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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS UNDER SECTION 12(b)
OR 12(g) OF THE SECURITIES ACT OF 1934
Millennium Multi Media.com Corporation
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(Name of Small Business Issuer in Its Charter)
Utah 91-182-1949
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(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
9301 Wilshire Blvd., Suite 201, Beverly Hills 90210
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(Address of Principal Executive Offices) (Zip Code)
(310) 777-8876
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(Registrant's Telephone Number, Including Area Code)
Securities to be registered pursuant to Section 12(b) of the Act:
Title of Each Class Name Of Each Exchange On Which
To Be So Registered Each Class Is To Be Registered
- -------------------------- ---------------------------------------
OTC BB
Securities to be registered pursuant to Section 12(g) of the Act:
Common Stock
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(Title of Class)
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TABLE OF CONTENTS
PART I.......................................................................2
Item 1 - Description of Business..........................................2
General................................................................2
Products and Services..................................................3
Markets................................................................3
Competition............................................................4
Patents, trademarks and licenses.......................................4
Reports to Security Holders............................................5
Financing..............................................................5
Item 2 - Management's Discussion and Analysis.............................5
Forward Looking Cautionary Statement...................................5
General................................................................6
Nine Months Ended September 30, 1999...................................6
Twelve Months Ended December 31, 1998..................................7
Potential Fluctuations in Financial Reports............................8
Item 3 - Description of Property..........................................8
Item 4 - Security Ownership of Certain Beneficial Owners and Management...8
Item 5 - Directors, Executive Officers, Promoters, and Control Persons....9
Item 6 - Executive Compensation..........................................13
Item 7 - Certain Relationships and Related Transactions..................14
Item 8 - Description of Securities.......................................14
General...............................................................14
Common Stock..........................................................14
Private Placement.....................................................15
Warrants..............................................................15
Preferred Stock.......................................................15
Stock Options.........................................................16
PART II.....................................................................17
Item 1 - Market Price of and Dividends on the Common Equity..............17
Item 2 - Legal Proceedings...............................................17
Item 3 - Changes in and Disagreements with Accountants...................18
Item 4 - Recent Sales of Unregistered Securities.........................18
Item 5 - Indemnification of Directors and Officers.......................18
PART F/S....................................................................20
Independent Auditor's Report..........................................20
Financial Statements for Years Ended December 31, 1997 &
December 31, 1998, and Nine Months Ended September 30, 1998...........21
Notes to Financial Statements.........................................28
PART III....................................................................35
Item 1 - Index to Exhibits...............................................35
Item 2 - Description of Exhibits.........................................36
Power of Attorney.....................................................35
Exhibit 23.1
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PART I
ITEM 1 - DESCRIPTION OF BUSINESS
GENERAL
Millennium Multi Media.com Corp. (formerly Glenhills Corporation) ("MMM" or the
"Company") was incorporated as Interstate Protectors Corporation on June 15,
1983 in the State of Utah. The Company had very little activity until 1991 when
it acquired Nutra Era, Inc. and Global Vision, Inc. From 1991 through 1994,
under the name Global Vision Unlimited, the Company concentrated its efforts on
the production and test marketing of consumer health and wellness products until
it discontinued operations in 1994.
On June 4, 1996, the Company and DHS Research Group (DHSRG) completed an
Agreement and Plan of Reorganization whereby the Company issued 1,900,784 shares
of its common stock in exchange for all of the issued and outstanding common
stock of DHSRG and the name of the Company was changed to DHS Industries, Inc.
The acquisition was accounted for as a recapitalization of DHSRG. On June 18,
1996, the Board of Directors of the Company resolved to effect a 1-for-100
reverse split of its issued and outstanding common shares.
DHSRG was incorporated on December 31, 1994 in the State of Nevada as Coast
Financial Resources, Inc. (CFR). In August of 1995, CFR purchased Southern
California Interviewing Service (SCIS). SCIS had been operating in the field of
marketing research since it was organized in 1957. On April 25, 1996, CFR's name
was changed to DHS Research Group. On September 15, 1999, DHSRG discontinued its
operations.
On December 2, 1996, the Company completed a Stock Purchase Agreement with
Quality Network Systems, Inc. (QNS), whereby DHS issued 50,000 shares of its
common stock in exchange for all of the issued and outstanding common stock of
QNS. QNS was incorporated on January 21, 1993 in the State of California. QNS is
a travel management company with independent travel agent members. On December
12, 1997, the Stock Purchase Agreement between the Company and QNS was rescinded
by mutual consent of both parties.
On March 20, 1998, the Company completed a Stock Purchase Agreement acquiring
all issued and outstanding shares of Holland American International Specialties,
Inc., a California corporation in an international specialty foods business, and
subsequently rescinded the transaction by mutual consent of both parties. The
name of the Company was changed to Glenhills Corporation on April 2, 1998.
On December 30, 1999, the Company acquired all issued and outstanding common
stock of Millennium Multi Media.com Corp., a Delaware corporation organized on
October 22, 1999, involved in the entertainment industry, in exchange for a
total of 68,484,551 shares of common stock, including finders' fees. Pursuant to
the provisions of the Reorganization Agreement, on January 3, 2000, the
Company's Board of Directors passed resolutions which provide for (i)
authorization for the Company to change its name to Millennium Multi Media.com
Corp., (ii) election of new directors and officers, and (iii) authorization for
the issuance of restricted shares of Common Stock to the Company's new officers,
directors, consultants and others as compensation for their services.
For the past several months, MMM has devoted substantially all of its efforts
and resources to its development as a developer, marketer and distributor of
entertainment content and services. MMM has leased office facilities, hired and
trained personnel, purchased computer hardware, software and communication
equipment, and developed operations and procedure manuals. MMM has surveyed the
potential market for its services, expanded relationships and affiliations
within the industry, searched and identified potential merger or acquisition
targets, and negotiated various entertainment project commitments.
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Presently, the Company has not entered into any other definitive agreements with
potential merger and acquisition targets, other than the recently completed
acquisition of Millennium Multi Media.com Corp., and there is no assurance that
the Company will enter into any mergers, acquisitions or other business
combinations with other companies.
PRODUCTS AND SERVICES
MMM's mission is to embrace traditional and digital communication modes to
provide a new age of entertainment content and services to consumers and
industry participants in the United States and around the world. The Company's
revenues are expected to be derived from participation and revenue and/or profit
sharing in various entertainment projects. Specifically, MMM intends to derive
revenue from activities in the following areas:
(i) development, licensing, marketing and distribution of film content and
technology,
(ii) development, licensing, marketing and distribution of music content and
acts,
(iii) development, licensing, marketing and distribution of other art
performances and shows,
(iv) development, licensing, marketing and distribution of entertainment-related
merchandise,
(v) development and marketing of entertainment-related Internet properties,
including content, service and distribution Web Sites,
(vi) development or participation in development of entertainment-related real
estate projects,
(vii) special direct response marketing services for entertainment industry
companies, and
(viii) other entertainment projects.
To date the Company has not earned any revenues. Presently, all Company's
projects are in development stages. The Company is negotiating agreements to
acquire rights to entertainment content, including certain film libraries, music
collections, and other art productions and performances. In its continued search
for other business opportunities, the Company intends to capitalize on the
industry experience among its management team members and use the Company's
standard promotional material, including full-color brochures, videos, an
Internet Web Site and a public relations packet.
The Company expects to utilize both traditional methods and the Internet for
marketing and distribution of entertainment content. The Company expects that
majority of its revenues will be derived by selling products and services to a
broad base of customers, including certain companies in the entertainment
industry and the general public. The Internet will provide a channel for
marketing and access to physical entertainment products, such as videos, compact
discs, or other merchandise, in auction and other clearance formats, as well as
digital delivery of certain content in the future to consumers. The Company
expects to source its entertainment content from several external suppliers, as
well as occasionally rely on internal development. As such, the availability of
the Company's entertainment content, albeit acquired or licensed, may to a
material extent depend on certain individual suppliers.
MARKETS
Entertainment industry covers all formats of recorded music, filmed products,
which includes movies and television programming, as well as other content and
services. United States producers lead the world's entertainment industry.
Worldwide demand for U.S. entertainment content is vigorous and continues to
grow domestically, and even faster abroad. Recently, technology developments
such as the Internet have led to greater access by consumers to a wide variety
of entertainment products and services. In fact, many industry insiders and
observers, including the Motion Picture Association of America (MPAA), believe
that within a decade the Internet will play a major role in delivering filmed
entertainment and recorded music to homes all around the world.
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The size of the industry is significant. Domestically, the box office ticket
sales totaled $6.9 billion in 1998, with 1.48 billion tickets sold - the highest
level in more than 40 years. In addition, it is estimated that U.S. consumers
spent $9.5 billion on video rentals and another $8 billion on the purchase of
videotapes and videodisks. In many foreign markets U.S. films have acquired a
share of box office receipts equal to or higher than that of domestic films and
the home video sector is still growing at a fast pace. The Company believes that
in the long term, international markets should continue to be a growth engine
for U.S. entertainment companies. According to the Bureau of Economic Analysis
of the U.S. Department of Commerce, the total sales of filmed entertainment to
foreign buyers surpassed $14 billion in 1996. Predictions for year 2003 are
$26.6 billion.
The International Federation of the Phonographic Industry, an international
trade association based in London, estimated that in 1998 total recorded music
sales worldwide surpassed $40.0 billion, of which U.S. produced albums
constituted about 50%, with over $12 billion sold domestically and about $8
million in foreign markets. Industry observers and prominent research firms,
such as Forrester Research, estimate that a significant portion of these
revenues will be attained through the Internet in the future, reaching 7.5
percent of total sales, or $1 billion, by 2002. Merchandising related to both
the movie and music sectors offers an additional revenue potential.
Trends and forecasts of entertainment spending by U.S. consumers (billions of
dollars):
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ENTERTAINMENT SPENDING (US) 1995 1996 1997 1998 1999 2003
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Box Office Receipts 5.5 5.9 6.4 6.7 7.0 8.2
Home Video 15.0 16.2 16.8 17.2 17.6 19.2
Cable Television 18.2 21.9 24.9 28.9 32.1 48.6
Recorded Music 12.3 12.5 12.2 12.3 12.5 14.0
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Total 51.0 56.5 60.3 65.1 69.2 90.0
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SOURCE: FORRESTER RESEARCH.
COMPETITION
The Company is subject to intense competition in the entertainment business. The
competitors include established media and communications companies, other
entertainment content and services providers, and independent producers,
marketers and distributors. These competitors generally have longer operating
histories, greater name recognition, larger installed customer bases (the
Company is a development stage company with no customers), and substantially
greater financial, technical, and marketing resources than the Company. The
Company will also be competing for highly qualified technical and managerial
personnel since it must continue developing sophisticated entertainment and
media properties and secure other entertainment business opportunities. There is
no assurance that the Company will be able to compete successfully in the
entertainment business, or in recruiting qualified personnel. However, the
Company has developed a comprehensive approach that the management believes will
continually allow it to identify, capture, develop and exploit a diversified mix
of profitable opportunities. The Company plans to capitalize on its already
assembled managerial expertise in the industry and its affiliations with leading
media corporations to advance the transformation of the global entertainment
market.
PATENTS, TRADEMARKS AND LICENSES
The Company is considering filing trademark and tradename applications with the
United States Office of Patents and Trademarks for its "Millennium Multi Media"
and "Millennium Multi Medi.com" trade names.
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Until this time, the Company has not been issued any registered trademarks. No
assurance can be given that the Company will decide to or be successful in
obtaining any trademarks, or that the trademarks, if obtained, will afford the
Company any protection or competitive advantages.
REPORTS TO SECURITY HOLDERS
The Company has on file an Information Statement with the National Association
of Securities Dealers, Inc. ("NASD") pursuant to Rule 15c2-11 to become a public
nonreporting company on the OTC Bulletin Board. According to amendments to NASD
Rules 6530 and 6540, effective January 4, 1999, the Company's securities are not
and will not become eligible for trading on the OTC Bulletin Board until its
Form 10SB Registration Statement is declared effective by the Securities and
Exchange Commission, and the Company remains current in its public reports. The
Company's shares are qualified for trading on a nonquoted basis on the "pink
sheets," where the Company's Common Stock is currently trading under the symbol
"GLNC".
When the Company becomes a reporting issuer, it will be required to make certain
regular disclosures by filing quarterly, annual and, when appropriate, other
reports with the Securities and Exchange Commission (SEC), which must be filed
electronically. Form 10-K is an annual report to the SEC. The report is due 90
days after the Company's fiscal year end. The Form 10-K includes the
full-audited financial statements for the year under report, as well as certain
prior financial information. Form 10-Q is a quarterly report containing
unaudited financial information and certain types of non-recurring events, which
occur during the reporting period. This report is due 45 days after the end of
each of the first three fiscal quarters.
FINANCING
The Company's Board of Directors has broad power to take any action which the
Board, in good faith and pursuant to the prudent business standard, deems
appropriate and in the best interests of the Company. Therefore a potential
exists that the Board of Directors will authorize finders' fees to promoters or
their affiliates or associates, subject to various restrictions placed upon
related party transactions and transactions with interested officers, directors
and their affiliates.
The Company has a $100,000 short-term loan from Regal Group, L.L.C. The annual
interest rate on the loan is 5% and a copy of the note is provided in Exhibit
10.4, Part III, Item 2 of this registration statement. The Articles of
Incorporation and Bylaws of the Company do not contain any limitation on the
amount or percentage of indebtness, funded or otherwise, the Company might
incur. The more the Company's assets are leveraged, the greater the risk that
short-term fluctuations in the Company's operations might have a material
adverse effect on the Company's ability to acquire additional financing, when
and if required. Typically, the more the Company becomes leveraged, the greater
the increase in debt service. Such an increase in debt service could adversely
affect the Company's ability to make distributions to its stockholders and
result in an increased risk of default on its obligations. The Board of
Directors of the Company will determine policies with respect to financing or
refinancing of assets and policies with respect to borrowings by the Company.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS
FORWARD LOOKING CAUTIONARY STATEMENT
This registration statement contains forward-looking statements that involve
risks and uncertainties. The Company's actual results could differ materially
from those anticipated in these forward-looking statements as a result of the
risks inherent in the entertainment, including but not limited to inability to
secure profitable
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projects, lower than anticipated sales, higher than anticipated costs, intense
competition, and other factors set forth in this item and elsewhere in this
registration statement.
GENERAL
REVENUES
The primary potential sources of revenue for the Company are proceeds from
production and distribution of entertainment content, such as films, music and
other art performances, as well as sales of entertainment related consumer
merchandise and marketing services provided to companies within the
entertainment industry. In the future, the Company also expects to derive
revenues from participation in development and operation of entertainment
related real estate properties, other intellectual properties and technologies,
as well as other entertainment related projects. The Company is a development
stage company and comparisons and trends at this time may not be a meaningful
indication of the Company's business prospects. Revenues will be recognized as
earned. The Company has not yet earned any revenue, and needs capital to develop
or acquire interests in said projects.
EXPENSES
General and administrative expenses consist primarily of costs associated with
finance and accounting, human resources, management, legal services, and office
overhead. Management intends to implement improved management information
systems and continue to expand staff in order to support project development
efforts. As a result, the Company expects general and administrative expenses to
increase in future periods.
FINANCIAL CONDITION
The Company does not have adequate capital to fund its business and needs to
raise additional capital or financing to develop or acquire interests in planned
projects. The Company may not be able to continue as a going concern if it does
not obtain additional funds. The Company is currently offering its Common Stock
and warrants in a private placement to raise up to $5,000,000, but there is no
assurance that the Company will raise any capital from the offering.
Historically, the Company has funded its operations primarily through loans and
the private sale of equity securities.
NINE MONTHS ENDED SEPTEMBER 30, 1999
REVENUES
Revenues for the nine month period ended September 30, 1999 were $284,186 as
compared to $269,985 for the nine month period ended September 30, 1998. The
revenues during these periods were derived primarily from marketing research
services, which have since then been discontinued. The Company' current business
is in a development stage and comparisons and trends at this time may not be a
meaningful indication of the Company's business prospects.
EXPENSES AND INCOME OR LOSS
The Company's expenses were generally comprised of general and administrative
costs. General and administrative costs for the nine month period ended
September 30, 1999 were $127,203 as compared to $241,053 for the nine month
period ended September 30, 1998.
The net loss for the nine month period ended September 30, 1999 was $80,360
compared to net loss of $241,966 for the nine month period ended September 30,
1998.
The basic loss per share for the nine month period ended September 30, 1999 was
$0.01 as compared to $0.02 for the nine month period ended September 30, 1998.
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STATEMENT OF CASH FLOWS
The Company's statement of cash flows for the nine months ended September 30,
1999 reflects that operating activities during that period utilized cash of
$12,045 as compared to $105,331 of cash utilized during the nine months ended
September 30, 1998. The cash used by financing activities for the nine months
ended September 31, 1999 was $5,414 as compared to $103,782 for the nine month
period ending September 30, 1998. There was no cash used or provided by
investing activities for the nine month period ending September 30, 1999 as
compared to $686 used by investing activities for the nine months ended
September 30, 1998.
