com (Isle of Man) Ltd.
10.7 Amendment to the Assignment Agreement dated October 18, 1999 between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.8 Termination to Amended Assignment Agreement dated September 1, 1999
between Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.9 Amendment to Schedule "A" of the Grand Prix Operating, License, Revenue
Sharing and Management Services Agreement dated as of September 1, 1999,
between Cyberoad Gaming Corporation and Asanol Management Corporation*
10.10 Amendment to the Grand Prix Operating, License, Revenue Sharing and
Management Services Agreement dated as of September 1, 1999, between
Cyberoad Gaming Corporation and Asanol Management Corporation*
10.11 Amended and Restated Software License Agreement effective as of October
15, 1998 by and between Nordic Investment Group and Cyberoad Gaming
Corporation*
10.12 Assignment Agreement dated as of July 15, 1999 by and between Cyberoad
Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.13 Amendment to the Assignment Agreement dated October 18, 1999 by and
between Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.14 Assignment Agreement and License dated April 19, 1999 between Cyberoad
Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.15 Amendment to Assignment Agreement and License dated June 11, 1999 between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.16 Revised Amendment to the Assignment Agreement and License dated October
18, 1999 between Cyberoad Gaming Company and Cyberoad.com (Isle of Man)
Ltd.
10.17 Non-Exclusive License Agreement dated April 19, 1999 by and between
Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
<PAGE> 73
10.18 Amendment to the Non-Exclusive License Agreement dated October 18, 1999
between Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.19 Amended and Restated Operating and Revenue Sharing Management Services
Agreement effective as of April 19, 1999 by and between Cyberoad Gaming
Company and Cyberoad.com (Isle of Man) Ltd.*
10.20 Amendment to the Grand Prix Operating, License, Revenue Sharing and
Management Services Agreement dated as of September 1, 1999, between
Asanol Management Corporation and Cyberoad Gaming Company*
10.21 Transfer Agreement dated September 1, 1999 between Asanol Management
Corporation and Cyberoad Gaming Company*
10.22 Website Marketing Agreement dated April 19, 1999 between Cyberoad Gaming
Company and Cyberoad.com (Isle of Man) Ltd.
10.23 Amendment to the Website Marketing Agreement dated October 18, 1999
between Cyberoad Gaming Company and Cyberoad.com (Isle of Man) Ltd.
10.24 Software Support Agreement dated April 19, 1999 between Cyberoad.com
(Isle of Man) Ltd. and Calvex International
10.25 Amendment to the Software Support Agreement dated October 18, 1999
between Cyberoad.com (Isle of Man) Ltd. and Calvex International
10.26 Sale of Rights Agreement dated May 1, 1999 between Cyberoad Gaming
Company and Cyberoad.com (Isle of Man) Ltd.
10.27 Sale of Rights Agreement dated July 8, 1999 between Cyberoad Gaming
Company and eBanx.com (Isle of Man) Limited
10.28 Transfer Agreement dated May 20, 1999 between eBanx.com (Isle of Man)
Limited and Cyberoad Gaming Company
10.29 Services Agreement dated April 19, 1999 between Cyberoad.com (Isle of
Man) Ltd. and eBanx.com (Isle of Man) Limited
10.30 Amendment to the Services Agreement dated October 18, 1999 between
Cyberoad.com (Isle of Man) Ltd. and eBanx.com (Isle of Man) Limited
10.31 Services Agreement dated as of December 31, 1999 between the cyberoad.com
Corporation and Kazootek Technologies Inc.
10.32 Employment Agreement, dated as of December 6, 1999 between Paul Mari and
Kazootek.com Technologies Inc.
10.33 Employment Agreement, dated as of October 12, 1999 between Eric Chan and
Kazootek.com Technologies Inc.
10.34 Employment Agreement, dated as of September 23, 1999 between Krista
Wilson and Kazootek.com Technologies Inc.
10.35 Consulting Agreement, dated as of November 15, 1999 between Cyberoad.com
(Isle of Man) Ltd. and Calvin Ayre
10.36 Engagement Letter dated October 25, 1999 between cyberoad.com Corporation
and Intrastate Registered Agent Corporation
<PAGE> 74
10.37 Revolving Line of Credit Agreement dated as of December 10, 1999 between
El Moro Finance Ltd, Cyberoad.com (Isle of Man) Ltd., Ecomm Relationship
Technologies Ltd, cyberoad.com Corporation, and Kazootek.com Technologies
Inc.
10.38 cyberoad.com Corporation Stock Award Plan
10.39 Form of Non-Statutory Stock Option Agreement
10.40 Shares for Debt Settlement Agreement dated as of May 1, 1999 between
Cyberoad Gaming Company, eBanx.com (Isle of Man) Limited and Asanol
Management Corporation
10.41 Assignment dated as of February 11, 2000, between Cyberoad.com (Ireland)
and CIOM, whereby Cyberoad.com (Ireland) assigns to Cyberoad.com (Isle
of Man) Ltd. all rights and interests in the Community Trademark
Applications for CYBEROAD and CYBEROAD.COM
10.42 Letter of Employment dated February 7, 2000, between Kazootek.com and
Stig Lyren
10.43 Agency Agreement dated November 11, 1999 between cyberoad.com Corporation
and Thomson Kernaghan & Co. Limited
10.44 Option to purchase common shares of cyberoad.com Corporation dated
November 11, 1999 issued to Thomson Kernaghan & Co. Limited
10.45 Agency Agreement dated July 14, 1999 between cyberoad.com Corporation and
Thomson Kernaghan & Co. Limited*
10.46 Option to purchase common shares of cyberoad.com Corporation dated June
30, 1999 issued to Thomson Kernaghan & Co. Limited
10.47 Share Purchase Agreement effective as of November 11, 1999 between
Cyberoad.com (Isle of Man) Ltd., cyberoad.com Corporation, Aundyr Enmyn
Limited, IFG International (Nominees) Limited, Aundyr Trust Company Ltd.
and eBanx.com (Isle of Man) Ltd.*
10.48 Agreement for the Exchange of Common Stock dated April 15, 1999 by and
among LAL Ventures Corp., Eric P. Littman, and Cyberoad.com Limited, a
corporation organized under the laws of Ireland
10.49 Amendment to Agreement for the Exchange of Common Stock executed as of
October 28, 1999 between cyberoad.com Corporation (formerly known as LAL
Ventures Corp.) and Cyberoad.com Limited, a corporation organized under
the laws of Ireland
21.1 Subsidiaries of the Registrant
23.1 Consent of Accountants
23.2 Consent of Attorneys*
24.1 Power of Attorney (included on signature page)
27.1 Financial Data Schedule
- -------------------
*To be filed by Amendment.
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
SUNSHINE EQUITIES CORP.
The undersigned subscriber to these Articles of Incorporation, a natural
person competent to contract, hereby forms a corporation under the laws of the
State of Florida.
ARTICLE I
NAME
The name of this corporation is SUNSHINE EQUITIES CORP.
ARTICLE II
NATURE OF THE BUSINESS
This corporation shall have the power to transact or engage in any
business permitted under the laws of the United States and of the State of
Florida.
ARTICLE III
CAPITAL STOCK
The capital stock of this corporation shall consist of 500,000,000 shares
of common stock having a par value of $.00001 per share. All of said stock
shall be issued only for cash or other property or for services at a just
valuation as shall be determined by the Board of Directors.
ARTICLE IV
INITIAL CAPITAL
The amount of capital with which this corporation shall commence business
shall be not less than One Hundred ($100.00) Dollars.
1
<PAGE> 2
ARTICLE V
TERM OF EXISTENCE
This corporation shall have perpetual existence.
ARTICLE VI
INITIAL ADDRESS
The initial address of the principal place of business of this corporation
in the State of Florida shall be 10709 SW 104th Street, Miami, Florida 33176.
The Board of Directors may at any time and from time to time move the principal
office of this corporation to any location within or without the State of
Florida.
ARTICLE VII
DIRECTORS
The business of this corporation shall be managed by its Board of
Directors. The number of such directors shall not be less than one (1) and,
subject to such minimum may be increased or decreased from time to time in the
manner provided in the By-Laws. The number of persons constituting the initial
Board of Directors shall be 1.
ARTICLE VIII
INITIAL DIRECTORS
The names and addresses of the initial Board of Directors are as follows:
David Goldweitz 10709 SW 104th Street
Miami, FL 33176
ARTICLE IX
SUBSCRIBER
The name and address of the person signing these Articles of
2
<PAGE> 3
Incorporation as subscriber is:
Eric P. Littman
Suite 202
1428 Brickell Avenue
Miami, FL 33131
ARTICLE X
VOTING FOR DIRECTORS
The Board of Directors shall be elected by the Stockholders of the
corporation at such time and in such manner as provided in the By-Laws.
ARTICLE XI
CONTRACTS
No contract or other transaction between this corporation and any person,
firm or corporation shall be affected by the fact that any officer or director
of this corporation is such other party or is, or at some time in the future
becomes, an officer, director or partner of such other contracting party, or
has now or hereafter a direct or indirect interest in such contract.
ARTICLE XII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
This corporation shall have the power, in its By-Laws or in any
resolution of its stockholders or directors, to undertake to indemnify the
officers and directors of this corporation against any contingency or peril as
may be determined to be in the best interests of this corporation, and in
conjunction therewith, to procure, at this corporation's expense, policies of
insurance.
3
<PAGE> 4
ARTICLE XIII
ELECTION
The corporation expressly elects not to be governed by the provisions of
Section 607.108 and 607.109, Florida Statutes.
ARTICLE XIV
AMENDMENT
Except as may be provided in the By-Laws of this corporation to the
contrary, these Articles of Incorporation may be amended by the affirmative
vote of a majority of the Board of Directors and by the affirmative vote of the
holders of not less than two-thirds (2/3) of the then outstanding stock of the
corporation.
ARTICLE XV
RESIDENT AGENT
The name and address of the initial resident agent of this corporation is:
Eric P. Littman
Suite 202
1428 Brickell Avenue
Miami, FL 33131
IN WITNESS WHEREOF, I have hereunto subscribed to and executed
4
<PAGE> 5
these Articles of Incorporation this 20th day of June, 1988.
/s/ ERIC P. LITTMAN
-----------------------------
Eric P. Littman, Subscriber
Subscribed and Sworn to this
20th day of June, 1988.
Before me:
/s/ ISABEL J. CANTERA
- --------------------------------
Notary Public
My Commission Expires:
Notary Public, State of Florida at Large
My Commission Expires Feb. 28, 1991
5
<PAGE> 6
ARTICLES OF AMENDMENT TO
SUNSHINE EQUITIES CORP.
THE UNDERSIGNED, being the President of SUNSHINE EQUITIES CORP., does
hereby amend its Articles of Incorporation as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be LAL Ventures Corp.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on August 11, 1998 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this on August 11, 1998.
/s/ ERIC P. LITTMAN
- --------------------------------
Eric P. Littman, President
The foregoing instrument was acknowledged before me on August 11, 1998,
by Eric P. Littman, who is personally known to me.
/s/ ISABEL J. CANTERA
-------------------------------------
Notary Public
My commission expires: [NOTARY PUBLIC SEAL]
1
<PAGE> 7
ARTICLES OF AMENDMENT TO
LAL VENTURES CORP.
THE UNDERSIGNED, being the president of LAL Ventures Corp., does hereby
amend the Articles of Incorporation of LAL Ventures Corp. as follows:
ARTICLE I
CORPORATE NAME
The name of the Corporation shall be cyberoad.com Corporation.
I hereby certify that the following was adopted by a majority vote of the
shareholders and directors of the corporation on April 28, 1999 and that the
number of votes cast was sufficient for approval.
IN WITNESS WHEREOF, I have hereunto subscribed to and executed this
Amendment to Articles of Incorporation this on April 28, 1999.
/s/ JOHN COFFEY
- ---------------------------------
John Coffey, President
The foregoing instrument was acknowledged before me on April 28, 1999, by
John Coffey, who is personally known to me.
/s/ Jose L. Ocampo Rojas
----------------------------------------
Jose L. Ocampo Rojas
Notary Public
FILED
99 MAY-3 P.M. 1:21
SECRETARY OF STATE
TALLAHASSEE, FLORIDA
<PAGE> 1
Exhibit 3.2
BYLAWS
OF
CYBEROAD.COM CORPORATION
(EFFECTIVE MAY 4, 1999)
<PAGE> 2
UNANIMOUS WRITTEN CONSENT
OF
THE BOARD OF DIRECTORS
OF
CYBEROAD.COM CORPORATION
IN LIEU OF SPECIAL MEETING
Pursuant to the laws of the State of Florida, the undersigned, being all
of the directors of Cyberoad.com Corporation, a Florida corporation (the
"Company"), acting without a meeting, DO HEREBY UNANIMOUSLY ADOPT the following
resolutions and DO HEREBY UNANIMOUSLY CONSENT to taking the following:
ADOPTION OF BYLAWS
WHEREAS the Board of Directors deems it advisable that the Bylaws of the
Company be amended to effect certain changes;
NOW, THEREFORE, BE IT HEREBY RESOLVED, that the Bylaws of the Company
be, and they hereby are, amended in their entirety and adopted in the form
attached.
EXECUTION IN COUNTERPART, this resolution may be signed in counterpart
by the parties, in as many counterparts as may be necessary, each of which so
signed shall be deemed an original and such counterpart together shall
constitute one and the same instrument and notwithstanding the date of
execution, shall be deemed to bear the date as set forth below.
DATED as of the 4th day of May, 1999
/s/ JOHN COFFEY
------------------------------------
JOHN COFFEY
/s/ EPPIE CANNING
------------------------------------
EPPIE CANNING
/s/ KENNETH MILLER
------------------------------------
KENNETH MILLER
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
ARTICLE ONE - OFFICES ..................................................... 1
Principal Office ...................................................... 1
Other Offices ......................................................... 1
ARTICLE TWO - MEETINGS OF SHAREHOLDERS .................................... 1
Place ................................................................. 1
Time of Annual Meeting ................................................ 1
Call of Special Meetings .............................................. 1
Conduct of Meetings ................................................... 1
Notice and Waiver of Notice ........................................... 1
Business and Nominations for Annual and Special Meetings .............. 2
Quorum ................................................................ 2
Voting Rights Per Share ............................................... 2
Voting of Shares ...................................................... 2
Proxies ............................................................... 3
Shareholder List ...................................................... 3
Action Without Meeting ................................................ 4
Fixing Record Date .................................................... 4
Inspectors and Judges ................................................. 4
Voting for Directors .................................................. 5
ARTICLE THREE - DIRECTORS ................................................. 5
Number, Term; Election; Qualification ................................. 5
Resignation: Vacancies, Removal ....................................... 5
Powers ................................................................ 5
Place of Meetings ..................................................... 5
Annual Meetings ....................................................... 5
Regular Meetings ...................................................... 5
Special Meetings and Notice ........................................... 6
Quorum and Required Vote .............................................. 6
Action Without Meeting ................................................ 6
Conference Telephone or Similar Communications Equipment Meetings ..... 6
Committees ............................................................ 7
Compensation of Directors ............................................. 7
</TABLE>
i
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C>
ARTICLE FOUR - OFFICERS .............................................. 7
Positions ........................................................ 7
Election of Specified Officers by Board .......................... 7
Election or Appointment of Other Officers ........................ 7
Compensation ..................................................... 8
Term; Resignation; Removal; Vacancies ............................ 8
Chair-man of the Board ........................................... 8
Chief Executive Officer .......................................... 8
President ........................................................ 8
Vice Presidents .................................................. 8
Secretary ........................................................ 9
Chief Financial Officer .......................................... 9
Treasurer ........................................................ 9
Other Officers: Employees and Agents ............................. 9
ARTICLE FIVE - CERTIFICATES FOR SHARES ............................... 9
Issue of Certificates ............................................ 9
Legends for Preferences and Restrictions on Transfer ............. 10
Facsimile Signatures ............................................. 10
Lost or Destroyed Certificates ................................... 10
Transfer of Shares ............................................... 10
Registered Shareholders .......................................... 11
Redemption of Control Shares ..................................... 11
ARTICLE SIX - GENERAL PROVISIONS ..................................... 11
Dividends ........................................................ 11
Reserves ......................................................... 11
Checks ........................................................... 11
Fiscal Year ...................................................... 11
Seal ............................................................. 11
Gender ........................................................... 11
ARTICLE SEVEN - AMENDMENT OF BYLAWS .................................. 11
</TABLE>
ii
<PAGE> 5
ARTICLE ONE - OFFICES
Section 1. Principal Office. The principal office of Cyberoad.com
Corporation, a Florida corporation (the "Corporation"), shall be located at such
place as is determined by the Board of Directors of the Corporation (the "Board
of Directors") in accordance with applicable law.
Section 2. Other Offices. The Corporation also may have offices at such
other places, either within or without the State of Florida, as the Board of
Directors may from time to time determine or as the business of the Corporation
may require.
ARTICLE TWO - MEETINGS OF SHAREHOLDERS
Section 1. Place. All annual meetings of shareholders shall be held at
such place, within or without the State of Florida, as may be designated by the
Board of Directors and stated in the notice of the meeting or in a duly executed
waiver of notice thereof. Special meetings of shareholders may be held at such
place, within or without the State of Florida, and at such time as shall be
stated in the notice of the meeting or in a duly executed waiver of notice
thereof.
Section 2. Time of Annual Meeting. Annual meetings of shareholders shall
be held on such date and at such time as is fixed, from time to time, by the
Board of Directors, provided, that there shall be an annual meeting held every
calendar year at which the shareholders shall elect a board of directors and
transact such other business as may be properly brought before the meeting.
Section 3. Call of Special Meetings, Special meetings of the
shareholders shall be held if called in accordance with the procedures set forth
in the Florida Business Corporation Act and the Corporation's Articles of
Incorporation (the "Articles of Incorporation") for the call of a special
meeting of shareholders.
Section 4. Conduct of Meetings. The Chairman of the Board of Directors
(or in his absence, the President, or in his absence, such other designee of the
Chairman of the Board of Directors) shall preside at the annual and special
meetings of shareholders and shall be given full discretion in establishing the
rules and procedures to be followed in conducting the meetings, except as
otherwise provided by law or in these Bylaws.
Section 5. Notice and Waiver of Notice. Except as otherwise provided by
law, written or printed notice stating the place, date and time of the meeting
and, in the case of a special meeting, the purpose or purposes for which the
meeting is called, shall be delivered not less than ten (10) nor more than sixty
(60) days before the date of the meeting, either personally or by first-class
mail or other legally sufficient means, by or at the direction of the Chairman
of the Board, President, or the persons calling the meeting, to each shareholder
of record entitled to vote at such meeting. If the notice is mailed at least
thirty (30) days before the date of the meeting, it may be done by a class of
United States mail other than first class. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail addressed to the
shareholder at the address appearing on the stock transfer books of the
Corporation, with postage thereon prepaid. If a meeting is adjourned to another
time and/or place, and if an announcement of the adjourned time and/or place is
made at the meeting, it shall not be necessary to give notice of the adjourned
meeting unless the Board of Directors, after adjournment, fixes a new record
date for the adjourned meeting. Whenever any notice is required to be given to
any shareholder, a waiver
1
<PAGE> 6
thereof in writing signed by the person or persons entitled to such notice,
whether signed before, during or after the time of the meeting stated therein,
and delivered to the Corporation for inclusion in the minutes or filing with the
corporate records, shall constitute an effective waiver of such notice. Neither
the business to be transacted at, nor the purpose of, any regular or special
meeting of the shareholders need be specified in any written waiver of notice.
Attendance of a person at a meeting shall constitute a waiver of (a) lack of or
defective notice of such meeting, unless the person objects at the beginning to
the holding of the meeting or the transacting of any business at the meeting, or
(b) lack of or defective notice of a particular matter at a meeting that is not
within the purpose or purposes described in the meeting notice, unless the
person objects to considering such matter when it is presented.
Section 6. Business and Nominations for Annual and Special Meetings.
Business transacted at any special meeting shall be confined to the purposes
stated in the notice thereof. At any annual meeting of shareholders, only such
business shall be conducted as shall have been property brought before the
meeting in accordance with the requirements and procedures set forth in the
Florida Business Corporation Act and the Articles of Incorporation. Only such
persons who are nominated for election as directors of the Corporation in
accordance with the requirements and procedures set forth in the Florida
Business Corporation Act and the Articles of Incorporation shall be eligible for
election as directors of the Corporation.
Section 7. Quorum. Shares entitled to vote as a separate voting group
may take action on a matter at a meeting only if a quorum of those shares exists
with respect to that matter. Except as otherwise provided in the Articles of
Incorporation or applicable law, shares representing a majority of the votes
pertaining to outstanding shares which are entitled to be cast on the matter by
the voting group constitute a quorum of that voting group for action on that
matter. If less than a quorum of shares are represented at a meeting, the
holders of a majority of the shares so represented may adjourn the meeting from
time to time. After a quorum has been established at any shareholders' meeting,
the subsequent withdrawal of shareholders, so as to reduce the number of shares
entitled to vote at the meeting below the number required for a quorum, shall
not affect the validity of any action taken at the meeting or any adjournment
thereof. Once a share is represented for any purpose at a meeting, it is deemed
present for quorum purposes for the remainder of the meeting and for any
adjournment of that meeting unless a new record date is or must be set for that
adjourned meeting.
Section 8. Voting Rights Per Share. Each outstanding share, regardless
of class, shall be entitled to vote on each matter submitted to a vote at a
meeting of shareholders, except to the extent that the voting rights of the
shares of any class are limited or denied by or pursuant to the Articles of
Incorporation or the Florida Business Corporation Act.
Section 9. Voting of Shares. A shareholder may vote at any meeting of
shareholders of the Corporation, either in person or by proxy. Shares standing
in the name of another corporation, domestic or foreign, may be voted by the
officer, agent or proxy designated by the bylaws of such corporate shareholder
or, in the absence of any applicable bylaw, by such person or persons as the
board of directors of the corporate shareholder may designate. In the absence of
any such designation, or, in case of conflicting designation by the corporate
shareholder, the chairman of the board, the president, any vice president, the
secretary and the treasurer of the corporate shareholder, in that order, shall
be presumed to be fully authorized to vote such shares. Shares held by an
administrator, executor, guardian, personal representative, or. conservator may
2
<PAGE> 7
be voted by such person, either in person or by proxy, without a transfer of
such shares into his name. Shares standing in the name of a trustee may be voted
by such person, either in person or by proxy, but no trustee shall be entitled
to vote shares held by such person without a transfer of such shares into his
name or the name of his nominee. Shares held by or under the control of a
receiver, a trustee in bankruptcy proceedings, or an assignee for the benefit of
creditors may be voted by such person without the transfer thereof into his
name. If shares stand of record in the names of two or more persons, whether
fiduciaries, members of a partnership, joint tenants, tenants in common, tenants
by the entirety or otherwise, or if two or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary of the Corporation
is given notice to the contrary and is furnished with a copy of the instrument
or order appointing them or creating the relationship wherein it is so provided,
then acts with respect to voting shall have the following effect: (a) if only
one votes, in person or by proxy, his act binds all, (b) if more than one vote,
in person or by proxy, the act of the majority so voting binds all; (c) if more
than one vote, in person or by proxy, but the vote is evenly split on any
particular matter, each faction is entitled to vote the share or shares in
question proportionally, or (d) if the instrument or order so filed shows that
any such tenancy is held in unequal interest, a majority or a vote evenly split
for purposes hereof shall be a majority or a vote evenly split in interest. The
principles of this paragraph shall apply, insofar as possible, to execution of
proxies, waivers, consents, or objections and for the purpose of ascertaining
the presence of a quorum.
Section 10. Proxies. Any shareholder of the Corporation, other person
entitled to vote on behalf of a shareholder pursuant to law, or attorney-in-fact
for such persons may vote the shareholders shares in person or by proxy. Any
shareholder of the Corporation may appoint a proxy to vote or otherwise act for
such person by signing an appointment form, either personally or by his
attorney-in-fact. An executed telegram or cablegram appearing to have been
transmitted by such person, or a photographic, photostatic, or equivalent
reproduction of an appointment form, shall be deemed a sufficient appointment
form. An appointment of a proxy is effective when received by the Secretary of
the Corporation (the "Secretary") or such other officer or agent which is
authorized to tabulate votes, and shall be valid for up to 11 months, unless a
longer period is expressly provided in the appointment form. The death or
incapacity of the shareholder appointing a proxy does not affect the right of
the Corporation to accept the proxy's authority unless notice of the death or
incapacity is received by the Secretary or other officer or agent authorized to
tabulate votes before the proxy authority under the appointment is exercised. An
appointment of a proxy is revocable by the shareholder unless the appointment
form conspicuously states that it is irrevocable and the appointment is coupled
with an interest.
Section 11. Shareholder List. After fixing a record date for a meeting
of shareholders, the Corporation shall prepare an alphabetical list of the names
of all its shareholders who are entitled to notice of the meeting, arranged by
voting group with the address of, and the number and class and series, if any,
of shares held by each. The shareholders list must be available for inspection
by any shareholder for a period of ten (10) days prior to the meeting or such
shorter time as exists between the record date and the meeting and continuing
through the meeting at the Corporation's principal office, at a place identified
in the meeting notice in the city where the meeting will be held, or at the
office of the Corporation's transfer agent or registrar. Any shareholder of the
Corporation or such person's agent or attorney is entitled on written demand to
inspect the shareholders' list (subject to the requirements of law), during
regular business hours and at his
3
<PAGE> 8
expense, during the period it is available for inspection. The Corporation shall
make the shareholders' list available at the meeting of shareholders, and any
shareholder or agent or attorney of such shareholder is entitled to inspect the
list at any time during the meeting or any adjournment. The shareholders' list
is prima facie evidence of the identity of shareholders entitled to examine the
shareholders' list or to vote at a meeting of shareholders.
Section 12. Action Without Meeting. Any action required or permitted by
law to be taken at a meeting of shareholders may be taken without a meeting or
notice if a consent, or consents, in writing, setting forth the action so taken,
shall be dated and signed by the holders of outstanding stock having not less
than the minimum number of votes that would be necessary to authorize or take
such action at a meeting at which all voting groups and shares entitled to vote
thereon were present and voted with respect to the subject matter thereof, and
such consent shall be delivered to the Corporation, within the period required
by Section 607.0704 of the Florida Business Corporation Act, by delivery to its
principal office in the State of Florida, its principal place of business, the
Secretary or another officer or agent of the Corporation having custody of the
book in which proceedings of meetings of shareholders are recorded. Within ten
(10) days after obtaining such authorization by written consent, notice must be
given to those shareholders who have not consented in writing or who are not
entitled to vote on the action, in accordance with the requirements of Section
607.0704 of the Florida Business Corporation Act.
Section 13. Fixing Record Date. For the purpose of determining
shareholders entitled to notice of or to vote at any meeting of shareholders or
any adjournment thereof, or entitled to receive payment of any dividend, or in
order to make a determination of shareholders for any other proper purposes, the
Board of Directors may fix in advance a date as the record date for any such
determination of shareholders, such date in any case to be not more than seventy
(70) days, and, in case of a meeting of shareholders, not less than ten (10)
days, before the meeting or action requiring such determination of shareholders.
If no record date is fixed for the determination of shareholders entitled to
notice of or to vote at a meeting of shareholders or the determination of
shareholders entitled to receive payment of a dividend, the date before the day
on which the first notice of the meeting is mailed or the date on which the
resolutions of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this Section, such determination shall
apply to any adjournment thereof, except where the Board of Directors fixes a
new record date for the adjourned meeting.
Section 14. Inspectors and Judges. The Board of Directors in advance of
any meeting may, but need not, appoint one or more inspectors of election or
judges of the vote, as the case may be, to act at the meeting or any adjournment
thereof. If any inspector or inspectors, or judge or judges, are not appointed,
the person presiding at the meeting may, but need not, appoint one or more
inspectors or judges. In case any person who may be appointed as an inspector or
judge fails to appear or act, the vacancy may be filled by the Board of
Directors in advance of the meeting, or at the meeting by the person presiding
thereat. The inspectors or judges, if any, shall determine the number of shares
of stock outstanding and the voting power of each, the shares of stock
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive votes, ballots and consents, hear and determine
all challenges and questions arising in connection with the right to vote, count
and tabulate votes, ballots and consents, determine the
4
<PAGE> 9
result, and do such acts as are proper to conduct the election or vote with
fairness to all shareholders. On request of the person presiding at the meeting,
the inspector or inspectors or judge or judges, if any, shall make a report in
writing of any challenge, question or matter determined by him or them, and
execute a certificate of any fact found by him or them.
Section 15. Voting for Directors. Unless otherwise provided in the
Articles of Incorporation, directors shall be elected by a plurality of the
votes cast by the shares entitled to vote in the election at a meeting at which
a quorum is present.
ARTICLE THREE - DIRECTORS
Section 1. Number; Term: Election; Qualification. The number of
directors of the Corporation shall be fixed from time to time, within the limits
specified by the Articles of Incorporation, by resolution of the Board of
Directors. Directors shall be elected in the manner and hold office for the term
as prescribed in the Florida Business Corporation Act and the Articles of
Incorporation. Directors must be natural persons who are 18 years of age or
older but need not be residents of the State of Florida, shareholders of the
Corporation or citizens of the United States.
Section 2. Resignation; Vacancies, Removal. A director may resign at
any time by giving written notice to the Board of Directors or the Chairman of
the Board. Such resignation shall take effect at the date of receipt of such
notice or at any later time specified therein, and, unless otherwise specified
therein, the acceptance of such resignation shall not be necessary to make it
effective. In the event the notice of resignation specifies a later effective
date, the Board of Directors may fill the pending vacancy (subject to the
provisions of the Articles of Incorporation) before the effective date if they
provide that the successor does not take office until the effective date.
Director vacancies shall be filled, and directors may be removed, in the manner
prescribed in the Florida Business Corporation Act and the Articles of
Incorporation. A director elected to fill a vacancy shall be elected for the
unexpired terms of his or her predecessor in office. Any directorship to be
filled by reason of an increase in the number of directors may be filled by the
Board of Directors for a term of office continuing only until the next election
of directors by the shareholders.
Section 3. Powers. The business and affairs of the Corporation shall be
managed by the Board of Directors, which may exercise all such powers of the
Corporation and do all such lawful acts and things as are not by statute or by
the Articles of Incorporation or by these Bylaws directed or required to be
exercised and done by the shareholders.
Section 4. Place of Meetings. Meetings of the Board of Directors,
regular or special, may be held either within or without the State of Florida.
Section 5. Annual Meetings. Unless scheduled for another time by the
Board of Directors, the first meeting of each newly elected Board of Directors
shall be held, without call or notice, immediately following each annual meeting
of shareholders.
Section 6. Regular Meetings. Regular meetings of the Board of Directors
may also be held without notice at such time and at such place as shall from
time to time be determined by the Board of Directors.
5
<PAGE> 10
Section 7. Special Meetings and Notice. Special meetings of the Board of
Directors may be called by the President or Chairman of the Board and shall be
called by the Secretary on the written request of any two directors. At least
forty-eight (48) hours' prior written notice of the date, time and place of
special meetings of the Board of Directors shall be given to each director.
Except as required by law, neither the business to be transacted at, nor the
purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting. Notices to
directors shall be in writing and delivered to the directors at their addresses
appearing on the books of the Corporation by personal delivery, mail or other
legally sufficient means. Subject to the provisions of the preceding sentence,
notice to directors may also be given by telegram, teletype or other form of
electronic communication. Notice by mail shall be deemed to be given three (3)
days after being deposited in the mails, properly addressed and with proper
postage prepaid. Whenever any notice is required to be given to any director, a
waiver thereof in writing signed by the person or persons entitled to such
notice, whether before, during or after the meeting, shall constitute an
effective waiver of such notice. Attendance of a director at a meeting shall
constitute a waiver of notice of such meeting and a waiver of any and all
objections to the place of the meeting, the time of the meeting and the manner
in which it has been called or convened, except when a director states, at the
beginning of the meeting or promptly upon arrival at the meeting, an objection
to the transaction of business because the meeting is not lawfully called or
convened.
Section 8. Quorum and Required Vote. A majority of the prescribed number
of directors determined as provided in the Articles of Incorporation shall
constitute a quorum for the transaction of business and the act of the majority
of the directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, unless a greater number is required by the
Articles of Incorporation. Whenever, for any reason, a vacancy occurs in the
Board of Directors, a quorum shall consist of a majority of the remaining
directors until the vacancy has been filled. If a quorum shall not be present at
any meeting of the Board of Directors, a majority of the directors present
thereat may adjourn the meeting to another time and place, without notice other
than announcement at the time of adjournment, At such adjourned meeting at which
a quorum shall be present, any business may be transacted that might have been
transacted at the meeting as originally called.
Section 9. Action Without Meeting. Any action required or permitted to
be taken at a meeting of the Board of Directors or committee thereof may be
taken without a meeting if a consent in writing, setting forth the action taken,
is signed by all of the members of the Board of Directors or the committee, as
the case may be, and such consent shall have the same force and effect as a
unanimous vote at a meeting. Action taken under this Section 9 is effective when
the last director signs the consent, unless the consent specifies a different
effective date. A consent signed under this Section 9 shall have the effect of a
meeting vote and may be described as such in any document.
Section 10. Conference Telephone or Similar Communications Equipment
Meetings. Directors and committee members may participate in and hold a meeting
by means of conference telephone or similar communications equipment by means of
which all persons participating in the meeting can hear each other.
Participation in such a meeting shall constitute presence in person at the
meeting, except where a person participates in the meeting for the express
purpose of
6
<PAGE> 11
objecting to the transaction of any business on the ground the meeting is not
lawfully called or converted.
Section 11. Committees. The Board of Directors, by resolution adopted
by a majority of the whole Board of Directors, may designate from among its
members an executive committee and one or more other committees, each of which,
to the extent provided in such resolution, shall have and may exercise all of
the authority of the Board of Directors in the business and affairs of the
Corporation except where the action of the full Board of Directors is required
by applicable law. Each committee must have two or more members who serve at the
pleasure of the Board of Directors. The Board of Directors, by resolution
adopted in accordance with this Article Three, may designate one or more
directors as alternate members of any committee, who may act in the place and
stead of any absent member or members at any meeting of such committee.
Vacancies in the membership of a committee may be filled only by the Board of
Directors at a regular or special meeting of the Board of Directors. The
executive committee shall keep regular minutes of its proceedings and report the
same to the Board of Directors when required. The designation of any such
committee and the delegation thereto of authority shall not operate to relieve
the Board of Directors, or any member thereof, of any responsibility imposed
upon it or such member by law.
Section 12. Compensation of Directors. The directors may be paid their
expenses, if any, of attendance at each meeting of the Board of Directors and
may be paid a fixed sum for attendance at each meeting of the Board of Directors
or a stated salary as director. No such payment shall preclude any director from
serving the Corporation in any other capacity and receiving compensation
therefor. Similarly, members of special or standing committees may be allowed
compensation for attendance at committee meetings or a stated salary as a
committee member and payment of expenses for attending committee meetings.
Directors may receive such other compensation as may be approved by the Board of
Directors.
ARTICLE FOUR - OFFICERS
Section 1. Positions. The officers of the Corporation may consist of a
Chairman of the Board, a Chief Executive Officer, a President, one or more Vice
Presidents (any one or more of whom may be given the additional designation or
rank of Executive Vice President or Senior Vice President), a Secretary, a Chief
Financial Officer and a Treasurer. Any two or more offices may be held by the
same person. Officers other than the Chairman of the Board need not be members
of the Board of Directors. The Chairman of the Board must be a member of the
Board or Directors.
Section 2. Election of Specified Officers by Board. The Board of
Directors at its first meeting after each annual meeting of shareholders shall
elect a Chairman of the Board, a Chief Executive Officer, a President, one or
more Vice Presidents (including any Senior or Executive Vice Presidents), a
Secretary, a Chief Financial Officer and a Treasurer.
Section 3. Election or Appointment of Other Officers. Such other
officers and assistant officers and agents as may be deemed necessary may be
elected or appointed by the Board of Directors, or, unless otherwise specified
herein, appointed by the Chairman of the Board. The Board of Directors shall be
advised of appointments by the Chairman of the Board at or before the next
scheduled Board of Directors meeting.
7
<PAGE> 12
Section 4. Compensation. The salaries, bonuses and other compensation of
the Chairman of the Board and all officers of the Corporation to be elected by
the Board of Directors pursuant to Section 2 of this Article Four shall be fixed
from time to time by the Board of Directors or pursuant to its direction. The
salaries of all other elected or appointed officers of the Corporation shall be
fixed from time to time by the Chairman of the Board or pursuant to his
direction.
Section 5. Term; Resignation; Removal; Vacancies. The officers of the
Corporation shall hold office until their successors are chosen and qualified.
Any officer or agent elected or appointed by the Board of Directors or the
Chairman of the Board may be removed, with or without cause, by the Board of
Directors, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed, Any officer or agent appointed by the Chairman
of the Board pursuant to Section 3 of this Article Four also may be removed from
such office or position by the Board of Directors or the Chairman of the Board,
with or without cause. Any vacancy occurring in any office of the Corporation by
death, resignation, removal or otherwise shall be filled by the Board of
Directors, or, in the case of an officer appointed by the Chairman of the Board,
by the Chairman of the Board or the Board of Directors. Any officer of the
Corporation may resign from his respective office or position by delivering
notice to the Corporation, and such resignation shall be effective without
acceptance. Such resignation shall be effective when delivered unless the notice
specifies a later effective date. If a resignation is made effective at a later
date and the Corporation accepts the future effective date, the Board of
Directors may fill the pending vacancy before the effective date if the Board
provides that the successor does not take office until such effective date.
Section 6. Chairman of the Board, The Chairman of the Board shall
preside at all meetings of the shareholders and of the Board of Directors. The
Chairman of the Board also shall serve as the chairman of any executive
committee.
Section 7. Chief Executive Officer. Subject to the control of the Board
of Directors, the Chief Executive Officer, in conjunction with the President,
shall have general and active management of the business of the Corporation,
shall see that all orders and resolutions of the Board of Directors are carried
into effect and shall have such powers and perform such duties as may be
prescribed by the Board of Directors. In the absence of the Chairman of the
Board or in the event the Board of Directors shall not have designated a
Chairman of the Board, the Chief Executive Officer shall preside at meetings of
the shareholders and the Board of Directors. The Chief Executive Officer shall
also serve as a vice-chairman of any executive committee.
Section 8. President. Subject to the control of the Board of Directors,
the President, in conjunction with the Chief Executive Officer, shall have
general and active management of the business of the Corporation and shall have
such powers and perform such duties as may be prescribed by the Board of
Directors. In the absence of the Chairman of the Board and the Chief Executive
Officer or in the event the Board of Directors shall not have designated a
Chairman of the Board and a Chief Executive Officer shall not have been elected,
the President shall preside at meetings of the shareholders and the Board of
Directors. The President also shall serve as a vice-chairman of any executive
committee.