INCOME TAXES
At September 30, 1999, the Company had net operating loss carryforwards of
approximately $1,185,000. No tax benefit had been reported in the financial
statements, because the Company believes that the carryforwards will expire
unused. The tax benefits of the loss carryforwards are offset by a valuation
allowance of the same amount.
LIQUIDITY AND CAPITAL RESOURCES
The Company does not have adequate capital to fund its business and needs to
raise additional capital or financing. The Company is currently offering its
Common Stock and warrants in a private placement to raise up to $5,000,000 at a
price of $0.50 per share.
TWELVE MONTHS ENDED DECEMBER 31, 1998
REVENUES
Revenues for the twelve month period ended December 31, 1998 were $491,630 as
compared to $607,373 for the twelve month period ended December 31, 1997. The
revenues during these periods were derived primarily from marketing research
services, which have since then been discontinued. The Company' current business
is in a development stage and comparisons and trends at this time may not be a
meaningful indication of the Company's business prospects.
EXPENSES AND INCOME OR LOSS
The Company's expenses were generally comprised of general and administrative
costs. General and administrative costs for the twelve month period ended
December 31, 1998 were $309,169 as compared to $549,960 for the twelve month
period ended December 31, 1997.
The net loss for the twelve month period ended December 31, 1998 was $236,570
compared to net loss of $457,678 for the twelve month period ended December 31,
1997.
The basic loss per share for the twelve month period ended December 31, 1998 was
$0.02 as compared to $0.10 for the twelve month period ended December 31, 1997.
The weighted average number of shares outstanding used in the basic loss per
share calculation for the twelve month period ended December 31, 1998 was
11,032,965 and 4,504,356 for the twelve month period ended December 31, 1997.
STATEMENT OF CASH FLOWS
The Company's statement of cash flows for the twelve months ended December 31,
1998 reflects that operating activities during that period utilized cash of
$85,173 as compared to $151,086 of cash utilized during the twelve months ended
December 31, 1997. The cash provided by financing activities for the twelve
months ended December 31, 1998 was $98,500 as compared to $163,686 for the
twelve month period ending December 31, 1997. The cash used by investing
activities for the twelve month period ending December 31, 1998 was $686 as
compared to $35,914 used by investing activities for the twelve months ended
December 31, 1997.
INCOME TAXES
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At December 31, 1998, the Company had net operating loss carryforwards of
approximately $1,100,000. No tax benefit had been reported in the financial
statements, because the Company believes that the carryforwards will expire
unused. The tax benefits of the loss carryforwards are offset by a valuation
allowance of the same amount.
LIQUIDITY AND CAPITAL RESOURCES
The Company does not have adequate capital to fund its business and needs to
raise additional capital or financing. The Company is currently offering its
Common Stock and warrants in a private placement to raise up to $5,000,000 at a
price of $0.50 per share.
POTENTIAL FLUCTUATIONS IN FINANCIAL REPORTS
The Company's operating results have fluctuated significantly in the past and
will likely continue to fluctuate significantly in the future as a result of a
variety of factors, many of which are beyond the Company's control. These
factors include frequent business transitions, the availability of capital or
financing to fund the Company's operations, the effectiveness of the Company's
entertainment properties development and marketing programs, increased
competition in the Company's markets and other general economic factors. Due to
these factors and the fact that the Company is still in a development stage, the
market price of the Company's Common Stock could likely be materially and
adversely affected.
ITEM 3 - DESCRIPTION OF PROPERTY
The Company owns no property. Commencing November 1, 1999, the Company entered
into a sub-lease for approximately 1,800 square feet of office space located at
9301 Wilshire Boulevard., Suite 201 & Suite 202, Beverly Hills, California 90210
for its corporate headquarters at an annual rent of approximately $52,000, plus
a pro rata share of building operating costs. The offices are part of a
professional business center building suitable for common business activities
and adequate, in aggregate for up to 15 employees. The Company has a commercial
lease agreement for the premises, copy of which is provided in Exhibit 10.3,
Part III, Item 2.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the security ownership of the officers and
directors of the Company and each person who owns of record, or is known by the
Company to own beneficially, more than five percent (5%) of the Company's Common
Stock as of February 29, 2000.
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SECURITY CLASS SHAREHOLDER'S NAME AND NUMBER OF PERCENT OF
ADDRESS (5) SHARES CLASS
- ---------------- -------------------------------- ------------- -----------
Common Stock Torco Enterprise, LLC (1) 22,076,475 27.4%
Common Stock Thorn Tree Management, LLC (2) 22,076,475 27.4%
Common Stock Illya Bond* (3) 14,717,650 18.3%
Common Stock Bobby Roberts* (4) 6,000,000 7.5%
Common Stock Phillips Management Svcs 5,561,773 6.9%
- ---------------- -------------------------------- ------------- -----------
* Beneficial Ownership
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(1) Joseph Torkan, a Director and Vice President of the Company, is a managing
partner of Torco Enterprise, LLC.
(2) David Peipers, a Director and Vice President of the Company, is a managing
partner of Thorn Tree Management, LLC.
(3) Illya Bond is a Director and Secretary of the Company.
(4) Bobby Roberts is a Director and President of the Company.
(5) All of these principal shareholders have an address at the Company's
executive offices.
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS, AND CONTROL PERSONS
The following table lists the officers and directors of the Company as of
February 29, 2000:
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NAME POSITION
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Bobby Roberts President and Director
Joseph Torkan Vice President and Director
David Peipers Vice President and Director
Joubin Torkan Vice President and Director
Dennis M. Phillips Director
Illya Bond Secretary and Director
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BOBBY ROBERTS, age 60, has been the President and Director of the Company since
its reorganization in December 1999. Mr. Roberts' career in the entertainment
business has spanned 35 years. He has been a record executive, film producer,
music publisher and personal manager, handling the careers of successful artists
such as The Mama's and The Papa's, Ann-Margret, Mama Cass Elliott, Paul Anka,
Richard Pryor, Steppenwolf, and Jan & Dean. He began in the 1950s as a member of
the internationally known dance act, the Dunhills, which was affiliated with and
worked all over the world with Danny Kaye and Milton Berle. In the 1960s, Mr.
Roberts co-founded Dunhill Records with Lou Adler. The company's first discovery
was The Mamas and The Papa's. Other artists to succeed on the Dunhill label
included Three Dog Night, Steppenwolf, Johnny Rivers and Mama Cass Elliott.
Thereafter, Mr. Roberts formed Landers-Roberts Productions with Hal Landers and
produced many successful motion pictures, the first being the MGM production
GYPSY MOTHS, starring Burt Lancaster and Deborah Kerr. Films that followed
included MONTE WALSH with Lee Marvin and Jack Palance, THE HOT ROCK, starring
Robert Redford and Zero Mostel and the huge box office success DEATH WISH
starring Charles Bronson, as well as the first sequel DEATH WISH II. Mr. Roberts
was also President of the Lorimar Music Group. Lorimar was responsible for
DALLAS, KNOTT'S LANDING and many other successful television shows. Mr. Roberts
recently produced the critically acclaimed theatrical show "Mort Sahl's
America", which enjoyed success both in New York and Los Angeles. Mr. Roberts
was the head of Santa Clarita Studios, Inc., a studio and entertainment company.
Mr. Roberts has also been a long-time member of The Academy of Motion Pictures
Arts and Sciences.
JOSEPH TORKAN, age 60, has been the Vice President and a Director of the Company
since its reorganization in December 1999. Mr. Torkan is a Vice President and
Chief Operating Officer of Regal Group, L.L.C. Mr. Torkan participates in major
real estate developments, currently concentrating on several shopping centers
and
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entertainment facilities in Las Vegas, Nevada. Since moving to Los Angeles in
1978, Mr. Torkan also established other businesses, among which are a furniture
manufacturing business and a truck and automobile parts manufacturing business.
Mr. Torkan holds a Bachalor of Arts Degree in Business Administration from Long
Island University.
DAVID PEIPERS, age 43, has been a Director of the Company since its
reorganization in December 1999. Mr. Peipers is an owner of 50% of Regal Group,
L.L.C., which he established for the purpose of owning, developing, constructing
and managing real estate interests. Mr. Peipers additionally is an active
investor in a variety of private companies. He was co-founder and Chairman of
Segrets, Inc., an apparel firm which markets women's sportswear under the Sigrid
Olsen label until the sale of the company to Liz Claiborne in 1999. Other
companies in which Mr. Peipers is a director and significant shareholder, either
directly or through affiliates, include SK Technologies (retail software), Delta
Omega Technologies (specialty chemicals), Equistar Holdings (mining), and
Domaine Clarence Dillon (wine). Mr. Peipers is also presently Chairman of
Offline Entertainment Group, a New York based independent film and television
company. His education includes a Bachelor of Arts Degree from Harvard College
in 1978 and a J.D. Degree from Harvard Law School in 1981.
JOUBIN TORKAN, age 35, has been a Director of the Company since its
reorganization in December 1999. Mr. Torkan attended USC and majored in Business
Administration. Mr. Torkan has been actively involved in major real estate
developments with his father Joseph Torkan, currently concentrating on several
shopping centers and entertainment facilities in Las Vegas under the ownership
of Regal Group, L.L.C. He also owns 100% of Designers Import International, a
high-end furniture manufacturing company supplying major hotels in Las Vegas,
Far East and Middle East countries. In addition, he is a minority shareholder of
a slip cover manufacturing company in Los Angeles.
DENNIS PHILLIPS, age 48, has been a Director of the Company since 1996. Mr.
Phillips is a published author of poetry, fiction and other literature. During
his career, Mr. Phillips has been a Book Review Editor of Sulfur Magazine and
served as an Executive Director and President of Beyond Baroque, a non-profit
literary and arts foundation. In addition, Mr. Phillips is the founding Editor
and Publisher of Littoral Books, an independent literary press. Currently, Mr.
Phillips is a professor at Art Center College of Design in Pasadena, where he
has been teaching since 1979, and an Adjunct Assistant Professor at Occidental
College in Los Angeles. He has also guest-lectured at University of California,
San Diego and Otis Art Institute, among other places.
ILLYA BOND , age 50, has been the Secretary and a Director of the Company since
its reorganization in December 1999. Mr. Bond has over 25 years of experience in
developing and managing financial and real estate assets. Mr. Bond was Vice
President, Syndication of American Development Corp. In this capacity, he was
responsible for the interfacing of company syndication products with the
corporate finance departments of firms including Merrill Lynch, Dean Witter,
Shearson, American Express and Kidder Peabody. During Mr. Bond's tenure,
American Development Corp. became the third largest developer in the United
States with more than $2 billion in assets and average annual syndication equity
raised of $190 million. Mr. Bond's other experience includes extensive
involvement in the banking and insurance industries through affiliations with
American Diversified Savings and Loan and American Pacific Insurance Company.
Illya Bond serves as a Director for PowerSource Corporation.
The following table lists the members of the Company's Executive Entertainment
Committee as of February 29, 2000 and key consultants retained by the Company.
The Executive Entertainment Committee is comprised of high level professionals
experienced in the entertainment industry, computer industry, legal industry,
international business, and finance who will render advice to the Company from
time to time upon the request of the Company's Board of Directors.
10
<PAGE>
---------------------------------------------------------
NAME POSITION
---------------------------------------------------------
Charles Weber Administrative Consultant
Michael Selsman Administrative Consultant
Charles Silvers Administrative Consultant
---------------------------------------------------------
CHARLES WEBER has been a successful key executive in the entertainment and
communications industry for over 20 years. During this time he has also been
Chairman and Chief Executive Officer of Weber Communications, Inc., an
international consulting firm providing professional management, consulting,
business development and financial services, specializing in strategic alliances
in the multimedia, technology, medical, broadcasting, entertainment, and
communications fields. In this capacity, Mr. Weber is very active in the
international marketplace and represents a number of companies in the Far East,
South America, as well as Eastern and Western Europe. Mr. Weber has been
instrumental in securing public and private corporate financing, domestic and
international distribution, mergers and acquisitions and the production and
financing of motion pictures. He has also served in executive roles for Fortune
500, real estate, and entertainment companies and has participated as an
executive producer of a number of feature films.
Mr. Weber has been President and Chief Executive Officer or Chief Operating
Officer of the following companies:
Lucasfilm, Ltd.: As President and Chief Executive Officer of George Lucas'
company, Mr. Weber was responsible for all aspects of the company's operations,
including international operations, financing, negotiations, production,
licensing, merchandising, Industrial Light and Magic and THX. He was also
involved in the making of: THE EMPIRE STRIKES BACK, RAIDERS OF THE LOST ARK, and
MORE AMERICAN GRAFFITI.
Embassy Communications: As President and Chief Operating Officer of Norman
Lear's and Jerry Perenchio's company, Mr. Weber was involved in corporate
development, television and motion picture production and international and
domestic distribution, cable operations, pay television services and Hispanic
broadcast stations. He was also involved in the making of BLADE RUNNER.
Entertainment Company of America (ECA): As President and Chief Executive
Officer, Mr. Weber led ECA's early involvement in the development of interactive
in-flight systems, developing the distribution and technical expertise to
support in-flight audio/video games, merchandising, communications and gaming
requirements on aircraft.
CanWest International Corp.: As President and Chief Executive Officer, Mr.
Weber's primary responsibility was the development and acquisition of companies
and strategic investments to add to CanWest Global Communications Corporation's
television interests outside of Canada. Mr. Weber was instrumental in the
acquisition and investigation of broadcast properties in Eastern Europe, South
America and the Far East.
Mr. Weber is a member of The Academy of Motion Pictures Arts and Sciences and
The Academy of Television Arts and Sciences. Mr. Weber is a graduate of
Manhattan College, where he received a Bachelor of Business Administration
degree and went on to earn a Master's degree in Business Administration from
Hofstra University.
MICHAEL SELSMAN has a wealth of diverse experience in the entertainment
industry, working in public relations, film production, publishing and numerous
other environments. Mr. Selsman started his career as a public relations and
national publicity executive, working in New York City with 20th Century Fox and
later with Paramount Pictures. After moving to Los Angeles, he became an Account
Executive with the Arthur P. Jacobs Company, the premiere entertainment public
relations firm, where he personally represented many well-known personalities,
including Judy Garland, Marilyn Monroe, Peter Sellers, Marlene Dietrich, Henry,
Jane and Peter
11
<PAGE>
Fonda, James Mason, Mervyn LeRoy, James Stewart, Lawrence Harvey, Rock Hudson,
and others. Subsequently, he joined Rogers and Cowan Public Relations,
representing the Disneyland Hotel, Ambassador Oil, The Wrather Corp., owners of
the Lassie franchise, Muzak, and others. Later in his career, Mr. Selsman also
represented authors such as Truman Capote, Ronald Dahl and others, while working
with famed literary agent, Irving Lazar.
Mr. Selsman gained remarkable experience as a talent agent with Artists Agency
Corporation, now ICM, participating in television packaging with the agency's
client, Bing Crosby Productions. In-house shows included "Ben Casey", "Medic",
and "Hogan's Heroes." He was also involved in the early career development of
James Garner, Alan Arkin, and Robert Redford.
As the President of Group Three, Mr. Selsman co-produced the feature film, DIRTY
LITTLE BILLY, distributed by Columbia Pictures, and also developed BURY MY HEART
AT WOUNDED KNEE by Dee Brown, WORLD WITHOUT END, AMEN by Jimmy Breslin, I, ROBOT
by Isaac Asimov, and THE FORTUNATE PILGRIM by Mario Puzo. Selsman and film
director Charles B. Pierce also collaborated with American International
Pictures to produce several films on far locations, including WINTERHAWK in
Montana, BOOTLEGGERS in Texas and Arkansas, THE NORSEMAN in Florida, and GREY
EAGLE in Wyoming and Colorado.
In addition, Mr. Selsman worked with Orson Welles preparing a film about the
assassination of Robert Kennedy and co-produced the feature film GOTCHA, which
was distributed by Universal, as well as developing 18 other feature film and
television projects working for MGM.
As a professional writer, Mr. Selsman wrote the screenplay for his original
feature film idea, "Getting Even With Steven" for Hemdale Pictures Corp. He has
also been employed as a writer by MGM Studios, Robert Halmi International, New
World Pictures, Brilliant Digital Entertainment, and others.
Mr. Selsman also worked for Samuel Goldwyn, Jr. at Goldwyn Studios.
CHARLES SILVERS has twenty-seven years of notable experience building and
supervising motion picture post production organizations and technical
facilities. In addition, he has nine years of experience consulting within the
industry, primarily in the areas of picture and sound editing, post production,
distribution, fulfillment and media preservation. Mr. Silvers also has prominent
skills in adapting new technologies and developing systems tailored to provide
economical solutions to production, completion, distribution and preservation
problems. From concept, planning and budgeting to scheduling and execution, Mr.
Silvers holds an extensive record in administration.
At RKO Pictures, Inc., Mr. Silvers created and implemented a low-budget
film/tape assets management program, providing the only insurance available to
protect and preserve original film or tape master elements. He also supervised
the production of a Movie of the Week as well as the conversion of theatrical
film for television presentation.
As a professional consultant, Mr. Silvers has principally consulted for the
entertainment industry. He consulted for Archives for Advanced Media developing
proposals and programs covering the world-wide management of film/ tape storage
materials. For Buena Vista Distribution Mr. Silvers consulted in the development
and design of a specialized transfer facility to upgrade and archive aging sound
recordings. At Scientific Environmental Control he established the criteria for,
and consulted in the development of environmentally secure packaging, vault
construction, climate controls, and materials maintenance schedules designed to
extend the storage life of film and tape.
Mr. Silvers' technological expertise is notable in the giants of the
entertainment industry which include Walt Disney Imagineering, Sony Studios/
Columbia, and Paramount Pictures. He has modified and upgraded or developed
computer programs and systems to: track development, revisions and manufacture
of internationally distributed products; provide detailed sound descriptions and
tracking for transient clients' sound elements; expend stock footage sales and
increase labor efficiency.
12
<PAGE>
Mr. Silvers also has extensive experience in administration where he has
enhanced the business for the companies for which he has worked. Such companies
include Cinetopia where he has analyzed and augmented a budget proposal to fund
a new process for combining live action and animation, and Pacific Video where
he analyzed operations and financials of a video facility being considered for
acquisition.
In his earlier professional career, Mr. Silvers was the Senior Vice President of
Post Production Facilities at Lorimar Productions (formerly MGM, now SONY). He
was responsible for the overall supervision of Lorimar Studios Sound &
Projection Departments and Editorial Facilities. As Vice President of Editorial
& Post Production, he was responsible world-wide for the editing, completion and
delivery of all theatrical and television programming. Prior to that, he was
responsible world-wide for the organization, operations, and costs related to
the editing, completion and delivery of all television programming as Director
of Editorial & Post Production.
Mr. Silvers served as the Director of Editorial and Post Production for MGM
Television and Columbia Television as well.
ITEM 6 - EXECUTIVE COMPENSATION
No executive officer of the Company has received any compensation from the
Company in excess of $100,000 during any fiscal year. Upon the availability of
funds, the Company expects to commence paying the following salaries to the
Company's executive officers, subject to change by Board of Directors:
----------------------------------------------------
NAME POSITION SALARY
----------------------------------------------------
Bobby Roberts President $60,000*
Joseph Torkan Vice President $60,000*
David Peipers Vice President $60,000*
Joubin Torkan Vice President $60,000*
Illya Bond Secretary $60,000*
----------------------------------------------------
*Salary deferred
The compensation payable to the Company's executive officers will generally not
exceed that which is customarily paid in the industry by companies of comparable
size and in the same geographic areas.
Directors receive no cash compensation for their services to the Company as
directors, but are reimbursed for expenses actually incurred in connection with
attending meetings of the Board of Directors, and may receive a cash fee for
attending meetings. The Company plans to establish a stock incentive program for
the directors, executive officers, employees and key consultants of the Company.
The Company estimates that it will set aside 10% of the issued and outstanding
Common Stock of the Company for the stock incentive program. At the present
time, the Company has no employment agreements with any of its nine full-time
employees and executives, however, such agreements are being currently
contemplated and are expected to be made in the future.
13
<PAGE>
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Except for the Reorganization Agreement made between the Company and Millennium
Multi Media.com Corp. on December 30, 1999, the Company has not entered into any
material business transactions during the past two years with (1) any director
or executive officer, (2) any nominee for election as a director, (3) any
existing shareholder owning more than 5% of the outstanding Common Stock of the
Company, or (4) any member of the immediate family of any officer or director of
the Company, other than a management contract with Phillips Management Services,
a copy of which is provided in Exhibit 10.1, Part III, Item 2, which has been
terminated as of December 30, 1999.
ITEM 8 - DESCRIPTION OF SECURITIES
GENERAL
The authorized capital stock of the Company consists of 300,000,000 shares of
Common Stock, par value $.001 per share, of which 84,082,201 were issued and
outstanding as of February 29, 2000, not including 1,388,120 shares subject to
legal challenge by the Company, which are likely to be cancelled, and including
3,500,000 shares subject to legal challenge, but for which cancellation is less
certain. See "LEGAL PROCEEDINGS" in Part II, Item 2. The authorized capital
stock also includes 20,000,000 shares of Preferred Stock, par value $.001, none
of which are issued or outstanding. The Company has on file an Information
Statement pursuant to Rule 15c2-11 and its common stock is trading as a
non-reporting company on the "pink sheets" under the symbol GLNC. The Company is
planning to change the symbol in the future.
The Company anticipates that Company securities may be issued to management in
the future (i) pursuant to a qualified or non-qualified stock option plan when
approved and adopted by the Company's Board of Directors and the Company's
stockholders, or (ii) as compensation for deferred or unpaid salary, but only
upon a finding by the Company's Board of Directors that such compensation is
fair and reasonable and that the issuance of such securities is in the best
interest of the Company.
COMMON STOCK
The Company is authorized to issue 300,000,000 shares of Common Stock, par value
$.001 per share. Holders of Common Stock are entitled to dividends when, as and
if declared by the Board of Directors out of funds available therefor, based
upon the Board's assessment of the financial condition of the Company, its
earnings, its need for funds, the effect of outstanding preferred stock, if any,
to the extent the preferred stock has a prior claim to dividends, and other
factors including any applicable laws. The Company has not declared or paid any
cash dividends and does not intend to pay cash dividends in the foreseeable
future on the shares of its Common Stock. The Company is not currently a party
to any agreement restricting the payment of dividends.
Holders of Common Stock are entitled to cast one vote for each share held at all
stockholder meetings for all purposes, including the election of directors. The
holders of more than 50% of the Common Stock issued and outstanding and entitled
to vote, present in person or by proxy, constitute a quorum at all meetings of
stockholders. The vote of the holders of a majority of Common Stock present at
such a meeting will decide any question brought before such meeting, except for
certain actions such as amendments to the Company's Articles of Incorporation,
mergers or dissolutions which require the vote of the holders of a majority of
the outstanding Common Stock. Upon liquidation or dissolution, the holder of
each outstanding share of Common Stock will be entitled to share equally in the
assets of the Company legally available for distribution to such stockholder
after payment of all liabilities and after distributions to preferred
stockholders legally entitled to such distributions. Holders of Common Stock do
not have any preemptive, subscription or redemption rights. The holders of the
14
<PAGE>
Common Stock do not have cumulative voting rights. All outstanding Shares of
Common Stock are fully paid and non-assessable. The holders of the Common Stock
do not have any registration rights with respect to the stock.
PRIVATE PLACEMENT
The Company is making a private placement of its Common Stock pursuant to Rule
506 of the Securities Act of 1933, as amended, to raise up to $5,000,000 in
capital. The Company is offering 1,000 Units consisting of an aggregate of
10,000,000 shares of Common Stock and 20,000,000 Common Stock Purchase Warrants.
Each Unit consists of 10,000 shares of Common Stock at $0.50 per share, 10,000
Class A Warrants exercisable at $1.00 at any time until December 31, 2000 and
1,000 Class B Warrants exercisable at $2.00 per Share at any time until December
31, 2001. As of February 29, 2000, the Company raised $120,000 by having sold 24
Units to the following investors.
- --------------------------------------------------------------------------------
Subscribtion Name of Subscriber Address of Subscriber Number of
Date Units
- --------------------------------------------------------------------------------
02/07/00 Fred Shakib 4405 Medley Pl, Encino, CA 91316 2
02/22/00 Daniel S. Allen 24022 US 33 East, Elkhart, IN 46518 1
02/29/00 Gordon L. Selfridge 721 Helen Dr, Hollister, CA 95023 20
02/29/00 Rodney Russell 7730 Eastbrook Dr, Anchorage, AK 99504 1
- --------------------------------------------------------------------------------
A maximum of 114,082,201 shares of Common Stock will be issued and outstanding
upon the issuance of all Units and exercise of all Warrants offered in the
private placement.
WARRANTS
The Units include a total of 10,000,000 Class A Warrants to purchase 10,000,000
shares of the Company's Common Stock for a purchase price of $1.00 per share,
exercisable at any time until December 31, 2000, and a total of 10,000,000 Class
B Warrants to purchase 10,000,000 shares of the Company's Common Stock for a
purchase price of $2.00 per share, exercisable at any time until December 31,
2001. The Warrants include customary anti-dilution provisions providing for
price and amount adjustments in the event of stock splits, reverse stock splits,
recapitalizations, stock dividends and similar transactions. No adjustments are
made for the issuance of additional shares of capital stock by the Company.
Other than the Class A and Class B Warrants included in the Units of the private
placement, the Company has no other warrants authorized, issued or outstanding.
PREFERRED STOCK
The Company is authorized to issue 20,000,000 shares of Preferred Stock, having
such rights, preferences and privileges, and issued in such series, as are
determined by the Company's Board of Directors in its discretion. To date, there
are no shares of Preferred Stock issued or outstanding.
15
<PAGE>
STOCK OPTIONS
The Company has granted options to certain directors and consultants to purchase
shares of Common Stock in consideration for services performed prior to
organization. The optionholders can purchase 45,000 shares Common Stock at a
price of $0.005 per share until October 14, 2004, 45,000 shares Common Stock at
a price of $1.00 per share until October 14, 2004 and 500,000 shares of Common
Stock at a price of $0.005 per share until December 31, 2004.
The Company has also granted a conditional option to Phillips Management
Services to purchase an aggregate total of 2,934,463 shares of Common Stock at a
price of $0.001 within one year of the fulfillment of the specified condition.
The option is conditional on exercise of a set of options in the same aggregate
amount, with an expiration date of March 30, 2001, granted by Phillips
Management Services to other non-affiliated parties.
16
<PAGE>
PART II
ITEM 1 - MARKET PRICE OF AND DIVIDENDS ON THE COMMON EQUITY
The Company's Common Stock was listed and trading on the Over-the-Counter
Bulletin Board ("OTC BB") from May 6, 1998 until December 1, 1999, when,
according to amendments to NASD Rules 6530 and 6540, effective January 4, 1999,
the Company's securities became ineligible for trading on the OTC BB. The
Company's securities will not become eligible for trading on the OTC BB until
its Form 10SB Registration Statement is declared effective by the Securities and
Exchange Commission, and the Company remains current in its public reports. The
Company's shares are qualified for trading on a nonquoted basis on the "pink
sheets," where the Company's Common Stock is currently trading under the symbol
"GLNC". The approximate number of holders of record for the Company's Common
Stock is 600. The closing sale price of the Company's common stock on the "pink
sheets" on March 28, 2000 was $0.23
- --------------------------------------------------------------------------------
Quarterly Period Stock Price ($)
Low High
October 1, 1999 - December 31, 1999 (Q4 '99) 0.200 0.020
July 1, 1999 - September 31, 1999 (Q3 '99) 0.040 0.040
April 1, 1999 - June 30, 1999 (Q2 '99) 0.020 0.060
January 1, 1999 - March 30, 1999 (Q1 '99) 0.007 0.040
October 1, 1998 - December 31, 1998 (Q4 '98) 0.007 0.040
July 1, 1998 - September 30, 1998 (Q3 '98) 0.035 0.187
April 1, 1998 - June 30, 1998 (Q2 '98) 0.156 0.343
- --------------------------------------------------------------------------------
The Company has not declared or paid any cash dividends and does not intend to
pay dividends in the foreseeable future on the shares of its Common Stock. The
Company is not currently a party to any agreement or condition restricting the
payment of dividends.
ITEM 2 - LEGAL PROCEEDINGS
The Company plans to initiate legal action to effect cancellation of
4,888,120 shares of Common Stock, consisting of amounts issued to the parties
indicated below, which have not been duly authorized, were not validly issued
and for which no consideration was paid. None of the parties below have earned
or otherwise performed or paid consideration for the issued shares. Emanuel
Corpus and Rose Fajardo have signed agreements rescinding the transactions in
which they received the listed certificates, but have not yet surrendered the
certificates for cancellation
<TABLE>
GLNC SHARES TO BE CHALLENGED
PARTY NUMBER OF SHARES CERTIFICATE NO.
17
<PAGE>
<S> <C> <C>
Sterling & Co. (1) 3,500,000 7514
Emanuel Corpus (2) 1,357,575 6229
Rose Fajardo (2) 30,545 6231
</TABLE>
(1) Presently, the shares are included in the Company's deemed issued and
outstanding shares. The Company intends to file a lawsuit to have them
cancelled. There is no assurance regarding the outcome of the litigation or
whether a judgement in favor of the Company canceling the shares will be
rendered.
(2) Presently, these shares are deemed not to be issued or outstanding, because
of the cancellation agreements signed by these individuals.
ITEM 3 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Jones, Jensen & Company's report on the financial statements for fiscal years
ending December 31, 1997 and December 31, 1998 contained no adverse opinion or
disclaimer of opinion and were not qualified or modified as to uncertainty,
audit scope or accounting principles. The Company had no disagreements with
Jones, Jensen & Company on any matter of accounting principles or practices,
financial statement disclosure, or auditing scope or procedure.
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES
The Company is making a private placement of its Common Stock pursuant to Rule
506 of the Securities Act of 1933, as amended, to raise up to $5,000,000 in
capital. The Company is offering 1,000 Units consisting of an aggregate of
10,000,000 shares of Common Stock and 20,000,000 Common Stock purchase Warrants.
Each Unit consists of 10,000 shares of Common Stock at $0.50 per share, 10,000
Class A Warrants exercisable at $1.00 at any time until December 31, 2000 and
1,000 Class B Warrants exercisable at $2.00 per Share at any time until December
31, 2001. See "DESCRIPTION OF SECURITIES - Private Placement" in Part I, Item 8.
As of February 29, 2000, the Company raised $120,000 by having sold 24 Units to
the following investors.
<TABLE>
- -----------------------------------------------------------------------------------------------------
Number of
Subscribtion Date Name of Subscriber Address of Subscriber Units
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
02/07/00 Fred Shakib 4405 Medley Pl, Encino, CA 91316 2
02/22/00 Daniel S. Allen 24022 US 33 East, Elkhart, IN 46518 1
02/29/00 Gordon L. Selfridge 721 Helen Dr, Hollister, CA 95023 20
02/29/00 Rodney Russell 7730 Eastbrook Dr, Anchorage, AK 99504 1
- -----------------------------------------------------------------------------------------------------
</TABLE>
ITEM 5 - INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under the Utah General Corporation Law and the Company's Articles of
Incorporation, the Company's directors will have no personal liability to the
Company or its stockholders for monetary damages incurred as the result of
18
<PAGE>
the breach or alleged breach by a director of his "duty of care." This provision
does not apply to the directors' (i) acts or omissions that involve intentional
misconduct or a knowing and culpable violation of law, (ii) acts or omissions
that a director believes to be contrary to the best interests of the corporation
or its shareholders or that involve the absence of good faith on the part of the
director, (iii) approval of any transaction from which a director derives an
improper personal benefit, (iv) acts or omissions that show a reckless disregard
for the director's duty to the corporation or its shareholders in circumstances
in which the director was aware, or should have been aware, in the ordinary
course of performing a director's duties, of a risk of serious injury to the
corporation or its shareholders, (v) acts or omissions that constituted an
unexcused pattern of inattention that amounts to an abdication of the director's
duty to the corporation or its shareholders, or (vi) approval of an unlawful
dividend, distribution, stock repurchase or redemption. This provision would
generally absolve directors of personal liability for negligence in the
performance of duties, including gross negligence. The effect of this provision
in the Company's Articles of Incorporation is to eliminate the rights of the
Company and its stockholders (through stockholder's derivative suits on behalf
of the Company) to recover monetary damages against a director for breach of his
fiduciary duty of care as a director (including breaches resulting from
negligent or grossly negligent behavior) except in the situations described in
clauses (i) through (vi) above. This provision does not limit nor eliminate the
rights of the Company or any stockholder to seek non-monetary relief such as an
injunction or rescission in the event of a breach of a director's duty of care.
In addition, the Company's Articles of Incorporation provide that if Utah law is
amended to authorize the future elimination or limitation of the liability of a
director, then the liability of the directors will be eliminated or limited to
the fullest extent permitted by the law, as amended. The Utah General
Corporation Law grants corporations the right to indemnify their directors,
officers, employees and agents in accordance with applicable law. The Company's
Bylaws provide for indemnification of such persons to the full extent allowable
under applicable law. These provisions will not alter the liability of the
directors under federal securities laws.