Section 9. Vice Presidents. The Vice Presidents, in the order of their
seniority, unless otherwise determined by the Board of Directors, shall, in the
absence or disability of the President and the Chief Executive Officer, perform
the duties and exercise the powers of the President.
8
<PAGE> 13
They shall perform such other duties and have such other powers as the Board of
Directors, the Chairman of the Board or the Chief Executive Officer shall
prescribe or as the President may from time to time delegate. Executive Vice
Presidents shall be senior to Senior Vice Presidents, and Senior Vice Presidents
shall be senior to all other Vice Presidents.
Section 10. Secretary. The Secretary shall attend all meetings of the
shareholders and all meetings of the Board of Directors and record all the
proceedings of the meetings of the shareholders and of the Board of Directors in
a book to be kept for that purpose and shall perform like duties for the
standing committees when required. The Secretary shall give, or cause to be
given, notice of all meetings of the shareholders and special meetings of the
Board of Directors and shall keep in safe custody the seal of the Corporation
and, when authorized by the Board of Directors, affix the same to any instrument
requiring it. The Secretary shall perform such other duties as may be prescribed
by the Board of Directors, the Chairman of the Board, the Chief Executive
Officer or the President.
Section 11. Chief Financial Officer. The Chief Financial Officer shall
be responsible for maintaining the financial integrity of the Corporation, shall
prepare the financial plans for the Corporation and shall monitor the financial
performance of the Corporation and its subsidiaries, as well as performing such
other duties as may be prescribed by the Board of Directors, the Chairman of the
Board, the Chief Executive Officer or the President.
Section 12. Treasurer. The Treasurer shall have the custody of
corporate funds and securities and shall keep full and accurate accounts of
receipts and disbursements in books belonging to the Corporation and shall
deposit all moneys and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board of Directors, taking proper vouchers for such
disbursements, and shall render to the Chairman of the Board and the Board of
Directors at its regular meetings or when the Board of Directors so requires an
account of all his transactions as Treasurer and of the financial condition of
the Corporation. The Treasurer shall perform such other duties as may be
prescribed by the Board of Directors, the Chairman of the Board, the Chief
Executive Officer or the President.
Section 13. Other Officers: Employees and Agents. Each and every other
officer, employee and agent of the Corporation shall possess, and may exercise,
such power and authority, and shall perform such duties, as may from time to
time be assigned to such person by the Board of Directors, the officer so
appointing such person or such officer or officers who may from time to time be
designated by the Board of Directors to exercise such supervisory authority.
ARTICLE FIVE - CERTIFICATES FOR SHARES
Section 1. Issue of Certificates. The shares of the Corporation shall be
represented by certificates, provided that the Board of Directors of the
Corporation may provide by resolution or resolutions that some or all of any or
all classes or series of its stock shall be uncertificated shares. Any such
resolution shall not apply to shares represented by a certificate until such
certificate is surrendered to the Corporation. Notwithstanding the adoption of
such a resolution by the Board of Directors, every holder of stock represented
by certificates (and upon request every holder of uncertificated shares) shall
be entitled to have a certificate signed by or in the name of the Corporation by
the Chairman of the Board or a Vice Chairman of the Board, or the Chief
9
<PAGE> 14
Executive Officer, President or Vice President, and by the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary of the
Corporation, representing the number of shares registered in certificate form.
Section 2. Legends for Preferences and Restrictions on Transfer. The
designations, relative rights, preferences and limitations applicable to each
class of shares and the variations in rights, preferences and limitations
determined for each series within a class (and the authority of the Board of
Directors to determine variations for future series) shall be summarized on the
front or back of each certificate. Alternatively, each certificate may state
conspicuously on its front or back that the Corporation will furnish the
shareholder a full statement of this information on request and without charge.
Every certificate representing shares that are restricted as to the sale,
disposition, or transfer of such shares shall also indicate that such shares are
restricted as to transfer, and there shall be set forth or fairly summarized
upon the certificate, or the certificate shall indicate that the Corporation
will furnish to any shareholder upon request and without charge, a full
statement of such restrictions. If the Corporation issues any shares that are
not registered under the Securities Act of 1933, as amended, or not registered
or qualified under the applicable state securities laws, the transfer of any
such shares shall be restricted substantially in accordance with the following
legend:
"THESE SHARES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
OR UNDER ANY APPLICABLE STATE LAW. THEY MAY NOT BE OFFERED FOR SALE,
SOLD, TRANSFERRED OR PLEDGED WITHOUT (1) REGISTRATION UNDER THE
SECURITIES ACT OF 1933 AND ANY APPLICABLE STATE LAW, OR (2) AT HOLDER'S
EXPENSE, AN OPINION (SATISFACTORY TO THE CORPORATION) OF COUNSEL
(SATISFACTORY TO THE CORPORATION) THAT REGISTRATION IS NOT REQUIRED."
Section 3. Facsimile Signatures. Any and all signatures on the
certificate may be a facsimile. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed upon such
certificate shall have ceased to be such officer, transfer agent or registrar
before such certificate is issued, it may be issued by the Corporation with the
same effect as if he were such officer, transfer agent or registrar at the date
of issue.
Section 4. Lost or Destroyed Certificates. The Board of Directors may
direct a new certificate or certificates to be issued in place of any
certificate or certificates theretofore issued by the Corporation alleged to
have been lost or destroyed, upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorizing such issue of a new certificate or certificates, the Corporation
may, in its discretion and as a condition precedent to the issuance thereof,
require the owner of such lost or destroyed certificate or certificates, or his
legal representative, to advertise the same in such manner as it shall require
and/or to give the Corporation a bond in such sum as it may direct as indemnity
against any claim that may be made against the Corporation with respect to the
certificate alleged to have been lost or destroyed,
Section 5. Transfer of Shares. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a
10
<PAGE> 15
new certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books.
Section 6. Registered Shareholders. The Corporation shall be entitled to
recognize the exclusive rights of a person registered on its books as the owner
of shares to receive dividends, and to vote as such owner, and shall not be
bound to recognize any equitable or other claim to or interest in such share or
shares on the part of any other person, whether or not it shall have express or
other notice thereof, except as otherwise provided by the laws of the State of
Florida.
Section 7. Redemption of Control Shares. As provided by the Florida
Business Corporation Act, if a person acquiring control shares of the
Corporation does not file an acquiring person statement with the Corporation,
the Corporation may, at the discretion of the Board of Directors, redeem the
control shares at the fair value thereof at any time during the 60-day period
after the last acquisition of such control shares. If a person acquiring control
shares of the Corporation files an acquiring person statement with the
Corporation, the control shares may be redeemed by the Corporation, at the
discretion of the Board of Directors, only if such shares are not accorded full
voting rights by the shareholders as provided by law.
ARTICLE SIX - GENERAL PROVISIONS
Section 1. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in
cash, property, stock (including its own shares) or otherwise pursuant to law
and subject to the provisions of the Articles of Incorporation.
Section 2. Reserves. The Board of Directors may by resolution create a
reserve or reserves out of earned surplus for any proper purpose or purposes,
and may abolish any such reserve in the same manner.
Section 3. Checks. All checks or demands for money and notes of the
Corporation shall be signed by such officer or officers or such other person or
persons as the Board of Directors may from time to time designate.
Section 4. Fiscal Year. The fiscal year of the Corporation shall end on
December 31 of each year, unless otherwise fixed by resolution of the Board of
Directors.
Section 5. Seal. The Board of Directors may adopt a corporate seal by
resolution. The corporate seal, if adopted, shall have inscribed thereon the
name and state of incorporation of the Corporation. The seal may be used by
causing it or a facsimile thereof to be impressed or affixed or in any other
manner reproduced.
Section 6. Gender. All words used in these Bylaws in the masculine
gender shall extend to and shall include the feminine and neutral genders.
ARTICLE SEVEN - AMENDMENT OF BYLAWS
Except as other-wise set forth herein, these Bylaws may be altered,
amended or repealed or new Bylaws may be adopted at any meeting of the Board of
Directors at which a quorum is present, by the affirmative vote of a majority of
the directors present at such meeting.
11
<PAGE> 16
PRESIDENT'S CERTIFICATE OF ADOPTION OF
THE BYLAWS OF CYBEROAD.COM CORPORATION
I hereby certify:
That I am the duly elected President of Cyberoad.com Corporation, a Florida
corporation;
That the foregoing Bylaws, constitute the Bylaws of said corporation as duly
adopted by the Board of Directors of the Corporation on March 16, 1999.
IN WITNESS WHEREOF, I have hereunder signed my name as of the 31st day of May,
1999.
/s/ JOHN COFFEY
- ---------------------------------------
John Coffey, President
12
<PAGE> 1
EXHIBIT 10.3
1
ASSIGNMENT AGREEMENT
Effective April 19, 1999.
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of
business at Box 174 Basseterre St. Kitts, West Indies.
(the "Assignor")
AND
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation having a
place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB.
(the "Assignee")
1.0 ASSIGNMENT
1.1 In consideration of the sum of one hundred thousand U.S. dollars
($100,000 U.S.) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Assignor hereby transfers, conveys, and assigns to the Assignee:
1.2 all of its rights, title and benefit as well as its obligations and
responsibilities pursuant to an Operating and Revenue Sharing
Management Agreement dated March 13, 1998 between the Assignor and
Internet Wagering Systems, Ltd.;
1.3 the said Agreement dated March 13, 1998;
1.4 all of its rights, title and benefit as well as its obligations and
responsibilities pursuant to a Nonexclusive License Agreement dated
March 5, 1998 between the Assignor and Internet Wagering Systems
Ltd.
1.5 the said Agreement dated March 5, 1998;
1.6 all of its rights, title and benefit as well as its obligations and
responsibilities pursuant to a Binding Letter of Intent dated March
5, 1998 between the Assignor and Internet Wagering System's Ltd; and
1.7 the said letter of Intent dated March 5, 1998.
<PAGE> 2
2
2.0 DOCUMENTS
The documents which are the subject of this Assignment Agreement are
attached hereto and marked Schedule "A".
3.0 SUCCESSORS
This Agreement shall entire to the benefit of the Assignee and shall be
binding upon the Assignor and its executors, successors and assigns.
4.0 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Isle of Man.
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
Per: /s/ LAWRENCE COFIELD Per: /s/ JOHN COFFEY
-------------------------- --------------------------
Name: Lawrence Cofield Name: John Coffey
Title: Director Title: Director
<PAGE> 1
EXHIBIT 10.4
AMENDMENT TO THE ASSIGNMENT AGREEMENT
Dated April 19, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation ("CGC") and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation,
("Cyberoad 10M");
WHEREAS this Amendment acknowledges that:
a) the Assignment Agreement amending the Operating and Revenue Sharing
Agreement for Internet Wagering Systems Ltd., executed by the parties
hereto, is to be made effective as of May 1, 1999; and
b) the total consideration, as paid in full, is U.S. $10,000.00, and
other good and valuable consideration, the receipt of which is hereby
acknowledged.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, each of which shall be deemed to be an original, and each of which
shall constitute one and the same instrument, and shall bear the date first
written above.
ACKNOWLEDGED AND AGREED TO ON THE 18th DAY OF OCTOBER, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD, /s/ JOHN COFFEY,
- -------------------------- --------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.6
ASSIGNMENT AGREEMENT
Effective April 19, 1999
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of
business at Box 174, Basseterre, St. Kitts, West Indies
(the "Assignor")
AND
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation having a
place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB
(the "Assignee")
1.0 ASSIGNMENT
1.1 In consideration of the sum of one hundred thousand U.S. dollars
($100,000.00 U.S.) and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Assignor
hereby transfers, conveys, and assigns to the Assignee;
1.2 all of its rights, title and benefit as well as its obligations and
responsibilities pursuant to an Operating License, Revenue Sharing and
Management Agreement dated May 5, 1998 between the Assignor and Asanol
Management Corporation;
1.3 the said Agreement dated May 5, 1998.
2.0 DOCUMENTS
The documents which are the subject of this Assignment Agreement are
attached hereto and marked Schedule "A"
<PAGE> 2
2
3.0 SUCCESSORS
This Agreement shall enure to the benefit of the Assignee and shall be
binding upon the Assignor and its executors, successors and assigns.
4.0 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Isle of Man.
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
Per: /s/ LAWRENCE COFIELD Per: /s/ JOHN COFFEY
-------------------------- --------------------------
Name: Lawrence Cofield Name: John Coffey
Title: Director Title: Director
<PAGE> 1
EXHIBIT 10.7
AMENDMENT TO THE ASSIGNMENT AGREEMENT
Dated April 19, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation,
("Cyberoad IOM");
WHEREAS this Amendment acknowledges that:
c) the Assignment Agreement amending the Operating and Revenue Sharing
Agreement for Asanol Management Corporation, executed by the parties
hereto, is to be made effective as of May 1, 1999; and
d) the total consideration, as paid in full, is U.S.$10,000.00, and
other good and valuable consideration, the receipt of which is hereby
acknowledged.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, each of which shall be deemed to be an original, and each of which
shall constitute one and the same instrument, and shall bear the date first
written above.
ACKNOWLEDGED AND AGREED TO ON THE 18TH DAY OF OCTOBER, 1999
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN)
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- --------------------------- --------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.8
TERMINATION TO AMENDED ASSIGNMENT AGREEMENT
DATED APRIL 19, 1999 TO
THE OPERATING AND REVENUE SHARING AGREEMENT
ASANOL MANAGEMENT CORPORATION
BETWEEN CYBEROAD GAMING CORPORATION, (the "Assignor") and CYBEROAD.COM (ISLE OF
MAN) LIMITED, (the "Assignee"), evidences that:
As of September 1, 1999, the parties hereby acknowledge and agree to the
termination of the above referenced agreement between the parties hereto, and
all rights and obligations on behalf of the parties thereunder are null and
void.
EXECUTION
This instrument may be executed in counterpart, in as many counterparts as may
be necessary, each of which shall be deemed to be an original and each of which
shall bear the date first written above.
ACKNOWLEDGED AND AGREED TO ON THE 1ST DAY OF SEPTEMBER, 1999
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN)
/s/ LAWRENCE COFIELD /s/ DAVID HARRIS
- --------------------------- --------------------------
Lawrence Cofield, David Harris,
Director Director
<PAGE> 1
EXHIBIT 10.12
ASSIGNMENT AGREEMENT
EFFECTIVE JULY 15, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation having its place
of business at Box 174, Basseterre St. Kitts, West Indies (the "Assignor");
AND
BETWEEN: CYBEROAD.COM (IOM) LTD., an Isle of Man corporation, having its place
of business at International House, Castle Hill, Victoria Road, Douglas, Isle of
Man.
1.0 ASSIGNMENT
1.1 In consideration of the sum of $1.00 U.S. and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Assignor hereby transfers, conveys, and assigns to the Assignee;
1.2 all of its rights, title and benefit as well as its obligations and
responsibilities pursuant to a Software License Agreement dated October 15, 1998
by and between Nordic Investment Corporation and Cyberoad Gaming Corporation
herein attached.
2.0 SUCCESSORS
2.1 This Agreement shall enure to the benefit of the Assignee and shall be
binding upon the Assignor and its executors, successors and assignees.
3.0 GOVERNING LAW
3.1 This Agreement shall be governed by and construed in accordance with
the laws of Isle of Man.
EXECUTION IN COUNTERPART
This assignment may be signed in counterpart, in as many counterparts as may be
necessary, by the parties, each of which shall be deemed to be an original, and
such counterparts together shall constitute one and the same instrument
notwithstanding the date of execution, and shall be deemed to bear the date as
set out below.
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD GAMING CORPORATION CYBEROAD.COM (IOM) LTD.
/s/ LAWRENCE COFIELD /s/ DAVID HARRIS
- --------------------------------- ---------------------------------
Lawrence Cofield, David Harris,
Director Director
<PAGE> 1
EXHIBIT 10.13
AMENDMENT TO THE ASSIGNMENT AGREEMENT
DATED JULY 15, 1999 AND
THE SOFTWARE LICENSE AGREEMENT
DATED OCTOBER 15, 1998
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation, ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) CORPORATION, an Isle of Man corporation,
("IOM");
WHEREAS this Amendment acknowledges that:
a) The Assignment Agreement between the parties hereto is hereby amended
to reflect an effective date of May 1, 1999.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, and each instrument shall be deemed an original, and shall
constitute one and the same agreement and shall bear the date first written
above.
ACKNOWLEDGED AND AGREED TO THIS 18TH DAY OF OCTOBER, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- --------------------------- --------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.14
ASSIGNMENT AGREEMENT AND LICENSE
Effective April 19, 1999
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place
of business at Box 174, Basseterre, St. Kitts, West Indies
(the "Assignor")
AND
CYBEROAD.COM (ISLE OF MAN) LIMITED an Isle of Man corporation having
a place, of business at International House, Castle Hill, Victoria
Road, Douglas, Isle of Man, IM2 4RB
(the "Assignee")
1.0 ASSIGNMENT
1.1 In consideration of the sum of three hundred thousand U.S. dollars
($300,000.00 U.S.) and the grant of a two site license by the
Assignee to the Assignor for 100% ownership of two companies
operating in Costa Rica: Sistemas de Informacion Tecnologica (SIT)
and Informacion y Tecnologia Canadiense (ITC) and the use of the
software "CR Netbook" and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
Assignor hereby transfers, conveys, and assigns to the Assignee all
of its rights, title and interest in and to the software product
known as "CR Netbook". The said software product shall include:
1.1.1 the source code for the software "CR Netbook";
1.1.2 copyright in all countries of the world;
1.1.3 all software modules that make up the "CR Netbook" system in
all languages, formats, media and versions and all
<PAGE> 2
modifications, updates and enhancements thereto produced up to
the effective date of this Agreement;
1.1.4 all user documentation; and
1.1.5 the trademark to the name "C.R. Netbook".
1.2 The Assignor shall not retain any copies of the source code for the
software "CR Netbook" and shall forward the said source code to the
Assignee forthwith.
2.0 ASSIGNOR'S WARRANTIES
2.1 The Assignor represents, warrants and covenants with the Assignee
that, subject to the rights granted herein, the Assignor has all
proprietary rights, title and interest in and to the software
product known as "CR Netbook" including copyright and trademark,
sufficient to assign all rights to the software pursuant to this
Agreement.
2.2 The Assignor represents, warrants and covenants with the Assignee
that there are no liens, encumbrances, security interests, pending
litigation and claims that would adversely affect any of the rights
assigned pursuant to this Agreement.
2.3 The Assignor shall defend the Assignee against any claim that any
portion of the software assigned pursuant to this Agreement
infringes any patent, trademark, trade secret or copyright, and the
Assignee shall pay any an all court costs awarded and legal fees
incurred in respect of any such claim, provided that:
2.3.1 the Assignee notifies the Assignor of the claim; and
2.3.2 the Assignor has the option of taking sole control of the
defense and all related settlement negotiations.
3.0 ASSIGNEE'S WARRANTIES
3.1 The Assignee warrants that in the event of insolvency of either the
Assignor or its parent corporations all of the rights, titles and
interests described herein will revert to the Assignor
<PAGE> 3
3.0 LICENSE
4.1 The Assignee hereby grants for the Assignor a non-exclusive license
to use the object code for the computer program "CR Netbook" and
accompanying documentation at two websites, subject to the terms and
restrictions set forth in this Agreement. The said websites shall
be:
- thebigbook.com
- a further website that the Assignor may establish
4.2 The Assignor may not copy or reproduce any part of the object code
for "CR Netbook" except for backup use. The Assignor may not
distribute copies of the said object code to others.
4.2.1 THE OBJECT CODE FOR TR NETBOOK" IS LICENSED "AS IS" WITHOUT
WARRANTY AS TO ITS PERFORMANCE.
4.3 THE ASSIGNEE SHALL NOT BE LIABLE FOR ANY DIRECT, INCIDENTAL OR
CONSEQUENTIAL DAMAGES RESULTING FROM THE USE OF THE OBJECT CODE FOR
"CR NETBOOK".
4.4 The license granted under this Agreement is effective until may
terminated. The Assignor terminate this license at any time by
destroying the object code for "CR Netbook" in all forms and the
documentation. The Assignee may terminate this license if the
Assignor breaches any term hereof.
5.0 SUCCESSORS
This Agreement shall ensure to the benefit of the Assignee and shall be
binding upon the Assignor and its executors, successors and assigns.
<PAGE> 4
6.0 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Isle of Man.
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
above written.
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF
MAN) LIMITED
Per: /s/ LAWRENCE COFIELD Per: /s/ JOHN COFFEY
----------------------------- --------------------------------
Name: Lawrence Cofield Name: John Coffey
Title: Director Title: Director
<PAGE> 5
Effective April 19,1999
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of business
at Box 174, Basseterre, St. Kitts, West Indies
(the "Assignor")
AND
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation having a place
of business at International House, Castle Hill, Victoria Road, Douglas, Isle of
Man, IM2 4RB
(the "Assignee")
ASSIGNMENT AGREEMENT
- --------------------------------------------------------------------------------
VARTY & COMPANY
Barristers & Solicitors
700-555 West Hastings Street
Vancouver, B.C. V6B 4N5
<PAGE> 1
EXHIBIT 10.15
AMENDMENT TO
ASSIGNMENT AGREEMENT AND LICENSE
WHEREAS:
CYBEROAD GAMING CORPORATION, (the "Assignor"), wishes to amend Section 1.1 of
the attached agreement (the "Assignment Agreement and License");
and
CYBEROAD.COM (ISLE OF MAN) LIMITED, (the "Assignee) wishes to amend Section 1.1
of the Assignment Agreement and License;
Now therefore for good and valuable consideration the receipt and sufficiency of
which is hereby acknowledged the Assignor and the Assignee agree as follows:
1.0 section 1.l of the Assignment Agreement and License is hereby deleted and
replaced with the following:
1.1 In consideration of the sum of thirty thousand U.S. dollars
($30,000.00 U.S.), the grant of a two site license by the Assignee
to the Assignor and the right to use the software "CR Netbook" on
and subject to the terms hereof, the Assignor hereby transfers,
conveys, and assigns to the Assignee, 100% ownership of two
companies operating in Costa Rica: Sistemas de Informacion
Tecnologica (SIT) and Informacion y Tecnologia Canadiense (ITC) and
all of its rights, title and interest in and to the software product
known as "CR Netbook. The said software product shall include:
1.1.1 the source code for the software "CR Netbook";
1.1.2 copyright in all countries of the world;
1.1.3 all software modules that make up the "CR Netbook" system in
all languages, formats, media and versions and all
modifications, updates and enhancements thereto produced up to
the effective date of this Agreement;
1.1.4 all user documentation; and
1.1.5 the trademark to the name "CR Netbook".
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2.0 the remaining terms and conditions of the original Assignment Agreement
shall remain in full force and effect unamended.
3.0 EXECUTION IN COUNTERPART
This Amendment may be signed by the, parties in as many counterparts as may be
necessary, each of which so signed shall be deemed to be an original ad such
counterpart together shall constitute one and the same instrument and
notwithstanding the date of execution shall be deemed to beer the date as set
forth below.
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duly authorized officers as of the day and year written
below.
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF
MAN) LIMITED
Per: /s/ LAWRENCE COFIELD Per: /s/ JOHN COFFEY
-------------------------------- -----------------------------
Name: Lawrence Cofield Name: John Coffey
Title: Director Title: Director
Dated this 11 Day of June, 1999 at 4 p.m.
<PAGE> 1
EXHIBIT 10.16
REVISED AMENDMENT TO THE ASSIGNMENT AGREEMENT
DATED APRIL 19, 1999 AND
THE AMENDMENT TO THE ASSIGNMENT AGREEMENT
DATED JUNE 11, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation, ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation,
("Cyberoad IOM");
WHEREAS this revised amendment acknowledges that:
a) the parties hereto agree that the effective date for all agreements,
being the Assignment Agreement and License, dated April 19, 1999 and
the Amendment to the Assignment Agreement, dated June 11, 1999, bear
the effective date of May 1, 1999.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as is
necessary, and shall be deemed an original, and shall constitute one and the
same instrument, and shall bear the date first written above.
ACKNOWLEDGED AND AGREED TO THIS 18TH DAY OF OCTOBER, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- --------------------------------- --------------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.17
NON-EXCLUSIVE LICENSE AGREEMENT
This Non-Exclusive License Agreement (hereinafter called the "Agreement"
or "License") is made and entered into effective this 19th day of April, 1999,
by and between Cyberoad.com(Isle of Man) Ltd. ("Cyberoad.com(IOM) Ltd. or
"Licensor"), an Isle of Man corporation, and Cyberoad Gaming
Corporation(CGC)("Licensee"), a St. Kitts corporation.
RECITALS
WHEREAS, Cyberoad.com(I0M) Ltd. and its affiliates are engaged in the
business of developing and manufacturing applications and communications
software and has developed certain software and hardware applications, Know-How,
trade secrets, copyrights and trademarks, and has obtained licenses to certain
hardware and software, and has expertise in networking, software, hardware,
security systems, electronic commerce, gaming systems, networked systems,
finance and banking for use by Content Providers on an Internet Website as part
of Licensor's CR Netbook(TM) gaming system; and
WHEREAS, CGC has a contract with Cyberoad.com(IOM) Ltd. to have
international gaining transactions conducted on its behalf under a data
processing license issued by the Government of Costa Rica for the operation of
transaction processing through satellite, telephone, Internet and other
technology; and
WHEREAS, CGC desires to secure a non-exclusive license to
Cyberoad.com(IOM) Ltd.'s Proprietary Technology, CR Netbook(TM),
WHEREAS, Cyberoad.com(IOM) Ltd. is willing to grant to CGC a
non-exclusive license
NOW, THEREFORE, in consideration of the foregoing premises and the
covenants and agreements recited in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by each Party, the Parties hereby agree as follows:
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ARTICLE I
DEFINITIONS
1.1 SOFTWARE, shall mean computer-readable programs for computer
operating systems or specific applications.
1.2 HARDWARE, shall mean the equipment and fixtures with which software
is used.
1.3 WEBSITE, shall mean Licensee's CR Netbook(TM)domain, accessible as a
website via the Internet at the URL: WWW.THEBIGBOOKCOM. Nothing in this
definition shall be construed as giving Cyberoad.com(IOM) Ltd. any rights, title
or legal ownership of, control or say of any nature over the website of CGC,
whether or not the CGC website is hosted on equipment owned and managed by
Cyberoad.com(IOM Ltd. CGC has absolute ownership and control over any of its
Uniform Resource Locators ("URL's") and the entire website.
1.4 INTERNET, shall mean a network of computer networks accessible
through telephonic means by computer for specific uses, including, but not
limited to recreational activities, such as games, wagering, betting, and
related support activities.
1.5 PLATFORMS, shall mean the equipment, programs, and telecommunications
network access necessary for the provision of specific telecommunication network
activities, including but not limited to games, activities, and other specific
uses.
1.6 NETWORK(s), shall mean a system(s) by which individual computer
operators may communicate with one another via telephonic or wireless means.
1.7 ON-LINE OPERATING SYSTEM(s), shall mean that software which supports
communication and specific applications over one or more networks.
1.8 PROPRIETARY TECHNOLOGY, shall mean that Cyberoad.com(IOM) Ltd.'s
Know-How, whether patented or unpatented, registered or unregistered,
copyrighted or uncopyrighted,
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confidential or in the public domain, or acquired by assignment, license, or
other means. The term Proprietary Technology shall include, but shall not be
limited to Cyberoad.com(IOM) Ltd.'s CR Netbook(TM) On-line Sportsbook management
and delivery system.
1.9 CGC SPORTSBOOK, shall mean Licensee's unique software application(s)
derived from Licensor's CR Netbook(TM)template, operating on the Site.
1.10 GAMING, shall mean gambling.
1.11 ON-LINE WAGERING, shall mean Gaming activities of any kind performed
over Network(s).
1.12 CONTENT PROVIDER, shall mean the Licensee of a website derived from
the CR Netbook(TM) template.
1.13 TERRITORY, shall mean only those countries or political subdivisions
in the world where On-line Wagering is lawful.
1.14 PROCESS, means the process, method, procedure, sequence, steps, or
use of apparatus including, in whole or in part, Licensor's Trade Secrets and
Know-How.
1.15 TRADE SECRETS, means the process, drawings, engineering designs,
computations, specifications, materials, customer lists, vendor sources,
formulas and any and all other secrets owned by Licensor to the method, Process
and equipment necessary to enable Licensee to use the CR Netbook(TM)as a Content
Provider.
1.16 KNOW-HOW, means the knowledge, skills, and experience of Licensor to
the method, Process, and equipment to make available the CR Netbook(TM)
application.
1.17 URL, shall mean Uniform Resource Location.
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1.18 SERVER, shall mean a computer Hardware system with communications
capabilities to support the On-Line Operating System(s).
1.19 CR NETBOOK(TM), shall mean On-line Sportsbook and Casino management
and delivery Software applications as demonstrated as of the date of this
Agreement or reasonable variations thereof, and use by On-Line Operating System
access of any other. Such Software is the template by which the bigbook.com
Sportsbook was developed by Cyberoad.com(IOM) Ltd. for Licensee.
1.20 THE BIGBOOK, shall mean the name of the Sportsbook specifically
designed for CGC by Cyberoad.com(IOM) Ltd.
ARTICLE II
THE LICENSE
2.1. GRANT OF NON-EXCLUSIVE LICENSE. For good and valuable consideration,
Cyberoad.com(IOM) Ltd. grants to CGC (a) a non-exclusive right and license to
use the Proprietary Technology as a Content Provider at www.thebigbook.com.
2.2 LICENSE FEE. The license has been granted in exchange for the right
for Cyberoad.com(IOM) Ltd. to acquire certain assets of CGC which include, inter
alia, the CR Netbook(TM), the assignment of certain licensees and the rights to
the domain name cyberoad.com
2.3 COVENANT NOT TO COMPETE. At all times during and after termination of
this License, CGC shall not advise, discuss with, consult with or otherwise
provide any services to any other party regarding Cyberoad.com(IOM) Ltd.
Proprietary Technology.
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ARTICLE III
TERM REPRESENTATIONS AND WARRANTIES
3.1 TERM. This Agreement shall remain in force indefinitely. Nothing in
this Agreement shall be construed as creating an exclusive right by either Party
with respect to the other Party's ongoing activities. Upgrades and support are
covered under separate agreement.
3.2.1 REPRESENTATIONS BY CYBEROAD.COM(IOM) LTD. Cyberoad.com(IOM) Ltd.
represents that it has kept the proprietary technology proprietary, has not
revealed the Trade Secrets and Know-How to anyone who has not agreed to observe
the confidential nature of such Proprietary Technology, its service marks and
copyrights am free of any known infringement or any known dilution by others, it
is the sole owner of such Proprietary Technology and has the right to grant the
non-exclusive license described in this Agreement, the execution of which will
not violate any other agreement to which Cyberoad.com(IOM) Ltd. is a party.
3.2.2 CONFIDENTIAL INFORMATION. Each Party shall treat all Confidential
Information which may be disclosed by the other Party (the "Disclosing Party")
to the Party receiving such information (the "Receiving Party") as confidential
commercial property and shall not, during or after the term of this Agreement,
use or disclose to others, except as provided in this Agreement, any
Confidential Information which may heretofore or hereafter come within the
knowledge of the Receiving Party in performing its duties hereunder. This
limitation on disclosure shall extend to the substance of any discussions
concerning the Confidential Information. The foregoing shall not prevent the
Receiving Party (a) from making use of or disclosing other information which the
Receiving Party can show has become part of the public domain other than by acts
or omissions of the Receiving Party; (b) which the Receiving Party can show has
been furnished to him/her by third parties as a matter of right, without
restriction oh disclosure; (c) which the Receiving Party can show was in his/her
possession prior to disclosure of the information from the Disclosing Party to
the Receiving Party; or (d) which has to be disclosed to a court of law or
governmental agency as a mater of law. (In the event of the occurrence of a
disclosure pursuant to subparagraph (d), the Receiving Party agrees to notify
the Disclosing Party promptly of the disclosure and of the
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circumstances concerning the disclosure and agrees to take whatever legal steps
are necessary to assist the Disclosing Party in protecting the Confidential
Information.).
3.2 WARRANTIES. CYBEROAD.COM(IOM) LTD. DISCLAIMS ALL WARRANTIES OR
REPRESENTATIONS, EXPRESSED OR IMPLIED, ON THE MERCHANDISE OR OPERATION OF
WWW.THEBIGBOOKCOM.
3.5 NO OTHER WARRANTIES. TO THE MAXIMUM EXTENT PERMITTED BY ISLE OF MAN
OR ANY OTHER LAW FOUND TO GOVERN ITS PERFORMANCE UNDER THIS AGREEMENT,
CYBEROAD.COM(IOM) LTD. DISCLAIMS ALL OTHER WARRANTIES, EXPRESSED OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR A PARTICULAR PURPOSE OR USE, FOR THE SERVICE, SOFTWARE, AND HARDWARE
INVOLVED IN OR RELATED TO THE OPERATION OF WWW.THEBIGBOOK.COM.
3.6 NO LIABILITY FOR CONSEQUENTIAL DAMAGES. TO THE MAXIMUM EXTENT
PERMITTED BY ISLE OF MAN OR ANY OTHER LAW FOUND TO GOVERN ITS PERFORMANCE UNDER
THIS AGREEMENT, CYBEROAD.COM(IOM) LTD. SHALL NOT BE LIABLE FOR ANY DAMAGES
WHATSOEVER (INCLUDING, BUT NOT LIMITED TO SPECIAL, INCIDENTAL, CONSEQUENTIAL, OR
INDIRECT DAMAGES FOR PERSONAL INJURY, LOSS OF BUSINESS PROFITS, BUSINESS
INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR EXEMPLARY) ARISING FROM OR
RELATED TO OPERATION OF WWW.THEBIGBOOK.COM
3.7 NO DEVELOPMENTS BY LICENSEE. Except as expressly and unambiguously
provided in this Agreement and as conditions of Licensee's license pursuant to
this Agreement Licensee represents, warrants and agrees:
(i) not to modify, alter, add to, create any derivative work of, or
include in any other software the Proprietary Technology or any
portion thereof;
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(ii) not to reverse assemble, decompi1c, or otherwise attempt to
derive source code (or the underlying ideas, algorithms,
structure or organization) from the Proprietary Technology;
(iii) to keep Cyberoad.com(IOM) Ltd. informed as to any problems
encountered with the Proprietary Technology. Licensee agrees to
conduct its business in a manner which favorably reflects upon
the Proprietary Technology. Licensee shall not use, in the
performance of its obligations under this Agreement, any
improvements or additions to or in support of the Website
applications considered a part of the CR Netbook(TM) gaming
system developed by or on its behalf, without the prior written
consent of Licensor.
3.8 TRANSFER OF INTERESTS. Both Parties agree not to transfer, delegate,
or convey any of its rights or obligations hereunder without the express written
consent of the other Party, which consent may be withheld in its sole discretion
if, the transferee does not qualify based upon its:
(i) experience and competence;
(ii) financial resources;
(iii) integrity and reputation, or;
(iv) status as a competitor.
ARTICLE IV
CONFIDENTIALITY
4.1 OBLIGATIONS. Each party shall receive and hold all Confidential
Information of the other party in confidence and shall exercise the same degree
of care to prevent the disclosure of such Confidential Information as it does to
protect its own Confidential Information. As a minimum protection, the receiving
party shall limit disclosure of Confidential Information to its employees having
a need to know such information and shall not disclose the Confidential
Information of the other party to any third party, individual, corporation or
other entity, without the prior written consent of the disclosing party, which
consent can be conditioned on such restrictions
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as the disclosing party may specify. Each party's obligations under this Section
shall survive the termination of this Agreement and shall continue so long as
the received Confidential Information remains Confidential Information within
the meaning of this Agreement.
4.2 RETURN OF CONFIDENTIAL INFORMATION. Within thirty (30) DAYS following
termination or expiration of this Agreement for whatever reason, at the
disclosing party's request the receiving party shall return the original and all
copies of Confidential Information to the disclosing party, or certify in
writing that all copies have been destroyed.
4.3 INSPECTION. Every party may, at its own expense, examine the other
party's applicable records to verify that such party has satisfied such party's
obligations under this Section 6 relating to the protection of Confidential
Information. Each party agrees to make its records available to the other party
as requested from time to time. No such examination shall be made more than once
during any three-month period, The audited party shall be entitled to require
execution of nondisclosure agreements by any person designated to perform such
an examination.
ARTICLE V
SYSTEMS REQUIREMENTS AND PERFORMANCE STANDARDS
5.1 CUSTOMIZING. At any time after final acceptance by CGC, at Licensee's
request and sole expense, Cyberoad.com(IOM) Ltd. shall promptly and reasonably
customize the original Site and www,thebigbook.com located there, by additional
programming, to create modifications and other requested changes.,
5.2 PROPRIETARY DATA BASES. Cyberoad.com(IOM) Ltd. shall provide a
reasonable system design to create proprietary database(s) of Clients who visit,
register, or wager at the Site. The database(s) will include the ability to
create a basic set of reports, including the delivery to CGC of the report
writer associated therewith, necessary to run the business and as specifically
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agreed by the Parties. Cyberoad.com(IOM) Ltd. will maintain the database(s) and
agrees that it will not solicit Licensee's clients or sell, disclose, or
knowingly transmit, any proprietary client data to any third party without
Licensee's written consent. Cyberoad.com(IOM) Ltd. further agrees not to
contact, attempt to sell to or in any way conduct business or initiate a direct
business relationship of any nature with the clients of CGC without the express
written consent of CGC. CGC acknowledges that any they will be responsible for
any software licenses from any third party suppliers that are needed for the
system to function.
5.3 CONTENTS Licensee shall be solely responsible for reasonably
approving the CGC Sportsbook "contents" to be installed by Cyberoad.com(IOM)
Ltd. for the benefit of Licensee. The system will be played from a CGC
Sportsbook sitting on a server(s) in Costa Rica and Vancouver, B.C.
5.4 SPECIFIC EVENT TYPES. Cyberoad.com(IOM Ltd,) shall provide at least
the following event types:
5.4.1 NFL FOOTBALL
5.4.2 COLLEGE FOOTBALL
5.4.3 BASKETBALL
5.4.4 ICE HOCKEY
5.4.5 BASEBALL
5.4.6 BOXING
5.5 The System shall include the following wagering types:
Moneyline
Game Total
Teasers & Parlays
Propositions/Exotics
Pointspreads
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Futures
Casino Games
5.6 NEW EVENT TYPES. Cyberoad.com(IOM) Ltd. shall promptly incorporate
new event types into the CGC Sportsbook as may be reasonably requested by
Licensee and as included from time to time in the standard Cyberoad.com(IOM)
Ltd. product family in the normal course of business. Such event types shall be
added at Licensee's expense unless they are incorporated into the standard
Cyberoad.com(IOM) Ltd. product family in which case they will be provided at the
sole expense of Cyberoad.com(IOM) Ltd..
5.7 PLAYER REGISTRATION. Cyberoad.com(IOM) Ltd. shall provide online user
access to allow users to register electronically as prospective account holders
of the Site and to review all rules, terms, and conditions applicable to Gaming
and other uses on the Site. Basic reports will be available to CGC in the
database(s) which will track registration activity.
5.8 MAINTENANCE. Cyberoad.com(IOM) Ltd. will provide general system
maintenance for the term of this agreement at its sole expense.
5.9 SOFTWARE SYSTEM. Cyberoad.com(IOM) Ltd. shall provide software
applications as are currently provided in the CGC Sportsbook system and any
updates available to Cyberoad.com(IOM) Ltd., and the demonstration CGC
Sportsbook system, which applications shall allow various systems solutions,
including On-Line real time Gaming, generation and reconciliation of wagering,
player accounting, and reporting such data to Licensee in a form and manner
reasonably agreed between Cyberoad.com(IOM) Ltd. and Licensee. This paragraph
does not in any way limit the intent of the CGC Sportsbook gaming system or in
any way intend that the CGC Sportsbook gaming system shall be limited by current
applications, whether developed or licensed by Cyberoad.com(IOM) Ltd.,
Cyberoad.com(IOM) Ltd. agrees to always have CGC supplied with its most current
on-line gaming technology, encompassed by both the applicable definition and
intent of the CGC Sportsbook gaming and Casino system will include current
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software applications either currently developed or licensed by
Cyberoad.com(IOM) Ltd..
5.10 HARDWARE. Hardware is as covered under the Operating and Revenue
Sharing, Management ServicesCyberoad.com(IOM) Ltd.
5.11 OPERATION AND REPAIR. The following performance standards shall
apply to Licensor's obligations under this Agreement up until delivery to CGC of
Cyberoad.com(IOM) Ltd.'s Notice of Completion:
5.12 SERVER(s). Cyberoad.com(IOM) Ltd. shall provide sufficient server
capacity such that a minimum of 10,000 users of the CGC Sportsbook may
reasonably operate the applications contained in the CGC Sportsbook gaming
system. All repairs made by Cyberoad.com(IOM) Ltd. shall be at its expense.
Licensee expressly waives and relinquishes the provisions of any law or any
other right permitting Licensee to make repairs at Cyberoad.com(IOM) Ltd.'s
expense. Cyberoad.com(IOM) Ltd. shall have no liability to Licensee for damages
arising from or related to operation of the Server except for gross negligence
of Cyberoad.com(IOM) Ltd.'s employees, agents, or invitees.
5.13 WEBSITE. Cyberoad.com(IOM) Ltd. shall, subject to content provided
by Licensee, keep the Site in good working condition and repair, except for any
damage caused to the Site by any negligent act of Licensee or its agents,
employees, or invitees, and except for reasonable wear and tear and events
beyond Cyberoad.com(IOM) Ltd.'s control. All repairs made by Cyberoad.com(IOM)
Ltd. shall be at its expense. Licensee expressly waives and relinquishes the
provisions of any law or any other right permitting Licensee to make repairs at
Cyberoad.com(IOM) Ltd.'s expense. Cyberoad.com(IOM) Ltd. shall have no liability
to Licensee for damages arising from or related to operation of the Site except
for gross negligence of Cyberoad.com(IOM) Ltd.'s employees, agents, or invitees,
5.14 ALTERATIONS. Licensee shall not make any alterations, revisions or
updates to any programs or graphic displays used on the Website and shall submit
all requests for any such
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alteration to Cyberoad.com(IOM) Ltd. in writing. Upon receipt of any such
request by Licensee, Cyberoad.com(IOM) Ltd. shall reasonably determine whether
any such alterations may be incorporated into the Website and Cyberoad.com(IOM)
Ltd. shall reasonably report such determinations to Licensee. Thereafter, if
Cyberoad.com(IOM) Ltd. determines such alterations may reasonably be made, it
shall do so at its sole expense.
5.15 FLAWS OR GLITCHES. Cyberoad.com(IOM) Ltd. shall promptly correct any
flaws or glitches in any program or graphic displays.
5.16 WEBSITE CONTROL. Cyberoad.com(IOM)Ltd., except as otherwise
specified in this Agreement, Cyberoad.com(IOM) Ltd. shall have exclusive control
of and management responsibilities for all Servers and shall have the right to
establish, modify, amend, and enforce reasonable rules and regulations for the
use of the Servers and Software at the site. Cyberoad.com(IOM) Ltd. shall
install system software, as approved by Licensee, on all Servers to ensure the
continued operation of the Website. Licensee shall be solely responsible for all
content made available at the Website and nothing herein shall be construed as
ownership by Cyberoad.com(IOM) Ltd. of CGC's proprietary content or URL's.
Nothing in this paragraph shall be construed to constitute control of such
contents by Cyberoad.com(IOM) Ltd. and the Licensee agrees to allow display at
the Website of any such disclaimer reasonably requested by Cyberoad.com(IOM)
Ltd..
ARTICLE VI
DISCLOSURES
6. DISCLOSURES.
Neither party shall disclose the terms of this Agreement to any third
party, except as required by law or any public regulatory agency, without the
prior written consent of the other party, which consent shall not be
unreasonably withheld; provided that either party may disclose the terms of this
Agreement to its employees who will perform services related to this Agreement,
to its legal counsel, accountants and other professional representatives and to
such other persons as may
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be required by court order or legal process. Each party acknowledges and agree
that it shall be responsible for, and such party shall not object to, the other
party disclosing the terms of this Agreement to any proposed investor or
contracting party, and their legal, accounting and other professional
representatives, in connection with any securities offering, proposed corporate
acquisition or reorganization, loan transaction with a financial institution or
similar transaction.
ARTICLE VII
DEFAULTS AND REMEDIES
7. EVENTS OF DEFAULTS AND REMEDIES.
7.1 DEFAULTS. It shall be an Event of Default if any of the following
breaches exists and remains in effect for a period of fifteen (15) days after
receipt of written notice to the other party.
7.1.2 There exists a final judgment declaring the Proprietary
Technology as infringing upon the rights of any third party to preclude or
substantially impair the lawful operation of the Proprietary Technology,
Licensee's Site or Licensee's CGC Sportsbook
7.1.3 Cyberoad.com(IOM) Ltd. fails to perform or comply with any
of the provisions set forth in this Agreement relating to system functions which
failure shall have continued for fifteen (15) DAYS;
7.1.4 Cyberoad.com(IOM) Ltd,. fails to perform or comply with
any of the warranties or representations set forth in this Agreement, which
failure shall have continued for thirty (30) days following notice by Licensee
to Cyberoad.com(IOM) Ltd..
7.2 LICENSEE'S RIGHTS AND REMEDIES. Upon occurrence of any Event of
Default described in Section 9 and at any time thereafter, in addition to all
other rights and remedies
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available under the Uniform Commercial Code of Isle of Man or other applicable
law, this Agreement or otherwise, Licensee shall, at its option, be entitled to
terminate this Agreement without any further obligation to Cyberoad.com(IOM)
Ltd. except for any obligations, including payment obligations, that have
occurred on or before the date of such termination, with or without notice to or
consent by Cyberoad.com(IOM) Ltd., except if such notice, consent, or judicial
process is expressly required by law.
ARTICLE VIII
ARBITRATION
8. ARBITRATION.
8.1 ARBITRATION OF DISPUTES. All disputes arising out of or in connection
with this contract, or in respect of any defined legal relationship associated
therewith or derived therefrom, shall be referred to and finally resolved by
arbitration administered by the British Columbia International Commercial
Arbitration Centre pursuant to its Rules. The Place of Arbitration shall be
Vancouver, British Columbia, Canada.
8.2 NOTICE. By signing in the space below you are agreeing to have any
dispute arising out of the matters included in the "Arbitration of Disputes"
provision decided by neutral arbitration and you are giving up your judicial
rights to discovery and appeal, unless those rights are specifically included in
the "Arbitration of Disputes" provision. Your agreement to this arbitration
provision is voluntary. We have read and understand the foregoing and agree to
submit disputes arising out of the matters included in the "Arbitration of
Disputes" provision to neutral arbitration.
CYBEROAD GAMING CORPORATION LTD. Cyberoad.com.(IOM) Ltd. LTD
By: /s/ LAWRENCE COFIELD By: /s/ JOHN COFFEY
--------------------- ---------------------------------
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ARTICLE IX
MISCELLANEOUS
9.1 NEW TECHNOLOGY. If, during the term of this Agreement,
Cyberoad.com(IOM) Ltd. makes any incremental improvements in the Proprietary
Technology or becomes the owner or licensee of such incremental improvements
through software and hardware applications, know-how, trade secrets, copyrights,
and trademarks, it shall communicate such improvements to CGC and give CGC full
information regarding their use. Any improvements or suggestions implemented
into the CR Netbook system by CGC shall immediately be the property of
Cyberoad.com(I0M) Ltd., and attach to CGC's license with all rights which are
granted to CGC for the Proprietary Technology, without payment of any additional
royalties for such improvements.
9.2 MARKING. CGC agrees it will mark all literature and Website
communications of any kind under this Agreement with the appropriate trademark,
copyright, or patent marking and further agrees to allow Cyberoad.com(IOM) Ltd,
to place the CR Netbook(TM) logo including a hyper-link to the Cyberoad.com(IOM)
Ltd. corporate site on the CGC Sportsbook website
9.3 CHOICE OF LAW. All disputes concerning the validity, interpretation,
or performance of this Agreement and any of its terms or conditions, or of any
rights or obligations of the Parties, shall be governed by the laws of the Isle
of Man.
9.4 COMPLETE UNDERSTANDING AND MODIFICATIONS. This Agreement constitutes
the complete expression of the terms of the grant of this non-exclusive license.
All previous and contemporaneous agreements, representations,. and negotiations,
whether oral, written, or implied, are superseded by this Agreement, except
those included in the recitals to this Agreement. Any modifications to this
Agreement must be reduced to writing, signed by both Parties, and attached to
this Agreement, to be effective.
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9.5 ASSIGNABILITY. CGC shall have the right, subject to Cyberoad.com(IOM)
Ltd.'s consent, which consent shall not be unreasonably withheld, to assign this
License to any one without restriction.
9.6 NO WAIVER. The failure by either Party to this Agreement to insist
upon performance by the other Party shall not constitute a waiver of any rights
under this Agreement and shall not bar, by waiver or estoppel, insistence upon
performance by the other Party.
9.7 RELATIONSHIP OF PARTIES. Nothing in this Agreement shall be construed
in a manner which would create the relationship between the parties of
employee-employer, principal-agent, joint venture, partnership, or anything
other than a Cyberoad.com(IOM) Ltd.-CGC relationship.
9.8 RETENTION OF OWNERSHIP. This Agreement is not to be construed as an
assignment of or transfer of ownership in the Proprietary Technology or related
information. Cyberoad.com(IOM) Ltd. retains ownership of the Licensed
Proprietary Technology and all its improvements, additions, and database(s)
related thereto, subject to this License.
9.9 SEVERABILITY. The provisions of this Agreement are severable. If any
provision of this Agreement or the application thereof to any person or
circumstances is held invalid, illegal or unenforceable, it shall be deemed
stricken and ill the remaining provisions shall remain in full force and effect.
9.10 SURVIVAL OF OBLIGATIONS. Each, Party does for it and its successors,
heirs, executors, administrators, representatives, insurers, agents, and
assigns, covenants and agrees that it and they will continue to adhere to the
restrictions and obligations of this Agreement and this Agreement shall inure to
their continued benefit.
9.11 RECITALS. The recitals shall be considered part of this Agreement.
16
<PAGE> 17
9.12 HEADINGS. The Headings are for informational purposes only and shall
not constitute part of this Agreement.
9.13 MULTIPLE COUNTERPARTS. This Agreement has been executed in multiple
counterparts, each of which shall be considered an original executed version of
this document.
9.14 LAWFUL USE. Nothing in this Agreement shall permit CGC to violate
the law of any country or political subdivision where gaming is unlawful. CGC
agrees to defend, indemnify, and hold Cyberoad.com(IOM) Ltd. harmless for any
violations of this paragraph.
9.15 NOTICES. Any notice given by either Party to the other Party shall
be deemed to have been sufficiently given if sent by registered air mail or by
cable, telex, or telecopier, to the address of the Party as follows, unless such
other Party designates another address in writing:
If to Cyberoad.com(IOM) Ltd.:
International House
Castle Hill, Victoria Road,
Douglas, Isle of Man, British Isles,
IM2 4RB
If to Licensee:
Cyberoad Gaming Corp.
Box 174
Basseterre, St. Kitts, W.I.
9.16 GOOD FAITH. The parties specifically agree to carry out the
provisions of this Agreement in good faith.
9.17 INTEGRATION. This Agreement shall constitute the entire Agreement
between the parties with respect to the subject matter hereof except sections
covered in more depth in the Operating, Revenue Sharing and Management Services
Agreement and any other agreement referred to in this agreement. All prior and
contemporaneous communications, representations, and agreements between the
parties concerning the subject of this Agreement, whether oral or written,
17
<PAGE> 18
are superseded by this Agreement.
9.18 FORCE MAJEURE. Neither party shall bear any responsibility or
liability for any losses arising out of any delay or interruption of their
performance of obligations under this Agreement due to an act of God, act of
governmental authority, act of public enemy or due to war, riot, flood, civil
commotion, earthquake, insurrection, labor difficulty, storm interruption of
electrical power, of any other cause beyond the reasonable control of the party
delayed.
9.19 LIMITATION ON LEGAL ACTIONS. No action (regardless of form or theory
of liability) arising out or relating to this Agreement may be brought by either
party more than two years after the date the cause of action occurred. A cause
of action shall be considered to have occurred when the injured party discovers,
or in the exercise of due diligence should have discovered, a default or breach
of this Agreement.
ARTICLE X
COMPLIANCE WITH LAW
10.1 CGC represents and warrants to Cyberoad.com(IOM) Ltd. that:
(i) no consent, approval, order or authorization of, or registration,
qualification, designation, declaration or filing with, any federal,
state, local or provincial governmental authority on the part of the
Licensee is required in connection with the consummation of the
transactions contemplated by this Agreement;
(ii) there is no action, suit, proceeding or investigation pending or
currently threatened against the Licensee which questions the validity
of this Agreement or the right of the Licensee to enter into it, or to
consummate the transactions contemplated hereby;
(iii) CGC has, and is in compliance with, all franchises, permits, licenses,
and any similar authority necessary for the conduct of its business as
now being conducted by it and believes it can obtain, any similar
authority for the conduct of its business as planned to be conducted;
and
18
<PAGE> 19
(iv) to the Licensees' knowledge the Licensee is in compliance in all
material respects with all federal or state statutes, rules or
regulations applicable to the transactions contemplated by this
Agreement and the execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated hereby will not
result in any such violation or cause the suspension, revocation,
impairment forfeiture, or non-renewal of any material permit, license,
authorization, or approval applicable to the CGC Sportsbook gaming
system.
10.2 Licensee acknowledges and agrees that it is not relying on
Cyberoad.com(IOM) Ltd. to advise it with respect to legal or regulatory
compliance in connection with the CGC Sportsbook gaming system or any other uses
of the Proprietary Technology licensed hereunder and that Licensee is making its
own determinations with respect thereto and is relying on its own legal counsel
to advise it connection therewith. Notwithstanding the foregoing, each Party
mutually acknowledges the existence of regulatory jurisdiction of national and
sub-national units in the Territory and covenant and agrees to cooperate at its
own expense with all such units to obtain any regulatory review, license,
concession, or other permission such units may reasonably require.
10.3 Nothing in this Agreement shall be construed as requiring
Cyberoad.com(IOM) Ltd., its affiliates, agents, and joint-venturer, to operate
or act as a Sportsbook operator or any equivalent entity relating to the risk of
any of the wagers transacted on its behalf under this agreement.
10.4 Licensee assumes all risk:
(i) associated with gaming related licensing and permitting
hereunder in the United States and each state thereof
and
(ii) and relating to or associated with Licensee the conduct
and operation of the On Line System.
10.5 FURTHER ACTION. The parties hereto shall execute and deliver all
documents, provide all information and take or forbear from all such action as
may he necessary or appropriate
19
<PAGE> 20
to achieve the purposes of the Agreement.
10.6 INDEMNITY. Both parties shall defend, indemnify and hold harmless
the other party against all claims, demands, actions, proceedings, costs and
damages of any kind, including attorney fees, arising from or related to any
acts or omission by the other which are relied on in entering into this
Agreement. Cyberoad.com(IOM) Ltd. shall defend, indemnify and hold CGC harmless
against all claims, demands, actions, proceedings, costs and damages of any
kind, including attorney fees, arising from any third parties who may have an
interest in technology provided by Cyberoad.com(IOM) Ltd. to CGC, caused by CGC
using any technology provided by Cyberoad.com(IOM) Ltd. in the manner
contemplated in this agreement.
IN WITNESS WHEREOF, each party of the parties has caused this Agreement to be
executed on the date first above stated.
CYBEROAD Cyberoad.com(IOM) Ltd.
/s/ By: /s/ JOHN COFFEY
- ------------------------- --------------------------------
Witness Title: Director
Cyberoad Gaming Corporation
/s/ By: /s/ LAWRENCE COFIELD
- ------------------------- --------------------------------
Witness Title: Director
21
<PAGE> 1
EXHIBIT 10.18
AMENDMENT TO THE NON-EXCLUSIVE LICENSE AGREEMENT
DATED APRIL 19,1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation, ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, and Isle of Man corporation
("IOM");
WHEREAS this Amendment acknowledges that:
a) the parties hereto agree that the Non Exclusive License Agreement
between the parties hereto shall bear an effective date of May 1,
1999.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary and each instrument shall be deemed and original, and shall constitute
one and the same instrument, and shall bear the date first written above.
ACKNOWLEDGED AND AGREED TO THIS 18TH DAY OF OCTOBER BY:
CYBEROAD GAMING CORPORATION CYBEROAD (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- ---------------------------------- --------------------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.22
WEBSITE MARKETING AGREEMENT
Effective April 19, 1999.
BETWEEN:
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation having a
place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB
("Cyberoad")
AND:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of
business at Box 174, Basseterre, St. Kitts, West Indies
("CGC")
NATURE OF AGREEMENT:
A. Cyberoad is able to provide specialized marketing and management
services with respect to Internet Sportsbook and Casino gaming websites.
B. CGC, owner of a Sportsbook and Casino website known as the Bigbook and
Casino, located at www.thebigbook.com, has expressed a desire to secure
the marketing and management services of Cyberoad on the terms and
conditions hereinafter set forth.
AGREEMENT:
The following shall constitute Cyberoad's and CGC's agreement with respect to
marketing and management services.
1. DEFINITIONS
The terms and expressions set out in Schedule "A" hereto shall, when
used in this Agreement and the Schedules hereto have the meanings there
ascribed to them.
<PAGE> 2
2.
2. MANAGEMENT SERVICES
Subject to the terms, covenants and provisos contained herein, Cyberoad
hereby agrees to provide to CGC those Management and Marketing services
specified in Schedule "A" hereto.
3. CONTRACT TERMS
The Management and Marketing Services and the payment terms shall be
those set out in Schedule "B" hereto.
4. TERM AND TERMINATION
4.01 This Agreement is effective from the date first written above
for a period of five years unless earlier terminated in
accordance with the terms Of this Agreement.
4.02 This Agreement shall be automatically renewed for successive
renewal periods of one year each on each anniversary of the
effective date of this Agreement. The terms of this Agreement
shall remain in full force and effect as long as it is renewed
annually. All provisions of this Agreement shall apply both for
the initial five year term of this Agreement and for all
subsequent extensions.
4.03 Cyberoad may terminate this Agreement following thirty (90) days
written notice.
5. MARKETING PLAN
Cyberoad must prepare and present a Marketing Plan, as outlined in
Schedule "A", for each year of the Agreement for approval by CGC. CGC
will not unreasonably withhold approval of said plan, Cyberoad will be
responsible for all costs associated with the preparation of the
Marketing Plan.
<PAGE> 3
3.
6. CONFIDENTIALITY
6.01 OBLIGATION Both parties to this Agreement shall keep in
confidence and prevent the disclosure to any person of any and
all Confidential Information which is received from the other
party by reason of negotiating, entering into or performing in
accordance with this Agreement.
6.02 EXCEPTIONS Notwithstanding the provisions of paragraph 6.01
hereof, neither party shall be liable for disclosure of the
Confidential Information if the Confidential Information was
required to be disclosed pursuant to law or a judicial order;
was generally known to the public at the time it was disclosed;
was known to the party receiving same at the time of its
disclosure; was disclosed with the prior approval of the other
party; was independently developed by the receiving party and
without any person having access to the Confidential Information
participating in such development; or is disclosed by a party to
this Agreement in exercising its rights under this Agreement,
6.03 EMPLOYEES The parties hereto hereby undertake to cause any
employees, contractors, or agents to whom any of the aforesaid
Confidential Information is or may be transmitted to be bound by
the same obligations of secrecy and confidentiality as the
parties are bound by pursuant to this Agreement.
7. OWNERSHIP
The parties acknowledge and agree that the websites, are the property
of CGC.
8. OPTION TO PURCHASE
In consideration of Cyberoad's commitment to assume all the
initial costs of the Marketing Plan, CGC grants to Cyberoad an
irrevocable option to purchase the Bigbook and Casino website
and all rights thereto, The term of said option will be five
years from the effective date of this Marketing Agreement and is
exerciseable at anytime upon Cyberoad giving CGC 30 days notice
and paying, upon closing, an additional $US200,000 to CGC.
<PAGE> 4
4
9. GENERAL
9.01 ENTIRE AGREEMENT Except as specifically provided herein, this
Agreement contains the entire and only agreement and
understanding between the parties relating to the subject matter
hereof and supercedes all proposals, written or oral, and all
other communications between the parties relating to the subject
matter of this Agreement. This Agreement may not be modified
except in writing signed by each of the parties hereto.
9.02 NO PARTNERSHIP OR AGENCY None of the parties hereto shall be
construed as creating or establishing a partnership or joint
venture or association of any type between them. Neither
Cyberoad nor CGC nor their directors, servants, employees,
contractors, officers or agents shall hold themselves out as
employees, servants, or agents of the other party.
9.03 SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS The rights and
obligations of the parties under paragraphs 6, and 7 hereof,
relating to "confidentiality" and "ownership", respectively,
shall survive and continue after expiration or termination of
this Agreement.
9.04 NOTICE Any notice required herein shall be deemed to have been
properly given 48 hours after being sent to the address of the
other party by fax, email, or by commercial courier service. The
addresses for notice shall be
CYBEROAD
Fax: 011 441 624 624 469
Email: [email protected]
Courier: the mailing address set out above
CGC
Fax: 604 601-5331
Courier: the mailing address set out above
9.05 GOVERNING LAW This Agreement shall be governed by and construed
in accordance with the laws of the Isle of Man.
9.06 FORCE MAJEURE The parties agree to use their best efforts to
carry out their respective obligations under this Agreement, but
in the event of strikes, lockouts, accidents, fires, delays of
carriers or suppliers, acts of God, government actions, state of
war or any other causes beyond their control, neither party
shall incur liability to the other due to the resulting
inability to perform.
<PAGE> 5
5
9.07 HEADINGS The headings used in this Agreement form no part of
this Agreement and shall be deemed to have been inserted for
convenience only.
9.08 ENUREMENT This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective successors
and assigns.
9.09 ASSIGNMENT This Agreement is not assignable by other party
without the written consent of the other party, which consent
shall not be unreasonably withheld.
9.10 SEVERABILITY In the event that any provision of this ability
proves to be invalid, void or illegal, that provision shall be
deemed to be severed from this Agreement and shall in no way
affect, impair or invalidate any other provision. All other
provisions of this Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD.COM (ISLE OF MAN) CYBEROAD GAMING CORP.
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ LAWRENCE COFIELD
--------------------------- ---------------------------------
Name John Coffey Name: Lawrence Cofield
Title: Director Title; Director
<PAGE> 6
6
SCHEDULE "A"
DEFINITIONS
The following terms and expressions, when used in this Agreement and all
schedules thereto, shall have the meanings here ascribed to them:
I "The Marketing Plan" shall mean
that plan which is prepared annually for the approval of CGC by Cyberoad
which outlines the details of the activities and services which Cyberoad
will implement and use in the marketing of the Bigbook website.
2. "Confidential Information" shall mean:
written or oral information concerning business plans, financial data,
technical data and other information pertaining to the business
operations of the other party.
MANAGEMENT AND MARKETING SERVICES
Cyberoad will provide state-of-the-art database building, market research,
graphic design and website development. Cyberoad will also supply fully
integrated response management and direct-mail processing services. These
include:
CORPORATE SERVICES
- Marketing Research
- Marketing Plans
- Promotion Plans
- Budgets & Timelines
- Project Management
CREATIVE SERVICES
- Concept Development
- Copy Writing
<PAGE> 7
7
- Graphic Design
- Electronic Art Production
- Illustration
TECHNICAL SERVICES
- Website Design
- Website Development
- Website Management
- Website Marketing
- Database Development
- Programming (HTML/Java)
MEDIA SERVICES
- Media Relations
- Media Planning
- Media Buying
- Electronic Media Dissemination
- Print Media Advertising
- Print Management
- Direct Mail Response Advertising
- Web Advertising
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) CYBEROAD GAMING CORP.
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ LAWRENCE COFIELD
--------------------------- --------------------------------
Name: John Coffey Name: Lawrence Cofield
Title: Director Title: Director
<PAGE> 8
8
SCHEDULE "B"
CONTRACT TERMS
FEES
The following fees and payments schedules shall apply with respect to this
Agreement.
1. It is the decision of CGC that 100% of its portion of revenues generated
from the BIGBOOK site be applied for the five year term of this
agreement to the marketing plan. In the event that revenues exceed the
Annual Marketing Budget this schedule contemplates that the scope of the
plan will be expanded accordingly.
2. Payment Terms:
Cyberoad shall advise CGC monthly of marketing costs and site revenues.
In the event that revenues accruing to the BIGBOOK site are not
sufficient to meet the requirements of the Marketing Plan, CGC shall be
responsible, subject to the terms of the Marketing Plan, for
contributing whatever additional funds are required within 15 days of a
written demand.
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) CYBEROAD GAMING CORP.
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ LAWRENCE COFIELD
--------------------------- --------------------------------
Name: John Coffey Name: Lawrence Cofield
Title: Director Title: Director
<PAGE> 9
Effective April 19, 1999.
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of
business at Box 174 Basseterre St. Kitts, West Indies.
("CGC")
AND
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation having a
place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB.
( "Cyberoad")
WEBSITE MARKETING AGREEMENT
<PAGE> 1
EXHIBIT 10.23
AMENDMENT TO THE WEBSITE MARKETING AGREEMENT
DATED APRIL 19,1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts corporation, ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED. and Isle of Man corporation;
WHEREAS this Amendment acknowledges that:
a) the parties hereto agree that the Website Marketing Agreement
between the parties hereto, shall bear an effective date of May
1, 1999.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, and all such counterparts shall be deemed to be an original and
shall constitute one and the same agreement and shall bear the date first
written above.
ACKNOWLEDGED AND AGREED TO THIS 18TH DAY OF OCTOBER, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
By: /s/ LAWRENCE COFIELD By: /s/ JOHN COFFEY
---------------------- -----------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.24
SOFTWARE SUPPORT AGREEMENT
Effective April 19, 1999.
BETWEEN:
CYBEROAD.COM (ISLE OF MAN) LIMITED., an Isle of Man corporation having
a place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB
("Cyberoad")
AND:
CALVEX INTERNATIONAL INC., a British Columbia corporation having place
of business at 700 - 555 West Hastings Street, Vancouver, BC, Canada,
V6B 4N5
("Calvex")
NATURE OF AGREEMENT:
A. Calvex is able to provide support services with respect to certain
computer programs (hereinafter defined and referred to as the
"Software") which is the property of Cyberoad.
B. Cyberoad has expressed a desire to receive the support services of
Calvex on the terms and conditions hereinafter set forth.
AGREEMENT:
The following shall constitute Cyberoad's and Calvex' agreement with respect to
support services for the Software.
1. DEFINITIONS
The terms and expressions set out in Schedule "A" hereto shall, when
used in this Agreement and the Schedules hereto have the meanings there
ascribed to them.
2. SUPPORT SERVICES
<PAGE> 2
2
Subject to the terms, covenants and provisos contained herein, Calvex
hereby agrees to provide to Cyberoad those Support Services specified in
Schedule "A" hereto.
3. CONTRACT TERMS
The Support Services Fees, and the payment terms shall be those set out
in Schedule "B" hereto.
4. TERM AND TERMINATION
4.01 This Agreement is effective from the date first written above
for a period of one year unless earlier terminated in accordance
with the terms of this Agreement.
4.02 This Agreement shall be automatically renewed for successive
renewal periods of one year each on each anniversary of the
effective date of this Agreement. The terms of this Agreement
shall remain in full force and effect as long as it is renewed
annually. All provisions of this Agreement shall apply both for
the initial one year term of this Agreement and for all
subsequent extensions.
4.03 Cyberoad may terminate this Agreement following thirty (30) days
written notice. Calvex may only terminate this Agreement
following thirty (30) days written notice if Cyberoad should
fail to pay for the support services or breach any of the terms
of this Agreement.
5. ENHANCEMENT POLICY
In the event that the performance of the Software is enhanced, Calvex
agrees to make available to Cyberoad each such enhancement, on the terms
described herein. Calvex will notify Cyberoad of each enhancement
release. Calvex will ship the enhancement release to Cyberoad and it
will be Cyberoad's responsibility to arrange for the installation of the
enhancement release. Calvex will be responsible for all costs associated
with the enhancement release excluding installation costs.
<PAGE> 3
3
6. CONFIDENTIALITY
6.01 OBLIGATION Both parties to this Agreement shall keep in
confidence and prevent the disclosure to any person of any and
all Confidential Information as defined in Schedule "A" hereto,
which is received from the other Party by reason of negotiating,
entering into or performing in accordance with this Agreement.
6.02 EXCEPTIONS Notwithstanding the provisions of paragraph 6.01
hereof, neither party shall be liable for disclosure of the
Confidential Information if the Confidential Information was
required to be disclosed pursuant to law or a judicial order;
was generally known to the public at the time it was disclosed;
was known to the party receiving same at the time of its
disclosure; was disclosed with the prior approval Of the other
party; was independently developed by the receiving party and
without any person having access to the Confidential Information
participating in such development; or is disclosed, by a party
to this Agreement in exercising its rights under this Agreement.
6.03 EMPLOYEES The parties hereto hereby undertake to cause any
employees, contractors, or agents to whom any of the aforesaid
Confidential Information is or may be transmitted to be bound by
the same obligations of secrecy and confidentiality as the
parties are bound by pursuant to this Agreement.
7. OWNERSHIP
The parties acknowledge and agree that the Software and all copies
thereof shall be the property of Cyberoad. All services provided by
Calvex in the performance of this Agreement are subject to Cyberoad's
proprietary rights.
8. GENERAL
8.01 ENTIRE AGREEMENT Except as specifically provided herein, this
Agreement contains the entire and only agreement and
understanding between the parties relating to the subject matter
hereof and supercedes all proposals, written or oral, and all
other communications between the parties relating to the subject
matter of this Agreement. This Agreement may not be modified
except in writing signed by each of the parties hereto.
<PAGE> 4
4
8.02 NO PARTNERSHIP OR AGENCY None of the parties hereto shall be
construed as creating or establishing a partnership or joint
venture or association of any type between them. Neither
Cyberoad nor Calvex nor their directors, servants, employees,
contractors, officers or agents shall hold themselves out as
employees, servants, or agents of the other party.
8.03 SURVIVAL OF CERTAIN RIGHTS AND OBLIGATIONS The rights and
obligations of the parties under paragraphs 6, and 7 hereof,
relating to "confidentiality" and "ownership", respectively,
shall survive and continue after expiration or termination of
this Agreement.
8.04 NOTICE Any notice required herein shall be deemed to have been
properly given 48 hours after being sent to the address of the
other party by fax, email, or by commercial courier service. The
addresses for notice shall be
CYBEROAD
Fax: 011 441 624 624 469
Email: [email protected]
Courier: the mailing address set out above
CALVEX
Fax: 604 601-5331
Email: www.calvex.com
Courier: the mailing address set out above
8.05 GOVERNING LAW This Agreement shall be governed by and construed
in accordance with the laws of British Columbia, Canada.
8.06 FORCE MAJEURE The parties agree to use their best efforts to
carry out their respective obligations under this Agreement, but
in the event of strikes, lockouts, accidents, fires, delays of
carriers or suppliers, acts of God, government actions, state of
war or any other causes beyond their control, neither party
shall incur liability to the other due to the resulting
inability to perform.
8.07 HEADINGS The headings used in this Agreement form no part of
this Agreement and shall be deemed to have been inserted for
convenience only.
8.08 ENUREMENT This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective successors
and assigns.
<PAGE> 5
8.09 ASSIGNMENT This Agreement is not assignable by other party
without the written consent of the other party, which consent
shall not be unreasonably withheld.
8.10 SEVERABILITY In the event that any provision of this ability
proves to be invalid, void or illegal, that provision shall be
deemed to be severed from this Agreement and shall in no way
affect, impair or invalidate any other provision. All other
provisions of this Agreement shall remain in full force and
effect.
IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD.COM (ISLE OF MAN) CALVEX INTERNATIONAL INC
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
--------------------------- --------------------------------
Name: John Coffey Name: Calvin Ayre
Title: Director Title: CEO
<PAGE> 6
6
SCHEDULE "A"
Definitions
The following terms and expressions, when used in this Agreement and all
schedules thereto, shall have the meanings here ascribed to them:
1. The "Software" shall mean:
The computer programs and all user documentation related thereto constituting
the CR Netbook system including all enhanced or modified versions of such
computer programs and documentation.
2. "Support Services" shall mean:
(a) Technical Support
The services of Calvex' help, desk. Enquiries and responses by:
Telephone: 604-601-5330
Fax: 604-601-5331
Email: www.calvex.com
(b) Development Work
The services of Calvex' programmers to develop enhancements and
modifications to the Software or other computer programs, including in
particular development of,
- vertical portal; and
- CR Netbook version 2
3. "Confidential Information" shall mean:
written or oral information concerning business plans, financial data,
technical data and other information pertaining to the business
operations of the other party.
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) CALVEX INTERNATIONAL INC
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
--------------------------- --------------------------------
Name: John Coffey Name: Calvin Ayre
Title: Director Title: CEO
<PAGE> 7
7
SCHEDULE "B"
CONTRACT TERMS
FEES
The following fees and payments schedules shall apply with respect to this
Agreement.
CR NETBOOK SOFTWARE
1. Support Services Fees:
(a) Programmer Cost
Calvex shall assign those programmers required to respond to Cyberoad's
needs based on the volume of technical support and development work
ordered by Cyberoad. Each programmer shall be billed to Cyberoad on the
basis of Calvex's cost plus a 5.0% administration fee.
2. Payment Terms:
(a) The Fees shall be paid by Cyberoad within 15 days of the date of
invoice.
(b) Calvex shall send to Cyberoad monthly statements showing the
support services used by Cyberoad and the sums charged therefor.
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) CALVEX INTERNATIONAL INC
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
--------------------------- --------------------------------
Name: John Coffey Name: Calvin Ayre
Title: Director Title: CEO
<PAGE> 8
Effective April 19, 1999.
BETWEEN:
CYBEROAD.COM (ISLE OF MAN) LIMITED., an Isle of Man corporation having a
place of business at International House, Castle Hill, Victoria Road,
Douglas, Isle of Man, IM2 4RB
("Cyberoad")
AND:
CALVEX INTERNATIONAL INC., a British Columbia corporation having place
of business at 700 - 555 West Hastings Street, Vancouver, BC, Canada,
V6B 4N5
("Calvex")
SOFTWARE SUPPORT AGREEMENT
VARTY & COMPANY
Barristers & Solicitors
700 - 555 West Hastings Street
Vancouver, B.C. V6B 4N5
<PAGE> 1
EXHIBIT 10.25
AMENDMENT TO THE SOFTWARE SUPPORT AGREEMENT
DATED APRIL 19,1999
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, and Isle of Man corporation
("Cyberoad IOM"); and
BETWEEN: CALVEX INTERNATIONAL INC., a British Columbia corporation ("Calvex");
WHEREAS this Amendment acknowledges that:
a) The parties hereto agree that the Software Support Agreement, between
the parties hereto, bears an effective date of May 1, 1999;
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as is
necessary, each of which shall be deemed to be an original, and each of which
shall constitute one and the same instrument, and shall bear the date first
written above.
ACKNOWLEDGED AND AGREED TO THIS 18th DAY OF OCTOBER, 1999 BY:
CYBEROAD.COM (ISLE OF MAN) LIMITED CALVEX INTERNATIONAL INC.
/s/ JOHN COFFEY /s/ KRISTA M. WILSON
- ---------------------------------- --------------------------------------
John Coffey, Krista M. Wilson,
Director Corporate Secretary
<PAGE> 1
EXHIBIT 10.26
SALE OF RIGHTS
EFFECTIVE AS OF MAY 1, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts, West Indies corporation,
("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation,
("Cyberoad IOM");
WHEREAS this agreement hereby acknowledges that:
a) CGC hereby agrees to sell and transfer 100% of it's capital
assets as set out in Schedule "A" attached, to Cyberoad IOM in
consideration for a total amount of U.S. $10.00, hereby
acknowledged as being accepted in full.
EXECUTION IN COUNTERPART
This agreement may be signed in counterpart, in as many counterparts as may be
necessary, each of which shall deemed to be an original, and shall constitute
one and the same agreement, and shall bear the date first written above.
AGREED TO AND ACKNOWLEDGED ON THE 1ST DAY OF MAY, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- ---------------------------- ----------------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 2
SCHEDULE "A"
ASSETS
Assets Cyberoad Gaming Corporation included under this Sale of Assets consist of
the following as at April 30, 1999:
<TABLE>
<CAPTION>
<S> <C>
Computer Equipment (NBV) 104,690.86
Computer Software (NBV) 7,238.76
Leased Equipment (NBV) 18,092.18
Furniture and Fixtures (NBV) 4,148.41
Office Equipment (NBV) 9,458.04
Asset Total 143,628.25
</TABLE>
<PAGE> 3
SALE OF RIGHTS
EFFECTIVE AS OF MAY 1, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts, corporation ("CGC"); and
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation,
("Cyberoad IOM"),
WHEREAS this agreement hereby acknowledges that:
a) CGC hereby agrees to sell and transfer 100% of it's capital
assets as set out in Schedule "A" attached, to Cyberoad IOM in
consideration for a total amount of U.S. $10.00, hereby
acknowledged as being received in full,
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, each of which shall deemed to be an original, and each of which shall
constitute one and the same instrument, and shall bear the date first written
above.