The Company intends to enter into agreements to indemnify its directors and
officers, in addition to the indemnification provided for in the Company's
Bylaws. These agreements, among other things, indemnify the Company's directors
and officers for certain expenses (including attorneys' fees), judgments, fines,
and settlement amounts incurred by any such person in any action or proceeding,
including any action by or in the right of the Company, arising out of such
person's services as a director or officer of the Company, any subsidiary of the
Company or any other company or enterprise to which the person provides services
at the request of the Company. The Company believes that these provisions and
agreements are necessary to attract and retain qualified directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions, the Company has been informed
that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
19
<PAGE>
PART F/S
INDEPENDENT AUDITOR'S REPORT
To the Board of Directors
Glenhills Corporation and Subsidiary
(Formerly DHS Industries, Inc.)
Encino, California
We have audited the accompanying consolidated balance sheet of Glenhills
Corporation and Subsidiary (formerly DHS Industries, Inc.) as of December 31,
1998, and the related consolidated statements of operations, stockholders'
equity (deficit), and cash flows for the years ended December 31, 1998 and 1997.
These consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the consolidated financial statements are
free of material misstatement. An audit also includes examining, on a test
basis, evidence supporting the amounts and disclosures in the used and
significant estimates made by management, as well as evaluating the overall
consolidated financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Glenhills
Corporation and Subsidiary (formerly DHS Industries, Inc.) as of December 31,
1998, and the results of their operations and their cash flows for the years
ended December 31, 1998 and 1997 in conformity with generally accepted
accounting principles.
The accompanying consolidated financial statements have been prepared assuming
that the Company will continue as a going concern. As discussed in Note 6 to the
consolidated financial statements, the Company's recurring losses from
operations and working capital deficit raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning these matters are
also described in Note 6. The consolidated financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
20
<PAGE>
FINANCIAL STATEMENTS FOR YEARS ENDED DECEMBER 31, 1997 & DECEMBER 31, 1998, AND
NINE MONTHS ENDED SEPTEMBER 30, 1998
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Balance Sheet
ASSETS
--------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------ ------------
(Unaudited)
CURRENT ASSETS
<S> <C> <C>
Cash $ 992 $ 18,451
Accounts receivable (Note 1) 5,720 27,306
Prepaid expenses - 3,600
------------- -------------
Total Current Assets 6,712 49,375
------------- -------------
FIXED ASSETS (Note 1)
Leasehold improvements 79,528 79,528
Equipment 48,168 48,168
Furniture and fixtures 30,805 30,805
Less: accumulated depreciation (93,716) (72,586)
------------- -------------
Total Fixed Assets 64,785 85,915
------------- -------------
OTHER ASSETS
Deposits 1,163 1,565
------------- -------------
Total Other Assets 1,163 1,565
------------- -------------
TOTAL ASSETS $ 72,660 $ 136,837
============= =============
</TABLE>
21
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Balance Sheet (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
------------- -------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Accounts payable $ 82,254 $ 49,917
Accrued expenses 11,573 11,063
Deferred revenue - 26,250
Notes payable - current portion (Note 2) 210,453 212,078
Leases payable - current portion (Note 3) 10,087 7,970
------------- -------------
Total Current Liabilities 314,367 307,280
------------- -------------
LONG-TERM DEBT
Notes Payable (Note 2) - -
Leases payable (Note 3) 12,472 18,378
------------- -------------
Total Long-Term Liabilities 12,472 18,378
------------- -------------
TOTAL LIABILITIES 326,839 325,656
------------- -------------
COMMITMENTS AND CONTINGENCIES (Note 4)
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock: 20,000,000 shares authorized; $0.001
par value; no shares issued and outstanding - -
Common stock: 300,000,000 shares authorized; $0.001
par value; 11,807,650 and 11,307,650 shares issued
and outstanding, respectively 11,807 11,307
Additional paid-in capital 935,867 921,367
Stock subscription receivable (10,625) (10,325)
Accumulated deficit (1,191,228) (1,110,868)
------------- -------------
Total Stockholders' Equity (Deficit) (254,179) (188,819)
------------- -------------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY (DEFICIT) $ 72,660 $ 136,837
============= =============
</TABLE>
22
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the
Nine Months
Ended For the Years Ended
September 30, December 31,
---------------------------- --------------------------
1999 1998 1998 1997
------------- ------------- ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
REVENUES $ 284,186 $ 269,985 $ 491,630 $ 607,337
COST OF SALES 158,467 119,006 273,962 334,736
------------- -------------
GROSS MARGIN 125,719 150,979 217,668 272,637
------------- -------------
EXPENSES
Rent 51,894 75,417 87,085 69,960
Depreciation and amortization 21,130 21,130 28,174 27,514
General and administrative 127,203 241,053 309,169 549,960
------------- ------------- ------------ ------------
Total Expenses 200,227 337,600 424,428 647,434
------------- ------------- ------------ ------------
LOSS FROM OPERATIONS (74,508) (186,621) (206,760) (374,797)
------------- ------------- ------------ ------------
OTHER INCOME (EXPENSE)
Loss on impairment of assets - (48,354) (48,534) -
Other income - - - 11,615
Interest expense (5,852) (6,991) (8,456) (14,593)
------------- ------------- ------------ ------------
Total Other Income (Expense) (5,852) (55,345) (56,810) (2,978)
------------- ------------- ------------ ------------
LOSS BEFORE DISCONTINUED OPERATIONS (80,360) (241,966) (263,570) (377,775)
Loss from discontinued operations - - - (79,903)
------------- ------------- ----------- ------------
LOSS BEFORE INCOME TAXES (80,360) (241,966) (263,570) (457,678)
Income tax expense - - - -
------------- ------------- ----------- ------------
NET LOSS $ (80,360) $ (241,966) $(263,570) $ (457,678)
============= ============= =========== ============
BASIC LOSS PER SHARE (Note 1) $ (0.01) $ (0.02) $ (0.02) $ (0.10)
============= ============= =========== ============
</TABLE>
23
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Common Stock Additional Stock
--------------------------- Paid-In Subscription Accumulated
Shares Amount Capital Receivable Deficit
------------- ------------ -------------- ------------- -------------
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1996 3,194,404 $ 3,194 $ 255,341 $ - $ (389,620)
Common stock issued for stock
subscription receivable 400,000 400 74,600 (75,000) -
Cash received for stock subscription
receivable - - - 24,375 -
Common stock issued for debt 5,109,913 5,110 233,939 - -
Common stock issued for services
rendered 120,000 120 34,399 - -
Common stock issued for cash 1,323,333 1,323 153,052 - -
Net loss for the year ended
December 31, 1997 - - - - (457,678)
------------- ------------ -------------- ------------- -------------
Balance, December 31, 1997 10,147,650 10,147 751,331 (50,625) (847,298)
Cash received for stock
subscription receivable - - - 40,000 -
Common stock issued for
services rendered 920,000 920 91,080 - -
Common stock issued for cash 240,000 240 59,760 - -
Capital contributions by
shareholders - - 19,196 - -
Net loss for the year ended
December 31, 1998 - - - - (263,570)
------------- ------------ -------------- ------------- -------------
Balance, December 31, 1998 11,307,650 $ 11,307 $ 921,367 $ (10,625) $(1,110,868)
Common Stock issued for
services rendered (unaudited) 500,000 500 14,500 - -
------------- ------------ -------------- ------------- -------------
Net loss for the nine months
ended September 30, 1999
(unaudited) - - - - (80,360)
------------- ------------ -------------- ------------- -------------
Balance September 30, 1999
(unaudited) 11,807,650 $ 11,807 $ 935,867 $ (10,625) $(1,191,228)
============= ============ ============== ============= =============
</TABLE>
24
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the
Nine Months
Ended For the Years Ended
September 30 December 31,
------------------------ -----------------------
1999 1998 1998 1997
----------- ----------- ----------- ----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (80,360) $(241,966) $(263,570) $(457,678)
Adjustments to reconcile net loss to net cash used
by operation activities:
Depreciation and amortization 21,130 21,130 28,174 27,514
Common stock issued for services rendered 15,000 92,000 92,000 34,519
Loss on impairment of assets - 48,354 48,354 -
Changes in operating assets and liabilities:
(Increase) decrease in receivables 21,586 (32,971) 8,913 3,103
(Increase) decrease in prepaid expenses 3,600 (958) (1,800) 490
(Increase) decrease in deposits and other assets 402 (2,348) (157) 40,666
Increase (decrease) in accounts payable 32,337 29,285 14,867 224,563
Increase (decrease) in accrued expenses 510 (20,587) (38,204) 42,187
Increase (decrease) in related party payables - - - (50,000)
Increase (decrease) in deferred revenues (26,250) 2,730 26,250 (16,450)
----------- ----------- ----------- ----------
Net Cash Used by Operating Activities (12,045) (105,331) (85,173) (151,086)
----------- ----------- ----------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets - (686) (686) (35,914)
----------- ----------- ----------- ----------
Net Cash Used by Investing Activities - (686) (686) (35,914)
----------- ----------- ----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Capital contributions by shareholders - 19,196 19,196 -
Payments on leases payable (3,789) (5,410) (7,222) (4,628)
Payments on notes payable (1,625) (10,004) (13,474) (10,436)
Proceeds from stock issuance - 100,000 100,000 178,750
----------- ----------- ----------- ----------
Net Cash Provided (Used) by $ (5,414) $ 103,782 $ 98,500 $163,686
Financing Activities ----------- ----------- ----------- ----------
</TABLE>
25
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Consolidated Statements of Cash Flows (Continued)
<TABLE>
<CAPTION>
FOR THE
NINE MONTHS
ENDED FOR THE YEARS ENDED
SEPTEMBER 30, DECEMBER 31,
---------------------- -----------------
1999 1998 1998 1997
---------- ---------- ------- --------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS $ (17,459) $ (2,235) $12,641 $(23,314)
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 18,451 5,810 5,810 29,124
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 992 $ 3,575 $18,451 $ 5,810
========== ========== ======= ========
SUPPLEMENTAL CASH FLOW INFORMATION
CASH PAID FOR:
Interest $ 3,614 $ 6,991 $ 8,456 $ 14,593
Income taxes $ - - $ - $ -
NON-CASH FINANCING ACTIVITIES
Common stock issued for
services rendered $ 15,000 $ 92,000 $92,000 $ 34,519
Equipment purchased under capital
leases $ - - $ - $ 38,198
Common stock issued for stock
subscription receivable $ - - $ - $ 75,000
Common stock issued for debt $ - - $ - $239,049
</TABLE>
26
<PAGE>
NOTES TO FINANCIAL STATEMENTS
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. Organization
Glenhills Corporation (Glenhills) (formerly DHS Industries, Inc.) (the
Company) was incorporated as Interstate Protectors Corporation on June 15, 1983
in the State of Utah. The Company had very little activity until 1991 when it
acquired Nutra Era, Inc. and Global Vision, Inc. From 1991 through 1994 (under
the name Global Vision Unlimited) the Company concentrated its efforts on the
production and test marketing of its consumer health and wellness products until
it discontinued operations in 1994. The Company has been involved in marketing
research throughout the country. The name of the Company was changed to DHS
Industries, Inc. in May of 1996 and later changed to Glenhills Corporation on
April 2, 1998.
DHS Research Group (DHSRG) was incorporated on December 31, 1994 in the
State of Nevada as Coast Financial Resources, Inc. (CFR). In August of 1995, CFR
purchased Southern California Interviewing Service (SCIS). SCIS had been
operating in the field of marketing research since it was organized in 1957. On
April 25, 1996, CFR's name was changed to DHS Research Group. On September 15,
1999, DHSRG discontinued its operations. On June 4, 1996, Glenhills and DHSRG
completed an Agreement and Plan of Reorganization whereby Glenhills issued
1,900,784 shares of its common stock in exchange for all of the issued and
outstanding common stock of DHSRG. The acquisition was accounted for as a
recapitalization of DHSRG, because the shareholders of DHSRG control the Company
after the acquisition. Therefore, DHSRG is treated as the acquiring entity.
There was no adjustment to the carrying value of the assets or liabilities of
DHSRG in the exchange as the market value approximated the net carrying value.
Glenhills is the acquiring entity for legal purposes and DHSRG is the surviving
entity for accounting purposes.
On June 18, 1996, the board of directors of the Company resolved to effect
a 1-for-100 reverse split of its issued and outstanding common shares. All
references to shares and per share amounts have been restated to reflect the
effects of the reverse stock split. Quality Network Systems, Inc. (QNS) was
incorporated on January 21, 1993 in the State of California. QNS is a travel
management company with independent travel agent members. On December 2, 1996,
Glenhills and QNS completed a stock purchase agreement whereby DHS issued 50,000
shares of its common stock in exchange for all of the issued and outstanding
common stock of QNS. During 1997, the stock purchase agreement between Glenhills
and QNS was canceled. The financial statements have been retroactively restated
to reflect that cancellation.
27
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
b. Income Taxes
At September 30, 1999, the Company had net operating loss carryforwards of
approximately $1,100,000 at December 31, 1998 and $1,185,000 at September 30,
1999, that may be offset against future taxable income through 2013. No tax
benefit had been reported in the financial statements, because the Company
believes there is a 50% or greater chance the carryforwards will expire unused.
The tax benefits of the loss carryforwards are offset by a valuation allowance
of the same amount.
c. Accounting Methods
The Company's financial statements are prepared using the accrual method of
accounting. The Company has elected a December 31 year end.
d. Cash and Cash Equivalents
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
e. Basic Loss Per Share
The computation of basic loss per share of common stock is based on the
weighted average number of shares outstanding during the period of the financial
statements as follows:
Loss Shares Per Share
(NUMERATOR) (DENOMINATOR) AMOUNT
----------------- --------------- ---------------
For the nine months ended
September 30, 1999
(unaudited) $ (80,360) 11,531,093 $ (0.01)
================= =============== ===============
For the nine months ended
September 30, 1998
(unaudited) $ (241,966) 10,940,397 $ (0.02)
================== =============== ===============
For the year ended
December 31, 1998 $ (263,570) 11,032,965 $ (0.02)
================== =============== ===============
For the year ended
December 31, 1997 $ (457,678) 4,504,356 $ (0.10)
================== =============== ===============
Fully diluted earnings (loss) per share is not presented, as any common
stock equivalents are antidilutive in nature.
28
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
f. 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 financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
g. Depreciation
Fixed assets are stated at cost. Depreciation on fixed assets is calculated
using the straight line method over an expected useful life of five to seven
years. Depreciation for the years ended December 31, 1998 and 1997 was $28,174
and $24,764, respectively. Depreciation for the nine months ended September 30,
1999 was $21,130.
h. Principles of Consolidation
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, DHS Research Group. All material intercompany
transactions and balances have been eliminated.
i. Revenue Recognition
Revenue is recognized upon completion of services being rendered to the
customer.
j. Advertising
The Company follows the policy of charging the costs of advertising to
expense as incurred.
k. Accounts Receivable
Accounts receivable are shown net of the allowance for doubtful accounts.
The allowance for doubtful accounts at December 31, 1998 and September 30, 1999
was $-0-.
29
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 2 - NOTES PAYABLE
The Company's notes payable consist of the following:
September 30,
1999
------------
(Unaudited)
Note payable to a shareholder, non-interest bearing,
principal amount of $200,000, no due date, note
secured by 1,000 shares of the Company's common
stock. $ 200,000
Note payable to an individual, accruing interest at 8%
per annum, principal and interest payments of
$1,252 due monthly, maturing August 1999,
secured by assets of the Company. 10,453
------------
Total 210,453
Less current portion (210,453)
------------
Long-term note payable $ -
=============
During May of 1995, the Company entered into an agreement with the
shareholder who holds the $200,000 note payable whereby the note ceased to
accrue interest. The principal of the note was to be paid with proceeds from a
proposed stock offering. The offering was unsuccessful and no payments were made
on the principal. The note has no specific due date.
30
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 3 - CAPITAL LEASE
The Company leases certain equipment with lease terms ending in 2000 and
2002. Obligations under these capital leases have been recorded in the
accompanying consolidated financial statements of the present value of future
minimum lease payments.
Obligation under capital leases consisted of the following:
September 30,
1999
------------
(Unaudited)
Total $ 22,559
Less: current portion (10,087)
--------------
Long-term portion $ 12,472
================
The future minimum lease payments under this capital lease and the net
present value of the future minimum lease payments are as follows:
Year Ending
December 31, AMOUNT
---------------- --------
1999 $ 10,150
2000 10,030
2001 9,104
2002 2,532
2003 and thereafter -
---------
Total future minimum lease payments 31,816
Less: amount representing interest (5,468)
---------
Present value of future minimum lease payments $ 26,348
=========
31
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 4 - COMMITMENTS AND CONTINGENCIES
As of December 31, 1998, the Company leased office space under
noncancelable operating leases which terminate in December of 2001. Future
minimum lease payments are as follows:
YEAR AMOUNT
-------- ----------
1999 $ 76,925
2000 76,925
2001 76,925
2002 -
2003 and thereafter -
----------
Total $ 230,775
==========
NOTE 5 - STOCK ISSUANCES
During the year ended December 31, 1997, the Company issued 115,500 shares
of its restricted common stock as consideration for services rendered valued at
an average price of $0.29 per share or $34,069. On September 5, 1997, 4,500
shares of its restricted common stock were issued to employees of the Company as
consideration for services rendered. These shares were valued at an average of
$0.10 per share or $450.
On February 26, 1998, the Company issued 500,000 shares of its common stock
as consideration for services rendered valued at $0.10 per share or $50,000. On
April 15, 1998, the Company issued 420,000 shares of its restricted common stock
as consideration for services rendered valued at $0.10 per share or $42,000.
During the year ended December 31, 1998, the Company issued 240,000 shares of
its common stock for cash of $60,000 as part of a private placement. The Company
also collected $40,000 from its stock subscriptions receivable related to stock
issued in 1997.
NOTE 6 - GOING CONCERN
The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern. However, the Company has
experienced operating losses and has a working capital deficit. It has not
established revenues sufficient to cover its operating costs and to allow it to
continue as a going concern. It is the intent of the Company to complete a
private placement and to actively seek potential mergers and acquisitions in the
entertainment industry. The company plans on operating under a new name,
Millennium Multi Media.com Corp., and will provide entertainment content and
merchandise. The Company intends to produce and distribute filmed programming,
movies and recorded music, market entertainment merchandise and manage industry
web sites.
32
<PAGE>
GLENHILLS CORPORATION AND SUBSIDIARY
(Formerly DHS Industries, Inc.)
Notes to the Consolidated Financial Statements
September 30, 1999
NOTE 7 - SUBSEQUENT EVENTS
In October 1999, Glenhills (formerly DHS Industries, Inc.) signed a letter
of intent with Millennium Multimedia Corporation (MMM), a Delaware corporation.
It is anticipated that MMM stockholders will acquire 80% ownership of
Glenhills Corp. common stock, prior to issuance of stock to finders, in exchange
for 100% of the issued and outstanding common shares of MMM.
Subsequently, in October 1999, DHSRG discontinued its operations.
33
<PAGE>
PART III
ITEM 1 - INDEX TO EXHIBITS
Exhibit 2.1 - Reorganization Agreement of December 30, 1999
Exhibit 3.1 - Articles of Incorporation
Exhibit 3.2 - Bylaws
Exhibit 10.1 - Material Contracts - Phillips Management Services
Consulting Agreement
Exhibit 10.2 - Material Contracts - Technical Management Consultants
Finders' Fee Agreement
Exhibit 10.3 - Material Contracts - Office Space Lease Agreement
Exhibit 10.4 - Material Contracts - Promissory Note Payable to Regal
Group, L.L.C.
Exhibit 21.1 - Subsidiaries of the Registrant
Exhibit 23.1 - Consent of Independent Certified Public Accountant
ITEM 2 - DESCRIPTION OF EXHIBITS
<PAGE>
POWER OF ATTORNEY
Know all men by these presents, that each person
whose signature appears below constitutes and appoints Bobby Roberts,
his true and lawful attorney-in-fact and agent with full power of
substitution and resubstitution, for him in 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 attorney-in-fact and agent, full power and authority to do
and perform each and every act and thing requisite and necessary to be
done, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming that said attorney-in-fact and
agent or the substitute or substitutes for him, may lawfully do or
cause to be done by virtue hereof.
/s/ Joseph Torkan
Joseph Torkan, Co-Chairman of the Board March 30, 2000
/s/ David Peipers
David Peipers, Co-Chairman of the Board March 30, 2000
/s/ Bobby Roberts
Bobby Roberts, Director and President March 30, 2000
/s/ Illya Bond
Illya Bond, Director and Secretary March 30, 2000
/s/ Joubin Torkan
Joubin Torkan, Director March 30, 2000
/s/ Dennis M. Phillips
Dennis M. Phillips, Director March 30, 2000
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: March 30, 2000 Millennium Multi Media.com Corp.
By: /s/ Bobby Roberts, President
<PAGE>
EXHIBIT 2.1
REORGANIZATION AGREEMENT OF DECEMBER 30, 1999
REORGANIZATION AGREEMENT
THIS REORGANIZATION AGREEMENT (the "Agreement") dated as of the 30th day of
December, 1999 is entered into by and between Millennium Multi Media.com Corp.
("MMM"), a Delaware corporation with offices and principal place of business at
9301 Wilshire Boulevard, Suite 201, Beverly Hills, California 90210, Glenhills
Corporation ("GLNC"), a Utah corporation with offices and principal place of
business at 17277 Ventura Boulevard, Suite 200, Encino, California 91316, and
Phillips Management Services ("GLNC Control Shareholder"), a general partnership
represented by Harold B. Phillips, with offices and principal place of business
at 17277 Ventura Boulevard, Suite 200, Encino, California 91316.
1
<PAGE>
RECITALS
A. MMM capital structure consists in its entirety of 1,000 shares of common
stock, which represent 100% of issued and outstanding Common Stock of MMM (the
"MMM Shares").
B. MMM desires to sell, assign and transfer to GLNC all 1,000 of the MMM
Shares, and GLNC desires to purchase and acquire the MMM Shares by way of an
exchange of the MMM Shares for shares of authorized and heretofore unissued
Common Stock of GLNC ("GLNC New Shares"), upon and subject to the terms and
conditions of this Agreement. This entire transaction shall be herein referred
to as "Purchase".
C. GLNC, its Board of Directors and its shareholders have deliberated and
deemed it in their best interest to acquire MMM in order that GLNC may fully
maximize its business potential. GLNC and MMM, respectively, have approved and
adopted this Agreement as a plan of reorganization within the provisions of
Section 368 (a)(1)(B) of the Internal Revenue Code of 1986, as amended.
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 THE PURCHASE AND CLOSING
1.1 Purchase and Sale.
Upon and subject to all the terms and conditions of this Agreement, MMM
agrees to sell, assign and transfer the MMM Shares to GLNC and GLNC shall
purchase and acquire the MMM Shares for the consideration set forth herein.
1.2 Consideration to MMM.
In consideration of the sale, assignment and transfer of the MMM Shares,
GLNC shall pay, or provide, to MMM an aggregate of the following consideration
at the Effective Date (defined in Section 1.4 below):
GLNC shall have issued a total of 64,870,600 of GLNC New Shares to all the
persons and entities as set forth in Schedule 1.2 (collectively "MMM
Participants"), equal to eighty percent (80%) of GLNC Common Stock, after giving
effect to such issuance, adjusted for the dilution of GLNC Common Stock for
outstanding options, warrants, other purchase rights or securities convertible
into common stocks, and other considerations, as listed in Schedule 2.2.
1.3 Finders' Fees.
Technical Management Consultants, acting as a finder and coordinator in the
Purchase ("Finder"), shall perform its services to satisfaction of both MMM and
GLNC, and shall receive an aggregate of the following consideration at the
Effective Date (defined in Section 1.4 below):
GLNC shall have issued a total of 3,613,951 of GLNC New Shares to all of
the persons and entities as set forth in Schedule 1.3 (collectively "TMC
Participants"), approximately equal to four and one quarter of percent (4.25%)
of GLNC Common Stock, after giving effect to such issuance, adjusted for the
dilution of GLNC Common Stock for outstanding options, warrants, other purchase
rights or securities convertible into common stocks, and other considerations,
as listed in Schedule 2.2.
1.4 Date and Place of Closing.
2
<PAGE>
The consummation of the transactions contemplated herein (the "Closing")
shall occur upon execution of this Agreement as of the date and year first above
written ("Effective Date"). Exchange of all books, records, financial
information, documents, and other materials deemed necessary to completion of
the transaction contemplated under this Agreement shall occur at the Closing or
as soon as practicable thereafter.
1.5 Transactions and Document Exchange at Closing.
At the Closing, the following transactions shall occur and documents shall
be exchanged, all of which shall be deemed to occur simultaneously:
A. GLNC will deliver, or cause to be delivered:
(i) Stock certificates for the GLNC New Shares to be issued to MMM
Participants and TMC Participants or their designees pursuant to this Agreement;
(ii) The Certificate of Officers as set forth in Section 6.5;
(iii) A certificate dated at or about the Closing date from the Secretary
of State of Utah to the effect that GLNC is a corporation duly organized,
validly existing, and in good standing under the laws of Utah;
(iv) Such other documents, instruments, and/or certificates, if any, as
required to be delivered pursuant to the provisions of this Agreement, or which
are reasonably determined by both parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise may be reasonably
requested by MMM in furtherance of the intent of this Agreement;
B. MMM will deliver, or cause to be delivered:
(i) Stock certificates for the MMM Shares to be sold and transferred to
GLNC pursuant to this Agreement, in proper form for transfer and duly endorsed
to GLNC with stock powers duly executed in favor of GLNC, transferring all
right, title, and interest in and to the MMM Shares to GLNC;
(ii) The Certificate of Officers as set forth in Section 5.5;
(iii) A certificate dated at or about the Closing date from the Secretary
of State of Delaware to the effect that MMM is a corporation duly organized,
validly existing, and in good standing under the laws of California;
(iv) Such other documents, instruments, and/or certificates, if any, as
required to be delivered pursuant to the provisions of this Agreement, or which
are reasonably determined by both parties to be required to effectuate the
transactions contemplated in this Agreement, or as otherwise may be reasonably
requested by GLNC in furtherance of the intent of this Agreement.
C. GLNC will make necessary preparations, including but not limited to
making required changes to GLNC Articles of Incorporation, to effectuate a
change of the official corporate name of the surviving entity from GLNC to
Millennium Multi Media.com Corp.
1.6 Post Closing Documents.
From time to time after the Closing, upon the reasonable request of any
party, the party to whom the request is made shall deliver such other and
further documents, instruments, and/or certificates as may be necessary to' more
fully vest in the requesting party the consideration provided for in this
Agreement or to enable the requesting party to obtain the rights and benefits
contemplated by this Agreement.
SECTION 2 REPRESENTATIONS, WARRANTIES AND COVENANTS OF GLNC
3
<PAGE>
GLNC represents, warrants and covenants, as of the date of this Agreement
and as of the Effective Date, as follows (all representations, warranties,
covenants and agreements made by GLNC in this Agreement are deemed to include
those of its wholly owned subsidiary, Access Research Group ("ARG"), unless the
context makes clear that the representation, warranty, covenant or agreement
pertains only to GLNC):
2.1 Organization.
GLNC is a corporation duly organized under the laws of Utah, subject to
certain conditions set forth in Schedule 2.1. GLNC has the corporate power to
own its property and to carry on its business as now being conducted and execute
and deliver this Agreement and consummate the transactions contemplated hereby
and thereby. GLNC is duly qualified to do business and is in good standing as a
foreign corporation in each state where it conducts business as set forth in
Schedule 2.1, constituting each state in which such qualification is required in
order to do business, except for states in which the failure to be so qualified
will not materially and adversely affect GLNC.
2.2 Capital Stock of GLNC.
Except as set forth in Schedule 2.2 attached hereto, as of the date hereof,
the authorized capital stock of GLNC consists of (i) 300,000,000 shares of
Common Stock, par value $.001, of which 16,745,770 shares are issued and
outstanding and (b) 20,000,000 shares of preferred stock of which no shares are
outstanding. As of the date of this Agreement, and except as set forth in
Schedule 2.2 attached hereto, there are no outstanding shares of capital stock,
or options, warrants or other rights to subscribe for or purchase from GLNC any
capital stock of GLNC or securities convertible into or exchangeable for capital
stock of GLNC. Such issued shares of GLNC are duly authorized, validly issued,
fully paid and non-assessable, and have not been issued in violation of any
preemptive rights. GLNC has one wholly owned subsidiary, ARG, and does not own
stock or equity of any other corporation.
2.3 Disclosure of GLNC.
GLNC has delivered to MMM its disclosure schedules, which contained true
and correct copies of its respective Articles of Incorporation, Bylaws, and
Minutes certified by its secretary as well as schedules of current officers and
directors and shareholder lists, including the nobos list from its transfer
agent enumerating all shareholders of GLNC Common Stock holding the securities
in the street name.
2.4 [Intentionally Omitted]
2.5 Financial Statements.
GLNC has previously furnished MMM a true and complete copy of GLNC's
audited balance sheet as of December 31, 1996, and the related statements of
operations, shareholders' equity and cash flows of GLNC as of December 31, 1996.
GLNC has previously furnished MMM a true and complete copy of GLNC's unaudited
balance sheets as of December 31, 1997, and December 31, 1998, and the related
statements of operations of GLNC as of December 31, 1997 and December 31, 1998.
GLNC has previously furnished MMM a true and complete copy of GLNC's unaudited
trial balance as of September 30, 1999.
2.6 Names, Patents, Trademarks.
Except as set forth in Schedule 2.6 attached hereto:
(i) GLNC neither owns, licenses, or possesses any copyrights, patents,
trademarks and trade names, federal, state or provincial, domestic or foreign;
(ii) GLNC has not received any notice with respect to any claim of alleged
infringement or unlawful or improper use of any copyright, patent, trademark,
trade name, process, invention, formula or other intangible property right owned
or alleged to be owned by others, which claim, if decided adversely, could have
a material adverse effect on the business or operations of GLNC.
2.7 Tax and Other Returns and Reports.
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Except as set forth in Schedule 2.7 attached hereto:
(i) All federal, state, local and foreign tax returns and tax reports,
domestic or foreign, required to be filed by GLNC have been filed on a timely
basis with the appropriate governmental agencies in all jurisdictions in which
such returns and reports are required to be filed and where failure to file
would materially and adversely effect GLNC. GLNC has not extended the time to
file any required tax returns or tax reports.
(ii) All significant federal, state, local and foreign income, franchise,
property and other taxes (including interest and penalties) due from GLNC have
been fully paid or adequately provided for on the books and financial statements
of GLNC.
(iii) No issues have been raised or are currently pending by the IRS or any
other taxing authority in connection with any of the returns and reports which,
individually or in the aggregate, might have a material adverse effect on GLNC,
nor does GLNC have any knowledge of circumstances under which such a claim could
be made. GLNC has not filed any tax returns on a unitary or consolidated basis
with any other entity and has not entered into any tax-sharing agreement.
(iv) All taxes, levies and other assessments which GLNC is required by law
to withhold or to collect have been duly withheld and collected and have been
paid over to the proper governmental authorities or held by GLNC for such
payment.
(v) The amounts reserved for taxes on the financial balance sheets will be
sufficient for the payment of all respective federal, state, provincial, county
and local taxes, domestic or foreign of any kind of GLNC including interest and
penalties in respect thereof whether disputed or not and whether accrued, due,
absolute, contingent or otherwise payable by GLNC attributable to all periods
ended on or before the Effective Date.
2.8 Agreements, Contracts and Commitments.
A. Schedule 2.8 attached hereto contains an accurate and complete list
of all agreements, contracts and leases to which GLNC is a party and which are
material to the condition (financial or other), business, prospects or
operations of GLNC. Except as indicated on Schedule 2.8, GLNC does not have in
effect and has no liability under:
(i) any collective bargaining agreements;
(ii) any bonus, deferred compensation, pension, profit-sharing, restricted
stock or employee stock purchase plans;
(iii) any employment or consulting agreement, contract or commitment with
an employee or consultant having more than one year to run from the date hereof
or containing an obligation to pay or accrue any monies more than $5,000 per
annum, except as otherwise provided in exhibit in Schedule 2.8;
(iv) any lease which involves a potential liability to GLNC as lessee or
any agreement of guarantee or indemnification running to any person or entity;
(v) any agreement or contract relating to capital expenditures which
obligates GLNC to make future payments;
(vi) any agreement or contract relating to the disposition or acquisition of
assets or any interest in any business enterprise except as contemplated hereby.
B. Except as set forth in Schedule 2.8, GLNC has not breached any of the
terms or conditions of:
(i) any agreement or contract set forth in Schedule 2.8 in such a manner as
would permit any other party to cancel or terminate the same or;
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(ii) any agreement or contract, including those referred to in clause (i),
if any such breach or breaches singly or in the aggregate would require the
payment of any amount.
2.9 Title to Properties: Liens and Encumbrances.
GLNC has good and marketable title to the assets and properties (real and
personal, tangible and intangible), which it owns and on which operations are
conducted and which are used in its business, other than property sold or
otherwise disposed of in the ordinary course of business subsequent to the
Effective Date, free and clear of all mortgages, security interests, liens,
charges or encumbrances of any nature whatsoever, except for taxes not yet due
and payable, none of which materially impairs the present use and occupation of
the premises. All such assets and properties, each of which is listed on
Schedule 2.9 are in good and serviceable condition, ordinary wear and tear
excepted. Except as listed on Schedule 2.9, GLNC is not a party to any lease of
real property, nor does GLNC own any real property.
2.10 No Breach of Statute or Contract; Governmental Authorizations; Required
Consents.