ACKNOWLEDGED AND AGREED TO ON THE 18TH DAY OF OCTOBER, 1999 BY:
CYBEROAD GAMING CORPORATION CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ LAWRENCE COFIELD /s/ JOHN COFFEY
- ---------------------------- ----------------------------------
Lawrence Cofield, John Coffey,
Director Director
<PAGE> 1
EXHIBIT 10.27
SALE OF RIGHTS
EFFECTIVE AS OF JULY 8, 1999
BETWEEN: CYBEROAD GAMING CORPORATION, a St. Kitts, West Indies corporation
("Cyberoad").
AND
BETWEEN: EBANX.COM(ISLE OF MAN) LIMITED, an Isle of Man corporation
("eBanx.com")
WHEREAS, both parties to the agreement acknowledge that 100% of all rights of
ownership of the following:
1. eBanx.com trademark;
2. domain name;
3. intellectual property, including eBanx systems (software); and
4. eBanx operations including assets and liabilities;
are hereby transferred in full to Ebanx.com (Isle of Man) Limited in
consideration for $50,000 U.S. and other consideration hereby acknowledged as
being received.
THIS AGREEMENT may be signed in one or more counterparts, each of which shall be
deemed an original, and all of which shall constitute one and the same
agreement.
ACKNOWLEDGED this 8th day July, 1999 by:
CYBEROAD GAMING CORPORATION EBANX.COM (IOM) LIMITED
/s/ LAWRENCE COFIELD /s/ DAVID HARRIS
- ----------------------------- -----------------------------
Lawrence Cofield, David Harris,
Director Director
<PAGE> 1
EXHIBIT 10.28
TRANSFER AGREEMENT
Effective May 20th, 1999.
BETWEEN:
EBANX.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation
("eBanx.com")
AND:
CYBEROAD GAMING CORPORATION, a St Kim West Indies corporation.
("Cyberoad")
1. Cyberoad hereby agree to transfer 100% ownership of Ebanx Limited of
Nevada USA to eBanx.com for $10.00 US and other consideration hereby
acknowledged as being received.
2. This agreement may be executed in one or more counterparts, each of which
shall be deemed an original and all of which shall constitute one and the
same agreement.
ACKNOWLEDGED
EBANX.COM (ISLE OF MAN) CYBEROAD GAMING CORP.
Per: /s/ DAVID HARRIS Per: /s/ LAWRENCE COFIELD
------------------------------ ---------------------------------
Name: David Harris Name: Lawrence Cofield
Title: Director Title: Director
<PAGE> 1
EXHIBIT 10.29
SERVICES AGREEMENT
Effective April 19, 1999
BETWEEN:
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation
having a place of business at International House, Castle Hill,
Victoria Road, Douglas, Isle of Man, IM2 4RB
("Cyberoad")
AND
eBANX.COM LTD, an Isle of Man corporation having a place of business
at International House, Castle Hill, Victoria Road, Douglas, Isle of
Man, IM2 4RB
("eBanx")
NATURE OF AGREEMENT:
A. eBanx supplies transaction services for internet gaming.
B. Cyberoad has expressed a desire to obtain the right to receive and use
eBanx' services for Cyberoad's clients.
AGREEMENT:
The following shall constitute Cyberoad's and eBanx, agreement with respect to
eBanx' transaction services.
1. SERVICES
Subject to the terms, covenants and provisos contained herein, eBanx
hereby agrees to provide to Cyberoad's clients those services specified in
Schedule "A" hereto.
2. CONTRACT TERMS
The service fees and the payment terms shall be those set out in Schedule
"B" hereto. These fees are subject to being adjusted in the normal course
of business but eBanx agrees herein that Cyberoad and its clients will
always receive the lowest preferred rate offered to eBanx clients.
1
<PAGE> 2
3. TERM AND TERMINATION
3.01 This Agreement is effective from the date first written above for a
period of one year unless earlier terminated in accordance with the
terms of this Agreement.
3.02 This Agreement shall be automatically renewed for successive renewal
periods of one year each on each anniversary of the effective date
of this Agreement. The terms of this Agreement shall remain in full
force and effect as long as it is renewed annually. All provisions
of this Agreement shall apply both for the initial one year term of
this Agreement and for all subsequent extensions.
3.03 Cyberoad may terminate this Agreement following thirty (30) days
written notice. eBanx may only terminate this Agreement following
thirty (30) days written notice if Cyberoad should fail to pay for
the support services or breach any of the terms of this Agreement,
4. GENERAL
4.01 Entire Agreement. Except as specifically provided herein, this
Agreement contains the entire and only Agreement and understanding
between the parties relating to the subject matter hereof and
supercedes all proposals, written or oral, and all other
communications between the parties relating to the subject matter of
this Agreement. This Agreement may not be modified except in writing
signed by each of the parties hereto.
4.02 No Partnership or Agency. No act of the parties hereto shall be
construed as creating or establishing a partnership or joint venture
or association of any type between them. Neither Cyberoad nor eBanx
nor their directors, servants, employees, contractors, officers or
agents shall hold themselves out as employees, servants, or agents
of the other party.
4.03 Notice. Any notice required herein shall be deemed to have been
properly given 48 hours after being sent to the address of the other
party by fax, email, or by commercial courier service. The
addresses for notice shall be:
<PAGE> 3
CYBEROAD
Email: [email protected]
Courier: the mailing address set out above
EBANX
Email: [email protected]
Courier: the mailing address set out above
4.04 Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of Isle of Man.
4.05 Force Majeure. The parties agree to use their best efforts to carry
out their respective obligations under this Agreement, but in the
event of strikes, lockouts, accidents, fires, delays of carriers
or suppliers, acts of God, government actions, state of war or any
other causes beyond their control, neither party shall incur
liability to the other due to the resulting inability to perform.
4.06 Headings. The headings used in this Agreement form no part of this
Agreement and shall be deemed to have been inserted for
convenience only.
4.07 Enurement. This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective successors and
assigns.
4.08 Assignment. This Agreement is not assignable by other party without
the written consent of the other party, which consent shall not be
unreasonably withheld.
4.09 Severability. In the event that any provision of this ability proves
to be invalid, void or illegal, that provision shall be deemed to be
severed from this Agreement and shall in no way affect, impair or
invalidate any other provision. All other provisions of this
Agreement shall remain in full force and affect.
2
<PAGE> 4
4
IN WITNESS WHEREOF the parties hereto have caused these presents to be executed
personally or by their duly authorized officers as of the day and year first
written above.
CYBEROAD.COM (ISLE OF MAN) EBANX.COM LTD
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
----------------------------------- ---------------------------------
Name: John Coffey Bane: Calvin Ayre
Title: Director Title: Director
<PAGE> 5
5
SCHEDULE "A"
The services provided by eBanx shall be as follows:
1. Receipt and payment of monies from depositor by:
credit card
direct deposit
Western Union
money order
electronic funds transfer
2. Creation of an account in the name of the depositor.
3. Provision of the monies from the depositor's account for use by the
depositor at gaming websites.
4. Making immediate adjustments to the depositor's account for credits and
debits as gaming proceeds.
5. Such additional services as eBanx shall develop.
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) eBANX.COM LTD
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
--------------------------- ----------------------------------
Name: John Coffey Name: Calvin Ayre
Title: Director Title: Director
<PAGE> 6
6
SCHEDULE "B"
SERVICE FEES AND PAYMENT TERMS
U.S. DOLLARS
A. SERVICE FEES
The service fees for the services shall be as follows:
<TABLE>
<S> <C>
1. Merchant Setup fee
An initial one time fee $500.00
2. Fixed Monthly Administration Fee
On electronic cash transfer (eCash)
transactions up to: 100,000.99 $200.00
100,001.00 to 200,000.99 $300.00
200,001.00 to 300,000.99 $400.00
300,001.00 to 400,000.99 $500.00
400,001.00 and over $600.00
3. Variable Monthly eCash Transaction Fees
On electronic cash transfer (eCash)
transactions up to: 200,000.99 4.00%
200,001.00 to 300,000.99 3.00%
300,001.00 to 400,000.99 2.00%
400,001.00 and over 1.00%
4. Pass Through Fees
- Merchant Bank Credit Card Processing Fees
</TABLE>
Note: Discount Rate and Transaction Fees apply to electronic cash transfer
(eCash) purchases and credit card reversal payouts.
<PAGE> 7
7
<TABLE>
<S> <C>
National Bank of the Redwoods
Discount Rates and Transaction Fees
Discount Rate (in) Qualified Credit Cards 3.15%
Discount Rate: (in) Non-Qualified Credit Cards 4.15%
Non-Qualified Credit Card Transactions:
Non US Credit Cards
Corporate Credit Cards
Any Cards which cause a delay in processing
Reserve on funds processed 5.00%
Item Fees (in and out) 0.51 cents per transaction
Returns (out) 0.30 cents per transaction
Misc Transaction Fee 0.30 cents per transaction
Address Verification Fee 0.10 cents per transaction
Chargeback Handling Fee $25.00 per event
</TABLE>
5. Pass Through Fees
- eBanx shall add to eBanx' fees any handling charges made by banks or
other financial institutions at the cost to eBanx without
adjustment.
B. PAYMENT TERMS
Payment for all services and support expenses shall be due fifteen (15) days
after the date of invoice.
ACKNOWLEDGED
CYBEROAD.COM (ISLE OF MAN) EBANX.COM LTD
LIMITED
Per: /s/ JOHN COFFEY Per: /s/ CALVIN AYRE
----------------------------- -------------------------------
Name: John Coffey Name: Calvin Ayre
Title: Director Title: Director
<PAGE> 1
EXHIBIT 10.30
AMENDMENT TO THE SERVICES AGREEMENT
Dated April 19, 1999
BETWEEN: CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation ("IOM");
and
BETWEEN: EBANX.COM LIMITED, and Isle of Man corporation ("eBanx");
WHEREAS this Amendment acknowledges that:
a) the parties hereto agree that the Services Agreement, between the
parties hereto, shall bear an effective date of May 1, 1999.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, each of which shall be deemed to be an original, and each of which
shall constitute one and the same instrument, and shall bear the date first
written above.
ACKNOWLEDGED AND AGREED TO THIS l8TH DAY OF OCTOBER, 1999 BY:
CYBEROAD.COM (ISLE OF MAN) LIMITED EBANX.COM LIMITED
/s/ JOHN COFFEY /s/ CALVIN AYRE
- -------------------------------------- ----------------------------------
John Coffey, Calvin Ayre,
Director Director
<PAGE> 1
EXHIBIT 10.31
SERVICES AGREEMENT
THIS AGREEMENT effective as of December 31, 1999, by and between:
KAZOOTEK.COM TECHNOLOGIES INC., a company incorporated under the laws of
British Columbia, carrying on business at Suite 620, 1380 Burrard Street,
Vancouver, BC, V6Z 2H3, ("Kazootek"); and
CYBEROAD.COM CORPORATION, a company incorporated under the laws of the State of
Florida, with its head office at Oficentro Sabana Sur, Edificio 7, 5 Piso, San
Jose, Costa Rica, ("Cyberoad")
NATURE OF AGREEMENT
WHEREAS
A. Cyberoad, a technology, software development and internet gaming company,
has expressed a desire to retain Kazootek for the purposes of providing
certain services described herein, and including but not limited to
software development and marketing, web development, network systems
administration, human resources administration, consulting, corporate
finance and securities administration.
B. Kazootek, a high-tech services provision company, has expressed a desire
to provide to Cyberoad certain services, including but not limited to, and
as contemplated above.
NOW THEREFORE this Agreement witnesses that in consideration of the mutual
terms, covenants and provisions herein contained, the parties hereto agree as
follows:
1. SERVICES
Subject to the terms, covenants and provisions contained herein, Kazootek
hereby agrees to provide to Cyberoad, and to its subsidiaries, in whole or
in part, joint venture partners, merchants and clients, as Cyberoad so
shall request in writing, from time to time, those services specified above
and described more fully in Schedule "A" attached hereto, (the "Services").
<PAGE> 2
2. FEES & PAYMENT TERMS
The service fees and payment terms shall be those outlined, but not limited
to, those in Schedule "B" attached hereto. These fees are subject to being
adjusted throughout the normal course of business, and Kazootek agrees
herein that Cyberoad and its clients will always receive the lowest
preferred rate offered.
3. TERMS OF AGREEMENT
A) This Agreement is effective as of the date first written above, for a
period of 1 year, unless earlier terminated in accordance with the
terms of this Agreement.
B) This Agreement shall be automatically renewed for successive renewal
periods of one year each, on each anniversary of the effective date of
this Agreement. The terms of this Agreement shall remain in full force
and effect as long as it is renewed annually. All provisions of this
Agreement shall apply both for the initial one-year term of this
Agreement and for all subsequent extensions.
C) Both parties hereto may terminate this Agreement after providing 30
days written notice or for breach of any of the terms contained
herein.
4. GENERAL
A) Independent Contractor. It is expressly agreed that Kazootek is acting
as an independent contractor in performing its services hereunder. No
act of the parties hereto shall be construed as creating or
establishing a partnership, joint venture or association of any type
between them. Neither party hereto, not their respective directors,
officers, employees, consultants or agents shall hold themselves out
as such of the other party.
B) Entire Agreement. Except as specifically provided for herein, this
Agreement contains the entire and only Agreement and understanding
between the parties, relating to this specific subject matter, and
supercedes all proposals, written or oral, and all other
communications between the parties hereto. This Agreement may not be
modified except in writing, signed by both parties hereto.
171
<PAGE> 3
C) Notice. Any notice required herein shall be deemed to have been
properly given 48 hours after being sent to the address of record for
the other party, by fax, email, mail or commercial courier service. The
addresses for such notice shall be:
Kazootek.com Technologies Inc.
Suite 620, 1380 Burrard Street
Vancouver, BC, V6Z 2H3
Cyberoad.com Corporation
Oficentro Sabana Sur
Edificio 7.5 Piso
San Jose, Costa Rica
D) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of British Columbia.
E) Enurement. This Agreement shall be binding upon and enure to the
benefit of the parties hereto and their respective successors and
assigns.
F) Assigns. This Agreement is not assignable by either party, without the
written consent of the other party, which consent shall not be
unreasonably withheld.
G) Survivability. In the event that any provision of this Agreement
proves to be invalid, void or illegal, that provision shall be deemed
to be severed from this Agreement, and shall in no way affect, impair
or invalidate any other provision or the Agreement as a whole. All
other provisions contained herein will remain in full force and effect.
EXECUTION IN COUNTERPART
This instrument may be signed in counterpart, in as many counterparts as may be
necessary, and each instrument shall bear the date first written above, and
shall be deemed to be an original, forming one and the same instrument.
IN WITNESS WHEREOF the parties hereto have caused this instrument to be
executed personally or by their duly authorized officers as of the day and year
first written above.
KAZOOTEK.COM TECHNOLOGIES INC. CYBEROAD.COM CORPORATION
/s/ PAUL MARI /s/ JOHN COFFEY
- ----------------------------- -----------------------------
Paul Mari, John Coffey,
President President
<PAGE> 4
SCHEDULE "A"
The services as described in the Agreement contained herein, shall include, but
not be limited to the following:
Software Development
Web Development
Network Systems Administration
Human Resources
Accounting
Corporate Finance & Securities Administration
Consulting
Web Marketing
Web Communications
Technology Development & Management
<PAGE> 5
SCHEDULE "B"
Payment for the services provided for by Kazootek shall constitute, but not be
limited to, the following, and may be revised and agreed to by the parties
under separate arrangement, if consented to by the parties in writing:
A nominal fee of all costs plus 10% Cdn. paid annually.
<PAGE> 1
EXHIBIT 10.32
EMPLOYMENT
AGREEMENT
WHEREAS KAZOOTEK.COM TECHNOLOGIES INC., Suite 620, 1380 Burrard Street,
Vancouver, BC, V6Z 2H3, (the "Employer"); and
WHEREAS PAUL MARI, (the "Employee");
HEREBY AGREE that as of December 6, 1999, the Employee and the Employer will
enter into an interim Employment Agreement for a trial period of 6 months from
the date of execution, during which time the appropriate training and transfer
of information will be conducted. The terms of this agreement are as follows:
a) the Employee agrees to apply, on a full-time basis, all of the time,
effort, skill and accountability necessary and appropriate for the
position of Chief Operating Officer with the Employer;
b) the Employee agrees to enter into a Non-disclosure and Solicitation
Agreement, attached hereto and agrees not to consider any additional
employment or consulting work with any organizations involved,
directly or indirectly, with Kazootek.com Technologies or it's
subsidiaries, without full and prior written approval of the Board of
Directors of Kazootek.com Technologies, Inc.
IN CONSIDERATION WHEREOF, the Employer will provide the Employee with the
appropriate training and information, and will make available all the necessary
tools and equipment required to perform in the above-mentioned capacity.
Compensation for this agreement, as provided for by the Employer, will consist
of the following:
i) base salary of $90,000.00 Cdn. per annum, paid out on the 15th and the
last day of the month for the duration of the trial period;
ii) cellular phone;
iii) paid parking;
iv) an option package, consisting of a number of shares to be negotiated,
of Cyberoad.com Corporation, at current market prices, in accordance
with the Company's Option Plan;
v) two weeks paid vacation, accrued on an annual basis;
vi) basic medical, dental and insurance coverage as set out in
accompanying package;
<PAGE> 2
vii) Sony Laptop and Palm Pilot, which upon successful completion of the
six month trial period, will belong to the Employee. If prior to the
six month trial period the Employee ceases to be Employed by the
Employer, the Employee may buy-out the lap top and palm pilot on a 180
day pro-rata basis.
THIS AGREEMENT, pursuant to the terms and conditions above, will remain in full
effect unless otherwise agreed upon by the Employee and the Employer, or both,
upon written notice. Either the Employee or the Employer, upon written notice,
may terminate this agreement at anytime. At the end of this six month trial
period, assuming both parties are in full agreement, a formal Employment
Agreement will be entered into incorporating a more detailed description of the
above.
DATED at Vancouver, British Columbia, the 6th day of December, 1999
ACKNOWLEDGED AND AGREED TO BY:
KAZOOTEK.COM TECHNOLOGIES INC. PAUL MARI
/s/ Krista Wilson /s/ Paul Mari
Employer Employee
<PAGE> 1
EXHIBIT 10.33
EMPLOYMENT
AGREEMENT
WHEREAS KAZOOTEK.COM TECHNOLOGIES INC., Suite 620, 1380 Burrard Street,
Vancouver, BC, V6Z 2H3, (the "Employer"); and
WHEREAS ERIC CHAN, of 6882 Barnard Drive, Richmond, BC, V7C 5T5, (the
"Employee");
HEREBY AGREE that as of October 12, 1999, the Employee and the Employer will
enter into an Employment Agreement for a period of one year, from the date of
execution, during which time the terms of the agreement will include, but not
be limited to, the following:
a) the Employee agrees to apply, on a full-time basis, all of the
time, effort, skill and accountability necessary and appropriate
for the position of Corporate Controller;
b) the Employee agrees to enter into a Non-disclosure and Solicitation
Agreement, attached hereto and agrees not to consider any
additional employment or consulting work with any organizations
involved, directly or indirectly, with Kazootek.com Technologies or
it's subsidiaries, without full and prior written approval of the
Board of Directors of Kazootek.com Technologies Inc.
IN CONSIDERATION WHEREOF, the Employer will provide the Employee with the
appropriate training and information, and will make available all the necessary
tools and equipment required to perform in the above-mentioned capacity.
Compensation for this agreement, as provided for by the Employer, will consist
of the following:
i) base salary of $62,000.00 Cdn. per annum, paid out on the 15th and
the last day of the month for the duration of the trial period;
ii) paid parking;
iii) an option package, consisting of 60,000 shares of cyberoad.com
Corporation, at U.S. $1.00 per share, in accordance with the
Company's Option Plan;
<PAGE> 2
v) three weeks paid vacation, accrued on an annual basis;
vi) basic medical, dental and insurance coverage as set out in
accompanying package;
THIS AGREEMENT pursuant to the terms and conditions above, will remain in full
force and effect unless otherwise agreed upon by the Employee and the Employer,
or both, upon 30 days written notice. Either the Employee or the Employer, upon
30 days written notice, may terminate this agreement, for any reason.
THIS AGREEMENT is governed by the laws of the Province of British Columbia.
DATED at Vancouver, British Columbia, the 12th day of October, 1999
ACKNOWLEDGED AND AGREED TO BY:
KAZOOTEK.COM TECHNOLOGIES INC. ERIC CHAN
/s/ PAUL MARI /s/ ERIC CHAN
- --------------------------- ---------------------------
Employer Employee
<PAGE> 1
EXHIBIT 10.34
EMPLOYMENT
AGREEMENT
WHEREAS KAZOOTEK.COM TECHNOLOGIES INC., Suite 620, 1380 Burrard Street,
Vancouver, BC, V6Z 2H3, (the "Employer"); and
WHEREAS KRISTA WILSON, of #406 - 2815 Yew Street, Vancouver, BC, V6K 3H6, (the
"Employee");
HEREBY AGREE that as of September 23, 1999, the Employee and the Employer will
enter into an Employment Agreement for a period of one year, from the date of
execution, during which time the terms of the agreement will include, but not be
limited to, the following:
a) the Employee agrees to apply, on a full-time basis, all of the time,
effort, skill and accountability necessary and appropriate for the
position of Manager of Corporate Services & Administration;
b) the Employee agrees to enter into a Non-disclosure and Solicitation
Agreement, attached hereto and agrees not to consider any additional
employment or consulting work with any organizations involved, directly
or indirectly, with Kazootek.com Technologies or it's subsidiaries,
without full and prior written approval of the Board of Directors of
Kazootek.com Technologies Inc.
IN CONSIDERATION WHEREOF, the Employer will provide the Employee with the
appropriate training and information, and will make available all the necessary
tools and equipment required to perform in the above-mentioned capacity.
Compensation for this agreement, as provided for by the Employer, will consist
of the following:
i) base salary of $55,000.00 Cdn. per annum, paid out on the 15th and the
last day of the month for the duration of the trial period;
ii) paid parking;
iii) an option package, consisting of 60,000 shares of cyberoad.com
Corporation, at U.S. $1.00 per share, in accordance with the Company's
Option Plan;
<PAGE> 2
v) three weeks paid vacation, accrued on an annual basis;
vi) basic medical, dental and insurance coverage as set out in
accompanying package;
THIS AGREEMENT pursuant to the terms and conditions above, will remain in full
force and effect unless otherwise agreed upon by the Employee and the Employer,
or both, upon 30 days written notice. Either the Employee or the Employer, upon
30 days written notice, may terminate this agreement, for any reason.
THIS AGREEMENT is governed by the laws of the Province of British Columbia.
DATED at Vancouver, British Columbia, the 23rd day of September, 1999
ACKNOWLEDGED AND AGREED TO BY:
KAZOOTEK.COM TECHNOLOGIES INC. KRISTA M. WILSON
/s/ Paul Mari /s/ Krista Wilson
Employer Employee
<PAGE> 1
EXHIBIT 10.35
CONSULTING AGREEMENT
This AGREEMENT made as of the 15th day of November, 1999, by and between
CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man corporation (the "Company"),
and CALVIN AYRE (the "Consultant").
WHEREAS, the Consultant heretofore has been engaged by the Company and the
Company seeks to compensate the Consultant by entering into this Agreement with
the Consultant;
WHEREAS, the Company and the Consultant mutually desire that the Consultant
continue to be engaged by the Company and that the Consultant devote his best
efforts and attention to the operation of the Company on a non-exclusive basis;
and
WHEREAS, the Company and the Consultant mutually desire to set forth the
terms of their intended relationship.
NOW THEREFORE, in consideration of the premises and the terms hereinafter
set forth, the parties, intending to be legally bound, agree as follows:
1. Engagement of the Consultant. Beginning on the Effective Date
(hereinafter defined), the Company has engaged the Consultant, and the
Consultant shall accept engagement by the Company, as its Consulting Expert,
pursuant to the terms of this Agreement.
2. Consultant's Duties. The Consultant's primary duties will consist of
those as may be reasonably determined by the Board of Directors and as are
generally consistent with the progression and forward success of the Company, as
may be determined from time to time by the Board of Directors. The Board of
Directors will assist and work with the Consultant in the performance of his
duties.
3. Time Obligations; Other Associations. The Consultant shall devote his
best efforts to the Company's business and purposes. The Consultant may from
time to time, consult with other businesses, but shall not engage in any
activities in conflict with the purposes and businesses of the Company as from
time to time conducted.
4. Compensation. For all services rendered by the Consultant to the
Company under this Agreement or otherwise, the Company shall compensate the
Consultant as follows commencing on the Effective Date:
4.1 Base Fee. Base fee at the rate of U.S.$10,000 per month, in year
one and will raise to U.S.$12,500 in year two. Base salary shall be payable no
less often than twice each month, on the fifteenth and on the last day of each
month, in conformity with the usual salary payment practices of the Company.
<PAGE> 2
4.2 STOCK OPTIONS. In addition to the base salary set forth above,
the Company shall grant to the Consultant, as set forth in the Stock Award
Agreement, attached hereto, options to purchase Three Hundred Thousand
(300,000) shares of common stock of the Company, CYBEROAD.COM CORPORATION, a
Florida company, exercisable at U.S.$1.00 per share. Such options shall vest in
full, and become exercisable as set out in the attached Stock Award Agreement.
In addition to the foregoing, the Consultant shall be included as part of the
group of senior executives considered for future grants of stock options under
stock option plans, if any, in effect for the Company from time to time.
4.3 BENEFITS. The Consultant shall be entitled to all fringe
benefits offered generally to the Company's senior officers and any other
benefit plans established by the Company, subject to the rules and regulations
in effect regarding participation in such plans.
4.4 SEVERANCE PAYMENT. If a Change in Control Event should occur
and the Consultant's engagement by the Company hereunder be terminated for any
reason (voluntarily or involuntarily) within two (2) years thereafter, the
Consultant shall be paid, simultaneously with such termination, a lump sum
payment equal to three (3) times his then annual rate of base salary.
4.5 EXPENSES. The Company shall reimburse the Consultant for all
reasonable business expenses incurred by the Consultant in connection with his
performance of services for the Company. The Company's obligation to reimburse
the Consultant for expenses pursuant to this subparagraph shall be subject to
the presentation to the Company by the Consultant of supporting vouchers,
receipts or other documentation in accordance with the Company's policies as in
effect from time to time.
5. NON-COMPETITION; CONFIDENTIALITY; CHANGE IN CONTROL EVENT
5.1 NON-COMPETITION; SMALL INTERESTS. During the term of the
Consultant's engagement hereunder by the Company, the Consultant shall not,
directly or indirectly, be employed by, own, manage, operate, join, control or
participate in the ownership, management, operation or control of or be
connected in any manner with the fields of business actually operated in by the
Company, provided, however, that nothing herein shall prevent the purchase or
ownership by the Consultant of less than ten percent (10%) of the outstanding
common shares or other equity interests of a publicly or privately held company.
5.2 The Consultant agrees that he will not, except to the Company
and its subsidiaries, affiliates, directors, officers, agents, employees,
consultants and others related to the Company, communicate or divulge, directly
or indirectly, any confidential or proprietary information relating to the
business, customers and suppliers or other affairs of the Company, its parents,
subsidiaries and their affiliates.
5.3 For purposes of this Agreement, a "Change in Control Event"
shall mean (i) a sale or other change in control of all or a substantial
portion of all of the Company's assets or (ii) any transaction or series of
related transactions (including without limitation any reorganization, merger
or consolidation) which results in the shareholders of the Company immediately
prior to such transaction holding, following such transaction, less than fifty
percent (50%) of the voting
2
<PAGE> 3
power of the surviving or continuing entity or (iii) a change of the voting
group that in fact controls the Company on the Effective Date or (iv) a change
in persons who constitute a majority of the Board of Directors of the Company
on the Effective Date.
6. Term and Termination.
6.1 This Agreement shall become effective on the date it is executed
by both parties (the "Effective Date"). Unless otherwise terminated as provided
in this section 6, or by way of 30 days written notice from the Consultant, the
term of the Consultant's engagement shall expire on November 15, 2001 provided,
however, that the term of this Agreement shall thereafter automatically renew
for successive one-year periods unless either party gives notice to the other
party of non-renewal no later than September 15th in any calendar year of this
Agreement after 2001. Any such notice of non-renewal by the Company shall be
deemed a termination without cause for purposes hereof.
6.2 The provisions of paragraph 6.1 notwithstanding, this Agreement
shall terminate upon the occurrence of any of the following:
a. Death of the Consultant; or
b. Inability of the Consultant to perform his duties for a period of
one hundred eighty (180) consecutive days due to sickness,
disability or any other cause, unless the Consultant is granted a
leave of absence by the Company.
7. Notice and Opportunity to Cure. Whenever a breach of this Agreement
by either party is relied upon as a justification for any action taken by the
other party, before such action is taken, the party asserting the breach shall
give the other party written notice of the existence and nature of the breach
and such other party shall have the opportunity to correct such breach during
the sixty-day period following such notice. If such cure is effected, then any
such breach shall not be a basis for the party intending to rely thereon.
8. Notices. All notices and other communications in connection with this
Agreement shall be in writing and shall be given by personal delivery or by
registered or certified mail, return receipt requested, addressed as follows:
If to the Consultant: Calvin Ayre
Oficentro Sabana Sur.
Edificio 7, 5 Piso
San Jose, Costa Rica
If to the Company: Corporate Secretary
c/o Kazootek.com Technologies Inc.
1380 Burrard Street - Suite 620
Vancouver, British Columbia
Canada V6Z 2H3
3
<PAGE> 4
or to such other address as the party to receive the notice or other
communication shall have designated by notice to the other hereunder. The date
any such notice or other communication shall be deemed hereunder to have been
given shall be seven (7) days after the date that it is deposited in the mails,
with proper portage prepaid, or when delivered personally by hand, courier or
otherwise.
9. Assignment. The rights of either party shall not be assigned or
transferred, whether voluntarily or by operation of law or otherwise, without
the other party's prior written consent, nor shall the duties of either party
be delegated in whole or in part, whether voluntarily or by operation of law or
otherwise, without the other party's prior written consent. Any attempted
assignment, transfer or delegation shall be of no force or effect unless so
consented to in writing.
10. Miscellaneous.
10.1 Waiver. No delay or failure by a party to exercise any right
under this Agreement, and no partial or single exercise of that right, shall
constitute a waiver of that or any other right, unless otherwise expressly set
forth in a writing signed by such party. No consent or waiver, express or
implied, by either party to any breach or default by the other party in the
performance by the other of its or his obligations hereunder shall be effective
unless made in a writing duly executed by the party giving or making such
consent or waiver. No such consent or waiver shall be deemed or construed to be
consent or waiver to or of any other breach or default in the performance by
such other party of the same or any other obligation of such party.
10.2 Amendments. To be effective, all changes, additions and other
amendments to this Agreement must be set forth in a writing signed by the party
to be charged, and no oral changes, additions or other amendments hereto shall
be binding upon either party.
10.3 Integration. This Agreement constitutes the entire agreement
between the parties relating to the subject matter hereof and supersedes and
cancels all other prior agreements, understandings, representations,
warranties, inducements or other matters in connection with such subject matter.
10.4 Severability. The unenforceability or invalidity of any
provision of this Agreement in a particular case shall not render unenforceable
or invalid in such case any other provision hereof or such provision in any
other case. If any one or more of the provisions of this Agreement shall for
any reason be deemed excessive as to duration, scope, activity or subject or
shall be otherwise unenforceable, such provision(s) shall be construed or
recast so as to enforce the intent of the parties as herein set forth to the
greatest extent permitted by applicable law.
10.5 Headings. The headings and titles in this Agreement are for
convenience of reference only and shall not in any way affect the meaning,
interpretation or enforcement of this Agreement.
4
<PAGE> 5
10.6 Governing Law. This Agreement shall be governed by the laws of
the Isle of Man as in effect for contracts made and to be performed in the Isle
of Man. The parties hereby submit to the jurisdiction of the courts of, and the
federal courts located in, the Isle of Man for all purposes related to this
Agreement and the relationship between the parties, and such courts shall have
exclusive jurisdiction of the subject matter hereof and thereof.
10.7 Nature of Relationship. The relationship of the parties shall be
only that of employer and consultant. The parties do not intend to be partners
and neither party shall hold itself out as being a partner of, or having a
similar relationship with, the other party.
10.8 Independent Legal Advice. The Consultant acknowledges that he:
(a) has read and understands this agreement;
(b) has signed this agreement voluntarily; and
(c) has been advised to obtain and has obtained independent
legal advice in connection with his execution of this
agreement.
10.9 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of which shall
constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
CALVIN AYRE CYBEROAD.COM (ISLE OF MAN) LIMITED
/s/ CALVIN AYRE /s/ JOHN COFFEY
- ---------------------------------- ----------------------------------
Consultant John Coffey,
Director
5
<PAGE> 1
EXHIBIT 10.36
REGISTERED AGENT AGREEMENT
THIS REGISTERED AGENT AGREEMENT is made as of the 21st day of October,
1999, by and among HOLLAND & KNIGHT LLP, a partnership engaged in the practice
of law, INTRASTATE REGISTERED AGENT CORPORATION ("Intrastate"), a Florida
corporation and cyberoad.com Corporation, a Florida Corporation ("Principal").
In consideration of the mutual covenants set forth below, the parties
hereto agree as follows:
1. Appointment. Principal hereby appoints Intrastate as Principal's
Registered Agent in the State of Florida and Intrastate hereby accepts such
appointment, subject to the terms and conditions set forth below.
2. Duties of Registered Agent. Intrastate's duties hereunder as
Registered Agent shall be limited to those required by Florida law, including
that upon the receipt of service of process, Intrastate shall forward the served
document or documents to Principal at the address provided in paragraph 6.
PURSUANT TO FLORIDA STATUTE CHAPTER 607.0505, UPON SUBPOENA FROM THE DEPARTMENT
OF LEGAL AFFAIRS (STATE OF FLORIDA), INTRASTATE MAY BE REQUESTED TO DISCLOSE
INFORMATION RELATING TO IDENTITY AND ADDRESS OF PAST AND PRESENT ACTUAL AND
BENEFICIAL SHAREHOLDERS, OFFICERS, AND DIRECTORS OF PRINCIPAL AS WELL AS THE
IDENTITY AND ADDRESS OF THOSE PERSONS PROVIDING INFORMATION TO INTRASTATE.
Under no circumstances shall Intrastate have a duty to defend or arrange for
the defense of Principal as to any lawsuit or other legal proceeding. PRINCIPAL
MUST MAKE ITS OWN ARRANGEMENTS FOR LEGAL REPRESENTATION.
3. Compensation. As compensation for providing the services of a
registered agent for the Principal as described below, Principal shall pay to
Holland & Knight LLP (as billing agent for Intrastate) $200.00 per calendar
year or any portion of a calendar year. In addition to the annual fee,
Principal agrees to reimburse Holland & Knight LLP and Intrastate for its
out-of-pocket costs (such as, but not limited to, postage, telephone,
photocopy, filing fees and taxes, telex and courier charges) incurred in the
performance of its duties hereunder. The annual fee may be adjusted upon notice
to Principal.
4. Resignation. Intrastate may resign effective thirty (30) days after
written notice to Principal at any time and for any reason. Principal may
terminate this agreement effective immediately at any time and for any reason
upon written notice to Intrastate and to Holland & Knight LLP.
5. Indemnification. Principal agrees to indemnify Holland & Knight LLP
and Intrastate and hold them harmless from any and all claims, liabilities,
actions,
<PAGE> 2
suits or proceedings at law or equity, or any other expenses, fees or charges of
any character or nature, that either of them may incur or with which either may
be threatened by reason of Intrastate's acting as Registered Agent hereunder,
and in connection therewith, to indemnify Holland & Knight LLP and Intrastate
against any and all expenses, including attorneys' fees and the cost of
defending any action, suit or proceeding or resisting any claim.
6. Notices. Notices of delivery of process or any other communication
hereunder shall be sent by first class mail, certified mail, facsimile (followed
by the original) or any other method judged by Intrastate to be appropriate
under the circumstances to the below, or in the case of notification sent to
Principal, to any other address of Principal contained in the files of
Intrastate or Holland & Knight LLP and are considered made upon the earlier of
personal delivery or mailing. Change of below addresses shall be made by
certified mail, return receipt requested, or by other means by which a written
record of receipt is provided.
If to Principal: If to Intrastate:
c/o Ms. Krista Wilson c/o Holland & Knight LLP
Corporate Secretary 701 Brickell Avenue
1380 Burrard Street Suite 3000
Suite #620 Miami, Florida 33131
Vancouver BC Canada Telephone: (305) 374-8500
Telephone: 604-601-5330 Fax: (305) 789-7799
Fax: 604-601-5331
7. General.
a. This Agreement may not be modified or amended except by a
writing executed by the parties hereto. ?The conduct of the parties without
such written amendment shall in no event constitute a modification hereof.
b. This Agreement shall be interpreted, construed and enforced
under the laws of the State of Florida.
HOLLAND & KNIGHT LLP CYBEROAD.COM CORPORATION
By: /s/ Bernard Jacobson Name: /s/ Krista Wilson
------------------------------- -----------------------------
Bernard Jacobson Title: Corporate Secretary
Miami Office ----------------------------
INTRASTATE REGISTERED AGENT CORPORATION
By: /s/ Bernard Jacobson
------------------------------------
2
<PAGE> 1
EXHIBIT 10.37
REVOLVING LINE OF CREDIT AGREEMENT
WHEREAS EL MORO FINANCE LTD., a Tortola, British Virgin Islands registered
company ("El Moro"), of Pasea Estate, Road Town, Tortola, B.V.I.; and
WHEREAS CYBEROAD.COM, (ISLE OF MAN) LIMITED, an Isle of Man registered company
("CIOM"), of International House, Castle Hill, Victoria Road, Douglas, Isle of
Man; and
WHEREAS ECOMM RELATIONSHIP TECHNOLOGIES (ISLE OF MAN) LIMITED, and Isle of Man
registered company, ("EIOM") of International House, Castle Hill, Victoria
Road, Douglas, Isle of Man; and
WHEREAS CYBEROAD.COM CORPORATION, a Florida based corporation ("Cyberoad") with
its head office at Oficentro Sabana Sur, Edificio 7, 5 Pesa, San Jose, Costa
Rica; and
WHEREAS KAZOOTEK.COM TECHNOLOGIES INC., a British Columbia corporation
("Kazoo"), of suite 620, 1380 Burrard Street, Vancouver, BC, V6Z 2H3; and
WHEREAS SYSTEMAS DE INFORMACION TECHNELOGICA S.I.T. S.A., a Costa Rica
registered company; and INFORMACION TECHNELOGICA CANADIENSE S.A., a Costa Rica
registered company, ("SIT and ITC", respectively), of Grupo Professional
Multidisciplinario, Apartado 290-2120, San Jose, Costa Rica;
HEREBY AGREE TO THE FOLLOWING RECITALS, TERMS AND CONDITIONS, AND ENTER INTO
THIS AGREEMENT AS OF THE 10TH DAY OF DECEMBER, 1999;
RECITALS
For consideration, security and interest paid, El Moro, hereby agrees to
provide to Cyberoad's 100% owned subsidiary CIOM, hereinafter referred to as
the "Cyberoad Group" collectively, a revolving line of credit in the amount of
U.S.$500,000.00, available as of the date first written above.
TERMS & CONDITIONS
1. El Moro will make available to the "Cyberoad Group", a revolving line of
credit in the amount of U.S.$500,000.00, as of December 10, 1999, for a
full-term of 5 years from the date of entitlement as set out in item 11
below. Such amount can be
<PAGE> 2
increased at any time under the same terms and conditions herein at the
sole discretion of El Moro.
2. Notice of foreclosure can be issued by El Moro only upon 2 consecutive
months or 60 days of non-payment by the Cyberoad Group, as outline herein,
and such notice must be provided by 30 days written notice to the Cyberoad
Group as set out in item 16 below.
3. Such line of credit will be administered from Swiss representative office,
Todistr.51, PO Box 1059, CH-8039 Zurich.
4. Such line of credit will not be subject to penalties or any additional
provisions other than as provided for in this Agreement, including but not
limited to, penalties for early payment or for non-use of funds.
5. This Agreement is binding and in full-effect as of December 10, 1999 and is
governed by the laws of British Columbia, Canada.
CONSIDERATION
6. The Cyberoad Group, upon advance of funds only, agree to provide to El Moro
interest payments of a compounded annual rate of 10% of the funds advanced
per annum only, or compound annual interest payments of prime (Switzerland)
+ 2 of the funds advanced, per annum only, for the first year of
instatement of the revolving line of credit, due and payable on the first
day of every month.
7. The Cyberoad Group, upon completion of the first year of instatement of the
revolving line of credit, agree to provide to El Moro interest as described
in item 4 above plus principal payments, due and payable on the first day
of every month.
8. In the case of missed interest or principle payments or any portion
thereof, the Cyberoad Group agrees to provide to El Moro, standard interest
payments on any outstanding amounts due and payable.
9. The Cyberoad Group agrees to furnish to El Moro, as additional
consideration for the open revolving line of credit, an unrestricted, open
source code license to all software developed by the Cyberoad Group,
specifically Cyberoad.com (Isle of Man) Limited and Ecomm Relationship
Technologies (Isle of Man) Limited, for up to two years after the revolving
line of credit is converted or repaid in full. This source license is
unrestricted in any way, but specifically includes the right to use the
software, extend it and sublicense it to an unlimited number of
sub-licensees
<PAGE> 3
without any future payments of any kind to the Cyberoad Group. Such
extensions becoming the exclusive property of El Moro; and
10. The Cyberoad Group agrees to allow El Moro, to independently enter into a
development agreement with Kazootek, for any future development needs
related to extending the open source license.
11. Kazootek agrees that it will enter into a development agreement with El
Moro, as set out in item 10 above, at the sole discretion of El Moro and
that it will act as trustee for the entire term of this agreement, for the
source code, both now and for all subsequent code developed on behalf of
the Cyberoad group until the end of this agreement as set out in 9 above.
12. The Cyberoad Group and El Moro hereby acknowledge and accept that the
terms and conditions of this agreement do not "kick-in" unless funds are
actually advanced to the Cyberoad Group. Execution of this Agreement does
not indicate entitlement to the terms and conditions as set forth above.
Upon advancement of funds, the entitlement date for the terms and
conditions set forth above, will be the date the funds are issued, and are
hereby referred to as the "Entitlement Date".
SECURITY
13. The Cyberoad Group also agrees to provide to El Moro as security for the
revolving line of credit, transfer of 100% ownership of SIT and ITC
collectively and their assets, and will furnish to El Moro the shares of
such companies, to be held in trust subject to repayment or conversion
provisions, by: EH & P Investments AG, Burglistrasse 6 PO Box CH-8027.
Zurich, Switzerland.
14. In the event of foreclosure, the above mentioned security shall become
forfeited to El Moro, in full, upon furnishment of written notice of not
less than 30 days by El Moro, of their intent to foreclose.
EXECUTION IN COUNTERPART
14. This instrument may be executed in counterpart by the parties hereto, in
as many counterparts as may be necessary, and each instrument shall be
deemed to be an original. Such counterparts together shall constitute one
and the same instrument, and shall bear the date first written above.
JURISDICTION OF GOVERNING LAW
<PAGE> 4
15. This agreement is subject to the laws of the Province of British Columbia,
Canada and is binding on all parties.
NOTICES
16. Addresses, for all parties, for delivery of all notices, shall be as set
out and described in full, above.
CONVERSION
17. The Cyberoad Group agrees that at the sole discretion of El Moro, any
outstanding monies owing for a period of 2 consecutive months or 60 days,
can be converted into freely-traded shares in the parent company,
Cyberoad.com Corporation, at current market prices as at the date first
written above, Dec 10th, 1999 plus the maximum discount allowed under
existing Securities and Exchange Act rules and regulations.
HEREBY ACKNOWLEDGED AND AGREED TO THIS 10TH DAY OF DECEMBER, 1999 BY AND
BETWEEN:
EL MORO FINANCE LTD. CYBEROAD.COM (ISLE OF MAN)
LIMITED
/s/ KAY-LINDA RICHARDSON /s/ JOHN COFFEY
- --------------------------------- -----------------------------
Kay-Linda Richardson, John Coffey,
Director Director
ECOMM RELATIONSHIP TECHNOLOGIES KAZOOTEK.COM TECHNOLOGIES
(ISLE OF MAN) LIMITED INC.
/s/ DAVID HARRIS /s/ CORINNA JEYS
- --------------------------------- ------------------------------
David Harris, Corinna Jeys,
Director Director
SIT AND ITC CYBEROAD.COM CORPORATION
/s/ JOHN COFFEY /s/ JOHN COFFEY
- --------------------------------- ------------------------------
John Coffey, John Coffey,
Director President
<PAGE> 1
EXHIBIT 10.38
CYBEROAD.COM CORPORATION
STOCK AWARD PLAN
1. PURPOSE OF THE PLAN.
The purpose of this Stock Award Plan (the "Plan") is to provide incentives
and rewards to selected eligible directors, officers, employees and consultants
of Cyberoad.com Corporation (the "Company") or its subsidiaries in order to
assist the Company and its subsidiaries in attracting, retaining and motivating
those persons by providing for or increasing the proprietary interests of those
persons in the Company, and by associating their interests in the Company with
those of the Company's shareholders.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Board of Directors of the Company
(the "Board"), or a committee of the Board (the "Committee") whose members shall
serve at the pleasure of the Board. If administration is delegated to the
Committee, the Committee shall have, in connection with the administration of
the Plan, the powers theretofore possessed by the Board (and references in this
Plan to the Board shall thereafter be to the Committee), subject, however, to
such resolutions, not inconsistent with the provisions of the Plan as may be
adopted from time to time by the Board.
The Board shall have all the powers vested in it by the terms of the Plan,
including exclusive authority (i) to select from among eligible directors,
officers, employees and consultants, those persons to be granted "Awards" (as
defined below) under the Plan; (ii) to determine the type, size and terms of
individual Awards (which need not be identical) to be made to each person
selected; (iii) to determine the time when Awards will be granted and to
establish objectives and conditions (including, without limitation, vesting and
performance conditions), if any, for earning Awards; (iv) to amend the terms or
conditions of any outstanding Award, subject to applicable legal restrictions
and to the consent of the other party to such Award; (v) to determine the
duration and purpose of leaves of absences which may be granted to holders of
Awards without constituting termination of their employment for purposes of
their Awards; (vi) to authorize any person to execute, on behalf of the Company,
any instrument required to carry out the purposes of the Plan; and (vii) to make
any and all other determinations which it determines to be necessary or
advisable in the administration of the Plan. The Board shall have full power and
authority to administer and interpret the Plan and to adopt, amend and revoke
such rules, regulations, agreements, guidelines and instruments for the
administration of the Plan and for the conduct of its business as the Board
deems necessary or advisable. The Board's interpretation of the Plan, and all
actions taken and determinations made by the Board pursuant to the powers vested
in it hereunder, shall be conclusive and binding on all parties concerned,
including the Company, its shareholders, any participants in the Plan and any
other employee of the Company or any of its subsidiaries.
1
<PAGE> 2
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is a director, officer, employee or consultant of the
Company, or any of its subsidiaries (a "Participant"), shall be eligible to be
considered for the grant of Awards under the Plan.
4. AWARDS.
(a) Common Stock and Derivative Security Awards. Awards authorized under
the Plan shall consist of any type of arrangement with a Participant that is not
inconsistent with the provisions of the Plan and that, by its terms, involves or
might involve or be made with reference to the issuance of (i) shares of the
Common Stock, par value per share as set forth in Stock Option Agreement, of the
Company (the "Common Stock") or (ii) a "derivative security" (as that term is
defined in Rule 16a-1(c) of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Exchange Act of 1934, as amended, as
the same may be amended from time to time) with an exercise or conversion price
related to the Common Stock or with a value derived from the value of the Common
Stock.
(b) Types of Awards. Awards are not restricted to any specified form or
structure and may include, but need not be limited to, sales, bonuses and other
transfers of stock, restricted stock, stock options, reload stock options, stock
purchase warrants, other rights to acquire stock or securities convertible into
or redeemable for stock, stock appreciation rights, phantom stock, dividend
equivalents, performance units or performance shares, or any other type of Award
which the Board shall determine is consistent with the objectives and
limitations of the Plan. An Award may consist of one such security or benefit,
or two or more of them in tandem or in the alternative.
(c) Consideration. Common Stock may be issued pursuant to an Award for any
lawful consideration as determined by the Board, including, without limitation,
a cash payment, services rendered, or the cancellation of indebtedness.
(d) Guidelines. The Board may adopt, amend or revoke from time to time
written policies implementing the Plan. Such policies may include, but need not
be limited to, the type, size and term of Awards to be made to participants and
the conditions for payment of such Awards.
(e) Terms and Conditions.
(i) Subject to the provisions of the Plan, the Board, in its sole and
absolute discretion, shall determine all of the terms and conditions of each
Award granted pursuant to the Plan.
(ii) The terms and conditions of an Award may include, among other
things:
(1) any provision necessary for such Award to qualify as an
incentive stock option under Section 422 of the Internal Revenue
Code of 1986, as amended (the "Code") (an "Incentive Stock
Option");
2
<PAGE> 3
(2) a provision permitting the recipient of such Award to pay the
purchase price of the Common Stock or other property issuable
pursuant to such Award, or to pay such recipient's tax
withholding obligation with respect to such issuance, in whole or
in part, by delivering previously owned shares of capital stock
of the Company (including "pyramiding") or other property, or by
reducing the number of shares of Common Stock or the amount of
other property otherwise issuable pursuant to such Award; or
(3) a provision conditioning or accelerating the receipt of benefits
pursuant to the Award, or terminating the Award, either
automatically or in the discretion of the Board, upon the
occurrence of specified events, including, without limitation, a
change of control of the Company, an acquisition of a specified
percentage of the voting power of the Company, the dissolution or
liquidation of the Company, a sale of substantially all of the
property and assets of the Company or an event of the type
described in Section 7 of the Plan.
(iii) The terms and conditions of each Award which is a stock option or
stock purchase right shall be in compliance with the following
limitations:
(4) The exercise price of an option or purchase price of a stock
purchase right may not be less than 85% of the fair value of the
Common Stock at the time the option or stock purchase right is
granted, unless the Participant owns stock possessing more than
10% of the total combined voting power of all classes of stock of
the Company, in which event the exercise price of an option may
not be less than 110% of the fair value of the Common Stock and
the purchase price of a stock purchase right may not be less than
100% of the fair value of the Common Stock;
(5) The exercise period of an option may not be more than 120 months
from the date the option is granted, unless the option is granted
to a Participant who owns stock possessing more than 10% of the
total combined voting power of all classes of stock of the
Company, in which event the exercise period of such option may
not be more than 60 months from the date the option is granted.
(6) A participant who is not an officer, director or consultant of
the Company must have the right to exercise an option at the rate
of at least 20% per year over 5 years from the date the option is
granted, subject to earlier termination of the option and other
reasonable conditions;
3
<PAGE> 4
(7) An option or stock purchase right may not be transferable
by the Participant other than by will or the laws of
descent and distribution;
(8) Subject to the provisions of Section 4(f) hereof, the
Participant must have the right to exercise an option,
following termination of employment, to the extent it was
exercisable at termination of employment; (I) at least six
months from the date of termination if termination if caused
by death or disability; and (II) at least 30 days from the
date of termination if termination was caused other than by
death or disability; and
(9) If an option agreement or stock purchase agreement gives
the Company the right to repurchase shares upon termination
of employment, (I) the repurchase price must be equal to
either the fair value of the shares on the date of
termination of employment or the original purchase price
paid by the Participant for the shares (provided that the
right to repurchase at the original purchaser price must
lapse at the rate of at least 20% of the shares per year
over 5 years from the date the option or stock purchase
right is granted), (II) the right must be exercised for
cash or cancellation of purchase money indebtedness for the
shares within 90 days of termination of employment, and
(III) the right must expire if the Common Stock of the
Company becomes publicly traded.
(f) Suspension or Termination of Awards. If the Company believes that a
Participant has committed an act of misconduct as described below, the Company
may suspend the Participant's rights under any then outstanding Award pending a
determination by the Board. If the Board determines that a Participant has
committed an act of embezzlement, fraud, nonpayment of any obligation owed to
the Company or any subsidiary, breach of fiduciary duty or deliberate disregard
of the Company's rules resulting in loss, damage or injury to the Company, or
if a Participant makes an unauthorized disclosure of trade secret or
confidential information of the Company, engages in any conduct constituting
unfair competition, or induces any customer of the Company to breach a contract
with the Company, neither the Participant nor his or her estate shall be
entitled to exercise any rights whatsoever with respect to such Award. In making
such determination, the Board shall act fairly and shall give the Participant a
reasonable opportunity to appear and present evidence on his or her behalf to
the Board.
5. SHARES OF COMMON STOCK SUBJECT TO THE PLAN.
The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards under the Plan (including Awards in the form of
Incentive Stock Options and Non-Statutory Stock Options) shall not exceed the
amount of Common Stock as approved by the Board of Directors, subject to
adjustment as provided in Section 7 of the Plan. Shares of Common Stock subject
to the Plan may consist, in whole or in part, of authorized and unissued shares
or treasury shares. Any shares of Common Stock subject to an Award which for
any reason expires or is
4
<PAGE> 5
terminated unexercised as to such shares shall again be available for issuance
under the Plan. For purposes of this Section 5, the aggregate number of shares
of Common Stock that may be issued at any time pursuant to Awards granted under
the Plan shall be reduced by: (i) the number of shares of Common Stock
previously issued pursuant to Awards granted under the Plan, other than shares
of Common Stock subsequently reacquired by the Company pursuant to the terms
and conditions of such Awards and with respect to which the holder thereof
received no benefits of ownership, such as dividends; and (ii) the number of
shares of Common Stock which were otherwise issuable pursuant to Awards granted
under this Plan but which were withheld by the Company as payment of the
purchase price of the Common Stock issued pursuant to such Awards or as payment
of the recipient's tax withholding obligation with respect to such issuance.
6. PAYMENT OF AWARDS.
The Board shall determine the extent to which Awards shall be payable in
cash, shares of Common Stock or any combination thereof. The Board may, upon
request of a Participant, determine that all or a portion of a payment to that
Participant under the Plan, whether it is to be made in cash, shares of Common
Stock or a combination thereof, shall be deferred. Deferrals shall be for such
periods and upon such terms as the Board may determine in its sole discretion.
7. DILUTION AND OTHER ADJUSTMENT.
In the event of any change in the outstanding shares of the Common Stock or
other securities then subject to the Plan by reason of any stock split, reverse
stock split, stock dividend, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate change, or if the
outstanding securities of the class then subject to the Plan are exchanged for
or converted into cash, property or a different kind of securities, or if cash,
property or securities are distributed in respect of such outstanding securities
as a class (other than cash dividends), then the Board may, and shall in the
event of a stock split, reverse stock split, stock dividend, recapitalization,
combination of recapitalization of the Company's stock, make such equitable
adjustments to the Plan and the Awards thereunder (including, without
limitation, appropriate and proportionate adjustments in (i) the number and type
of shares or other securities or cash or other property that may be acquired
pursuant to Incentive Stock Options and other Awards theretofore granted under
the Plan, (ii) the maximum number and type of shares or other securities that
may be issued pursuant to Incentive Stock Options and other Awards thereafter
granted under the Plan; and (iii) the maximum number of securities with respect
to which Awards may thereafter be granted to any Participant in any fiscal year)
as the Board in its sole discretion determines appropriate, including any
adjustments in the maximum number of shares referred to in Section 5 of the
Plan. Such adjustments shall be conclusive and binding for all purposes of the
Plan.
8. MISCELLANEOUS PROVISIONS.
(a) Definitions. As used herein, "subsidiary" means any current or future
corporation which would be a "subsidiary corporation," as that term is defined
in Section 424(f) of the Code, of the Company; and the term "or" means "and/or."
5
<PAGE> 6
(b) CONDITIONS ON ISSUANCE. Securities shall not be issued pursuant to
Awards unless the grant and issuance thereof shall comply with all relevant
provisions of law and the requirements of any securities exchange or quotation
system upon which any securities of the Company are listed, and shall be
further subject to approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is determined by Company counsel to
be necessary to the lawful issuance and sale of any security or Award, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such securities as to which requisite authority shall not have been obtained.
(c) RIGHTS AS SHAREHOLDER. A participant under the Plan shall have no
rights as a holder of Common Stock with respect to Awards hereunder unless and
until certificates for shares of such stock are issued to the participant.
(d) AGREEMENTS. All Awards granted under the Plan shall be evidenced by
written agreements in such form and containing such terms and conditions (not
inconsistent with the Plan) as the Board shall from time to time adopt.
(e) WITHHOLDING TAXES. The Company shall have the right to deduct from
all Awards hereunder paid in cash any federal, state, local or foreign taxes
required by law to be withheld with respect to such awards and, with respect to
awards paid in stock, to require the payment (through withholding from the
participant's salary or otherwise) of any such taxes. The obligation of the
Company to make delivery of awards in cash or Common Stock shall be subject to
the restrictions imposed by any and all governmental authorities.
(f) NO RIGHTS TO AWARD. No Participant or other person shall have any
right to be granted an Award under the Plan. Neither the Plan nor any action
taken hereunder shall be construed as giving any Participant any right to be
retained in the employ of the company or any of its subsidiaries or shall
interfere with or restrict in any way the rights of the Company or any of its
subsidiaries, which are hereby reserved, to discharge a Participant at any time
for any reason whatsoever, with or without good cause.
(g) COSTS AND EXPENSES. The costs and expenses of administering the Plan
shall be borne by the Company and not charged to any award nor to any
Participant receiving an Award.
(h) FUNDING OF PLAN. The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to assure the payment of any Award under the Plan.
(i) INFORMATION TO AWARD HOLDERS. The Company will provide to
Participants who have received Awards under the Plan financial statements of the
Company at least annually.
6
<PAGE> 7
9. AMENDMENTS AND TERMINATION.
(a) Amendments. The Board may at any time terminate or from time to time
amend the Plan in whole or in part, but no such action shall adversely affect
any rights or obligations with respect to any Awards theretofore made under the
Plan. However, with the consent of the Participant affected, the Board may amend
outstanding agreements evidencing Awards under the Plan in a manner not
inconsistent with the terms of the Plan.
(b) Shareholder Approval. To the extent that Section 422 of the Code, other
applicable law, or the rules, regulations, procedures or listing agreement of
any national securities exchange or quotation system, requires that any
amendment of the Plan be approved by the shareholders of the Company, no such
amendment shall be effective unless and until it is approved by the shareholders
in such a manner and to such a degree as is required.
(c) Termination. Unless the Plan shall theretofore have been terminated as
above provided, the Plan (but not the awards theretofore granted under the Plan)
shall terminate on and no awards shall be granted after August 18, 2009.
10. EFFECTIVE DATE.
The Plan is effective on April 1, 1999, the date on which it was adopted by
the Board of Directors of the Company.
11. GOVERNING LAW.
The Plan and any agreements entered into thereunder shall be construed and
governed by the laws of the State of Florida applicable to contracts made
within, and to be performed wholly within, such jurisdiction, without regard to
the application of conflict of laws rules of such jurisdiction.
7
<PAGE> 1
EXHIBIT 10.39
STOCK OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)
THIS STOCK OPTION AGREEMENT (the "Option Agreement") is made and entered into as
of the execution date of the Option Certificate to which it is attached (the
"Certificate") by and between cyberoad.com Corporation, a Florida Corporation,
(the "Company") and the person named in the Certificate (the "Optionee").
The Board of Directors of the Company, (the "Board") has authorized the grant to
the Optionee of a non-statutory stock option to purchase shares of the Company's
Common Stock, par value set at market price at time of grant, per share (the
"Common Stock"), upon the terms and subject to the conditions set forth in this
Option Agreement and in the Stock Award Plan, attached hereto.
The Company and Option agree as follows:
1. GRANT OF OPTION
The Company hereby grants to the Option the right and option (the
"Option"), upon the terms and subject to the conditions set forth in this
Option Agreement and Stock Award Plan, to purchase all or any portion of
that number of shares of the Common Stock (the "Shares") set forth in the
Certificate at the Option exercise price set forth in the Certificate (the
"Exercise Price").
2. TERM OF OPTION
The Option shall terminate and expire on the Option Expiration Date set
forth in the Certificate (the "Expiration Date"), unless sooner terminated
as provided herein.
3. EXERCISE PERIOD
a) subject to the provisions of Sections 3, 5 and 7 of this Option
Agreement, the Option shall become exercisable (in whole or in part)
upon and after the dates set forth under the caption "Exercise
Schedule" in the Certificate. The installments shall be cumulative;
the Option may be exercised as to any or all Shares covered by an
installment, at any time or times after the installment first becomes
exercisable and until the Option Expiration Date or termination of the
Option;
b) notwithstanding anything to the contrary contained in this Option
Agreement, the Option may not be exercised, in whole or in part,
unless and until any then applicable requirements of all federal,
state and local laws and regulatory agencies shall have been fully
complied with to the satisfaction of the Company and its counsel.
4. EXERCISE OF OPTION
There is no obligation to exercise the Option, in whole or in part. The
Option may be exercised, in whole or in part, only by delivery to the
Company of the following:
<PAGE> 2
a) written notice of exercise in the form attached hereto, stating the number
of Shares being purchased (the "Purchased Shares"):
b) payment of the Exercise Price of the Purchased Shares either in cash, or
with the consent of the Board (which may be withheld at its discretion, or
by delivery to the Company of other shares of Common Stock with an
aggregate Fair Market Value equal to the total Exercise Price of the
Purchased Shares, or according to a deferred payment or other arrangement,
(which may include without limiting the generality of the foregoing, the
use of other shares of Common Stock) with the person to whom the Option is
granted or to whom the Option is transferred pursuant to the terms of this
Option Agreement, or in any other form of legal consideration that may be
acceptable to the Board; and
c) if requested by the Company, a letter of investment intent in such form and
containing such provisions as the Company may require.
In case of any deferred payment arrangement, interest shall be payable at least
annually and shall be payable at the minimum rate of interest necessary to avoid
the imputation of interest under the applicable provision of the Internal
Revenue Code of 1986, as amended (the "Code"), and Treasury Regulations.
Following receipt of notice and payment referred to above, the Company shall
issue and deliver to the Optionee a stock certificate or stock certificates
evidencing the Purchased Shares, however, the Company shall not be obligated to
issue a fraction or fractions of a share of its Common Stock, and my pay to
Optionee, in cash or by cheque, the Fair Market Value of any fraction or
fractions of a share exercised by Optionee. "Fair Market Value" shall be
determined as follows:
i) if the Common Stock is listed on any established stock exchange or a
national market system, including without limitation to the Nasdaq
National Market, the Fair Market Value of a share of Common Stock
shall be the closing sale price for such stock (or the closing bid, if
no sales are reported) as quoted on such system or exchange (or the
exchange with the greatest determination, as reported in the Wall
Street Journal or such other source as the Board deems reliable;
ii) if the Common Stock is quoted on the NASDAQ system (but not the NASDAQ
National Market) or is regularly quoted by recognized securities
dealer but selling prices are not reported, the Fair Market Value of a
share of Common Stock shall be the mean between the bid and asked
prices for the Common Stock on the last market trading day prior to
the day of determination, as reported in the Wall Street Journal or
such other source as the Board deems reliable; and
<PAGE> 3
iii) in the absence of an established market of the Common Stock, the
Fair Market Value shall be determined in good faith, by the
Board.
5. TERMINATION OF SERVICES
a) if Optionee shall cease to be an officer, director, consultant or
employee of the Company, or any Subsidiary or Parent of the Company,
for any reason other than death or permanent disability (a
"Terminating Event"), or termination by the Company for cause, the
Optionee shall have the right, subject to the provisions of Section 5
herein, to exercise the Option at any time following such Terminating
Event until the earlier to occur of 1) 30 days following the date of
such Terminating Event or 2) the Expiration Date. The Option may be
exercised following a Terminating Event only to the extent
exercisable as of the date of the Terminating Event. To the extent
unexercised at the end of the period referred to above, the Option
shall terminate. The Board, in its sole and absolute discretion,
shall determine whether or not authorized leaves of absence shall
constitute termination of employment for purposes of this Option
Agreement;
b) if, by reason of death or disability, (a "Special Termination
Event"), Optionee shall cease to be an officer, director, consultant
or employee, the Company or any Subsidiary or Parent of the Company,
then the Optionee, the Optionee's executors or administrators or any
person or persons acquiring the Option directly from the Optionee by
bequest or inheritance, shall have the right to exercise the Option
at any time following such Special Terminating Event until the
earlier to occur of 1) six months following the date of such Special
Terminating Event and 2) the Expiration Date. The Option may be
exercised following a Special Terminating Event only to the extent
exercisable at the date of the Special Terminating Event. To the
extent unexercised at the end of the period referred to above, the
Option shall terminate. For purposes of this Option Agreement,
"disability" shall mean total and permanent disabled unless he
furnishes proof of such disability in such form and manner, and at
such times as the Board may from time to time require;
c) if Optionee's employment shall be terminated "for cause" by the
Company, any Subsidiary or any Parent, the Option shall terminate and
expire upon such termination of employment. For purposes of this
Option Agreement, but not limited to, "for cause" shall mean:
i) with respect to employees and consultants of the Company, the
willful failure or refusal by Optionee to perform his duties to
the Company; or
ii) Optionee's willful disobedience of any orders or directives of
the Board of any officers thereof acting under the authority
thereof or Optionee's deliberate interference with the
compliance by other employees of the Company with any such
orders or directives; or
<PAGE> 4
iii) The willful failure or refusal of Optionee to abide by or comply
with the written policies, standard procedures or regulations of
the Company; or
iv) Any willful or continued act or course of conduct by Optionee
which the Board in good faith determines might reasonably be
expected to have a material or detrimental effect on the Company
or the business, operations, affairs or financial position
thereof; or
v) The committing by the Optionee of any fraud, theft, embezzlement
or other dishonest act against the Company; or
vi) With respect to consultants, any material breach of their
consulting agreement with the Company; and
vii) Nothing in the Plan, the Certificate or the Option Agreement
shall confer upon the Optionee any right to continue in the
service and/or employ of the Company or any Affiliate (as
defined in the Plan) or shall affect the right of the Company or
any Affiliate to terminate the relationship or employment of
Optionee, with or without cause.
6. RESTRICTIONS ON PURCHASED SHARES
a) Market Stand-Off
i) in connection with any underwritten public offering by the
Company of its equity securities pursuant to an effective
registration statement filed under the Securities Act of 1933,
as amended (the "1933 Act"), including the Company's initial
public offering, Optionee shall not sell, make any short sale
of, loan, hypothecate, pledge, grant any option for the purchase
of, or otherwise dispose or transfer for value or otherwise
agree to engage in any of the foregoing transactions with
respect to any Purchased Shares without the prior written
consent of the Company or its underwriters, for such period of
time from and after the effective date of such registration
statement as may be requested by the Company or such
underwriters; provided however, that in no event shall such
period exceed 180 days. This Section 6 shall only remain in
effect for the two-year period immediately following the
effective date of the Company's initial public offering and
shall thereafter terminate and cease to be in force or effect.
Optionee agrees to execute and deliver to the Company such
further documents or instruments as the Company may reasonably
determine to be necessary or appropriate to effect the
provisions of this Section 6;
ii) in the event of any stock dividend, stock split,
recapitalization or other transaction resulting in an adjustment
under Section 7 hereof, then any new, substituted or additional
securities or other property which is by reason of such
transaction distributed with respect to or in exchange for the
<PAGE> 5
Purchased Shares, shall be immediately subject to the provisions
of this Section 6, to the same extent the Purchased Shares are at
such time covered by such provisions;
iii) in order to enforce the provisions of Section 6, the company may
impose stop-transfer instructions with respect to the Purchased
Shares until the end of the applicable standoff period.
b) SECURITIES LAW RESTRICTIONS
Optionee shall not sell, transfer, assign, pledge or dispose of (with
or without consideration) (collectively "Transfer") and the Company
shall not be required to register any such Transfer and the Company
may instruct its transfer agent not to register any such Transfer,
unless and until all of the following events shall have occurred:
i) the Purchased Shares are Transferred pursuant to and in
conformity with 1) and effective registration statement filed
with the Securities and Exchange Commission (the "Commission")
pursuant to the 1933 Act, or 2) an exemption from registration
under the 1933 Act, and 3) the securities laws of any state of
the United States; and
ii) Optionee has, prior to the Transfer of such Purchased Shares,
and if requested by the Company, provided all relevant
information to Company's counsel so that upon Company's request,
Company's counsel is able to, and actually prepares and delivers
to the Company, a written opinion that the proposed Transfer is
1) pursuant to a registration statement which has been filed
under the 1933 Act as then in effect, and the Rules and
Regulations of the Commission thereunder and 2) is either
qualified or registered under any applicable state securities
laws, or exempt from such qualification or registration. The
Company shall bear all reasonable costs of preparing such
opinion.
c) NONCOMPLYING TRANSFERS INVALID
Any attempted Transfer which is not in full compliance with this
Section 6 shall be null and void ab initio of a no force or effect.
7. ADJUSTMENTS UPON RECAPITALIZATION
a) Subject to the provisions of Section 7, if any change is made in the
Common Stock, without receipt of consideration by the Company (through
merger, consolidation, reorganization, recapitalization,
reincorporation, stock dividend, dividend in property other than cash,
stock split, liquidating dividend, combination of shares, exchange of
<PAGE> 6
shares, change in corporate structure or other transaction not
involving the receipt of consideration by the Company) the Option will
be appropriately adjusted in the class(es) and number of shares and
price per share of stock subject to the Option. Such adjustments shall
be made by the Board, the determination of which shall be final,
binding, and conclusive. The conversion of any convertible securities
of the Company, shall not be treated as a "transaction not involving
the receipt of consideration by the Company";
b) In the event of 1) a dissolution, liquidation or sale of substantially
all of the assets of the Company or 2) a merger or consolidation in
which the Company is not the surviving corporation or 3) a reverse
merger in which the Company is the surviving corporation but the
shares of the Common Stock outstanding immediately preceding the
merger are converted by virtue of the merger into other property,
whether in the form of securities, cash or otherwise, then at the sole
discretion of the Board, and to the extent permitted by applicable
law, the Option shall terminate upon such event and may be exercised
prior thereto to the extent the Option is then exercisable; or
continue in full force and effect and, if applicable, the surviving
corporation or an Affiliate of such surviving corporation shall assume
the Option and/or shall substitute a similar option or award in place
of the Option.
c) To the extent that the foregoing adjustments relate to stock or
securities of the Company, such adjustments shall be made by the
Board, and its determination shall be final, binding and conclusive;
d) The provisions of this Section 7 are intended to be exclusive, and
Optionee shall have no other rights upon the occurrence of any of the
events described in Section 7.
e) The grant of the Option shall not affect in any way, the right or
power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to
merge, consolidate, dissolve or liquidate, or to sell or transfer all
or any part of its business or assets.
8. WAIVER OF RIGHTS TO PURCHASE STOCK
By signing this Option Agreement, Optionee acknowledges and agrees that
neither the Company nor any other person or entity is under any obligation
to issue, sell, assign or transfer to Optionee, any portion or equity
security of the Company, other than the Shares subject to the Option and
any other right or option to purchase Common Stock which was previously
granted in writing to Optionee by the Board. By signing this Option
Agreement, Optionee specifically waives all rights, which he or she may
have had prior to the date of this Option Agreement, to receive any option
or equity security of the Company.
<PAGE> 7
9. INVESTMENT INTENT
Optionee represents and agrees that if he or she exercises the Option in
whole or in part, and if at the time of such exercise the Plan and/or the
Purchased Shares have not been registered under the 1933 Act, he or she
will acquire Shares upon such exercise for the purpose of investment and
not with a view to the distribution of such Shares, and that upon each
exercise of the Option, he or she will furnish to the Company a written
statement to such effect.
10. LEGEND ON STOCK CERTIFICATES
Optionee agrees that all certificates representing Purchased Shares will be
subject to such stock transfer orders and other restrictions (if any) as
the Company may deem advisable under the rules, regulations and other
requirements of the Commission, any stock exchange upon which the Common
Stock is then listed and any applicable federal or state securities laws,
and the Company may cause a legend or legends to be put on such
certificates to make appropriate reference to such restrictions.
11. NO RIGHTS AS SHAREHOLDER
Except as provided in Section 7 of this Option Agreement, Optionee shall
have no rights as a shareholder with respect to the Shares until the date
of the issuance to Optionee of a stock certificate or stock certificates
evidencing such Shares. Except as may be provided in Section 7 of this
Option Agreement, no adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the
date such stock certificate is issued.
12. MODIFICATION
The Board (excluding the Optionee if he is a director) may modify, extend
or renew the Option or accept the surrender of, and authorize the grant of
a new Option I substitution for, the Option (to the extent not previously
exercised). No modification of the Option shall be made which, without the
consent of Optionee, would alter or impair any rights of the Optionee under
the option.
13. WITHHOLDING
The Company shall be entitled to require as a condition of delivery of any
Purchased Shares upon exercise of any Option that the Optionee agree to
remit, at the time of such delivery or such later date as the Company may
determine, an amount sufficient to satisfy all federal, state and local
withholding tax requirements relating thereto, and Optionee agrees to take
such other action required by the Company to satisfy such withholding
requirements.
<PAGE> 8
14. CHARACTER OF OPTION
The Option is not intended to qualify as an "incentive stock option" as
that term is defined in Section 422 of the Code.
15. GENERAL PROVISIONS
a) Further Assurances
Optionee shall promptly take all actions and execute all documents
requested by the Company, which the Company deems to be reasonably
necessary to effectuate the terms and intent of this Option Agreement.
b) Notices
All notices, requests, demands and other communications under this
Option Agreement shall be in writing and shall be given to the
parties hereto as follows:
i) if to the Company, in writing to:
cyberoad.com Corporation
c/o Suite 602, 1380 Burrard Street
Vancouver, BC, V6Z 2H3
ii) if to the Optionee, in writing to:
the address set forth in the records of the Company at that
time.
or at such address or addresses as may have been furnished by such
either party in writing to the other party hereto. Any such notice,
request, demand or other communication shall be effective 1) if given
by mail, 72 hours after such communication is deposited in the mail,
by first-class certified mail, return receipt requested, postage
prepaid, addressed as aforesaid, or 2) if given by any other means,
when delivered at the address specified in this subsection.
c) Transfer of Rights under this Option Agreement
The Company may at any time transfer and assign its rights and
delegate its obligations under this Option Agreement to any other
person, corporation, firm or entity, including its officers,
directors and stockholders, with or without consideration.
d) Option Non-Transferable
Optionee may not Transfer the Option except by will or the laws of
descent and distribution, and the Option may be exercised during the
lifetime of Optionee only
<PAGE> 9
by Optionee or by his or her guardian or legal representative in the
case of a disability, and upon Optionee's death, only by his or her
Estate or by any person who acquired the Option by bequest or
inheritance or by reason of the death of Optionee.
e) Successors and Assigns
Except to the extent specifically limited by the terms and provisions
of this Option Agreement, this Option Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective
successors, assigns, heirs and personal representatives.
f) Governing Law
THIS OPTION AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF FLORIDA APPLICABLE TO CONTRACTS MADE IN,
AND TO BE PERFORMED WITHIN, THAT STATE, EXCEPT TO THE EXTENT PREEMPTED
BY FEDERAL LAW, WHICH SHALL TO THAT EXTENT GOVERN.
g) Miscellaneous
Titles and captions contained in this Option Agreement are inserted
for convenience of reference only and do not constitute a part of this
Option Agreement for any other purpose. Except as specifically
provided herein, neither this Option Agreement nor any right pursuant
hereto or interest herein shall be assignable by any of the parties
hereto without the prior written consent of the other party hereto.
THE SIGNATURE PAGE TO THIS OPTION AGREEMENT CONSISTS OF THE SIGNATURE PAGE OF
THE OPTION CERTIFICATE. EACH INSTRUMENT TOGETHER CONSTITUTES ONE AND THE SAME
INSTRUMENT.
<PAGE> 10
OPTION CERTIFICATE
(NON-STATUTORY STOCK OPTION)
THIS IS TO CERTIFY that cyberoad.com Corporation, a Florida corporation, (the
"Company"), has granted to the person named below (the "Optionee") a stock
option (the "Option") to purchase shares (the "Shares") of the Company's Common
Stock upon the terms and conditions as set out below:
NAME OF OPTIONEE: _________________________________________
ADDRESS OF OPTIONEE: C/O KAZOOTEK.COM TECHNOLOGIES INC.
SUITE 620, 1380 BURRARD STREET
VANCOUVER, BC, V6Z 2H3
NUMBER OF SHARES: __________________________________________
OPTION EXERCISE PRICE __________________________________________
(PER SHARE)
DATE OF GRANT: __________________________________________
EXPIRATION DATE: __________________________________________
EXERCISE (VESTING) SCHEDULE:
The Option shall become exercisable as follows:
This Option shall be exercisable commencing on ________________ and shall vest
in 1/24 equal monthly installments thereafter.
SUMMARY OF OTHER TERMS:
This Option is defined in the Stock Option Agreement (Non-Statutory Stock
Option) (the "Option Agreement") which is attached to this Option Certificate
(the "Certificate") hereto. This Certificate summarizes certain of the
provisions of the Option Agreement for your information, but is not complete.