A. Neither the execution and delivery of this Agreement by GLNC nor
consummation of the transactions contemplated hereby or thereby by GLNC
(including the issuance of GLNC New Shares to MMM Participants) will conflict
with or result in a breach of any of the terms, conditions or provisions of the
Articles of Incorporation or Bylaws of GLNC or any judgment, order, injunction
or decree of any court or governmental authority to which GLNC is subject or any
agreement or contract to which GLNC is a party and which is material to the
financial condition or the conduct of the businesses of GLNC, or constitute a
material default thereunder.
B. To the best knowledge of GLNC after due inquiry, GLNC is not in
violation of any applicable law, statute, order, rule or regulation promulgated
by any federal, state, local or foreign governmental authority relating to the
operation, conduct or ownership of the property or business of GLNC, which
violation might have a material adverse affect on GLNC.
C. Neither the execution and delivery of this Agreement, nor the
consummation of the Purchase contemplated hereby, are events which of themselves
or with the giving of notice or the passage of time or both, would constitute a
violation of or conflict with or result in any breach of, or default under the
terms, conditions or provisions of, any judgment, law or regulation, or GLNC's
Articles of Incorporation or Bylaws, or any lease, contract, mortgage, deed of
trust, indenture, agreement or instrument to which GLNC is a party or by which
it is bound, or would result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever on the property or assets of GLNC and no
such event of itself or with the giving of notice or the passage of time or both
will result in the acceleration of the due date of any obligation to which GLNC
is bound.
D. GLNC is not party to any action, suit, claim, proceeding or
investigation either pending or, to the best knowledge of its officers and
directors, threatened against, respectively, GLNC or any of its officers or
directors in their capacities as such, at law or in equity, or by or before any
federal, state, provincial, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign. GLNC is not
the subject of any outstanding judgment, or operating under, subject to, or in
default with respect to, any order, writ, injunction or decree of any court or
federal, state, provincial, municipal or other governmental department,
commission, board, agency or instrumentality, domestic or foreign, which impairs
or could impair the conduct of its business in any material way.
2.11 Litigation.
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Except as set forth in Schedule 2.11, GLNC is not party to any action,
suit, claim, proceeding or investigation either pending or, to the best
knowledge of its officers and directors, threatened against, respectively, GLNC
or any of its officers or directors in their capacities as such, at law or in
equity, or by or before any federal, state, provincial, municipal or other
governmental department, commission, board, agency or instrumentality, domestic
or foreign. GLNC is not the subject of any outstanding judgment, or operating
under, subject to, or in default with respect to, any order, writ, injunction or
decree of any court or federal, state, provincial, municipal or
other-governmental department, commission, board, agency or instrumentality,
domestic or foreign, which impairs or could impair the conduct of its business
in any material way.
2.12 Authorization of Agreement.
The execution and delivery and the performance of this Agreement by GLNC
have been duly and validly authorized and approved by the Board of Directors of
GLNC, and GLNC has taken all action required by law, its Articles of
Incorporation and Bylaws to authorize the execution, delivery and performance of
this Agreement and other documents contemplated in this Agreement related to the
Purchase (the "Purchase Documents").
2.13 Status of GLNC Common Stock.
The GLNC New Shares to be issued to MMM Participants pursuant to this
Agreement, when so issued, will be duly and validly authorized and issued, fully
paid and non-assessable.
2.14 Brokers' and Finders' Fees.
Except as set forth in Section 1.3 and described in Schedule 1.3, no agent,
broker, investment banker, person or firm acting on behalf of GLNC is or will be
entitled to any brokers' or finders' fee or any other commission or similar fee
directly or indirectly from GLNC in connection with any of the transactions
contemplated herein.
2.15 Indemnification.
GLNC hereby agrees to indemnify and hold harmless MMM, MMM Participants and
each director, officer and shareholder thereof, from and against any and all
losses, claims, damages, expenses or liabilities, joint or several, to which
they or any of them may become subject under the Securities Act or any other
statute or at common law or otherwise and, except as provided below, shall
reimburse MMM and each such director, officer or shareholder for any legal or
other expenses reasonably incurred by them or any of them in connection with
investigating or defending any actions whether or not resulting in any
liability, insofar as such losses, claims, damages, expenses, liabilities or
actions result from a breach or alleged breach of the representations,
warranties or covenants contained in this Agreement, or arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in this Agreement, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, but only insofar as
the untrue statement or omission or alleged untrue statement or omission was
made with respect to the description of GLNC.
Promptly after receipt by a party to be indemnified pursuant to this
Section 2.15 of notice of a statement of claim, demand or commencement of any
action in respect of which indemnity may be sought against GLNC hereunder, the
indemnified party will notify GLNC in writing thereof, and GLNC shall, subject
to the provisions stated below, assume the defense of such claim or action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to MMM and shall not be counsel otherwise employed by GLNC), and
the payment of expenses insofar as such claim or action shall relate to any
alleged liability in respect of which indemnity may be sought against GLNC. The
indemnified party or parties shall have the right to employ separate counsel in
any action and to participate in the defense thereof, but the fees and expenses
of their counsel shall not be at the expense of GLNC unless the employment of
that counsel has been specifically authorized by GLNC. GLNC shall not be liable
to indemnify any person for any settlement of any action effected without GLNC's
consent. Notwithstanding any provision in this Agreement to the contrary, the
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obligations of GLNC under this Section 2.15 shall survive consummation of
the transactions contemplated by this Agreement and the other Purchase Documents
for a period of three (3) years after the Effective Date.
2.16 Compliance with Laws.
GLNC is not in violation of any term or provision of its Articles of
Incorporation or Bylaws, or of any term or provision of any judgment, decree,
order, statute, injunction, rule, ordinance or governmental regulation
(including building, zoning, or environmental) applicable to it, its properties,
or of any agreement or instrument applicable to it; GLNC has maintained in full
force and effect any license or permit material to the conduct of its business,
and has not received any notification that any revocation or limitation thereof
is threatened or pending.
2.17 Insurance.
Schedule 2.17 contains a true, correct and complete description of all
policies of fire, casualty and extended coverage, public liability, worker's
compensation, life and other forms of insurance owned or held, respectively, by
GLNC. All such policies are in full force and effect and will remain so through
the Effective Date. All buildings, plants and properties, including but not
limited to leasehold interests, machinery, equipment, billboards and inventories
of GLNC are adequately insured against loss or damage by fire and all other
hazards and risks of the character usually insured against by persons operating
similar properties in the localities where such properties are located
(including use and occupancy insurance) under valid and enforceable policies
issued by insurers of recognized responsibility. Such insurance coverage will be
continued in full force and effect through the Effective Date.
2.18 Absence of Undisclosed Liabilities; Adverse Changes in Condition.
A. GLNC has no liabilities or obligations which, individually or in the
aggregate, are material to GLNC and which have not been:
(i) reflected in the consolidated trial balance of GLNC as of September 30,
1999 referred to in Section 2.5 (the "GLNC Trial Balance"); or
(ii) incurred in the ordinary course of business since December 31, 1996.
B. Except as set forth in Section 2.5, since September 30, 1999, whether or
not in the ordinary course of business, there has not been, occurred or arisen:
(i) any material adverse change in the consolidated financial condition or
in the operations of the business of GLNC from that shown on the GLNC Trial
Balance; or
(ii) any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, materially and adversely affecting any property or
business of GLNC which is material to the financial condition of the operations
of the business of GLNC; or
(iii) any actual or, to the knowledge of GLNC, threatened, strike or other
labor trouble or dispute which materially adversely affects, or which insofar as
GLNC knows might materially adversely affect the business or prospects of GLNC.
SECTION 3 REPRESENTATIONS, WARRANTIES AND COVENANTS OF MMM
MMM represents, warrants and covenants, as of the date of this Agreement
and as of the Effective Date, as follows:
3.1 Organization.
MMM is a corporation duly organized under the laws of Delaware, subject to
certain conditions set forth in Schedule 3.1. MMM has the corporate power to own
its property and to carry on its business as now being
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conducted and execute and deliver this Agreement and consummate the
transactions contemplated hereby and thereby.
3.2 Capital Stock of MMM.
Except as set forth in Schedule 3.2 attached hereto, as of the date hereof,
the authorized capital stock of MMM consists of 1,000 shares of Common Stock,
par value $.001, of which 1,000 shares are issued and outstanding. As of the
date of this Agreement, and except as set forth in Schedule 2.2 attached hereto,
there are no outstanding options, warrants or other rights to subscribe for or
purchase from MMM any capital stock of MMM or securities convertible into or
exchangeable for capital stock of MMM. Such issued shares of MMM are duly
authorized, validly issued, fully paid and non-assessable, and have not been
issued in violation of any preemptive rights. MMM has no subsidiaries and does
not own stock or equity of any other corporation.
3.3 Disclosure of MMM.
MMM has delivered to GLNC its disclosure schedules, which contained true
and correct copies of its respective Articles of Incorporation, Bylaws, and
Minutes certified by its secretary as well as schedules of current officers and
directors and shareholder lists.
Business Plan and Conduct.
MMM is an Internet entertainment company embracing traditional and digital
communication modes to provide a new age of entertainment content to consumers
in the United States and around the world. Through its affiliations within the
industry, MMM will produce and distribute entertainment content in the filmed
programming and recorded music sectors, as well as facilitate other projects, as
described in the MMM Business Plan, included in Exhibit B.
3.5 Financial Statements.
MMM has previously furnished GLNC a true and complete copy of MMM's initial
unaudited balance sheet as of December 15, 1999.
3.6 Names, Patents, Trademarks.
Except as set forth in Schedule 3.6 attached hereto:
(i) MMM neither owns, licenses, or possesses any copyrights, patents,
trademarks and trade names, federal, state or provincial, domestic or foreign;
(ii) MMM has not received any notice with respect to any claim of alleged
infringement or unlawful or improper use of any copyright, patent, trademark,
trade name, process, invention, formula or other intangible property right owned
or alleged to be owned by others, which claim, if decided adversely, could have
a material adverse effect on the business or operations of MMM.
3.7 [Intentionally Omitted]
3.8 Agreements, Contracts and Commitments.
A. Schedule 3.8 attached hereto contains an accurate and complete list
of all agreements, contracts and leases to which MMM is a party and which are
material to the condition (financial or other), business, prospects or
operations of MMM. Except as indicated on Schedule 3.8, MMM does not have in
effect and has no liability under:
(i) any collective bargaining agreements;
(ii) any bonus, deferred compensation, pension, profit-sharing, restricted stock
or employee stock purchase plans;
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(iii) any employment or consulting agreement, contract or commitment with
an employee or consultant having more than one year to run from the date hereof
or containing an obligation to pay or accrue any monies more than $5,000 per
annum, except as otherwise provided in exhibit in Schedule 2.8;
(iv) any lease which involves a potential liability to MMM as lessee or any
agreement of guarantee or indemnification running to any person or entity;
(v) any agreement or contract relating to capital expenditures which
obligates MMM to make future payments;
(vi) any agreement or contract relating to the disposition or acquisition
of assets or any interest in any business enterprise except as contemplated
hereby.
B. Except as set forth in Schedule 3.8, MMM has not breached any of the
terms or conditions of:
(i) any agreement or contract set forth in Schedule 3.8 in such a manner as
would permit any other party to cancel or terminate the same or;
(ii) any agreement or contract, including those referred to in clause (i),
if any such breach or breaches singly or in the aggregate would require the
payment of any amount.
3.9 Title to Properties: Liens and Encumbrances.
MMM has good and marketable title to the assets and properties (real and
personal, tangible and intangible), which it owns and on which operations are
conducted and which are used in its business, other than property sold or
otherwise disposed of in the ordinary course of business subsequent to the
Effective Date, free and clear of all mortgages, security interests, liens,
charges or encumbrances of any nature whatsoever, except for taxes not yet due
and payable, none of which materially impairs the present use and occupation of
the premises. All such assets and properties, each of which is listed on
Schedule 3.9 are in good and serviceable condition, ordinary wear and tear
excepted. Except as listed on Schedule 3.9, MMM is not a party to any lease of
real property, nor does MMM own any real property.
3.10 No Breach of Statute or Contract; Governmental Authorizations;
Required Consents.
A. Neither the execution and delivery of this Agreement by MMM nor
consummation of the transactions contemplated hereby or thereby by MMM will
conflict with or result in a breach of any of the terms, conditions or
provisions of the Articles of Incorporation or Bylaws of MMM or any judgment,
order, injunction or decree of any court or governmental authority to which MMM
is subject or any agreement or contract to which MMM is a party and which is
material to the financial condition or the conduct of the businesses of MMM, or
constitute a material default thereunder.
B. To the best knowledge of MMM after due inquiry, MMM is not in violation
of any applicable law, statute, order, rule or regulation promulgated by any
federal, state, local or foreign governmental authority relating to the
operation, conduct or ownership of the property or business of MMM, which
violation might have a material adverse affect on MMM.
C. Neither the execution and delivery of this Agreement, nor the
consummation of the Purchase contemplated hereby, are events which of themselves
or with the giving of notice or the passage of time or both, would constitute a
violation of or conflict with or result in any breach of, or default under the
terms, conditions or provisions of, any judgment, law or regulation, or MMM's
Articles of Incorporation or Bylaws, or any lease, contract, mortgage, deed of
trust, indenture, agreement or instrument to which GLNC is a party or by which
it is
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bound, or would result in the creation or imposition of any lien, charge or
encumbrance of any nature whatsoever on the property or assets of MMM and no
such event of itself or with the giving of notice or the passage of time or both
will result in the acceleration of the due date of any obligation to which MMM
is bound.
D. MMM is not party to any action, suit, claim, proceeding or investigation
either pending or, to the best knowledge of its officers and directors,
threatened against, respectively, MMM or any of its officers or directors in
their capacities as such, at law or in equity, or by or before any federal,
state, provincial, municipal or other governmental department, commission,
board, agency or instrumentality, domestic or foreign. MMM is not the subject of
any outstanding judgment, or operating under, subject to, or in default with
respect to, any order, writ, injunction or decree of any court or federal,
state, provincial, municipal or other governmental department, commission,
board, agency or instrumentality, domestic or foreign, which impairs or could
impair the conduct of its business in any material way.
3.11 Litigation.
MMM is not party to any action, suit, claim, proceeding or investigation either
pending or, to the best knowledge of its officers and directors, threatened
against, respectively, MMM or any of its officers or directors in their
capacities as such, at law or in equity, or by or before any federal, state,
provincial, municipal or other governmental department, commission, board,
agency or instrumentality, domestic or foreign. MMM is not the subject of any
outstanding judgment, or operating under, subject to, or in default with respect
to, any order, writ, injunction or decree of any court or federal, state,
provincial, municipal or other-governmental department, commission, board,
agency or instrumentality, domestic or foreign, which impairs or could impair
the conduct of its business in any material way.
3.12 Authorization of Agreement.
The execution and delivery and the performance of this Agreement by MMM
have been duly and validly authorized and approved by the Board of Directors of
MMM, and MMM has taken all action required by law, its Articles of Incorporation
and Bylaws to authorize the execution, delivery and performance of this
Agreement and other Purchase Documents.
3.13 [Intentionally Omitted]
3.14 Brokers' and Finders' Fees.
Except as set forth in Section 1.3 and described in Schedule 1.3, no agent,
broker, investment banker, person or firm acting on behalf of MMM is or will be
entitled to any brokers' or finders' fee or any other commission or similar fee
directly or indirectly from MMM in connection with any of the transactions
contemplated herein.
3.15 Indemnification.
MMM hereby agrees to indemnify and hold harmless GLNC, and each director,
officer and shareholder thereof, from and against any and all losses, claims,
damages, expenses or liabilities, joint or several, to which they or any of them
may become subject under the Securities Act or any other statute or at common
law or otherwise and, except as provided below, shall reimburse GLNC and each
such director, officer or shareholder for any legal or other expenses reasonably
incurred by them or any of them in connection with investigating or defending
any actions whether or not resulting in any liability, insofar as such losses,
claims, damages, expenses, liabilities or actions result from a breach or
alleged breach of the representations, warranties or covenants contained in this
Agreement, or arise out of or are based upon any untrue statement or alleged
untrue statement of a material fact contained in this Agreement, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements therein
not misleading, but only insofar as the untrue statement or omission or alleged
untrue statement or omission was made with respect to the description of MMM.
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Promptly after receipt by a party to be indemnified pursuant to this
Section 3.15 of notice of a statement of claim, demand or commencement of any
action in respect of which indemnity may be sought against MMM hereunder, the
indemnified party will notify MMM in writing thereof, and MMM shall, subject to
the provisions stated below, assume the defense of such claim or action
(including the employment of counsel, who shall be counsel reasonably
satisfactory to GLNC and shall not be counsel otherwise employed by MMM), and
the payment of expenses insofar as such claim or action shall relate to any
alleged liability in respect of which indemnity may be sought against MMM. The
indemnified party or parties shall have the right to employ separate counsel in
any action and to participate in the defense thereof, but the fees and expenses
of their counsel shall not be at the expense of MMM unless the employment of
that counsel has been specifically authorized by MMM. MMM shall not be liable to
indemnify any person for any settlement of any action effected without MMM's
consent. Notwithstanding any provision in this Agreement to the contrary, the
obligations of MMM under this Section 3.15 shall survive consummation of the
transactions contemplated by this Agreement and the other Purchase Documents for
a period of three (3) years after the Effective Date.