Your rights are governed by the Option Agreement, not by this summary. The
Company strongly suggests that you carefully review the full Option Agreement
prior to signing this Certificate or exercising the Option.
Among the terms of the Option Agreement are the following:
1. EMPLOYMENT
The Option Agreement does not obligate the Company to retain you for any
period of time, nor does it succeed your employment agreement with the
Company. The terms of your
<PAGE> 1
EXHIBIT 10.40
SHARES FOR DEBT SETTLEMENT AGREEMENT
Effective: May 1, 1999
BETWEEN:
CYBEROAD GAMING CORPORATION, a St. Kitts corporation having a place of
business at Box 174, Basseterre, St. Kitts, West Indies
("CGC")
AND
eBANX.COM(Isle of Man) LTD, an Isle of Man corporation having a place of
business at International House, Castle Hill, Victoria Road, Douglas, Isle
of Man, IM42 4RB
("eBanx")
AND
ASANOL MANAGEMENT CORPORATION, a Torotola corporation having an address at
Road Town, Pasea Estate, PO Box 3149 Tortola
("Asanol")
WHEREAS,
CGC owes $306,437.51 to Asanol as of March 31, 1999
AND
Asanol agrees that the debt is $306,437.51
AND
Asanol wishes CGC to repay that debt
<PAGE> 2
AND
Asanol is willing to accept shares of CGC in settlement
NOW THEREFORE IT IS HEREBY AGREED AS FOLLOWS:
1.0
1.1 that in consideration of the payment by CGC of 200,000 common shares
of Cyberoad Gaming Corp. and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Asanol
hereby grants CGC and its affiliate eBanx full and final release
from the debt of $306,437.51.
2.0 SUCCESSORS
This Agreement shall enure to the benefit of and shall be binding upon
all parties and their executors, successors and assigns.
3.0 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of Isle of Man.
4.0 EXECUTION IN COUNTERPART
This Amendment may be signed by the parties in as many counterparts as may
be necessary, each of which so signed shall be deemed to be an original,
and such counterpart together shall constitute one and the same instrument
and notwithstanding the date of execution shall be deemed to bear the date
as set forth below
2
<PAGE> 3
IN WITNESS WHEREOF the parties have caused these presents to be executed
personally or by their duty authorized officers as of the day and year first
above written.
CYBEROAD GAMING CORPORATION
Per:
-----------------------
Name: Lawrence Cofield
Title: Director
ASANOL MANAGEMENT CORPORATION
Per:
-----------------------
Name: Sergei Nitsenko
Title:
eBANX.COM (ISLE OF MAN) LTD
Per:
-----------------------
Name: David Harris
Title: Director
<PAGE> 1
EXHIBIT 10.41
THIS ASSIGNMENT is made the 11th day of February Two Thousand BETWEEN
CYBEROAD.COM (Ireland) LTD., an Irish company, c/o Pannell Kerr Forster, 17
Percy Place, Dublin 4, Ireland (hereinafter referred to as "the Assignor") of
the one part AND CYBEROAD.COM (ISLE OF MAN) LIMITED, an Isle of Man company, of
International House, Castle Hill, Victoria Road, Douglas, Isle of Man, IM2 4RB,
United Kingdom (hereinafter referred to as "the Assignee") of the other part
WHEREAS
(A) The Assignor is entitled to the benefit of Community Trade Mark applications
set forth in the Schedule to this Deed of Assignment (hereinafter referred to as
"the Applications")
(B) The parties hereto have agreed that the Applications should be transferred
by the Assignor to the Assignee for the consideration hereinafter set forth
NOW THIS ASSIGNMENT WITNESSETH
(1) Pursuant to the Agreement and in consideration of the sum of ten Punts
(IRpunt10.00) now paid by the Assignee to the Assignor (the receipt whereof is
hereby acknowledged) the Assignor as beneficial owner hereby assigns to the
Assignee the Applications, the right, title and interest therein and all of the
rights, powers, privileges and immunities arising or accrued therefrom free from
all encumbrances to the intent that the registration of the trade marks pursuant
to the
<PAGE> 2
Applications (and of any national trade mark registrations pursuant to the
conversion of the Applications into national Applications) shall be in the name
of and shall vest in the Assignee TO HOLD unto the Assignee absolutely
(2) At the request and cost of the Assignee the Assignor shall at all times
hereafter do all such acts and execute all such documents as may reasonably be
necessary or desirable to secure the vesting in the Assignee of all the rights
as are assigned to the Assignee hereunder including without limitation, such
acts and the execution of such documents necessary or proper to obtain the
registration of the trade marks pursuant to the Applications
(3) The Assignor has not done (or omitted) and will not do (or omit to be done)
any act, matter or thing whereby registration of the trade marks applied for in
the Applications may be invalidated
(4) IT IS HEREBY CERTIFIED that the transaction hereby effected does not form
part of a larger transaction or of a series of transactions in respect of which
the amount or value or the aggregate amount or value of the consideration
exceeds five thousand Punts (IRpunt5000.00)
(5) The Assignment shall be construed in all respects in accordance with Irish
law
IN WITNESS WHEREOF the parties hereto have executed this Deed the day and year
first hereinbefore written
<PAGE> 3
Schedule hereinbefore referred to
The Community Trade Mark Applications
<TABLE>
<CAPTION>
Trade Mark Application Class Services
Number
<S> <C> <C> <C>
CYBEROAD 001165752 35 Marketing distributed wide area
network gaming (sportsbook and
casino) systems; marketing sports and
gaming Internet portals.
42 Computer software and network systems
development; computer network
management and support; developing
and managing distributed wide area
network gaming (sportsbook and casino)
systems; developing and managing
sports and gaming
</TABLE>
<PAGE> 4
Schedule contd
<TABLE>
<CAPTION>
Trade Mark Application Class Services
Number
<S> <C> <C> <C>
CYBEROAD.COM 001166172 35 Marketing distributed wide area
network gaming (sportsbook and casino)
systems; marketing sports and gaming
Internet portals.
42 Computer software and network systems
development; computer network
management and support; developing and
managing distributed wide area network
gaming (sportsbook and casino)
systems; developing and managing
sports and gaming Internet portals.
</TABLE>
<PAGE> 5
THE COMMON SEAL OF
CYBEROAD.COM (IRELAND) LTD.
was hereunto affixed in the presence of:-
/s/ KRISTA WILSON
- -----------------------------------
Krista Wilson
- -------------------
Corporate Secretary
THE COMMON SEAL OF
CYBEROAD.COM (ISLE OF MAN) LIMITED
was hereunto affixed in the presence of: -
/s/ KRISTA WILSON
- -----------------------------------
/s/ Krista Wilson
- -----------------------------------
Corporate Secretary
<PAGE> 1
EXHIBIT 10.42
Kazootek.com Technologies Inc.
620 -1380 Burrard Street, Vancouver, BC V6Z 2H3
Phone: (604) 601-5330 Fax: (604) 601-5331
January 31, 2000
Stig Lyren
12444-63A Avenue
Surrey, BC
V3X 2C7
Dear Stig,
LETTER OF EMPLOYMENT
We have pleasure in offering you a position with Kazootek.com under the
following terms and conditions:
APPOINTMENT: Chief Financial Officer
COMMENCEMENT DATE: February 7, 2000
PROBATIONARY PERIOD: Six months
SALARY: CDN$80,000.00 per annum paid out on 15th and the last
day of the month.
LEAVE ENTITLEMENT: You are entitled to 3 weeks paid vacation per
completed year of service.
Leave shall be taken by arrangement with your
supervisor. The timing of such leave will be dependent
upon the exigencies of the Company's business but,
where practicable, to suit your convenience.
MEDICAL: A. MSP
The Company will pay your MSP on the first day of
your employment.
B. Medical and Dental Coverage:
The Company will provide medical, dental and
insurance coverage in accordance with the policy
governing at the time being in force.
STOCK OPTIONS: After the probationary period, you will receive in an
amount of 20,000 shares at current market price as at
time of issuance, and as set forth in accompanying
stock option agreement.
<PAGE> 2
Kazootek.com Technologies Inc.
620 -1380 Burrard Street, Vancouver, BC V6Z 2H3
Phone: (604) 601-5330 Fax: (604) 601-5331
TERMINATION OF EMPLOYMENT:
A. Termination of your employment can be effected by either party at any time
during the probationary period without notice or payment in lieu.
Upon successful completion of the probationary period, notice of
termination by either party should be two weeks notice or payment in lieu
thereof.
b. The Company may terminate your employment at any time without notice or
payment in lieu of notice, if, in the opinion of the Company, you are
guilty of any act of dishonesty, misconduct or neglect of duty.
AMENDMENTS:
Should there at any time in the future be a change in the policies of the
Company, it may be necessary to vary the terms and conditions of your
employment but the Company would, in such circumstance, ensure prior notice be
given unto you.
If you are prepared to accept this offer, please confirm your acceptance by
signing the copy of the letter.
Yours truly,
Kazootek.com Technologies Inc.
/s/ PAUL MARI
- -----------------
Paul Mari
President
I accept and agree to the terms and conditions set above:
/s/ STIG LYREN
- -----------------
Stig Lyren
FEBRUARY 7/00
- -----------------
(Date)
<PAGE> 1
EXHIBIT 10.43
AGENCY AGREEMENT
November 11, 1999
Cyberoad.com Corporation
Officentro Sabana Sur
Building 7, Fifth Floor
San Jose, Costa Rica
Attention: John Coffey, President
Dear Sirs:
We understand that Cyberoad.com Corporation (the "Corporation") proposes
to issue up to 1,000,000 shares (the "Closing Shares") of common stock, par
value $0.00001 per share (the "Common Stock") at a price of US$3.50 each (the
"Offering") and to grant an option to Thomson Kernaghan & Co. Limited
(hereinafter referred to as the "Agent") to increase the size of the Offering by
up to the number of additional shares (the "Option Shares") equal to the sum of
(a) 150,000 plus (b) that number that equals the difference between 1,000,000
and the number of Closing Shares issued on or prior to the Closing Date (as
hereinafter defined) in connection with the Offering (the Closing Shares and the
Option Shares are referred to herein collectively as the "Shares").
Subject to the terms and conditions set forth below, the Corporation
hereby appoints the Agent as the sole and exclusive agent of the Corporation to
solicit, on a best efforts basis, offers to purchase the Shares, and the Agent
hereby agrees to act as such agent. It is understood and agreed that the Agent
is under no obligation to purchase any Shares, although it may subscribe for and
purchase Shares if it so desires.
The terms and conditions relating to the purchase and sale of the Shares
are as follows:
1. THE OFFERING
(a) Sale on Exempt Basis. The Agent will use its best efforts to arrange
for purchasers (the "Purchasers") for the Shares in Ontario and in such other
provinces of Canada as may be determined by the Agent and the Corporation (the
"Qualifying Provinces") and in such jurisdictions outside Canada and outside the
United States as may be determined by the Agent and the Corporation. The sale of
the Shares to Purchasers in Ontario is to be effected in a manner exempt from
the prospectus requirements of the Securities Act (Ontario) and the Regulation
thereunder. Each Purchaser of the Shares resident in or subject to the
securities laws of Ontario shall purchase under subsections 72(1)(a), (c) or (d)
of the Securities Act (Ontario) as qualified by subsection 27(l) of the
Regulation thereto.
(b) Commission. The Corporation agrees to pay to the Agent at the Time
of Closing (as hereinafter defined) a cash commission equal to 8% of the gross
proceeds on the sale of the
<PAGE> 2
-2-
Shares (the "Commission") in consideration of the services to be rendered by the
agent in connection with the Offering, which services shall include:
(i) acting as agent of the Corporation to solicit, on a best
efforts basis, offers to purchase the Shares;
(ii) assisting in the preparation of the form of subscription
agreements (the "Subscription Agreements") to be entered
into by the Corporation and each of the Purchasers; and
(iii) advising the Corporation with respect to the private
placement of the Shares.
In addition to the Commission, as additional consideration for the
performance of its obligations hereunder, the Corporation shall issue to the
Agent at the Time of Closing, compensation options (the "Compensation Options")
entitling the holders thereof to purchase that number of shares of common stock
of the Corporation (the "Brokers' Shares") equal to 10% of the number of Shares
issued in the Offering at the Time of Closing, exercisable until the date which
is two years following the Closing Date, at a price of US$3.50 per Brokers'
Share. The Corporation will use its reasonable best efforts to register the
resale of the Brokers' Shares in the 1933 Act Registration Statement (as
hereinafter defined).
(c) Appointment of Sub-Agent. The Corporation agrees that the Agent will
be permitted to appoint other registered dealers (or other dealers duly
qualified in their respective jurisdictions) as its agent to assist in the
Offering and that the Agent may determine the remuneration payable to such other
dealers appointed by it.
(d) Covenants of the Agent. The Agent covenants, represents and warrants
to the Corporation that: (i) it will comply with all applicable securities
legislation of each province of Canada and such other jurisdictions outside of
Canada in which it solicits or procures subscriptions in connection with the
Offering; (ii) except as described herein, it will not solicit or procure
subscriptions for Shares so as to require registration thereof or filing of a
prospectus with respect thereto under the laws of any jurisdiction; (iii) it, or
its duly appointed agents, is duly qualified in the jurisdictions in which it
solicits or procures subscriptions in connection with the Offering; and (iv) it
will obtain from each Purchaser an executed Subscription Agreement in a form
reasonably acceptable to the Corporation and to the Agent relating to the
transactions herein contemplated.
2. OFFERING OPTION - By the Corporation's acceptance of this Agreement, the
Corporation hereby grants to the Agent an option (the "Offering Option") to sell
the Option Shares on behalf of the Corporation at US$3.50 per Option Share and
on the other terms and conditions of the Subscription Agreement. The Offering
Option may be exercised by the Agent, in whole or in part, at any one time up to
and including 5:00 p.m. (Seattle time) on the date that is 30 days from the
Closing Date. If the Agent exercises the Offering Option, a closing will occur
(the "Offering Option Closing") in the State of California on or prior to the
date that is two business days after the date of the exercise of the Offering
Option where the Agent shall pay to the Corporation the aggregate gross
<PAGE> 3
-3-
proceeds of the Offering Option by certified cheque or bank draft payable to the
Corporation or its nominee against delivery to the Agent of a certificate in
definitive form representing all of the Option Shares registered in the name
that the Purchasers of the Option Shares may direct. The applicable terms,
conditions, and provisions of the agreement resulting from the Corporation's
acceptance of this offer shall apply mutatis mutandis to the Offering Option
Closing. This clause creates an option only and the making of any payments on
account of the purchase price of any of the Option Shares issued on exercise of
the Offering Option shall not obligate the Agent to sell any further Option
Shares issued on exercise of the Offering Option. In the event the Corporation
shall subdivide, consolidate or otherwise change its Common Shares during the
period the Offering Option is outstanding, the Option Shares issuable upon the
exercise of the Offering Option shall similarly be subdivided, consolidated or
changed such that the Agent receives the same number and type of securities that
it would have otherwise received had it exercised in full such option prior to
such subdivision, consolidation or change. The exercise price shall be adjusted
accordingly and notice shall be given to the Agent of such adjustment. In the
event of any dispute as to the required adjustment to the exercise price and
number of Option Shares issuable upon exercise of the Offering Option, such
adjustment shall be determined conclusively by the auditors of the Corporation.
At the Offering Option Closing, the Agent will receive a cash commission
(the "Option Commission") equal to 8% of the gross proceeds for the Option
Shares purchased pursuant to the exercise of the Offering Option and will
receive compensation options entitling the holders thereof to purchase that
number of Common Shares that equals 10% of the number of Option Shares issued at
the Offering Option Closing (the "Offering Option Compensation Options"),
exercisable until the date which is two years following the Offering Option
Closing, at a price of US$3.50 each.
As used herein, the term "Subject Securities" includes the Shares, the
Compensation Options, the Offering Option and the Offering Option Compensation
Options.
3. REGISTRATION, ESCROW AND PENALTY PROVISIONS - Neither the Offering nor the
Offering Option is being made to U.S. Persons (as such term is defined in
Regulation S under the United States Securities Act of 1933, as amended (the
"U.S. Securities Act")).
The Corporation recognizes that it is fundamental to the Purchasers that
the Shares and Option Shares may be traded without restriction in the United
States. In accordance with this recognition that it is fundamental to the
Purchasers of Shares and Option Shares that the foregoing event occurs, the
Corporation covenants and agrees that:
(a) it will file with the Securities and Exchange Commission (the
"SEC") a Form 10-SB, Form 20-F or Form 8-A or other appropriate
form (a "1934 Act Form") under the United States Securities
Exchange Act of 1934, as amended, seeking status as a reporting
company in the United States, on or prior to December 7, 1999 or
as soon practicable thereafter;
(b) it will file with the SEC a Registration Statement (the "1933
Act Registration Statement") under the U.S. Securities Act on or
prior to December 7, 1999 or as soon as practicable thereafter
to qualify the re-sale of the Shares and the Broker's
<PAGE> 4
-4-
Shares issuable upon exercise of the Compensation Options
Compensation Options;
(c) in the event either the 1934 Act Form or the 1933 Act
Registration Statement is not filed on or prior to December 7,
1999 (the "60 Day Filing Deadline"), the Corporation will
deliver to each Purchaser of Closing Shares in the Offering and
Option Shares in the Offering Option, for no further
consideration, an additional 0.02 shares of Common Stock in
respect of each Closing Share issued in connection with the
Offering and each Option Share issued in connection with the
Offering Option, and will deliver a further 0.02 shares of
Common Stock to each such Purchaser for each further 30 days, or
part thereof, that elapse beyond the foregoing 60 Day Filing
Deadline until both filings are effected;
(d) it will keep the 1933 Act Registration Statement effective for a
period of not less than 24 months from the Closing Date;
(e) it will use its commercially reasonable efforts to ensure that
both the 1934 Act Form and the 1933 Act Registration Statement
become effective as soon as possible;
(f) in the event that both the 1934 Act Form and the 1933 Act
Registration Statement have not become effective (the "Effective
Date") on or prior to February 5, 2000 (the " 120 Day
Deadline"), unless waived by the Agent in writing, the
Corporation will deliver to each Purchaser of Closing Shares in
the Offering and Option Shares in the Offering Option, for no
further consideration, an additional 0.02 shares of Common
Stock, in respect of each Closing Share issued in connection
with the Offering and each Option Share issued in connection
with the Offering Option, and will deliver a further 0.02 shares
of Common Stock to each such Purchaser for each 30 days, or part
thereof, that elapse beyond the 120 Day Deadline until the
Effective Date;
(g) as additional consideration for each Purchaser acquiring Shares
pursuant to the Offering, it will issue to the Agent on behalf
of the Purchasers an additional 850,000 shares of Common Stock
(the "Escrowed Shares") and deposit the Escrowed Shares with the
Agent to hold in escrow subject to release to the Purchasers (or
their nominees) in accordance with subsections 3(c) and 3(f)
hereof, with any remaining Escrowed Shares being released to the
Corporation for cancellation on the earlier to occur of: (i) the
Effective Date; and (ii) October 7, 2000;
(h) at the Closing it will direct an amount equal to 10% of the
gross proceeds of the Offering (the "Escrowed Funds") to be
placed in escrow with the Agent pursuant to an escrow agreement
between the Corporation and the Agent (the "Escrow
<PAGE> 5
-5-
Agreement") which will provide, among other matters, that the
escrow and invest the Escrowed Funds pursuant to the Escrow
Agreement and that the Escrowed Funds will be released to the
Corporation on the earlier to occur of: (i) the Effective Date;
and (ii) October 7, 2000.
4. REPRESENTATIONS AND WARRANTIES OF THE CORPORATION - The Corporation
represents and warrants to the Agent and acknowledges that the Agent is relying
upon such representations and warranties, as follows:
(a) the Corporation has full corporate power and authority to
undertake the Offering, the Offering Option and all other
transactions contemplated herein;
(b) the authorized capital of the Corporation consists of
500,000,000 shares of Common Stock, par value $0.00001 per
share, of which at the date hereof 11,109,650 shares of Common
Stock are issued and outstanding and an additional 1,500,000
shares of Common Stock will be issued after the closing of the
Offering in connection with the transfer of 100% of the
ownership of eBanx [Isle of Man] Ltd. to Cyberoad.com [Isle of
Man] Ltd., which transfer is subject only to the issue and sale
of in excess of 571,428 shares pursuant to the Offering in
accordance with the terms and conditions of the share purchase
agreement dated November, 1999 between Cyberoad.com [Isle of
Man] Ltd., Aundyr Enmyn Limited, IFG International (Nominees)
Limited, Aundyr Trust and eBanx.com [Isle of Man] Ltd. (the
"eBanx Acquisition Agreement"); and
(c) the Corporation has no subsidiaries other than the subsidiaries
listed below (which list includes eBanx [Isle of Man] Ltd. and
eBanx [Nevada] Ltd., which companies will only become
subsidiaries of the Corporation after the Closing of the
Offering pursuant to the eBanx Acquisition Agreement)
(collectively, the "subsidiaries") and the Corporation
beneficially owns, or will own following the Closing of the
Offering in the case of eBanx [Isle of Man] Ltd. and eBanx
[Nevada] Ltd., directly or indirectly, the percentage indicated
below of all of the issued and outstanding voting and equity
shares in the capital of each of the subsidiaries free and clear
of all mortgages, liens, charges, pledges, security interest,
encumbrances, claims or demands of any kind whatsoever except as
set forth in the financial statements referred to in
subparagraph 4(k) below, all of such shares have been duly
authorized and validly issued and are outstanding as fully paid
and non-assessable shares and no person has any right, agreement
or option, present or future, contingent or absolute, or any
right capable of becoming a right, agreement or option, for the
purchase from the Corporation of any interest in any of such
shares or for the issue or allotment of any unissued shares in
the capital of any subsidiary or any other security convertible
into or exchangeable for any such shares:
<PAGE> 6
-6-
<TABLE>
<CAPTION>
Beneficial Equity and Voting
Name Jurisdiction of Incorporation Ownership
- ---- ----------------------------- ---------
<S> <C> <C>
Cyberoad.com [Isle of Man] Ltd. ("IOM") Isle of Man Company
Information y Technologies Canadian Costa Rica IOM
Sistemas de Informacion Technologies Costa Rica IOM
eBanx.com [Isle of Man] Ltd.("eBanx IOM") Isle of Man IOM(1)
eBanx [Nevada] Ltd. ("eBanx Nevada") Nevada eBanx IOM(1)
</TABLE>
(1) Subject to closing of the Offering pursuant to the terms of the eBanx
Acquisition Agreement.
(d) the Corporation and each of the subsidiaries is duly qualified
to conduct business under the laws of the jurisdiction in which
it conducts its business and is in good standing in each such
jurisdiction;
(e) to the best knowledge of the Corporation, the Corporation and
each of the subsidiaries possesses all material licenses,
certificates, registrations, authorities, permits, consents and
qualifications issued by the appropriate state, provincial,
municipal or federal regulatory agencies or bodies necessary to
conduct the business now operated by it and all such licences,
certificates, registrations, authorities, permits, consents and
qualifications are valid and in full force and effect and do not
contain any unusually burdensome provision, condition or
limitation which has a material adverse effect on the operation
of the business of the Corporation or the subsidiaries as now
conducted and neither the Corporation nor the subsidiaries have
received any notice of proceedings relating to the revocation or
modification of any such licenses, certificates, authorities,
permits, consents or qualifications which, if the subject of an
unfavourable decision, ruling or finding would materially and
adversely affect the conduct of the business, operations,
financial condition, income or future prospects of the
Corporation and the subsidiaries, taken as a whole;
(f) all of the press releases issued by or on behalf of the
Corporation or any of the subsidiaries since March 31, 1999,
copies of which are attached hereto as Schedule A, were true and
correct in all material respects and did not contain a
misrepresentation (as defined in the Securities Act (Ontario))
as at the date of such issuance;
(g) except as set forth herein, neither the Corporation nor any of
the subsidiaries is a party to or has granted any agreement,
warrant, option, right or privilege capable of becoming an
agreement, for the purchase,
<PAGE> 7
-7-
subscription or issuance of any shares of Common Stock or
securities convertible into or exchangeable for shares of Common
Stock other than not more than 1,700,000 options granted to
directors, officers and employees of the Corporation exercisable
at US$1.00 each, not more than 500,000 options granted to
directors, officers and employees of the Corporation exercisable
at market prices at the time of grant, 200,000 compensation
options granted to the Agent exercisable at US$1.00 each, and
1,500,000 Common Shares in connection with the acquisition of
eBanx IOM;
(h) each of this Agreement, the Subscription Agreements, the Escrow
Agreement and the Compensation Options (collectively the
"Transaction Documents") has been, or will be upon execution
thereof, duly authorized and executed by the Corporation and
constitutes, or will constitute when executed, a legal, valid
and binding obligation of the Corporation enforceable in
accordance with its terms except that: (i) the enforcement
thereof may be limited by bankruptcy, insolvency and other laws
affecting the enforcement of creditors' rights generally, (ii)
rights of indemnity, contribution and waiver of contribution
thereunder may be limited under applicable law and (iii)
equitable remedies, including, without limitation, specific
performance and injunctive relief, may be granted by a court of
competent jurisdiction;
(i) the entering into of each of the Transaction Documents and the
performance of the transactions contemplated thereby will not
result in a breach of, and do not create a state of facts which,
after notice or lapse of time or both, will result in a breach
of, and do not and will not conflict with: (i) any statute, rule
or regulation applicable to the Corporation or its subsidiaries;
(ii) any of the terms, conditions or provisions of the
Corporation's Articles of Incorporation or by-laws or
resolutions of the Corporation or its subsidiaries; or (iii) any
trust indenture, agreement, instrument or other document to
which the Corporation is a party or by which the Corporation or
its subsidiaries is a party or will be contractually bound as of
the Time of Closing; or (iv) any judgment, decree or order
binding on the Corporation, its subsidiaries or any of their
assets;
(j) the audited financial statements of Cyberoad Gaming Corporation
("Gaming") as at and for the seven months ended February 28,
1999 (the "Audited Financial Statements"), previously delivered
to the Agent (i) are in accordance with the books and records of
Gaming; (ii) contain and reflect all adjustments necessary for
the fair presentation of the results of operations and the
financial condition of the business of Gaming for the period
covered thereby; and (iii) present fairly the assets and
financial condition of Gaming as at February 28, 1999 and the
results of its
<PAGE> 8
-8-
operations and the changes in its financial position in
accordance with U.S. generally accepted accounting principles
applied on a consistent basis;
(k) the unaudited consolidated financial statements of the
Corporation as at and for the month ended May 31, 1999 (the
"Unaudited Financial Statements"), previously delivered to the
Agent (i) are in accordance with the books and records of the
Corporation and the subsidiaries; and (ii) present fairly the
consolidated assets and financial condition of the Corporation
as at May 31, 1999 and the consolidated results of its
operations and the changes in its consolidated financial
position for the period then ended in accordance with U.S.
generally accepted accounting principles applied on a consistent
basis;
(1) other than as disclosed in the Audited Financial Statements and
the Unaudited Financial Statements, or otherwise disclosed in
writing to the Agent, no material actions, suits, inquiries or
governmental proceedings are outstanding or pending or, to the
knowledge of the Corporation, are contemplated or threatened to
which the Corporation or any of the subsidiaries is a party or
to which the property of the Corporation or the subsidiaries is
subject that would result individually or in the aggregate in
any material adverse change in the operation, business or
condition of the Corporation;
(m) each of the Corporation and the subsidiaries has filed all
necessary tax returns and notices and has paid all applicable
taxes of whatever nature for all tax years to the date hereof to
the extent such taxes have become due or have been alleged to be
due by the appropriate taxing authority and neither the
Corporation nor the subsidiaries is aware of any tax
deficiencies or interest or penalties accrued or accruing, or
alleged to be accrued or accruing, thereon with respect to
itself where, in any of the above cases it might reasonably be
expected to result in any material adverse change in the
condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Corporation or the
subsidiaries, taken as a whole;
(n) other than the Agent, there is no person, firm or corporation
acting or purporting to act at the request of the Corporation or
any of the subsidiaries, who is entitled to any brokerage or
finder's fee in connection with the transactions contemplated
herein;
(o) each of the Corporation and the subsidiaries is validly existing
under the laws of the jurisdiction of its incorporation and has
all requisite corporate capacity, power and authority to carry
on its business as now conducted by it and as proposed to be
conducted by it in the Business Plan (as defined below) and to
own, lease and operate its assets and the Corporation has all
<PAGE> 9
-9-
requisite corporate power and authority to carry out the
provisions and the transactions contemplated hereunder;
(p) the April 19, 1999 business plan of the Corporation (the
"Business Plan") together with the Subscription Agreements and
the attachments thereto which describes the business (the
"Business") of the Corporation and the subsidiaries,
collectively, do not contain a misrepresentation (as such term
is defined in the Securities Act (Ontario)) regarding the
Corporation which might reasonably be expected to result in any
material adverse effect on the condition, financial or
otherwise, or in the earnings, business affairs or business
prospects of the Corporation or the subsidiaries, taken as a
whole;
(q) for the purposes of the representations and warranties contained
in this paragraph 4(q), the following terms have the following
meanings:
(i) "Computer Technology" means computer hardware, software,
firmware, interfaces, logic, control systems,
engineering documentation, technical designs, systems
requirements, specifications, plans, testing procedures
and all related documentation whether in printed or
computer format, and other equipment that includes
computing technology or embedded logic such as
microchips and sensors;
(ii) "COTS" means third party commercial off-the-shelf
software licensed to the Corporation or its subsidiaries
and utilized by the Corporation or its subsidiaries in
conducting the Business;
(iii) "Intellectual Property" means all technical designs,
systems requirements, specifications and plans, computer
software, whether in machine or human readable form,
patents, trademarks, service names, tradenames,
copyrights, licences, trade secrets or other proprietary
rights or property licensed, sub-licensed or otherwise
transferred to third parties by the Corporation and its
subsidiaries or otherwise used in the Business as now
conducted;
(iv) "Software Licences" means the material licences of Third
Party Software and COTS to the Corporation and its
subsidiaries; and
(v) "Third Party Software" means the software licensed to
the Corporation or its subsidiaries which is bundled
with, embedded in or forms part of the Intellectual
Property;
<PAGE> 10
-10-
(A) the Corporation and/or its subsidiaries owns or
holds a license in respect of the copyright in
any software which is a part of the Intellectual
Property;
(B) any source code for any software forming part of
the Intellectual Property which the Corporation
or any subsidiary holds has been treated as a
trade secret of the Corporation;
(C) subject to any patent or other proprietary
rights of third parties not known to the
Corporation, the Corporation and its
subsidiaries, taken as a whole:
I. have the exclusive right to use, sell,
license, prepare derivative works for,
and dispose of, the Intellectual
Property except for licences to
customers; and
II. have the right to act unilaterally to
bring actions for the infringement or
misappropriation of the Intellectual
Property;
(D) neither the Corporation nor any of its
subsidiaries have received notice that they,
either individually or together, are infringing
upon or otherwise acting adversely to the right
or claimed right of any person under or with
respect to any of the Intellectual Property, and
to the knowledge of each of them, there is no
basis for any such claim provided that the
Corporation has no knowledge of whether or not
there is any infringement of third party patent
or other proprietary rights with respect to any
of the Intellectual Property;
(E) the Software Licences:
I. are in good standing and in full force
and effect and no event, condition or
occurrence exists that, after notice or
lapse of time or both, would constitute
a default under any of the Software
Licences; and
II. have not been assigned by the
Corporation and/or its Subsidiaries;
(F) no material Software License to the Corporation
and/or its Subsidiaries has been terminated in
the last year;
<PAGE> 11
-11-
(G) to the knowledge of the Corporation:
I. there are no activities or conduct of
any third party that would constitute
material infringement of any rights of
the Corporation and/or its Subsidiaries
in or to the Intellectual Property; and
II. neither the Corporation nor its
Subsidiaries has received any notices
asserting that any right in or to the
Intellectual Property, or, subject to
the terms of the Software Licences, the
proposed use, sale, license or
disposition of the Intellectual Property
as contemplated by the Corporation or
its Subsidiaries, conflicts or will
conflict with the rights of any other
party, nor is there any basis for any
such assertion;
(H) the only persons who own or have any rights to
the use of the Intellectual Property are Gaming,
Asanol Management Corporation ("Asanol") and
Internet Wagering Systems, Ltd. ("IWS");
(I) subject to closing of the Offering and the
Corporation's satisfaction of debt to Advanced
Financial Services, Inc. (which the Corporation
hereby covenants to satisfy promptly following
closing), there are no liens or other
encumbrances on or against the Intellectual
Property;
(J) to the knowledge of the Corporation, the
execution, delivery and performance of the
Transaction Documents and the consummation of
the transactions contemplated in this Agreement
will not breach, violate or conflict with any
instrument or agreement governing any rights to
the Intellectual Property or the Third Party
Software, will not cause the forfeiture or
termination of any rights to the Intellectual
Property or the Third Party Software or in any
way excludes the right of the Corporation and/or
its subsidiaries to use, sell, license or
dispose of, or to bring any action for the
infringement of, any rights to the Intellectual
Property which the Corporation and/or its
subsidiaries might otherwise have or in any way
exclude the right of the Corporation and/or its
subsidiaries to use, license or sub-license any
rights to the Third Party Software which the
Corporation and/or its subsidiaries might
otherwise have;
<PAGE> 12
-12-
(K) except with respect to the COTS and the Third
Party Software, all software which forms part of
the Intellectual Property was written only by
individuals who were either full time employees
of the Corporation or contractors who assigned
their intellectual property rights therein to
the Corporation or its subsidiaries pursuant to
written agreements. All of the aforesaid
individuals have waived in writing or have
agreed orally to waive in writing their rights
in such software (and the Corporation hereby
covenants to obtain written waivers from all
such individuals within 30 days following
closing of the Offering);
(L) all licences granted by the Corporation or its
subsidiaries to use the Intellectual Property
have only been granted in the ordinary course of
business and have been in respect of object code
versions of the software comprised in the
Intellectual Property;
(M) there are no restrictions on the ability of the
Corporation or its subsidiaries or any successor
to or assignee from them to use and exploit all
rights in the Intellectual Property, other than
in accordance with the terms of the applicable
Software Licenses and the COTS and Third Party
Software. None of the rights of the Corporation
or its subsidiaries in the Intellectual Property
or the Third Party Software will be impaired or
affected in any way by the transactions
contemplated by this agreement;
(N) to the Corporation's best knowledge, all
Intellectual Property or other Computer
Technology provided by the Corporation or its
subsidiaries to any third party including
without limitation pursuant to any license
agreement is Year 2000 compliant. Without
limiting the foregoing, to the best knowledge of
the Corporation, all Third Party Software and
COTS provided to third parties is Year 2000
compliant. The Corporation does not have any
obligations (contingent or otherwise) in respect
of any Third Party Software provided to third
parties by the Corporation or its subsidiaries
that is not Year 2000 compliant;
(0) the source code for the Intellectual Property
has not been delivered or made available to any
person (other than the
<PAGE> 13
-13-
subsidiaries, Gaming, IWS and Asanol) and none
of the Corporation or its subsidiaries has
agreed to or undertaken to or in any other way
promised to provide such source code to any
other person; and
(P) to the best knowledge of the Corporation, the
COTS are in good standing and in full force and
effect and no event, condition or occurrence
exists that, after notice or lapse of time or
both, would constitute a default under any of
the COTS licenses.
(r) no order ceasing or suspending trading in securities of the
Corporation or prohibiting the sale of securities by the
Corporation has been issued and to the knowledge of the
Corporation, no proceedings for this purpose have been
instituted, are pending, contemplated or threatened; provided,
however, as of December 1, 1999 if the Corporation does not file
a registration statement with the U.S. Securities and Exchange
Commission which is at that date declared effective, the
Corporation's securities will cease to trade on the OTC Bulletin
Board; and provided further, that the Corporation has not filed
a registration statement at the date hereof and believes its
securities will be halted from trading as of December 1, 1999;
(s) since May 31, 1999, the Corporation has not, directly or
indirectly, declared or paid any dividend or declared or made
any other distribution on any of its shares or securities of any
class, or, directly or indirectly, redeemed, purchased or
otherwise acquired any of its shares or securities or agreed to
do any of the foregoing;
(t) there is not, in the Articles of Incorporation or by-laws of the
Corporation or in any agreement, mortgage, note, debenture,
indenture or other instrument or document to which the
Corporation is a party, any restriction upon or impediment to
the declaration or payment of dividends by the directors of the
Corporation or the payment of dividends by the Corporation to
the holders of its Common Stock; and
(u) Interwest Transfer Co., Inc. ("Interwest"), at its principal
offices at 1981 East 4800 South, Suite 100, Salt Lake City,
Utah, U.S.A. 84117 has been duly appointed as the transfer agent
and registrar for all of the outstanding Common Shares.
5. COVENANTS OF THE CORPORATION - The Corporation hereby covenants to and with
the Agent that it will:
(a) fulfil all legal requirements to permit the creation, issuance,
offering and sale of the Subject Securities as contemplated in
this Agreement including, without limitation, compliance with
all applicable securities legislation to enable the Shares to be
offered
<PAGE> 14
-14-
for sale and sold to Purchasers without the necessity of filing
a prospectus in the provinces of Ontario;
(b) prior to any Closing, permit the Agent and its counsel to
conduct all due diligence which the Agent may reasonably require
to conduct in order to fulfil its obligations under applicable
securities legislation;
(c) ensure that at the respective times of filing and at all times
subsequent to the filing thereof until two years thereafter, the
1933 Act Registration Statement and the 1934 Act Form will fully
comply in all material respects, with the requirements of
applicable securities legislation;
(d) deliver in Toronto, within three Business Days of the Effective
Date for the 1933 Act Registration Statement and the 1934 Act
Form, as the case may be, without charge to the Agent, as many
copies of the 1933 Act Registration Statement and the 1934 Act
Form, as the Agent may reasonably request, and such delivery
shall constitute: (A) the consent of the Corporation to use such
documents in connection with the distribution of the Shares and
the Broker's Shares issuable upon exercise of the Compensation
Options and the Offering Option Compensation Options; and (B)
the Corporation's representation and warranty to the Agent that,
at the time of delivery by the Corporation to the Agent, the
information and statements contained therein (except information
and statements relating solely to or provided by the Agent)
contain no material misrepresentation and do not omit to state a
material fact relating to the Corporation, and the Shares and
the Broker's Shares issuable upon exercise of the Compensation
Options and the Offering Option Compensation Options;
(e) to appoint the Agent, as custodian under the Escrow Agreement;
(f) forthwith after the Closing, to file such documents as may be
required under the applicable securities laws of the Qualifying
Provinces relating to the private placement of the Shares which,
without limiting the generality of the foregoing, shall include
a Form 45-501F1 as prescribed by the Regulation made under the
Securities Act (Ontario); and
(g) in the event that any person, firm or corporation acting or
purporting to act for the Corporation or any of the subsidiaries
establishes a claim for any fee from the Agent relating to the
Offering, the Corporation covenants to indemnify and hold
harmless the Agent with respect thereto and with respect to all
costs reasonably incurred in the defense thereof.
<PAGE> 15
-15-
6. CONDITIONS OF CLOSING - The purchase and sale of the Shares and the Closing
shall be subject to the following conditions, which conditions may be waived in
writing in whole or in part by the party entitled to the benefit thereto:
(a) the Corporation having obtained all requisite regulatory
approvals required to be obtained by the Corporation in respect
of the Offering and the Offering Option, as applicable, on terms
mutually acceptable to the Corporation and the Agent;
(b) the Corporation, and the Agent having complied fully with all
relevant statutory and regulatory requirements required to be
complied with prior to the Time of Closing in connection with
the Offering and the Offering Option, as applicable;
(c) the Corporation having taken all necessary corporate action to
authorize and approve the Transaction Documents and all other
matters relating thereto;
(d) the Agent having received at Closing legal opinions of counsel
to the Corporation, addressed to the Agent and each of the
Purchasers, acceptable in all reasonable respects to counsel to
the Agent;
(e) the Agent having delivered to the Corporation at the Closing
duly executed Subscription Agreements to purchase Shares and
such Subscription Agreements having been accepted by the
Corporation; and
(f) the Corporation having delivered to the Agent a certificate of
Interwest as registrar and transfer agent which certifies that
as at the Closing Date and before giving effect to the Offering,
11,109,650 Common Shares are issued and outstanding.
7. CLOSING - The purchase and sale of the Shares (the "Closing") shall be
completed at such place as the Corporation and the Agent may agree upon, in one
or more Closings, at 11:00 a.m. (Toronto time) (the "Time of Closing") the
first of which shall occur on November 11, 1999 or at such other time or on such
other date as the Corporation and the Agent may agree upon (the "Closing Date").
The parties acknowledge that U.S. $499,999.50 has been advanced to the
Corporation prior to the first Time of Closing pursuant to a Subscription
Agreement provided to the Corporation in advance of the Time of Closing to
purchase 142,857 Closing Shares (the "Advance").
At the Time of Closing, the Corporation shall deliver to the Agent on
behalf of the Purchasers:
(a) an irrevocable direction to Interwest to issue and deliver: (i)
to the Purchasers certificates representing the Closing Shares,
and Option Shares, if applicable, duly registered as directed by
the subscription agreements; and (ii) at the first Closing, to
the Agent, as custodian, certificates representing 850,000
Common Shares to be held in escrow;
<PAGE> 16
-16-
(b) the legal opinion(s) as contemplated in subsection 6(d) hereof;
and
(c) such further documentation as is contemplated in the closing
agenda attached as Schedule B hereto or as the applicable
regulatory authorities may reasonably require;
against delivery by the Agent to the Corporation of (a) duly executed
Subscription Agreements to purchase such Shares; and (b) payment to the
Corporation or its nominee by certified cheques or bank drafts or other
mechanism agreed to by the Corporation and the Agent, of that amount that equals
90% of the aggregate purchase price for the Shares paid for at the Time of
Closing less: (i) 10% of the amount of the Advance; (ii) the Commission; and
(iii) the expenses payable at the Time of Closing in accordance with section 8
hereof. The Agent shall retain, as custodian under the Escrow Agreement, that
amount that equals 10% of the purchase price for the Shares paid for at the Time
of Closing plus, at the first Closing, 10% of the amount of the Advance.
8. EXPENSES - Whether or not Closing occurs, the Corporation shall pay all
costs, fees and expenses, if any, of or incidental to the performance of the
obligations under this Agreement including, without limitation; (i) the cost of
preparing, filing and amending, if applicable, the 1933 Act Registration
Statement and the 1934 Act Form, (ii) the cost of printing certificates for the
Shares and Broker's Shares issuable upon exercise of the Compensation Options
and Offering Option Compensation Options, (iii) the cost of registration,
countersignature and delivery of the Shares and Broker's Shares issuable upon
exercise of the Compensation Options and Offering Option Compensation Options,
(iv) the fees and expenses of the Corporation's auditors, counsel and any local
counsel, (v) the reasonable fees and expenses of the Agent's counsel, and (vi)
the Agent's reasonable out-of-pocket expenses (including marketing expenses
provided that any flights shall be business class). Such amounts payable to the
Agent and its agents shall be identified in reasonable detail in documents
tabled at Closing and shall be paid by the Corporation at the Time of Closing to
the Agent in respect of fees and expenses incurred to such date (other than
expenses of Bruce MacDonald and Dal Brynelen which shall be payable after the
Time of Closing), and as soon as reasonably possible following receipt of any
additional invoices therefor in respect of expenses and fees incurred after the
Time of Closing (and expenses of Bruce MacDonald and Dal Brynelen), which, to
the extent such expenses and fees incurred after the Time of Closing exceed U.S.
$3,000, have been approved in advance by the Corporation and within a reasonable
time period following receipt of any additional invoices therefor along with
sufficient supporting material as may be reasonably requested by the
Corporation.
9. INDEMNITIES
(a) the Corporation (as the "Indemnifying Party") hereby covenants
and agrees to protect, indemnify and hold harmless the Agent and
its directors, officers, employees, attorneys and agents
(individually, an "Indemnified Party" and, collectively, the
"Indemnified Parties") from and against all losses (except for
loss of profits), claims, expenses, costs, damages or
liabilities, whether joint or several (including the
<PAGE> 17
-17-
aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims provided such settlement is made
pursuant to the terms and conditions of this section 9) which
they may suffer or incur caused by or arising directly or
indirectly by reason of:
(i) any information or statement (except any information or
statement made or provided by or solely relating to the
Agent, unless such information or statements were
provided to the Agent, or prepared, by the Corporation)
contained in the Business Plan, the 1934 Act Form or the
1933 Act Registration Statement being or being alleged
to be a misrepresentation;
(ii) the omission to state in the Business Plan, the 1934 Act
Form or the 1933 Act Registration Statement, or any
amendment to such document a material fact required to
be stated therein or necessary to make the statements
therein not misleading (except the omission to state a
material fact made or provided by or solely relating to
the Agent, unless such information or statements were
provided to the Agent, or prepared, by the Corporation);
(iii) the Corporation not complying with any requirement of
any securities legislation or regulatory requirements of
any jurisdiction in which Purchasers reside in
connection with the Offering, or the Offering Option;
(iv) any order made or any inquiry, investigation or
proceeding commenced or threatened by any regulatory
authority based upon an allegation that any untrue
statement or alleged omission or any misrepresentation
or alleged misrepresentation in the Business Plan, the
1934 Act Form, the 1933 Act Registration Statement or
any amendment to such document exists (except
information and statements made or prepared by or solely
relating to the Agent, unless such information or
statements were provided to the Agent, or prepared, by
the Corporation) which prevents or restricts the trading
of the Shares or the Option Shares or the Brokers'
Shares; or
(v) the Corporation's failure to comply with any of its
obligations hereunder;
(b) the Agent (as the "Indemnifying Party") agrees to indemnify and
hold harmless the Corporation and its agents, employees,
attorneys, officers and directors of each of the foregoing
(individually, an "Indemnified Party" and collectively, the
"Indemnified Parties") from and against any and all losses
(except for loss of profits), claims, costs, damages,
liabilities or expenses, whether joint or several (including the
aggregate amount paid in reasonable settlement of any actions,
suits, proceedings or claims provided such settlement is made
pursuant to the terms and conditions of this section 9) which
they may suffer or incur arising directly out of or based
directly upon the willful misconduct or gross negligence of the
Agent;
<PAGE> 18
-18-
(c) if any action or claim (including any governmental or regulatory
investigation or proceeding) shall be asserted against an
Indemnified Party in respect of which indemnity may be sought
from an Indemnifying Party pursuant to the provisions hereof, or
if any such potential action or potential claim shall come to
the knowledge of an Indemnified Party, the Indemnified Party
shall promptly notify the Indemnifying Party in writing of the
nature of such action or claim (provided that any failure to so
notify shall not affect the Indemnifying Party's liability under
this section 9 unless such delay has prejudiced the defense to
such claim). The Indemnifying Party shall be entitled but not
obliged to participate in or to assume the defense thereof,
provided, however that the defense shall be through legal
counsel acceptable to the Indemnified Party, acting reasonably.
In addition, the Indemnified Party shall also have the right to
employ separate counsel in any such action and to participate in
the defense thereof, and the fees and expenses of such counsel
shall be borne by the Indemnified Party unless (i) the
employment thereof has been specifically authorized in writing
by the Indemnifying Party; (ii) the Indemnified Party has been
advised by counsel acceptable to the Indemnifying Party, acting
reasonably, that representation of the Indemnifying Party and
the Indemnified Party by the same counsel would be inappropriate
due to actual or potential differing interests between them; or
(iii) the Indemnifying Party has failed, within a reasonable
time after receipt of such written notice to assume the defense
of such action or claim. It is understood and agreed that the
Indemnifying Party shall not, in connection with any action,
suit, proceeding or claim in the same jurisdiction, be liable
for the legal fees and expenses of more than one separate legal
firm to represent the Indemnified Parties. Neither party shall
effect any settlement of any such action or claim or make any
admission of liability without the written consent of the other
party, such consent not to be unreasonably withheld or delayed.
The indemnity hereby provided for shall remain in full force and
effect and shall not be limited to or affected by any other
indemnity in respect of any matters specified in this section
obtained by the Indemnified Party from any other person;
(d) to the extent that any Indemnified Party is not a party to this
Agreement, the Agent or Corporation, as the case may be, shall
obtain and hold the right and benefit of this section in trust
for and on behalf of such Indemnified Party;
(e) the Corporation hereby waives its right to recover contribution
from the Agent with respect to any liability of the Corporation
by reason of or arising out of any misrepresentation or omission
contained in the Business Plan, 1934 Act Form or the 1933 Act
Registration Statement or any amendment to such documents;
provided, however, that such waiver shall not apply in respect
of liability caused or incurred by reason of or arising out of
any misrepresentation or omission which is based upon or results
from information made or provided by or solely relating to the
Agent contained in such document (unless such information or
statements were provided to the Agent, or prepared, by the
Corporation); and
<PAGE> 19
-19-
(f) each of the Corporation and the Agent hereby consents to personal
jurisdiction and service and venue in any court in which any claim which
is subject to indemnification hereunder is brought against the other or
any Indemnified Party and to the assignment of the benefit of this
section to any Indemnified Party for the purpose of enforcement provided
that nothing herein shall limit the Indemnifying Party's right or
ability to contest the appropriate jurisdiction or forum for the
determination of any such claims.
10. CONTRIBUTION - In the event that, for any reason, the indemnity provided for
in section 9 hereof is illegal or unenforceable, then each Indemnifying Party,
in lieu of indemnifying such Indemnified Party, shall contribute to the
aggregate of all losses, claims, costs, damages, expenses or liabilities (except
loss of profits in connection with the sale of Shares) of the nature provided
for in section 9 hereof such that the Agent shall be responsible for that
portion represented by the percentage that the Commission bears to the gross
proceeds from the Offering and the Corporation shall be responsible for the
balance provided that in no event shall the Agent be responsible for any amount
in excess of the Commission actually received by the Agent. Notwithstanding the
foregoing, a person guilty of fraudulent misrepresentation shall not be entitled
to contribution from any other party. Any party entitled to contribution will,
promptly after receiving notice of commencement of any claim, action, suit or
proceeding against such party in respect of which a claim for contribution may
be made against another party or parties under this section, notify such party
or parties from whom contribution may be sought. In no case shall such party
from whom contribution may be sought be liable under this Agreement unless such
notice shall have been provided, but the omission to so notify such party shall
not relieve the party from whom contribution may be sought from any other
obligation it may have otherwise than under this section. The right to
contribution provided in this section shall be in addition and not in derogation
of any other right to contribution which any Indemnifying Party may have by
statute or otherwise by law.
11. TERMINATION RIGHTS - In addition to any other remedies which may be
available to the Agent, the Agent shall be entitled, at its option, to terminate
and cancel, without any liability on its part, all of its obligations under this
Agreement and the obligations of any person whom the Agent has solicited to
purchase the Shares who has executed a Subscription Agreement, by notice in
writing to that effect delivered to the Corporation prior to the Time of Closing
if:
(a) the Agent is not satisfied in its sole discretion with the
results of all or any portion of its due diligence review and
investigations of the Corporation or the subsidiaries;
(b) there is in the sole opinion of the Agent a material change or
change in material fact or new material fact or an undisclosed
material fact or material change which might be expected to have
an adverse effect on the business, affairs, profitability or
prospects of the Corporation on a consolidated basis or on the
market price or value of the Common Shares, Shares or other
securities of the Corporation;
<PAGE> 20
-20-
(c) there should develop, occur or come into effect any occurrence
of national or international consequence, or any action, law or
regulation, inquiry, or other occurrence of any nature
whatsoever which, in the sole opinion of the Agent, seriously
affects, or may seriously affect, the financial markets or the
business of the Corporation, its subsidiaries and affiliates,
taken together or the market price or value of the Common
Shares, Shares or other securities of the Corporation;
(d) the state of the financial markets is such that in the sole
opinion of the Agent it would be unprofitable to offer or
continue to offer the Shares for sale;
(e) there is a new inquiry, action, suit, proceeding or
investigation (whether formal or informal instituted or
announced or threatened) in relation to the Corporation, any one
of the subsidiaries or any one of the Corporation's directors,
officers or principal shareholders;
(f) any order to cease trading in the securities of the Corporation
is made, threatened or announced by a competent securities
regulatory authority; or
(g) the Corporation is in material breach of a term, condition, or
covenant of this Agreement or any representation or warranty
given by the Corporation in this Agreement is or becomes
materially false.
If the Agent terminates this Agreement pursuant to this section there
shall be no further liability on the part of the Agent or of the Corporation to
the Agent except in respect of any obligation which may have arisen or may
thereafter arise under sections 9 or 10 hereof.
The right of the Agent to terminate its obligations under this Agreement
is in addition to such other remedies as it may have in respect of any default,
act or failure to act of the Corporation in respect of any of the matters
contemplated by this Agreement.
12. BREACH OF AGREEMENT - All terms and conditions of this Agreement to be
performed or satisfied by the Corporation shall be constituted as conditions and
any breach of, or failure by the Corporation to comply with, any term or
condition of this Agreement shall entitle the Agent, on behalf of the
Purchasers, to terminate their respective obligations to purchase the Shares by
notice to that effect given to the Corporation prior to the Time of Closing. In
the event of any such termination, there shall be no further liability on the
part of the Corporation or the Agent. The Agent may waive, in whole or in part,
or extend the time for compliance with, any terms and conditions without
prejudice to its rights in respect of any other terms and conditions or any
other or subsequent breach or non-compliance provided, however, that any waiver
or extension must be in writing and signed by the Agent in order to be binding
upon it.
13. NOTICES - Any notice under this Agreement shall be given in writing and
either delivered or telecopied to the party to receive such notice at the
address or telecopy numbers indicated below:
<PAGE> 21
-21-
to the Corporation or any indemnified party:
Cyberoad.com Corporation
Officentro Sabana Sur
Building 7, Fifth Floor
San Jose, Costa Rica
Attention: Mr. John Coffey, President
Fax: (506) 231-7733
with a copy to:
Julie M. Kaufer, Esq.
Troop Steuber Pasich Reddick & Tobey
2029 Century Park East
24th Floor
Los Angeles, California
90067-3010
Attention: Julie M. Kaufer
Fax: (310) 728-2313
to the Agent or any Indemnified Party:
Thomson Kernaghan & Co. Limited
365 Bay Street, Suite 1000
Toronto, Ontario
M5H 2V2
Attention: Gregg Badger
Fax: (416) 860-6352
with a copy to:
Beach, Hepburn
Suite 1000, 36 Toronto Street
Toronto, Ontario
M5C 2C5
Attention: Jay Goldman
Fax: (416) 350-3510
<PAGE> 22
-22-
or such other address or telecopy number as such party my hereafter designate by
notice in writing to the other party. If a notice is delivered, it shall be
effective from the date of delivery; and if such notice is telecopied (with
receipt confirmed), it shall be effective on the Business Day following the date
such notice is telecopied.
14. SURVIVAL - All representations, warranties, and agreements of the parties
contained herein or contained in any document submitted pursuant to this
Agreement or in connection with the purchase of the Closing Shares shall survive
the purchase of the Closing Shares by the Purchasers, the exercise of the
Offering Option and subsequent disposition of the Option Shares by the
Purchasers and shall continue in full force and effect unaffected by any
subsequent disposition of the Subject Securities, for a period of two years from
the Closing, and the Agent shall not be limited or prejudiced by any
investigation made by or on behalf of the Agent in the course of the
distribution of the Shares except for those matters in respect of which the
Agent had knowledge prior to proceeding with the Closing of the Offering.
15. ENTIRE AGREEMENT - The provisions herein contained constitute the entire
agreement between the parties hereto and supersede all previous communications,
representations, understandings and agreements between the parties with respect
to the subject matter hereof, whether verbal or written, including without
limitation the letter agreement between the Corporation and the Agent dated and
accepted by the Corporation on June 18, 1999.
16. COUNTERPARTS - This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which when taken together
shall be deemed to be one and the same document, and notwithstanding their
actual date of execution shall be deemed to be dated as of the date first above
written.
17. GENERAL - The Agreement shall be governed by and interpreted in accordance
with the laws of Florida and the federal laws of the United States applicable
therein and time shall be of the essence hereof.
<PAGE> 23
-23-
18. CURRENCY - Unless otherwise indicated, all dollar amounts referred to in
this Agreement are in lawful money of the United States.
If the above is in accordance with your understanding, please sign and
return to the Agent a copy of this letter, whereupon this letter and your
acceptance shall constitute a binding agreement between the Corporation and the
Agent.
THOMSON KERNAGHAN & CO. LIMITED
Per: /s/ GREGG BADGER
------------------------------
The above offer is hereby accepted and agreed to as of the date first
above written.
CYBEROAD.COM CORPORATION
Per: /s/ JOHN COFFEY
------------------------------
<PAGE> 24
SCHEDULE A
[CYBEROAD.COM LOGO]
FOR IMMEDIATE RELEASE
CYBEROAD.COM COMPLETES ACQUISITION
AGREES TO $US7 MILLION PRIVATE PLACEMENT
Dublin, Ireland -- April 29, 1999 -- cyberoad.com Ltd., a corporation organized
under the laws of Ireland, announced today the completion of a share exchange
agreement with LAL Ventures Corp. (OTC BB: LALV) and a $US2,000,000 financing
by way of private placement. Under the terms of the share exchange, LAL
Ventures will acquire all of the stock of cyberoad.com Ltd. in exchange for
restricted common stock of LAL Ventures. LAL Ventures plans to change its name
to cyberoad.com Corporation. By this transaction, cyberoad.com Corporation
becomes the parent corporation of cyberoad.com Ltd. The common stock of LAL
Ventures will trade under the symbol "LALV" until such time as a new symbol is
assigned.
cyberoad.com also announced the signing of an agreement with investment
bankers, Thomson Kernaghan & Company Ltd., to complete a financing on a best
efforts basis of a private placement of up to 2,000,000 shares of its common
stock at a price of $US3.50 per share. The closing of this financing is subject
to definitive documentation and satisfactory due diligence.
cyberoad.com is a leading Internet company that develops and manages
distributed wide area network gaming (Sportbook and Casino) systems.
For more information about cyberoad.com please contact:
H. Graham Christie V.P.
Website: cyberoad.com
e-mail:[email protected]
Phone: 1-888-263-0000
Except for the historical information contained herein, matters discussed in
this news release may be considered forward looking statements that involve
risks and uncertainties, including those related to customer acceptance of new
products and services, impact of competition, the risk of delay in product
development and release dates, risks of product returns, investments in new
business opportunities and the other risks detailed from time to time in the
Company's SEC reports, including without limitation its quarterly reports on
Form 10-Q and its annual report on Form 10-K. The actual results the Company
achieves may differ materially from any forward-looking statements due to such
risks and uncertainties.
<PAGE> 25
A-2
[CYBEROAD.COM LOGO]
FOR IMMEDIATE RELEASE
CYBEROAD.COM CORPORATION
CHANGES TRADING SYMBOL TO "FUNN"
Dublin, Ireland -- May 10, 1999 -- cyberoad.com Corporation, formerly LAL
Ventures Corp. (OTC BB: LALV) announced today that it has received regulatory
approval for its name change and has been assigned the new OTC BB trading
symbol: FUNN.
cyberoad.com Corporation is a pioneering Internet company that develops,
markets and manages distributed wide area network gaming systems (sportsbooks
and casinos). cyberoad.com Corporation also provides ongoing management and
technical support services for its gaming-industry clients.
The FUNN trading symbol emphasizes the Company's commitment to the unlimited
market for online interactive entertainment software.
For more information about cyberoad.com please contact:
H. Graham Christie V.P.
Website: cyberoad.com
e-mail: [email protected]
Phone: 1-888-263-0000
Except for the historical information contained herein, matters discussed in
this news release may be considered forward looking statements that involve
risks and uncertainties, including those related to customer acceptance of new
products and services, impact of competition, the risk of delay in product
development and release dates, risks of product returns, investments in new
business opportunities and the other risks detailed from time to time in the
Company's SEC reports, including without limitation its quarterly reports on
Form 10-Q and its annual report on Form 10-K. The actual results the Company
achieves may differ materially from any forward-looking statements due to such
risks and uncertainties.
<PAGE> 26
A-3
CYBEROAD.COM BETS ON VERSANT FOR DATABASE
PERFORMANCE
VERSANT OBJECT DATABASE DRIVES WEB-BASED SPORTS BETTING SYSTEM
FREMONT, California, May 25, 1999 -- Versant Corporation (NASDAQ: VSNT), a
leader in enterprise component management an distributed object systems,
announced today that Irish technology development company cyberoad.com (OTC:BB
FUNN) will release this summer Version 2 of CR Netbook, a web-based sports
betting system that uses the Versant Object Database Management System (ODBMS).
Some of the most prominent online gaming sites, which includes The Big Book &
Casino (http://thebigbook.com), Grand Prix Sportsbook
(http://grandprixsports.com) and Mayan Sportsbook (http://mayansports.com),
will be upgrading to version 2 of the Versant-based CR Netbook software when it
becomes available this summer, Version 2 of the product is expected to be the
most advanced, scalable sports betting system on the market.
"Using Versant, rather than a relational database, allows us to focus more on
the business object model, and avoid the compromises we would have to make if
we were to optimize the program for relational storage," said Carl Schmidt, CIO
of Cyberoad.com. "This directly translates into faster development times, and
ultimately a faster product."
Versant's distributed object-based technology was the obvious choice for the
Irish developer. Because Cyberoad.com is experiencing very rapid growth, the
company needed a high degree of scalability, easy development, and strong
support. Versant fit the bill in each case. "The distributed database
requirements for an application of this nature are very steep, but Versant was
able to meet every one of them," said Nick Ordon, President and CEO of Versant.
"The wagering sites that are using CR Netbook are growing rapidly and need a
robust database with a distributed architecture behind their operations.
Versant's ODBMS is uniquely capable of powering these complex, distributed
systems."
The online wagering sites, which depend on CR Netbook to provide the brains
behind the betting, have to be fast, user-friendly and highly secure. Using The
Big Book and other Netbook-powered sits, users can confidently place bets
online in real time. On the back end, Versant enables a quick response time for
end users, keeps rigorous track of each and every transaction across multiple
locations, and makes sure the electronic money floating through each site is
safe and secure.
"Versant's support for distribution and replication is excellent," added
Schmidt. "As the sportsbook operators that use our system start to address the
global market, they'll invariably need to deploy multiple points of presence to
meet demand and provide strong response times to end users. Using Versant, this
distribution will be virtually transparent to our application."
This press release contains forward-looking information within the ???? of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, and is subject to the safe harbor created by these
sections. These forward-looking statements include those related in the
availability and ???? of the Versant-based CR Netbook. Versant ???? no
obligation to update the information contained in this press release.
Further Information Contact:
Michelle Fridman
Versant Corporation
510-789-1500
[email protected]
Greg Taylor
Cyberoad.com
[email protected]
<PAGE> 27
A-4 [CYBEROAD LOGO]
CYBEROAD.COM(TM) IS
CALLING ALL 'WISE GUYS'
cyberoad.com(tm) creates a smarter, faster WiseGuy Contest
Dublin, Ireland, September 24, 1999 - cyberoad.com Corporation (OTC BB:PUNN), a
leading internet technology company today launched a faster, more user-friendly
version of the WiseGuy Contest available at www.thesportsmachine.com, the
original free gaming contest website.
The most exciting new feature of the new, free WiseGuy Contest allows
participants to select their bet choices and place them into a "shopping cart"
called the Bet Builder. Players are then able to quickly place bets from this
shopping cart. As well, unlike most any other gaming environment, WiseGuy
Contest participants can now place three new, dynamic bet types parlaying and
teasing across multiple sports, as well as buying points on a spread within a
parlay. In addition, the new "Open Bets" section offers contestants an
instantly updated game status report on all their open bets as the event is
completed and graded, allowing players to check the "real time" status of all
bets.
"cyberoad.com has improved the technology that operates the free WiseGuy Contest
based on feedback from players," said Graham Christie, vice president for
cyberoad.com. "The WiseGuy Contest's new technology is part of our ongoing
mission to provide the most user-friendly, seamless and exciting gaming
environment for players of all sites powered by cyberoad.com".
The WiseGuy Contest is the premier free online sports betting contest. Players
test their wagering abilities with $10,000 of "playdough" provided each month,
where they can place bets on point spreads, buy points, moneylines, game totals,
parlays and teasers.
In addition, the WiseGuy Contest includes a comprehensive Betting Guide where
novice players can learn the inside strategies and get insight before ever
placing a bet.
The WiseGuy Contest is one of four gaming and sportsbook sites powered by
cyberoad.com technology. Other game websites that operate with the cyberoad.com
software include www.thebigbook.com, www.mayansports.com and
www.grandprixsports.com.
cyberoad.com is a pioneer among Internet companies, sp?? the global gaming
industry; providing superior software and network systems development, network
management and ongoing technical support services for its gaming industry
clients.
<PAGE> 28
SCHEDULE B
CLOSING AGENDA
CYBEROAD.COM CORPORATION
Issue of up to 1,000,000 Shares at U.S. $3.50 per Share
for Gross Proceeds of up to U.S. $3,500,000
CLOSING DATE: Thursday, November 11, 1999
TIME: 11:00 a.m. (Toronto time)
PLACE: 36 Toronto Street, Suite 1000, Toronto, Ontario M5C 2C5
DEFINED TERMS
"Agency Agreement" the agency agreement between the Company and the Agent
dated November 11, 1999, relating to the sale of
Closing Shares
"Agent" Thomson Kernaghan & Co. Limited
"BH" Beach, Hepburn, counsel to the Agent
"Company" Cyberoad.com Corporation
"Compensation Option" non-assignable compensation option entitling the Agent
to purchase up to 10% of the number of Closing Shares
issued at closing at a price of U.S. $3.50 per share at
any time on or before the date which is two years
following the closing date
"Compensation Option
Certificate" certificate representing the Compensation Option
"Custodian" Thomson Kernaghan & Co. Limited
"Offering Option" option entitling the Agent to sell additional Shares at
a price of U.S. $3.50 per Option Share at any time on
or before the date which is 30 days following the
closing date
"Offering Option
Compensation Option" compensation option entitling the Agent to Purchase 10%
of the number of Option Shares issued at the Offering
Option closing at a price of U.S.
<PAGE> 29
B-2
$3.50 per Share at any time on or before the date which
is two years following the closing
"Transfer Agent" Interwest Transfer Co., Inc.
"TS" Troop Steuber Pasich Reddick & Tobey LLP, counsel to
the Company
All other capitalized words not otherwise defined herein shall have the meanings
ascribed to such words in the Agency Agreement.
STANDARD DELIVERY
Unless otherwise noted, sufficient original copies of the document will
be prepared so that "Standard Delivery" may be made of each document; original
payments and certificates representing Shares will be delivered only to the
parties entitled thereto and photocopies of the same will be provided to all
other parties.
Standard Delivery means delivery to the following parties and in the
following numbers:
<TABLE>
<S> <C>
Company 1
Agent 1
TS 1
BH 1
-
Total 4
=
</TABLE>
TERMS OF CLOSING
All deliveries at the closing as well as all deliveries and payments called for
shall be held in escrow until all such deliveries and payments have been made.
Agreement by a representative of the Company, the Agent, TS and BH that all such
deliveries and payments have been completed, shall be conclusive evidence that
same have been completed.
REPRESENTATION
On behalf of the Company: Krista Wilson
On behalf of the Agent: Gregg Badger
On behalf of TS: Julie M. Kaufer
On behalf of BH: Jay Goldman
On behalf of the Custodian: Gregg Badger
<PAGE> 30
B-3
I. DOCUMENTS TO BE DELIVERED AT CLOSING
<TABLE>
<CAPTION>
ITEM DOCUMENT DELIVERED BY DELIVERED TO
---- -------- ------------ ------------
<S> <C> <C> <C>
1. Agency Agreement Agent Standard Delivery
2. Escrow Agreement Custodian Standard Delivery
and Custodian
3. Subscription Agreements with Agent Company (original)
consents/waivers of Purchasers Standard Delivery
(copies)
4. Secretary's Certificate attaching: Company Standard Delivery
(a) certified copies of articles and by-
laws of the Company
(b) certified consent resolution of the
directors of the Company: (i)
approving the Agency, Escrow
and Subscription Agreements;
(ii) allotting, and reserving for
issue shares issuable in
connection with the Offering, the
Offering Option, upon exercise
of the Compensation Option and
Offering Option Compensation
Option and under the Escrow
Agreement; (iii) approving the
appointment of the Transfer
Agent as the registrar and
transfer agent of the Company
and; (iv) certain other matters;
and
(c) bring down certificate from the
Agency Agreement
5. Certificate of incumbency of
signatories of the Company
6. Certificate of Compliance/Good Company Agent (original)
Standing for the Company and each of Standard Delivery
the subsidiaries (copies)
7. Letters from local counsel of each of Company Standard Delivery
the subsidiaries confirming registered
shareholders thereof
8. Specimen certificate evidencing Company Standard Delivery
Shares
</TABLE>
<PAGE> 31
B-4
<TABLE>
<CAPTION>
ITEM DOCUMENT DELIVERED BY DELIVERED TO
---- -------- ------------ ------------
<S> <C> <C> <C>
9. Certificate of Transfer Agent as to Company Standard Delivery
issued and outstanding shares
10. eBanx [Isle of Man] Ltd. acquisition Company Standard Delivery
agreement (copies)
11. Comfort letter re: Cyberoad [Ireland] Company Standard Delivery
(copies)
12. Direction of the Company to the Company Transfer Agent
Transfer Agent with respect to (original)
registration particulars of the Shares to Standard Delivery
be issued and delivered to the (copies)
Purchasers and Escrowed Shares to
be issued and delivered to the
Custodian
13. Letter of the Agent confirmed by the Agent Standard Delivery
Company confirming gross proceeds of
$2,271,007; commission payable to the
Agent of $181,680.56; expenses of
$58,324.75; net proceeds payable to the
Company of $1,303,901.49; directing the
advance of $227,100.70 to the Custodian;
and attaching applicable supporting
documentation for the expenses set forth
therein
14. Evidence of wire transfer or cheque Agent Company (original)
(including transfer identification number) Standard Delivery
from the Agent to the Company in the (copies)
amount of $1,303,901.49 representing the
net proceeds of the Offering, payable to
the Company
15. Compensation Option Company Agent (original)
Standard Delivery
(copies)
16. Receipt of Agent for commission, Agent Company (original)
expenses and Compensation Option Standard Delivery
Certificate (copies)
</TABLE>
<PAGE> 32
B-5
I. DOCUMENTS TO BE DELIVERED AT CLOSING (CONT'D.)
<TABLE>
<S> <C> <C> <C>
17. Advance of the Agent to the Custodian in Agent Custodian (original)
the amount of $227,100.70, representing Standard Delivery
the funds to be held in escrow by the (copies)
Custodian pursuant to the Escrow
Agreement
18. Receipt of the Custodian for the foregoing Custodian Company (original)
cheque Standard Delivery
(copies)
19. Opinion of TS together with supporting Company Standard Delivery
officers' certificate in respect of opinion
20. Opinion of local Florida counsel Company Standard Delivery
</TABLE>
II. MATTERS TO BE COMPLETED FOLLOWING THE CLOSING
<TABLE>
<S> <C>
1. Certificates representing an aggregate of 648,859 Shares
registered in accordance with item 12 of the closing documents
2. Certificates representing an aggregate of 850,000 Escrowed
Shares issued to the Agent on behalf of the Purchasers and
delivered to the Custodian
3. Settlement of matters relating to Dal Brynelen
4. Company to issue Press Release
5. Exercise of Offering Option, if applicable
6. Closing of Exercise of Offering Option, if applicable
7. Filing of Form 45-501F1 (Ontario)
8. Prepare and file 1934 Act Form and 1933 Act Registration
Statement
9. Release of Escrowed Funds and Escrowed Shares
</TABLE>
<PAGE> 1
EXHIBIT 10.44
OPTION TO PURCHASE COMMON SHARES OF
CYBEROAD.COM CORPORATION
(EXISTING UNDER THE LAWS OF FLORIDA)
VOID AFTER
NOVEMBER 11, 2001
THIS CERTIFIES that, for value received THOMSON KERNAGHAN & CO. LIMITED
(the "Holder"), is the registered holder of 64,886 compensation options (the
"Compensation Options") which entitle the holder, subject to the terms and
conditions set forth in this Compensation Option Certificate, to purchase from
Cyberoad.com Corporation (the "Company"), up to 64,886 shares (the "Shares") of
common stock, par value $0.0001 per share (the "Common Stock") of the
Corporation, as presently constituted, at any time until 5:00 p.m. (Los Angeles
time) on November 11, 2001 (the "Time of Expiry") on payment of US$3.50 per
Share (the "Exercise Price"). The number of Shares which the Holder is entitled
to acquire upon exercise of the Compensation Options and the Exercise Price are
subject to adjustment as hereinafter provided. This Compensation Option
Certificate is being issued pursuant to an agency agreement dated November 11,
1999 between the Company and the Holder (the "Agency Agreement"). Capitalized
terms used and not otherwise defined herein have the meanings given to such
terms in the Agency Agreement.
1. Exercise of Compensation Options
(a) Election to Purchase. The rights evidenced by this certificate
may be exercised by the Holder in whole or in part and in accordance with the
provisions hereof by delivery of an Election to Purchase in substantially the
form attached hereto as Appendix "I", properly completed and executed, together
with payment of the Exercise Price for the number of Shares specified in the
Election to Purchase at the office of the Company at Cyberoad.com Corporation,
Attention: Mr. John Coffey, President, Officentro Sabana Sur, Building 7, Fifth
Floor, San Jose, Costa Rica, or such other address as may be notified in writing
by the Company (the "Company Office"). In the event that the rights evidenced by
this certificate are exercised in part, the Company shall, contemporaneously
with the issuance of the Shares issuable on the exercise of the Compensation
Options so exercised, issue to the Holder a Compensation Option Certificate on
identical terms in respect of that number of Shares in respect of which the
Holder has not exercised the rights evidenced by this certificate.
(b) Exercise. The Company shall, on the date it receives a duly
executed Election to Purchase and the Exercise Price for the number of Shares
specified in the Election to Purchase (the "Exercise Date"), issue that number
of Shares specified in the Election to Purchase.
(c) Share Certificates. As promptly as practicable after the
Exercise Date, the Company shall issue and deliver to the Holder, registered in
such name or names as the Holder
<PAGE> 2
may direct or if no such direction has been given, in the name of the Holder, a
certificate or certificates for the number of Shares specified in the Election
to Purchase. To the extent permitted by law, such exercise shall be deemed to
have been effected as of the close of business on the Exercise Date, and at such
time the rights of the Holder with respect to the number of Compensation Options
which have been exercised as such shall cease, and the person or persons in
whose name or names any certificate or certificates for the Shares shall then be
issuable upon such exercise shall be deemed to have become the holder or holders
of record of the Shares represented thereby.
(d) Each certificate issued representing Shares issued upon exercise
of the Compensation Options, unless such Shares are then
registered for resale under an effective registration statement
under the Securities Act of 1933, as amended (the "Act"), shall
bear a legend in substantially the following form:
"THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(TOGETHER WITH THE REGULATIONS PROMULGATED THEREUNDER, THE
"ACT"), AND MAY NOT BE SOLD, OFFERED FOR SALE, TRANSFERRED,
PLEDGED OR HYPOTHECATED WITHIN THE UNITED STATES (AS THAT TERM
IS DEFINED IN REGULATION S PROMULGATED UNDER THE ACT) OR TO A
U.S. PERSON (AS THAT TERM IS DEFINED IN REGULATION S) IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT FILED UNDER THE
ACT AND ANY APPLICABLE STATE SECURITIES LAWS, UNLESS AN
EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE. HEDGING
TRANSACTIONS INVOLVING THESE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT."
(e) Fractional Shares. No fractional shares of Common Stock shall be
issued upon exercise of any Compensation Options and no payments
or adjustment shall be made upon any exercise on account of any
cash dividends on the shares of Common Stock issued upon such
exercise. If any fractional interest in a share of Common Stock
would, except for the provisions of the first sentence of this
Section 1(e), be deliverable upon the exercise of a Compensation
Option, the Company shall, in lieu of delivering the fractional
share therefor, pay to the Holder an amount in cash equal to the
Fair Market Value (as hereinafter defined) of such fractional
interest.
(f) Corporate Changes. In the event that, after the date hereof and
prior to the Time of Expiry, the Company shall be a party to any
capital reorganization, amalgamation, arrangement, merger or
sale of all or substantially all of its assets, whether or not
the Company is the surviving entity:
(i) the number of shares of Common Stock subject to
unexercised Compensation Options shall be adjusted so
that the Holder of unexercised
<PAGE> 3
Compensation Options will be entitled to receive, upon
the exercise of such Compensation Options, in lieu of
the number of shares of Common Stock to which such
Holder was entitled to purchase, the number of
securities of the Company or of the surviving entity, as
the case may be, that the Holder would have been
entitled to receive by reason of such reorganization,
merger, amalgamation, arrangement or sale of all or
substantially all of its assets (the "Event") if, on the
date thereof, the Holder had been the registered holder
of the number of shares of Common Stock to which the
Holder was theretofore entitled to subscribe for and
purchase; and
(ii) the Exercise Price shall be adjusted to be the amount
determined by multiplying the Exercise Price in effect
immediately prior to the Event by the number of shares
of Common Stock subject to the unexercised Compensation
Options immediately prior to the Event, and dividing the
product thereof by the number of securities determined
in paragraph 1(f)(i) hereof.