3.16 Compliance with Laws.
MMM is not in violation of any term or provision of its Articles of
Incorporation or Bylaws, or of any term or provision of any judgment, decree,
order, statute, injunction, rule, ordinance or governmental regulation
(including building, zoning, or environmental) applicable to it, its properties,
or of any agreement or instrument applicable to it; MMM has maintained in full
force and effect any license or permit material to the conduct of its business,
and has not received any notification that any revocation or limitation thereof
is threatened or pending.
3.17 Insurance.
Schedule 3.17 contains a true, correct and complete description of all
policies of fire, casualty and extended coverage, public liability, worker's
compensation, life and other forms of insurance owned or held, respectively, by
MMM. All such policies are in full force and effect and will remain so through
the Effective Date. All buildings, plants and properties, including but not
limited to leasehold interests, machinery, equipment, billboards and inventories
of MMM are adequately insured against loss or damage by fire and all other
hazards and risks of the character usually insured against by persons operating
similar properties in the localities where such properties are located
(including use and occupancy insurance) under valid and enforceable policies
issued by insurers of recognized responsibility. Such insurance coverage will be
continued in full force and effect through the Effective Date.
3.18 Absence of Undisclosed Liabilities; Adverse Changes in Condition.
A. MMM has no liabilities or obligations which, individually or in the
aggregate, are material to MMM and which have not been:
(i) reflected in the initial balance sheet of MMM as of December 15, 1999
referred to in Section 3.5 (the "MMM Balance Sheet"); or
(ii) incurred in the ordinary course of business since (incorporation
date).
B. Except as set forth in Section 3.5, since December 15, 1999, whether
or not in the ordinary course of business, there has not been, occurred or
arisen:
(i) any material adverse change in the consolidated financial condition or
in the operations of the business of MMM from that shown on the MMM Balance
Sheet; or
(ii) any damage or destruction in the nature of a casualty loss, whether
covered by insurance or not, materially and adversely affecting any property or
business of MMM which is material to the financial condition of the operations
of the business of MMM; or
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(iii) any actual or, to the knowledge of MMM, threatened, strike or other
labor trouble or dispute which materially adversely affects, or which insofar as
MMM knows might materially adversely affect the business or prospects of MMM.
SECTION 4 CONDUCT AND TRANSACTIONS ON AND FOLLOWING THE EFFECTIVE DATE
4.1 Investigations; Operation of Business of GLNC and MMM.
As of the Effective Date or as soon as practicable thereafter:
A. GLNC and MMM each agree to use their best efforts to give to the other
and their respective representatives and agents full access to all the premises
and books and records of GLNC and MMM, and to cause its officers and independent
auditors to furnish the other such financial operations data and other
information with respect to the business and properties of it as the other shall
from time to time reasonably request; provided, however, that any such
investigation:
(i) shall be conducted in such manner as not to interfere unreasonably with
the operation of the business of GLNC or MMM, as the case may be, and
(ii) shall not affect any of the representations and warranties
hereunder. All information obtained by one party from the other hereunder shall
be kept confidential and shall be revealed only to those persons, including
counsel, accountants and investment bankers, who have a need for such
information in the performance of their duties for their respective principals,
unless disclosure of such material is compelled by a judicial or administrative
process, or, in the opinion of their respective counsel, by other requirements
of law. The foregoing shall not apply to information (a) ascertainable or
obtained from public information; (b) received from a third party not known to
the recipient to be under a duty to keep it confidential; (c) which becomes
known to the public (other than through a breach of this Agreement); or (d)
which was independently developed by (or in the possession of prior to its
disclosure to) the party other than the one to which it relates. It is
understood that each party shall be deemed to have satisfied its obligation to
hold such information confidential if it exercises the same care as it takes to
preserve confidentiality for its own similar information. In the event of
termination of this Agreement, each party will return all documents, work papers
and other material obtained from the other party in connection with the
transactions contemplated hereby.
B. Each party will use its best efforts to preserve substantially intact
their business organizations, to keep available the services of their present
officers and employees, and to preserve their present relationships with persons
having significant business relations therewith.
C. GLNC shall conduct its business only in the ordinary course, and by way
of amplification and not limitation, will not without the prior written consent
of MMM:
(i) issue, sell, purchase or redeem, or grant or commit to issue any GLNC
capital stock, other than upon the exercise of outstanding stock options,
warrants or stock purchase rights described in Schedule 2.2;
(ii) grant or commit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of its capital stock
or issue or commit to issue any securities convertible into or exchangeable for
shares of GLNC capital stock;
(iii) declare, set aside, or pay any dividend or distribution with respect
to the capital stock or other ownership interest of GLNC;
(iv) directly or indirectly redeem, purchase or otherwise acquire or commit
to acquire any GLNC capital stock;
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(v) transfer or dispose of any assets or incur any liability except in the
ordinary course of business;
(vi) effect a split or reclassification of any capital stock of GLNC or a
recapitalization of GLNC;
(vii) engage in any transaction which would result in the Purchase,
reorganization, consolidation or division of GLNC or any other transaction
having similar effect;
(viii) change the Articles of Incorporation, By-Laws or other governing
instruments of GLNC, other than speculated by this Agreement;
(ix) acquire or agree to acquire the stock or assets of any other business;
(x) take any action after the date hereof that would cause any
representation or warranty contained in this Agreement to become untrue in any
material respect;
(xi) pay any obligation or liability, other than (a) obligations or
liabilities reflected in GLNC's balance sheet when due, (b) liabilities incurred
since the date of such Balance Sheets in the ordinary course of business, and
(c) obligations under any franchise agreements, lease agreements, pension,
bonus, profit sharing, employee stock ownership, stock option and warrant
agreements, and the other agreements set forth in the exhibits;
(xii) make or become obligated to make any payment or distribution
(including, without limitation, dividends) to its stockholders (in their
capacity as stockholders);
(xiii) do any act or omit to do any act, or permit any act or omission to
act, which will cause it to breach any contract or commitment to which it is a
party;
(xiv) solicit from any other person or entity an offer or expression of
interest in or with respect to an offer for an acquisition, combination, or
similar transaction involving it or substantially all of its assets or
securities except as described herein and GLNC will promptly inform MMM of the
existence of any unsolicited offer or expression of interest; or
(xv) waive the provisions of any statute of limitations as such provisions
may apply to the assessment of federal, state or foreign income taxes payable by
it for any taxable year or period or portion thereof prior to the Effective
Date.
C. MMM shall conduct its business only in the ordinary course, and by way
of amplification and not limitation, will not without the prior written consent
of GLNC:
(i) issue, sell, purchase or redeem, or grant or commit to issue any MMM
capital stock, other than upon the exercise of outstanding stock options,
warrants or stock purchase rights described in Schedule 3.2;
(ii) grant or commit to grant any options, warrants, or other rights to
subscribe for or purchase or otherwise acquire any shares of its capital stock
or issue or commit to issue any securities convertible into or exchangeable for
shares of MMM capital stock;
(iii) declare, set aside, or pay any dividend or distribution with respect
to the capital stock or other ownership interest of MMM;
(iv) directly or indirectly redeem, purchase or otherwise acquire or commit
to acquire any MMM capital stock;
(v) transfer or dispose of any assets or incur any liability except in the
ordinary course of business;
(vi) effect a split or reclassification of any
capital stock of MMM or a recapitalization of MMM;
(vii) engage in any transaction which would result in the Purchase,
reorganization, consolidation or division of MMM or any other transaction having
similar effect;
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(viii) change the Articles of Incorporation, By-Laws or other governing
instruments of MMM, other than speculated by this Agreement;
(ix) acquire or agree to acquire the stock or assets of any other business;
(x) take any action after the date hereof that would cause any
representation or warranty contained in this Agreement to become untrue in any
material respect;
(xi) pay any obligation or liability, other than (a) obligations or
liabilities reflected in MMM's balance sheet when due, (b) liabilities incurred
since the date of such Balance Sheets in the ordinary course of business, and
(c) obligations under any franchise agreements, lease agreements, pension,
bonus, profit sharing, employee stock ownership, stock option and warrant
agreements, and the other agreements set forth in the exhibits;
(xii) make or become obligated to make any payment or distribution
(including, without limitation, dividends) to its stockholders (in their
capacity as stockholders);
(xiii) do any act or omit to do any act, or permit any act or omission to
act, which will cause it to breach any contract or commitment to which it is a
party;
(xiv) solicit from any other person or entity an offer or expression of
interest in or with respect to an offer for an acquisition, combination, or
similar transaction involving it or substantially all of its assets or
securities except as described herein and MMM will promptly inform GLNC of the
existence of any unsolicited offer or expression of interest; or
(xv) waive the provisions of any statute of limitations as such provisions
may apply to the assessment of federal, state or foreign income taxes payable by
it for any taxable year or period or portion thereof prior to the Effective
Date.
4.2 Stockholder Approval.
If required by law, GLNC and MMM shall submit and recommend this Agreement
to its stockholders for approval at a meeting of its stockholders to be held at
the earliest practicable date for the purpose of considering and voting upon a
proposal to approve the Purchase.
SECTION 5 CONDITIONS TO OBLIGATION OF GLNC
The obligation of GLNC to effect the Purchase shall be subject to each of
the following conditions:
5.1 Representations and Warranties of MMM to be True.
The representations and warranties of MMM herein contained shall be true in
all material respects at the Effective Date or as soon as practicable thereafter
with the same effect as though made at such time, except to the extent waived
hereunder or affected by the schedules delivered hereunder; MMM shall have
performed in all material respects all obligations and complied in all material
respects with all covenants and conditions required by this Agreement to be
performed or complied with by it; and MMM shall have delivered to GLNC a
certificate of MMM in form and substance satisfactory to GLNC dated the
Effective Date or as soon as practicable thereafter and signed by its principal
financial officer, to all such effects.
5.2 Shareholder Approval.
The shareholders of MMM shall have approved this Agreement, if required by
law.
5.3 No Legal Proceedings.
No injunction or restraining order shall be in effect prohibiting the
Purchase, and no action or proceeding shall have been instituted and, as of the
Effective Date, remain pending before a court to restrain or prohibit the
transactions contemplated by this Agreement.
5.4 Statutory Requirements.
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All statutory requirements for the valid consummation by MMM of the
transactions contemplated by this Agreement shall have been fulfilled, including
the shareholder approval described in Section 4.2; all authorizations, consents
and approvals of all federal, state and local governmental agencies and
authorities required to be obtained in order to permit consummation by MMM of
the transactions contemplated by this Agreement, and to permit the businesses
presently carried on by GLNC and MMM to continue unimpaired in all material
respects immediately following the Effective Date shall have been obtained.
5.5 Certificate of Officers.
GLNC shall have received from the officers of MMM, a certificate dated the
Effective Date or as soon as practicable thereafter, in form and substance
satisfactory to GLNC, substantially to the effect that:
(i) MMM is a corporation duly incorporated and validly existing and in good
standing under the laws of the State of Delaware;
(ii) MMM is duly qualified to do business as a foreign corporation and in
good standing in each state set forth in Schedule 3.1;
(iii) MMM has the corporate power to carry on its existing business;
(iv) the authorized capital stock of MMM consists of 1,000 shares of common
stock, no par value, and the number of issued and outstanding shares of capital
stock of MMM is 1,000 common shares;
(v) each of this Agreement and the Purchase Documents has been duly
authorized, executed and delivered by MMM and is the valid and binding
obligation of MMM. All corporate action by MMM and its shareholders required to
authorize the Purchase has been taken and MMM has the corporate power to effect
the Purchase provided for in this Agreement;
(vi) all authorizations, consents and approvals of all governmental
agencies and authorities, including state securities or "blue sky" authorities,
required in order to permit consummation by MMM of the transactions contemplated
by this Agreement and the Agreement of Purchase have been obtained;
(vii) all of the outstanding capital stock of MMM has been duly and validly
authorized and issued, is fully paid and nonassessable; and
(viii) to the best knowledge of such officers, neither the execution and
delivery by MMM of this Agreement, nor consummation of the transactions
contemplated hereby or thereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, regulation or ruling of any court or governmental authority, domestic or
foreign, to which MMM is subject, or constitute a material default thereunder.
5.6 Required Consents.
MMM shall have obtained the consents or approvals of each person and
governmental agency whose consents or approval is required in connection with
the execution, delivery and performance of this Agreement except for such
consents or approvals the failure of which to obtain would not in the aggregate
have a material adverse effect on GLNC or MMM.
5.7 Officer Agreements.
MMM shall have provided to GLNC evidence in writing indicating consent and
commitment of MMM officers to assume the officers' positions of GLNC pursuant to
the provisions of Section 7.6.
SECTION 6 CONDITIONS TO OBLIGATION OF MMM
The obligation of MMM to effect the Purchase shall be subject to each of
the following conditions:
6.1 Representations and Warranties of GLNC to be True.
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The representations and warranties of GLNC herein contained shall be true
in all material respects at the Effective Date or as soon as practicable
thereafter with the same effect as though made at such time, except to the
extent waived hereunder or affected by the schedules delivered hereunder; GLNC
shall have performed in all material respects all obligations and complied in
all material respects with all covenants and conditions required by this
Agreement to be performed or complied with by it; and GLNC shall have delivered
to MMM a certificate of GLNC in form and substance satisfactory to MMM dated the
Effective Date or as soon as practicable thereafter and signed by its principal
financial officer, to all such effects.
6.2 Shareholder Approval.
The shareholders of GLNC shall have approved this Agreement, if required by
law.
6.3 No Legal Proceedings.
No injunction or restraining order shall be in effect prohibiting the
Purchase, and no action or proceeding shall have been instituted and, as of the
Effective Date, remain pending before a court to restrain or prohibit the
transactions contemplated by this Agreement.
6.4 Statutory Requirements.
All statutory requirements for the valid consummation by GLNC of the
transactions contemplated by this Agreement shall have been fulfilled, including
the shareholder approval described in Section 4.2; all authorizations, consents
and approvals of all federal, state and local governmental agencies and
authorities required to be obtained in order to permit consummation by GLNC of
the transactions contemplated by this Agreement, and to permit the businesses
presently carried on by MMM and GLNC to continue unimpaired in all material
respects immediately following the Effective Date shall have been obtained.
6.5 Certificate of Officers.
MMM shall have received from the officers of GLNC, a certificate dated
the Effective Date or as soon as practicable thereafter, in form and substance
satisfactory to MMM, substantially to the effect that:
(i) GLNC is a corporation duly incorporated and validly existing and in
good standing under the laws of the State of Utah;
(ii) GLNC is duly qualified to do business as a foreign corporation and in
good standing in each state set forth in Schedule 2.1;
(iii) GLNC has the corporate power to carry on its existing business;
(iv) the authorized capital stock of GLNC consists of 300,000,000 shares of
common stock, $0.001 par value, and 20,000,000 shares of preferred stock, $0.001
par value; and the number of issued and outstanding shares of GLNC Common Stock
of GLNC is 11,857,650 shares, and there are no outstanding preferred shares;
(v) the shares of GLNC Common Stock to be issued in exchange for shares of
MMM Common Stock pursuant to the Agreement have been duly authorized and are
duly and validly issued, fully paid and nonassessable;
(vi) each of this Agreement and the Purchase Documents has been duly
authorized, executed and delivered by GLNC and is the valid and binding
obligation of GLNC. All corporate action by GLNC and its shareholders required
to authorize the Purchase has been taken and GLNC has the corporate power to
effect the Purchase provided for in this Agreement;
(vii) all authorizations, consents and approvals of all governmental
agencies and authorities, including state securities or "blue sky" authorities,
required in order to permit consummation by GLNC of the transactions
contemplated by this Agreement and the Agreement of Purchase have been obtained;
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(viii) all of the outstanding capital stock of GLNC has been duly and
validly authorized and issued, is fully paid and nonassessable; and
(ix) to the best knowledge of such officers, neither the execution and
delivery by GLNC of this Agreement, nor consummation of the transactions
contemplated hereby or thereby, will conflict with or result in a breach of any
of the terms, conditions or provisions of any judgment, order, injunction,
decree, regulation or ruling of any court or governmental authority, domestic or
foreign, to which GLNC is subject, or constitute a material default thereunder.
6.6 Required Consents.
GLNC shall have obtained the consents or approvals of each person and
governmental agency whose consents or approval is required in connection with
the execution, delivery and performance of this Agreement except for such
consents or approvals the failure of which to obtain would not in the aggregate
have a material adverse effect on MMM or GLNC.
6.7 [Intentionally Omitted]
6.8 GLNC Common Stock.
At the Effective Date or as soon as practicable thereafter, GLNC shall have
issued a number of shares of GLNC New Shares to MMM Participants, in exchange
for all of the then issued and outstanding shares of MMM Common Stock, in
accordance with the provisions of this Agreement.