(g) Subdivision or Consolidation of Shares of Common Stock
(i) in the event that, after the date hereof and prior to
the Time of Expiry, the Company shall subdivide its
outstanding shares of Common Stock into a greater number
of shares of Common Stock, and conversely, in the event
that the outstanding shares of Common Stock shall be
consolidated into a smaller number of shares of Common
Stock, the Exercise Price shall be adjusted to be the
amount determined by multiplying the Exercise Price in
effect immediately prior to such subdivision or
consolidation by the number of shares of Common Stock
outstanding at such time and dividing the product
thereof by the number of shares of Common Stock
outstanding immediately after giving effect to such
subdivision or consolidation; and
(ii) upon each adjustment of the Exercise Price as provided
in this subsection (g), the Holder shall thereafter be
entitled to acquire, at the Exercise Price resulting
from such adjustment, the number of shares of Common
Stock (calculated to the nearest tenth of a share of
Common Stock) obtained by multiplying the Exercise Price
in effect immediately prior to such adjustment by the
number of shares of Common Stock which may be acquired
hereunder immediately prior to such adjustment and
dividing the product thereof by the Exercise Price
resulting from such adjustment.
(h) Change or Reclassification of Shares of Common Stock. In the
event that, after the date hereof and prior to the Time of
Expiry, the Company shall change or reclassify its outstanding
shares of Common Stock into a different class of securities:
<PAGE> 4
(i) the number of shares of Common Stock subject to
unexercised Compensation Options shall be adjusted as
follows so that the Holder of unexercised Compensation
Options will be entitled to receive, upon the exercise
of such Compensation Options, in lieu of the number of
shares of Common Stock to which such Holder was entitled
to purchase, the number of successor class of securities
that the Holder would have been entitled to receive by
reason of such change or reclassification if, on the
date thereof, the Holder had been the registered holder
of the number of shares of Common Stock to which the
Holder was theretofore entitled to subscribe for and
purchase; and
(ii) the Exercise Price shall be adjusted to the amount
determined by multiplying the Exercise Price in effect
immediately prior to the change or reclassification by
the number of shares of Common Stock subject to the
unexercised Compensation Options immediately prior to
the change or reclassification, and dividing the
product thereof by the number of the successor class of
securities determined in paragraph 1(h)(i) hereof.
(i) Offering to Shareholders. In the event that, after the date
hereof and prior to the Time of Expiry, the Company shall issue
rights, options or warrants to all or substantially all the
holders of the outstanding shares of Common Stock entitling
them, for a period expiring not more than 45 days after the
record date or date of entitlement established to receive
rights, options or warrants (any such date being hereinafter
referred to in this Subsection 1(i) as the "record date"), to
subscribe for or purchase shares of Common Stock or securities
convertible into or exchangeable for shares of Common Stock at a
price per share or, as the case may be, having a conversion or
exchange price per share, less than 95% of the Fair Market Value
(as hereinafter defined) on such record date, the Exercise Price
shall be adjusted immediately after the expiration of such
rights, options or warrants so that it shall equal the price
determined by multiplying the Exercise Price in effect on such
record date by a fraction, of which the numerator shall be the
total number of shares of Common Stock outstanding on such
record date plus a number equal to the number arrived at by
dividing the aggregate subscription or purchase price of the
total number of additional shares of Common Stock issued upon
the exercise of such rights, options or warrants or, as the case
may be, the aggregate conversion or exchange price of the
convertible or exchangeable securities so issued by such Fair
Market Value, and of which the denominator shall be the total
number of shares of Common Stock outstanding on such record date
plus the total number of additional shares of Common Stock so
issued upon the exercise of such rights, options or warrants (or
into which the convertible or exchangeable securities so offered
were converted or exchanged); shares of Common Stock owned by or
held for the account of the Company or any subsidiary of the
Company shall be deemed not to be outstanding for the purpose of
any such computation; such adjustment shall be made successively
whenever such a record date is fixed.
<PAGE> 5
(j) Carry Over of Adjustments. No adjustment of the Exercise Price
shall be made if the amount of such adjustment shall be less
than 1% of the Exercise Price in effect immediately prior to the
event giving rise to the adjustment, provided, however, that in
such case any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount to
at least 1% of the Exercise Price.
(k) Notice of Adjustment. Upon any adjustment of the number of
shares of Common Stock and upon any adjustment of the Exercise
Price, then and in each such case the Company shall give written
notice thereof to the Holder, which notice shall state the
Exercise Price and the number of shares of Common Stock or other
securities subject to the unexercised Compensation Options
resulting from such adjustment, and shall set forth in
reasonable detail the method of calculation and the facts upon
which such calculation is based. Upon the request of the Holder
there shall be transmitted promptly to the Holder a statement of
the firm of independent chartered accountants retained to audit
the financial statements of the Company to the effect that such
firm concurs in the Company's calculation of the change.
(1) Other Notices. In the event that, after the date hereof and
prior to the Time of Expiry:
(i) the Company shall declare any dividend upon its shares
of Common Stock payable in shares of Common Stock;
(ii) the Company shall offer for subscription pro rata to the
holders of its shares of Common Stock any additional shares of any class
or other rights;
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or consolidation,
amalgamation or merger of the Company with, or sale of all or
substantially all of its assets to, another corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or winding-up of the Company,
then, in any one or more of such cases, the Company shall give
to the Holder (A) at least 10 days' prior written notice of the
date on which a record date shall be taken for such dividend,
distribution or subscription rights or for determining rights to
vote in respect of any such reorganization, reclassification,
consolidation, merger, amalgamation, sale, dissolution,
liquidation or winding-up and (B) in the case of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, at least 10 days' prior
written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (A) shall also
specify, in the case of any such dividend,
<PAGE> 6
distribution or subscription rights, the date on which the
holders of shares of Common Stock shall be entitled thereto, and
such notice in accordance with the foregoing clause (B) shall
also specify the date on which the holders of shares of Common
Stock shall be entitled to exchange their shares of Common Stock
for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up, as
the case may be.
(m) Shares to be Reserved. The Company will at all times keep
available, and reserved, out of its authorized shares of Common
Stock, solely for the purpose of issue upon the exercise of the
Compensation Options, such number of shares of Common Stock as
shall then be issuable upon the exercise of the Compensation
Options. The Company covenants and agrees that all shares of
Common Stock which shall be so issued will, upon issuance, be
duly authorized, fully paid and non-assessable. The Company will
take all such actions as may be necessary to ensure that all
such shares of Common Stock may be so issued without violation
of any applicable requirements of any exchange upon which the
shares of Common Stock may be listed or in respect of which the
shares of Common Stock are qualified for unlisted trading
privileges. The Company will take all such actions as are within
its power to ensure that all such shares of Common Stock may be
so issued without violation of any applicable law.
(n) Issue Tax. The issuance of certificates for shares of Common
Stock upon the exercise of Compensation Options shall be made without charge to
the Holder for any issuance tax in respect thereto, provided that the Company
shall not be required to pay any tax which may be payable in respect of any
transfer involved in the issuance and delivery of any certificate in a name
other than that of the Holder.
(o) Fair Market Value. For the purposes of any computation
hereunder, the "Fair Market Value" of a security at any date shall be the
average closing sales price per share for the security for the 20 consecutive
trading days ending on the third trading day immediately before such date on any
stock exchange, quotation system or dealing network on which the shares of
Common Stock are listed or trade, or, if the security in respect of which a
determination of Fair Market Value is being made is not listed on any stock
exchange or does not trade on any quotation system or dealing network, the Fair
Market Value shall be determined by the directors, which determination shall be
conclusive. The average price shall be determined by dividing by 20 the sum of
the daily closing sale price per share on the said exchange or dealing network
during the said 20 consecutive trading days.
2. Replacement
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Compensation Option Certificate and, if
requested by the Company, upon delivery of a bond of indemnity satisfactory to
the Company (or, in the case of mutilation, upon surrender of this Compensation
Option Certificate), the Company will issue to the Holder a replacement
certificate (containing the same terms and conditions as this Compensation
Option
<PAGE> 7
Certificate).
3. Expiry Date
The Compensation Options shall expire and all rights to purchase Shares
hereunder shall cease and become null and void at 5:00 p.m. (Los Angeles time)
on November 11, 2001.
4. No Rights Prior to Exercise
Subject to the terms and conditions hereof, prior to its exercise
pursuant to Section 1 above, this Compensation Option shall not entitle the
Holder to any voting or other rights as holder of shares of Common Stock.
5. Covenant
So long as any Compensation Options remain outstanding the Company
covenants that it will use its commercially reasonable efforts to register the
resale of the Shares issuable upon exercise of the Compensation Options in the
1933 Act Registration Statement filed with the Securities and Exchange
Commission under the Act.
6. Successors
This Compensation Option Certificate shall enure to the benefit of and
shall be binding upon the Holder and the Company and their respective
successors.
IN WITNESS WHEREOF the Company has caused this Compensation Option
Certificate to be signed by its duly authorized officers.
DATED as of the 11th day of November, 1999.
CYBEROAD.COM CORPORATION
Per:
<PAGE> 8
APPENDIX "I"
ELECTION TO EXERCISE
The undersigned hereby irrevocably elects to exercise the number of
Compensation Options of CYBEROAD.COM CORPORATION set out below for the number of
Shares (or other property or securities subject thereto) as set forth below:
(a) Number of Compensation Options to be Exercised:
(b) Number of Shares to be Acquired:
(c) Exercise Price per Share: $
(d) Aggregate Purchase Price [(b) multiplied by (c)]: $
and hereby tenders a certified cheque, bank draft or cash for such aggregate
purchase price, and directs such Shares to be registered and a certificate
therefor to be issued as directed below.
DATED this ________ day of______________, ____.
Per:
Direction as to Registration
Name of Registered Holder:
Address of Registered Holder:
<PAGE> 1
EXHIBIT 10.46
OPTION TO PURCHASE COMMON SHARES OF
CYBEROAD.COM CORPORATION
(EXISTING UNDER THE LAWS OF FLORIDA)
VOID AFTER
JUNE 30, 2001
THIS CERTIFIES that, for value received THOMSON KERNAGHAN & CO. LIMITED
(the "Holder"), is the registered holder of 200,000 compensation options (the
"Compensation Options") which entitle the holder, subject to the terms and
conditions set forth in this Compensation Option Certificate, to purchase from
Cyberoad.com Corporation (the "Company"), up to 200,000 shares of common stock
in the capital of the Corporation (the "Shares"), at any time until 5:00 p.m.
(Seattle time) on June 30, 2001 (the "Time of Expiry") on payment of US$1.00 per
Share (the "Exercise Price"). The number of Shares which the Holder is entitled
to acquire upon exercise of the Compensation Options and the Exercise Price are
subject to adjustment as hereinafter provided.
1. Exercise of Compensation Options
(a) Election to Purchase. The rights evidenced by this certificate may be
exercised by the Holder in whole or in part and in accordance with the
provisions hereof by delivery of an Election to Purchase in substantially the
form attached hereto as Appendix "I", properly completed and executed, together
with payment of the Exercise Price for the number of Shares specified in the
Election to Purchase at the office of the Company at 1380 Burrard Street, Suite
620, Vancouver, British Columbia, V6Z 2H3, or such other address in the United
States or Canada as may be notified in writing by the Company (the "Company
Office"). In the event that the rights evidenced by this certificate are
exercised in part, the Company shall, contemporaneously with the issuance of the
Shares issuable on the exercise of the Compensation Options so exercised, issue
to the Holder a Compensation Option Certificate on identical terms in respect of
that number of Shares in respect of which the Holder has not exercised the
rights evidenced by this certificate.
(b) Exercise. The Company shall, on the date it receives a duly executed
Election to Purchase and the Exercise Price for the number of Shares specified
in the Election to Purchase (the "Exercise Date"), issue that number of Shares
specified in the Election to Purchase.
(c) Share Certificates. As promptly as practicable after the Exercise
Date, the Company shall issue and deliver to the Holder, registered in such name
or names as the Holder may direct or if no such direction has been given, in the
name of the Holder, a certificate or certificates for the number of Shares
specified in the Election to Purchase. To the extent permitted by law, such
exercise shall be deemed to have been effected as of the close of business on
the Exercise Date, and at such time the rights of the Holder with respect to the
number of Compensation Options which have been exercised as such shall cease,
and the person or persons
<PAGE> 2
in whose name or names any certificate or certificates for the Shares shall then
be issuable upon such exercise shall be deemed to have become the holder or
holders of record of the Shares represented thereby.
(d) Fractional Shares. No fractional Shares shall be issued upon
exercise of any Compensation Options and no payments or
adjustment shall be made upon any exercise on account of any
cash dividends on the Shares issued upon such exercise. If any
fractional interest in a Share would, except for the provisions
of the first sentence of this Section 1(d), be deliverable upon
the exercise of a Compensation Option, the Company shall, in
lieu of delivering the fractional share therefor, pay to the
Holder an amount in cash equal to the Fair Market Value (as
hereinafter defined) of such fractional interest.
(e) Corporate Changes. In the event that, after the date hereof and
prior to the Time of Expiry, the Company shall be a party to any
capital reorganization, amalgamation, arrangement, merger or
sale of all or substantially all of its assets, whether or not
the Company is the surviving entity:
(i) the number of Shares subject to unexercised Compensation
Options shall be adjusted so that the Holder of
unexercised Compensation Options will be entitled to
receive, upon the exercise of such Compensation Options,
in lieu of the number of Shares to which such Holder was
entitled to purchase, the number of securities of the
Company or of the surviving entity, as the case may be,
that the Holder would have been entitled to receive by
reason of such reorganization, merger, amalgamation,
arrangement or sale of all or substantially all of its
assets (the "Event") if, on the date thereof, the Holder
had been the registered holder of the number of Shares
to which the Holder was theretofore entitled to
subscribe for and purchase; and
(ii) the Exercise Price shall be adjusted to be the amount
determined by multiplying the Exercise Price in effect
immediately prior to the Event by the number of Shares
subject to the unexercised Compensation Options
immediately prior to the Event, and dividing the product
thereof by the number of securities determined in
paragraph I(e)(i) hereof.
(f) Subdivision or Consolidation of Shares
(i) in the event that, after the date hereof and prior to
the Time of Expiry, the Company shall subdivide its
outstanding Shares into a greater number of Shares, and
conversely, in the event that the outstanding Shares of
the Company shall be consolidated into a smaller number
of Shares, the Exercise Price shall be adjusted to be
the amount determined by multiplying the Exercise Price
in effect immediately prior to such subdivision or
consolidation by the number of Shares outstanding at
such
<PAGE> 3
time and dividing the product thereof by the number of
Shares outstanding immediately after giving effect to
such subdivision or consolidation;
(ii) upon each adjustment of the Exercise Price as provided
herein, the Holder shall thereafter be entitled to
acquire, at the Exercise Price resulting from such
adjustment, the number of Shares (calculated to the
nearest tenth of a Share) obtained by multiplying the
Exercise Price in effect immediately prior to such
adjustment by the number of Shares which may be acquired
hereunder immediately prior to such adjustment and
dividing the product thereof by the Exercise Price
resulting from such adjustment.
(g) Change or Reclassification of Shares. In the event that, after
the date hereof and prior to the Time of Expiry, the Company
shall change or reclassify its outstanding Shares into a
different class of securities:
(i) the number of Shares subject to unexercised Compensation
Options shall be adjusted as follows so that the Holder
of unexercised Compensation Options will be entitled to
receive, upon the exercise of such Compensation Options,
in lieu of the number of Shares to which such Holder was
entitled to purchase, the number of successor class of
securities that the Holder would have been entitled to
receive by reason of such change or reclassification if,
on the date thereof, the Holder had been the registered
holder of the number of Shares to which the Holder was
theretofore entitled to subscribe for and purchase; and
(ii) the Exercise Price shall be adjusted to the amount
determined by multiplying the Exercise Price in effect
immediately prior to the change or reclassification by
the number of Shares subject to the unexercised
Compensation Options immediately prior to the change or
reclassification, and dividing the product thereof by
the number of the successor class of securities
determined in paragraph 1(g)(i) hereof.
(h) Offering to Shareholders. In the event that, after the date
hereof and prior to the Time of Expiry, the Company shall issue
rights, options or warrants to all or substantially all the
holders or the outstanding Shares of the Company entitling them,
for a period expiring not more than 45 days after the record
date or date of entitlement established to receive rights,
options or warrants (any such date being hereinafter referred to
in this Subsection 1(h) as the "record date"), to subscribe for
or purchase Shares of the Company or securities convertible into
or exchangeable for Shares at a price per share or, as the case
may be, having a conversion or exchange price per share less
than 95% of the Fair Market Value (as hereinafter defined) on
such record date, the Exercise Price shall be adjusted
immediately after the expiration of such rights, options or
warrants so that it shall equal the price determined by
multiplying the Exercise Price in effect on such record date by
a fraction, of which the numerator shall be the total number of
<PAGE> 4
Shares outstanding on such record date plus a number equal to
the number arrived at by dividing the aggregate subscription or
purchase price of the total number of additional Shares issued
upon the exercise of such rights, options or warrants or, as the
case may be, the aggregate conversion or exchange price of the
convertible or exchangeable securities so issued by such Fair
Market Value, and of which the denominator shall be the total
number of Shares outstanding on such record date plus the total
number of additional Shares so issued upon the exercise of such
rights, options or warrants (or into which the convertible or
exchangeable securities so offered were converted or exchanged);
Shares owned by or held for the account of the Company or any
subsidiary of the Company shall be deemed not to be outstanding
for the purpose of any such computation; such adjustment shall
be made successively whenever such a record date is fixed.
(i) Carry Over of Adjustments. No adjustment of the Exercise Price
shall be made if the amount of such adjustment shall be less
than 1% of the Exercise Price in effect immediately prior to the
event giving rise to the adjustment, provided, however, that in
such case any adjustment that would otherwise be required then
to be made shall be carried forward and shall be made at the
time of and together with the next subsequent adjustment which,
together with any adjustment so carried forward, shall amount to
at least 1% of the Exercise Price.
(j) Notice of Adjustment. Upon any adjustment of the number of
Shares and upon any adjustment of the Exercise Price, then and
in each such case the Company shall give written notice thereof
to the Holder, which notice shall state the Exercise Price and
the number of Shares or other securities subject to the
unexercised Compensation Options resulting from such adjustment,
and shall set forth in reasonable detail the method of
calculation and the facts upon which such calculation is based.
Upon the request of the Holder there shall be transmitted
promptly to the Holder a statement of the firm of independent
chartered accountants retained to audit the financial statements
of the Company to the effect that such firm concurs in the
Company's calculation of the change.
(k) Other Notices. In the event that, after the date hereof and
prior to the Time of Expiry:
(i) the Company shall declare any dividend upon its Shares
payable in Shares;
(ii) the Company shall offer for subscription pro rata to the
holders of its Shares any additional shares of any class
or other rights;
(iii) there shall be any capital reorganization or
reclassification of the capital stock of the Company, or
consolidation, amalgamation or merger of the Company
with, or sale of all or substantially all of its assets
to, another corporation; or
(iv) there shall be a voluntary or involuntary dissolution,
liquidation or
<PAGE> 5
winding-up of the Company,
then, in any one or more of such cases, the Company shall give
to the Holder (A) at least 10 days' prior written notice of the
date on which a record date shall be taken for such dividend,
distribution or subscription rights or for determining rights to
vote in respect of any such reorganization, reclassification,
consolidation, merger, amalgamation, sale, dissolution,
liquidation or winding-up and (B) in the case of any such
reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, at least 10 days' prior
written notice of the date when the same shall take place. Such
notice in accordance with the foregoing clause (A) shall also
specify, in the case of any such dividend, distribution or
subscription rights, the date on which the holders of Shares
shall be entitled thereto, and such notice in accordance with
the foregoing clause (B) shall also specify the date on which
the holders of Shares shall be entitled to exchange their Shares
for securities or, other property deliverable upon such
reorganization, reclassification, consolidation, merger,
amalgamation, sale, dissolution, liquidation or winding-up, as
the case may be.
(1) Shares to be Reserved. The Company will at all times keep
available, and reserve if necessary under Canadian law, out of
its authorized Shares, solely for the purpose of issue upon the
exercise of the Compensation Options, such number of Shares as
shall then be issuable upon the exercise of the Compensation
Options. The Company covenants and agrees that all Shares which
shall be so issuable will, upon issuance, be duly authorized and
issued as fully paid and non-assessable. The Company will take
all such actions as may be necessary to ensure that all such
Shares may be so issued without violation of any applicable
requirements of any exchange upon which the Shares of the
Company may be listed or in respect of which the Shares are
qualified for unlisted trading privileges. The Company will take
all such actions as are within its power to ensure that all such
Shares may be so issued without violation of any applicable law.
(m) Issue Tax. The issuance of certificates for Shares upon the
exercise of Compensation Options shall be made without charge to
the Holder for any issuance tax in respect thereto, provided
that the Company shall not be required to pay any tax which may
be payable in respect of any transfer involved in the issuance
and delivery of any certificate in a name other than that of the
Holder.
(n) Fair Market Value. For the purposes of any computation
hereunder, the "Fair Market Value" of a security at any date
shall be the average, trading price per share for the security
for the 20 consecutive trading days ending on the third trading
day immediately before such date on any stock exchange or
dealing network on which the Shares are listed or trade, or, if
the security in respect of which a determination of Fair Market
Value is being made is not listed on any stock exchange or does
not trade on any dealing network, the Fair Market Value shall be
determined by the directors, which determination shall be
conclusive. The average price shall be
<PAGE> 6
determined by dividing by 20 the sum of the daily mean of the
high and low trading price per share on the said exchange or
dealing network during the said 20 consecutive trading days.
2. Replacement
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Compensation Option Certificate and, if
requested by the Company, upon delivery of a bond of indemnity satisfactory to
the Company (or, in the case of mutilation, upon surrender of this Compensation
Option Certificate), the Company will issue to the Holder a replacement
certificate (containing the same terms and conditions as this Compensation
Option Certificate).
3. Expiry Date
The Compensation Options shall expire and all rights to purchase Shares
hereunder shall cease and become null and void at 5:00 p.m. (Seattle time) on
June 30, 2001.
4. Covenant
So long as any Compensation Options remain outstanding the Company
covenants that it will use its reasonable best efforts to register the Shares
issuable upon exercise of the Compensation Options in any registration statement
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended.
5. Successors
This Compensation Option Certificate shall enure to the benefit of and
shall be binding upon the Holder and the Company and their respective
successors.
IN WITNESS WHEREOF the Company has caused this Compensation Option
Certificate to be signed by its duly authorized officers.
DATED as of the 30 day of June, 1999.
CYBEROAD.COM CORPORATION
Per:
<PAGE> 7
APPENDIX "I"
ELECTION TO EXERCISE
The undersigned hereby irrevocably elects to exercise the number of
Compensation options of CYBEROAD.COM CORPORATION set out below for the number of
Shares (or other property or securities subject thereto) as set forth below:
(a) Number of Compensation Options to be Exercised:
(b) Number of Shares to be Acquired:
(c) Exercise Price per Share: $
(d) Aggregate Purchase Price [(b) multiplied by (c)]: $
and hereby tenders a certified cheque, bank draft or cash for such aggregate
purchase price, and directs such Shares to be registered and a certificate
therefor to be issued as directed below.
DATED this ____________ day of ________________, ____.
Per:
Direction as to Registration
Name of Registered Holder:
Address of Registered Holder:
<PAGE> 1
EXHIBIT 10.48
THE SECURITIES WHICH ARE THE SUBJECT OF THIS AGREEMENT HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT 0F 1933 (THE "1933 ACT"), NOR REGISTERED UNDER ANY
STATE SECURITIES LAW, AND ARE "RESTRICTED SECURITIES" AS THAT TERM IS DEFINED IN
RULE 144 UNDER THE 1933 ACT. 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 15th day of April, 1999, by and among LAL Ventures
Corp., a Florida corporation, (the "ISSUER"), and Eric P. Littman, ("EPL"), and
Cyberoad.com Limited, a corporation organized under the laws of Ireland
("Cyberoad")
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, the ISSUER agrees to issue to Cyberoad, 8,710,410 shares of the
restricted common stock of ISSUER, $0.01 par value (the "Shares"), in exchange
for 100% of the issued and outstanding shares of Cyberoad such that Cyberoad
shall become a wholly owned subsidiary of the ISSUER. As a material inducement
to the transaction, EPL will cancel 2,000,000 shares of his common stock of the
ISSUER.
2. REPRESENTATIONS AND WARRANTIES. ISSUER and EPL represent and
warrants to Cyberoad the following:
i. Organization. ISSUER is a corporation duly organized, validly
existing, and in good standing under the laws of Florida, and has all necessary
corporate powers to own properties and carry on a business, and is duly
qualified to do business and is in good standing in Florida. All actions taken
by the Incorporators, directors and shareholders of ISSUER have been valid and
in accordance with the laws of the State of Florida.
ii. Capital. The authorized capital stock of ISSUER consists of
50,000,000 shares of common stock, $0.001 par value, of which 5,025,000 shares
are issued and outstanding. Of these 5,025,000 shares, the EPL owns 5,000,000
shares. 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 ISSUER to issue or to transfer from
treasury any additional shares of its capital stock. None of the outstanding
shares of ISSUER are subject to any stock restriction
LAL Ventures Corp. Stock Exchange Agreement, Page 1
<PAGE> 2
agreements. All of the shareholders of ISSUER have valid title to such shares
and acquired their shares in a lawful transaction and in accordance with the
laws of Florida.
iii. OTC Bulletin Board Listing. The Company is currently listed on
the OTC Electronic Bulletin Board with the following trading symbol: LALV.
iv. Financial Statements. The audited Financial Statements of the
ISSUER as of August 31, 1999, and the related statements of income and retained
earnings for the period then ended have been prepared in accordance with
generally accepted accounting principles consistently followed by ISSUER
throughout the periods indicated, and fairly present the financial position of
ISSUER as of the date of the financial statements.
v. Absence of Changes, Since the date of the financial
statements, there has not been any change in the financial condition or
operations of ISSUER, except changes in the ordinary course of business, which
changes have not in the aggregate been materially adverse.
vi. Liabilities. ISSUER 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 the ISSUERS'
financial statement. ISSUER is not aware of any pending, threatened or asserted
claims, lawsuits or contingencies involving ISSUER or its common stock. There is
no dispute of any kind between ISSUER and any third party, and no such dispute
will exist at the closing of this Agreement. At closing, ISSUER will be free
from any and all liabilities, liens, claims and/or commitments.
vii. Ability to Carry Out Obligations. ISSUER has the right, power,
and authority to enter into and perform its obligations under this Agreement.
The execution and delivery of this Agreement by ISSUER and the performance by
ISSUER of its obligations hereunder will not cause, constitute, or conflict with
or result in (a) any breach or violation or any of 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 ISSUER 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) an event that would cause ISSUER to be liable to any party, or (c)
an event that would result in the creation or imposition or any lien, charge or
encumbrance on any asset of ISSUER or upon the securities of ISSUER to be
acquired by SHAREHOLDERS.
viii. Full Disclosure. None of representations and warranties made
by the ISSUER, or in any certificate or memorandum furnished or to be furnished
by the ISSUER, contains or will contain any untrue statement of a material
fact, or omit any material fact the omission of which would be misleading.
ix. Contract and Leases. ISSUER is not currently carrying on any
business and is not a party to any contract, agreement or lease. No person holds
a power of attorney from ISSUER.
x. Compliance with Laws. To the best of its knowledge, ISSUER has
LAL Ventures Corp. Stock Exchange Agreement, Page 2
<PAGE> 3
complied with, and is not in violation of any federal, state, or local statute,
law, and/or regulation.
xi. Litigation. ISSUER 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 knowledge of the ISSUER, there
is no basis for any such action or proceeding and no such action or proceeding
is threatened against ISSUER and ISSUER 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.
xii. Conduct of Business. Prior to the closing, ISSUER shall
conduct its business in the normal course, and shall not (1) sell, pledge. or
assign any assets (2) amend its Articles of Incorporation or Bylaws, (3) declare
dividends, redeem or sell stock or other securities, (4) incur any liabilities,
(5) acquire or dispose of any assets, enter into any contract, guarantee
obligations of any third party, or (6) enter into any other transaction.
xiii. Corporate Documents. Copies of each of the following
documents, which are true complete and correct in all material respects, will be
attached to and made a part of this Agreement:
(1) Articles of Incorporation;
(2) Bylaws;
(3) Minutes of Shareholders Meetings;
(4) Minutes of Directors Meetings;
(5) List of Officers and Directors;
(6) Audited Financial Statements of the Company dated
August 31, 1998 statements described in
Section 2(iii);
(7) Stock register and stock records of ISSUER and a
current, accurate list of ISSUER's shareholders.
xiv. Documents. All minutes. consents or other documents pertaining
to ISSUER to be delivered at closing shall be valid and in accordance with the
laws of Florida.
xv. Title. The Shares to be issued pursuant to this Agreement will
be, at 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
the right to receive any proxy or similar instrument with respect to such
shares, except as provided in this Agreement, the ISSUER 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 pursuant to this Agreement. There is no
applicable local, state or federal law, rule, regulation, or decree which would,
as a result of the issuance of the Shares, impair, restrict or delay any voting
rights with respect to the Shares.
3 Cyberoad represents and warrants to ISSUER the following:
LAL Ventures Corp. Stock Exchange Agreement, Page 3
<PAGE> 4
i. Organization. Cyberoad is a corporation duly organized,
validly existing, and in good standing under its state laws of incorporation and
has all necessary corporate powers to own properties and carry on a business,
and is duly qualified to do business and is in good standing in Nevada. All
actions taken by the Incorporators, directors and shareholders of Cyberoad have
been valid and in accordance with the laws of Ireland.
ii. Counsel. Cyberoad represents and warrants that prior to
Closing, it has been represented by independent counsel.
4. INVESTMENT INTENT. Cyberoad is acquiring the Shares for its own
account for purposes of investment and without expectation, desire, or need for
resale and not with the view toward distribution, resale, subdivision, or
fractionalization of the Shares.
5. CLOSING. The closing of this transaction shall take place at the law
offices of Eric P. Littman, 7695 S.W. 104th Street, Suite 210, Miami, Florida,
33156. Unless the closing of this transaction takes place on or before April
30, 1999, then either party may terminate this Agreement.
6. DOCUMENTS TO BE DELIVERED AT CLOSING.
i. By the ISSUER
(1) Board of Directors Minutes authorizing the issuance of a
certificate or certificates for the 8,710,410 shares to be issued to Cyberoad
pursuant to this Agreement.
(2) Instructions to the ISSUER's transfer agent to cancel
2,000,000 shares of EPL's common stock of the ISSUER.
(3) The resignation of the current officers and directors of
ISSUER.
(4) A Board of Directors resolution appointing such persons
as Cyberoad designates as a director(s) of ISSUER.
(5) Audited financial statements of ISSUER for the period
ending August 30,1999.
(6) All of the business and corporate records of ISSUER,
including but not limited to correspondence files, bank statements, checkbooks,
savings account books, minutes of shareholder and directors meetings, financial
statements, shareholder listings, stock transfer records, agreements and
contracts.
ii. Cyberoad.
LAL Ventures Corp. Stock Exchange Agreement, Page 4
<PAGE> 5
(1) Delivery to the ISSUER, or to its Transfer Agent, the
certificates representing 100% of the issued and outstanding stock of Cyberoad.
7. 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. This Agreement and any provision hereof, may
not be waived, changed, modified, or discharged orally, but only by an agreement
in writing signed by the party against whom enforcement of any waiver, change,
modification, or discharge is sought.
iii. Choice of Law. This Agreement shall be exclusively governed
by and construed in accordance with the laws of the State of Florida, if any
action is brought among the parties with respect to this Agreement or otherwise.
by way of a claim or counterclaim, the parties agree that in any such action,
and on all issues, the parties irrevocably waive their right to a trial by jury.
Exclusive jurisdiction and venue for any such action shall be the State Courts
of Miami-Dade County, Florida. In the event suit or action is brought by any
party under this Agreement to enforce any of its terms, or in any appeal
therefrom, it is agreed that the prevailing party shall be entitled to
reasonable attorneys fees to be fixed by the arbitrator, trial court, and/or
appellate court.
iv. 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.
v. Time of Essence. Time is of the essence of this Agreement and
of each and every provision hereof
vi. Entire Agreement. This Agreement contains the entire Agreement
and understanding between the parties hereto, and supersedes all prior
agreements and understandings.
vii. Counterparts. This Agreement may be executed simultaneously in
one or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.
LAL Ventures Corp. Stock Exchange Agreement, Page 5
<PAGE> 6
viii. 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 notice is to be given, or on 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 addressed, and by fax, as follows:
ISSUER: Eric P. Littman, Esquire
and EPL 7695 S.W. 104th Street
Suite 210
Miami, Florida 33156
Cyberoad: Cyberoad.com Limited
c/o Calvex International Inc.
2380 Burrard St., Suite 620
Vancouver, BC Canada V6Z 2H3
Copy to: Patti L.W. McGlasson, Esquire
Horwitz and Beam
2 Venture Plaza
Suite 350
Irvine CA 92618
LAL Ventures Corp. Stock Exchange Agreement, Page 6
<PAGE> 7
IN WITNESS WHEREOF, the undersigned has executed this Agreement on April
15, 1999.
LAL VENTURES CORP. CYBEROAD.COM LIMITED
By: By:
-------------------------- --------------------------
Eric P. Littman, President John Coffey, President
- ----------------------
Eric P. Littman, Individually as the
Selling Shareholder
LAL Ventures Corp. Stock Exchange Agreement, Page 7
<PAGE> 1
EXHIBIT 10.49
AMENDMENT TO AGREEMENT FOR THE EXCHANGE OF COMMON STOCK
This is an Amendment to the Agreement for the Exchange of Common Stock
entered into among LAL Ventures Corp. now known as Cyberoad.Com Corporation, a
Florida corporation (the "Issuer"), Eric P. Littman and Cyberoad.com Limited, a
company organized under the laws of Ireland (the "Irish Company"). The
Agreement for the Exchange of Common Stock is referred to as the "Agreement"
and this Amendment thereto is called the "Amendment".
RECITALS
Pursuant to the terms of the Agreement, Issuer agreed to issue 8,710,410
shares of its common stock, the only class of securities which the Issuer had
outstanding, to the Irish Company in exchange for 100% of the issued and
outstanding shares of the Irish Company. That provision of the Agreement is not
correct in that it was intended by the parties that the Issuer would issue
8,659,650 shares of its common stock in exchange for 100% of the issued and
outstanding shares of Cyberoad.com (Isle of Man) Limited, a corporation
organized under the laws of the Isle of Man (the "Manx Company"). The Agreement
also provided for the delivery at closing of certificates representing 100% of
the issued and outstanding stock of the Irish Company, which in fact did not
occur since such stock always has been owned by the shareholders of the Irish
Company who were not parties to the Agreement. 8,659,650 shares of the common
stock of the Issuer in fact were issued to the Irish Company which became the
record owner of those shares.
The parties now wish to correct the errors contained in the Agreement.
In consideration of the mutual promises herein contained and for other
good and valuable consideration, the parties agree as set forth below.
1. Upon execution of this Amendment by the parties, the Irish Company
shall cause to be issued and delivered to the Issuer certificates representing
100% of the issued and outstanding shares of the Manx Company, duly registered
in the name of the Issuer.
2. Except as expressly amended by this Amendment, the terms of the
Agreement shall remain in full force and effect. If there is any conflict
between the terms of the Agreement and this Amendment, this Amendment shall
control.
3. The Issuer and the Irish Company represent and warrant to each other
that the entry into this Amendment and the actions to be taken by each of them
pursuant to this Amendment have been duly authorized.
<PAGE> 2
4. This Amendment may be executed in several counterparts each of which
shall be deemed an original, but all of which together shall constitute one and
the same instrument.
Executed as of the 28th of October, 1999.
CYBEROAD.COM CORPORATION f/k/a CYBEROAD.COM LIMITED,
LAL VENTURES CORP. a company organized under
the law of Ireland
By: /s/ JOHN COFFEY By: /s/ JOHN COFFEY
-------------------------- ---------------------
John Coffey, President President
/s/ ERIC P. LITTMAN
--------------------------
Eric P. Littman
<PAGE> 1
EXHIBIT 21.1
SUBSIDIARIES OF CYBEROAD.COM CORPORATION
----------------------------------------
Cyberoad.com (Isle of Man) Ltd., a corporation existing under the laws of Isle
of Man
Sistemas de Informacion Tecnologica, a corporation existing under the laws of
Costa Rica
Informacion y Tecnologia Canadiense, a corporation existing under the laws of
Costa Rica
Ebanx Limited, a Nevada corporation
Ecomm Relationship Technologies (IOM) Limited, a corporation existing under the
laws of Isle of Man
<PAGE> 1
Exhibit 23.1
[PANNELL KERR FOSTER LETTERHEAD]
A.S. Henshaw
File #: 195400
February 23, 2000
Board of Directors
cyberoad.com Corporation
Oficentro Sabana Sur
Edificio 7, 5 Piso
San Jose, Costa Rica
Dear Sirs:
We consent to the incorporation in the Registration Statement on Form SB-2 of
our report dated December 22, 1999 relating to the consolidated balance sheets
of cyberoad.com Corporation as of September 30, 1999 and December 31, 1998 and
the related consolidated statements of operations, stockholders' equity
(deficit) and cash flows for the nine months ended September 30, 1999 and the
year ended December 31, 1998. We also consent to the incorporation in the same
Registration Statement of our report dated September 24, 1999 relating to the
consolidated balance sheets of Cyberoad Gaming Corporation as of April 30, 1999,
July 31, 1998 and 1997 and the related consolidated statements of operations,
stockholders' equity (deficit) and cash flows for the nine months ended April
30, 1999 and for the years ended July 31, 1998 and July 31, 1997.
/s/ PANNELL KERR FOSTER
CHARTERED ACCOUNTANTS
Vancouver, Canada
ASH/dm
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CYBEROAD.COM
CORPORATION FINANCIAL STATEMENTS AS OF SEPTEMBER 30, 1999.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 2,534
<SECURITIES> 0
<RECEIVABLES> 264
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,107
<PP&E> 1,054
<DEPRECIATION> 37
<TOTAL-ASSETS> 4,759
<CURRENT-LIABILITIES> 976
<BONDS> 0
0
0
<COMMON> 132
<OTHER-SE> 4,085
<TOTAL-LIABILITY-AND-EQUITY> 4,759
<SALES> 0
<TOTAL-REVENUES> 803
<CGS> 0
<TOTAL-COSTS> 629
<OTHER-EXPENSES> 1,007
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (832)
<INCOME-TAX> 0
<INCOME-CONTINUING> (832)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (832)
<EPS-BASIC> (0.10)
<EPS-DILUTED> (0.10)
</TABLE>