6.9 Election of Directors.
At the Effective Date, the persons identified in Schedule 6.9 shall be
elected or appointed to the Board of Directors of GLNC, as more specifically
described in Section 7.5 hereof.
6.10 Surviving Name.
At the Effective Date, the name of GLNC shall be changed to Millennium
Multi Media.com Corp.
SECTION 7 CERTAIN UNDERSTANDINGS AND AGREEMENTS
7.1 Shareholders' Meeting.
If required by law, GLNC and MMM will cause a shareholders' meeting to be
held at or prior to the Effective Date by GLNC and MMM for the purpose of
adopting this Agreement and approving and ratifying the consummation of the
transactions contemplated hereby.
7.2 Reservation of Stock.
The Board of Directors of GLNC prior to the Effective Date or as soon as
practicable thereafter will reserve sufficient shares of GLNC New Shares for
issuance pursuant to the terms of this Agreement and take such other action as
is necessary in connection therewith.
7.3 GLNC Liabilities.
GLNC hereby agrees to resolve all financial obligations of GLNC, as set
forth in GLNC Trial Balance prior to the Effective Date, or by a special
agreement between GLNC Control Stockholder and MMM, pursuant to Section 7.4.
7.4 Explicit Indemnification and Security.
GLNC hereby agrees to indemnify and hold
harmless MMM, MMM Participants and each director, officer and shareholder
thereof, from and against any and all GLNC liabilities incurred by GLNC, its
officers or directors, past and present, or any of its subsidiaries, merger or
other combination partners, owned or conducting business with, either currently
or in the past, including but not limited to liabilities disclosed in GLNC Trial
Balance,
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whether already settled by MMM as of the date of this Agreement or
currently outstanding, provided however that in no event shall such
indemnification exceed the total sum of $90,000, as set forth herein below and
in the notes payable in Exhibit D ($5,000) and Exhibit E ($85,000). Said
aggregate current and potential liabilities shall be secured by GLNC Control
Stockholder with currently issued and outstanding Common Stock of GLNC owned and
controlled by the GLNC Control Shareholder (the GLNC Control Shares") in the
amount of 50,000 shares pursuant to a 6-month Note Payable set forth in Exhibit
D, and 340,000 shares pursuant to a 12-month Note Payable set forth in Exhibit
E. The sole remedy of MMM, MMM Participants and each director, officer and
shareholder thereof shall be to foreclose and sell the shares placed as security
for such obligations by GLNC Control Shareholder. GLNC, its officers, directors,
attorneys, agents and shareholders shall have no liability.
In the event that any such GLNC liabilities are presented for payment, MMM
shall forthwith advise GLNC Control Shareholder of such claim and all
information relating thereto. GLNC Control Shareholder shall have ten (10) days
following receipt of such claim by GLNC Control Shareholder, in which to approve
or disapprove the payment thereof. In the event GLNC Control Shareholder
disapproves the payment of such claim, GLNC Control Shareholder shall have the
option of undertaking, at its own expense, the defense thereof, including
selection of counsel, terms of settlement and other matters relating directly to
the disposition of such claim. GLNC Control Shareholder's election to assume
defense of any such claim shall be contained in the ten (10) day notice provided
hereinabove. At such time as any such claim is paid by MMM, whether by reason of
GLNC Control Shareholder's approval thereof or judgement having been entered and
satisfied by MMM, the indemnity provided herein by GLNC Control Shareholder
shall become effective. Should MMM pay such claim without the consent of GLNC
Control Shareholder or other than pursuant a judgement entered against MMM, GLNC
Control Shareholder shall be released from indemnity provisions provided herein
and MMM shall have no right to proceed to collect any funds from GLNC Control
Shareholder pursuant to the note set forth in Exhibit E. Under any
circumstances, the indemnity provisions in this Agreement and in Exhibit E shall
expire one (1) year from the Effective Date of this Agreement.
7.5 Board of Directors Following Purchase.
A. GLNC Control Shareholder shall have the right to elect the equivalent of
up to 20% of the members of the Board of Directors in elections held within a
period of two (2) years following the Effective Date, currently equal to one (1)
seat pursuant to Paragraph B in Section 7.5 below. Such right shall be cancelled
in the event of changes to the structure of the Board of Directors resulting
from a potential material corporate merger, acquisition, combination or other
reorganization approved by the Board of Directors.
B. Upon consummation of the Purchase, the Board of Directors of GLNC shall
be the five (5) directors identified in Schedule 6.9, who shall be elected by
consent in lieu of a special meeting of shareholders following the consummation
of the Purchase. The Board of Directors of GLNC shall, prior to the Effective
Date, appropriately adjust the number of seats on the board in the GLNC Bylaws,
if necessary.
7.6 Conduct of Business.
Upon consummation of the Purchase, the Board of Directors shall appoint the
following as officers and/or administrative consultants of GLNC:
Name: Position:
Bobby Roberts President
Joseph Torkan Vice President
Illya Bond Secretary
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Charles Weber Administrative Consultant
Michael Selsman Administrative Consultant
7.7 Operating Budget.
MMM acknowledges that GLNC has experienced operating losses and has a
working capital deficit. MMM agrees to deposit, prior to the Effective Date or
as soon as practicable thereafter, funds in the amount of $250,000 in cash
and/or marketable securities in account in the name of MMM for the exclusive use
in the ordinary course of business following the Effective Date.
7.8 Operations
If within six (6) months following the Effective Date, MMM has not
commenced operations of any Internet or other business set forth in the MMM
business plan, attached hereto as Exhibit B, GLNC shall have the option to
rescind this Agreement upon giving a written notice thereof within sixty (60)
days of the expiration of said six (6) months period. Should GLNC exercise such
option, MMM shall be liable for all debts, obligations and expenses incurred by
MMM following the Effective Date of this Agreement through the effective date of
such rescission, and agrees to indemnify GLNC, its officers, directors,
attorneys, agents and shareholders free and harmless from all such debts and
expenses, including but not limited to all attorney fees and costs incurred by
such indemnified parties and relating to such rescission and indemnification.
7.9 SEC Reports.
MMM acknowledges that GLNC is not a reporting company and has not filed
current audited financial statements and necessary forms with SEC, and has been
scheduled to be suspended by NASD from the Bulletin Board, where it has been
listed and trading, on December 1, 1999. Upon consummation of the Purchase, MMM
agrees to file the Form 10SB required by SEC and NASD, including audited
financial statements of GLNC and MMM, within sixty (60) days following the
Effective Date. In the event that MMM has not made such required filing within
sixty (60) days following the Effective Date, GLNC reserves the right to rescind
this Agreement for thirty (30) days without incurring any liability to MMM,
unless the delay is caused directly by GLNC's inability to produce required
financial and/or legal records, documents and other information to the
satisfaction of a mutually agreed upon accountant expected to audit GLNC's
financial statements and provide an adequate opinion.
7.10 Stock Split.
Upon consummation of the Purchase, the Board of Directors of GLNC shall be
prevented from voting on, agreeing to and/or instituting a stock split related
to any capital stock of GLNC for a period of at least ninety (90) days following
the Effective Date. Following such period, the Board of Directors decision to
effectuate any stock split, including a reverse stock split of the Common Stock
of GLNC, shall be restricted by a requirement of a unanimous vote, for a period
of another 90 days.
7.11 GLNC Control Shareholder Shares
Upon consummation of the purchase, the GLNC Control Shareholder agrees not
to sell, assign or transfer any GLNC Control Shares, whether publicly or in a
private transaction, other than under provisions set forth in Section 7.4, for a
period of three (3) months following the Effective Date.
7.12 Code Requirements
All persons, including but not limited to MMM Participants who shall
receive shares under this Agreement shall fully comply with all California
Securities Code requirements relating to the within transaction.
SECTION 8 TERMINATION OF OBLIGATIONS AND WAIVERS OF CONDITIONS; PAYMENT OF
EXPENSES
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8.1 Termination of Agreement and Abandonment of Purchase.
Anything herein to the contrary notwithstanding, this Agreement and the
Purchase contemplated hereby may be terminated, whether before or after approval
of this Agreement by GLNC and/or MMM, as follows, and in no other manner:
A. Mutual Consent. By mutual consent of the Boards of Directors of GLNC and
MMM.
B. Expiration Date. By the Boards of Directors of GLNC or MMM, if the
respective representations in Section 2 and Section 3 have not been fulfilled
within thirty (30) days of the Effective Date, which date may be extended by
mutual agreement of the Boards of Directors of GLNC and MMM.
C. SEC Filing Delay. By the Board of Directors of GLNC in accordance with
Section 7.8.
8.2 Payment of Expenses; Waiver of Conditions.
In the event that this Agreement shall be terminated pursuant to Section
8.1, all obligations of the parties under this Agreement shall terminate and
there shall be no liability of any party to the other. Each party hereto will
pay all costs and expenses incident to its negotiation and preparation of this
Agreement and to its performance of and compliance with all agreements and
conditions contained herein or therein on its part to be performed or complied
with, including the fees, expenses and disbursements of its counsel; provided
that the obligations of MMM and GLNC contained in Sections 2.15 and 3.15 hereof,
and the confidentiality obligations of the parties contained Paragraph A of
Section 4.1 hereof, shall survive any such termination. If any of the conditions
specified in Section 5.1 hereof have not been satisfied, GLNC may nevertheless
at its election proceed with the transactions contemplated hereby and if any of
the conditions specified in Section 6.1 hereof has not been satisfied, MMM may
nevertheless at its election proceed with the transactions contemplated hereby.
Any such election to proceed shall be evidenced by a certificate executed on
behalf of the electing party by an authorized officer or representative. Upon
consummation of the Purchase shall be consummated, each party hereto will pay
all of its own costs and expenses in connection therewith.
SECTION 9 GENERAL
9.1 Amendments.
Subject to applicable law, this Agreement and any schedule, list or exhibit
attached hereto may be amended only by an instrument in writing signed by an
officer or authorized representative of each of the parties hereto upon
authorization by the Board of Directors of GLNC or MMM before or after the
meeting of shareholders referred to in Section 7.1 hereof, except that no such
amendment shall affect the rate of exchange provided for in this Agreement. 9.2
No Assignment.
This Agreement may not be assigned by either party, by operation of law or
otherwise.
9.3 Survival of Representations and Warranties.
All the respective representations and warranties of GLNC and MMM contained
herein shall survive the Closing.
9.4 Governing Law.
Except where the laws of another jurisdiction are mandatorily applicable,
this Agreement and the legal relations among the parties hereto shall be
governed by and construed in accordance with the laws of the State of
California.
9.5 Notices.
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Any notice or other communications required or permitted hereunder shall be
sufficiently given if sent by registered mail or certified mail, postage prepaid
and addressed as follows:
If to GLNC, to:
Dennis M. Phillips, President
Glenhills Corp.
17277 Ventura Blvd., Suite 200
Encino, CA 91316
If to MMM, to:
Illya Bond, Director
Millennium Multi Media.com Corp.
9301 Wilshire Blvd., Suite 201
Beverly Hills, CA 90210
With copies to:
- ---------------------
- ---------------------
- ---------------------
- ---------------------
9.6 Headings.
The descriptive headings of the sections and subsections of this Agreement
are inserted for convenience only and do not constitute a part of this
Agreement.
9.7 Counterparts.
This Agreement may be executed in one or more counterparts, all of which
shall be considered one and the same agreement.
9.8 Reliance Upon.
Representations and Warranties. Notwithstanding any right of any party hereto to
fully investigate the affairs of any other party, the parties hereto may rely
upon the representations, warranties and covenants made to it in this Agreement
and on the accuracy of any certificate, any schedule attached hereto
(collectively the "Disclosure Schedules"), exhibits or other document given or
delivered to it pursuant to this Agreement. Further, knowledge by an agent of
any party hereto of any facts not otherwise disclosed in this Agreement, the
Disclosure Schedules or any other Purchase Documents, shall not constitute a
defense to any claim for misrepresentation, breach of any warranty, agreement,
or covenant under this Agreement, the Disclosure Schedules or any other Purchase
Documents. No representations or warranties have been made by or on behalf of
any person to induce any party to enter into this Agreement or to abide by or
consummate the transactions contemplated by this Agreement, except
representations and warranties expressly set forth herein, in the Disclosure
Schedules or in any other Purchase Documents.
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9.9 Waiver
No purported waiver by any party of any default by any other party of any
term, covenant or condition contained herein shall be deemed to be a waiver of
such term, covenant or condition unless the waiver is in writing and signed by
the waiving party. No such waiver shall in any event be deemed a waiver of any
subsequent default under the same or any other term, covenant or condition
contained herein.
9.10 Entire Agreement.
This Agreement, together with the schedules attached hereto and any
certificate, exhibit or other document given or delivered pursuant hereto, sets
forth the entire understanding among the parties concerning the subject matter
of this Agreement and incorporates all prior negotiations and understandings.
There are no covenants, promises, agreements, conditions or understandings,
either oral or written, between them relating to the subject matter of this
Agreement other than those set forth herein. No alteration, amendment, change or
addition to this Agreement shall be binding upon any party unless in writing and
signed by the party to be charged.
9.11 No Partnership.
Nothing contained in this Agreement will be deemed or construed by the
parties hereto or by any third person to create the relationship of principal
and agent or partnership or joint venture.
9.12 Partial Invalidity.
If any term, covenant or condition in this Agreement or the application
thereof to any person, party or circumstance shall be invalid or unenforceable,
the remainder of this Agreement or the application of such term, covenant or
condition to persons or circumstances, other than those as to which it is held
invalid, shall be unaffected thereby and each term, covenant or condition of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.
9.13 Joint Preparation.
This Agreement is to be deemed to have been prepared jointly by the parties
hereto and any uncertainty or ambiguity existing herein, if any, shall not be
interpreted against any party, but shall be interpreted according to the
application of the rules of interpretation for arm's length agreements.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed by their authorized officers as of the date and year first above
written.
Signed by:
/s/ JOSEPH TORKAN /s/ HAL PHILLIPS
- ------------------------------ ------------------------------
Millennium MultiMedia.com Corp. Phillips Management Services
Name: Joseph Torkan Name: Harold Phillips
------------------------- -------------------------
Position: Director Position: Partner
--------------------- ---------------------
/s/ DENNIS PHILLIPS /s/ ROBERT STUCKELMAN
- ------------------------------ ------------------------------
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Glenhills Corp. Technical Management Consultants
Name: Dennis Phillips Name: Robert Stuckelman
------------------------- -------------------------
Position: President Position: President
--------------------- ---------------------
SCHEDULE 1.2
GLNC New Shares Distribution to MMM Shareholders
The distribution of the 64,870,600 shares of GLNC Common Stock will be
designated by the Board of Directors upon consummation of the Purchase.
SCHEDULE 1.3
Finders' Fee Distribution
Total Number of Number of Shares by Individual TMC Participants
Shares to TMC
Participants The Stuckelman Compound Capital The World Wide Tytus
Family Trust Group Web Store Biniakiewicz
3,613,951 2,565,905 578,232 361,395 108,419
SCHEDULE 2.1
GLNC Qualifications; Corporate Standing
GLNC is qualified as a foreign corporation in the State of California.
SCHEDULE 2.2
Outstanding Dilutive GLNC Securities
A. GLNC has the following issued and outstanding options to purchase an
aggregate total of 620,000 shares of GLNC Common Stock by the parties and under
the terms specified below:
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<TABLE>
<S> <C> <C> <C>
Party Name Number of Shares Expiration Date Exercise Price Per Share
The Greenfield Family 250,000 Dec. 31, 2004 $0.005
Trust
The Daniel Family Trust 250,000 Dec. 31, 2004 $0.005
Ray Mendoza 45,000 Oct. 14, 2004 $0.005
Ray Mendoza 75,000 Oct. 14, 2004 $1.00
</TABLE>
B. GLNC is required to issue an aggregate total of 240,000 shares of GLNC
Common Stock as compensation earned prior to the Effective Date for performing
services and duties of the Directors of GLNC, which shall be issued upon the
consummation of the Purchase to the parties specified below:
Party Name Number of Shares
Dennis M. Phillips 120,000
Martin Zucker 60,000
Ray Mendoza 60,000
C. GLNC has advised MMM that 1,388,120 shares of GLNC Common Stock,
consisting of amounts issued to parties indicated below ("GLNC Cancelled
Shares"), and included in the total issued and outstanding number of shares of
GLNC Common Stock indicated in a statement of shareholders provided by the
transfer agent dated December 3, 1999, should be considered cancelled based on
agreements executed with the parties to such effect. In addition, GLNC has
advised MMM that 3,500,000 shares of GLNC Common Stock issued to Sterling & Co.
(the "Sterling Shares") and included in the total issued and outstanding number
of shares of GLNC Common Stock indicated in a statement of shareholders provided
by the transfer agent dated December 3, 1999, should also be cancelled. GLNC has
advised MMM that legal action against said parties must be initiated to effect
cancellation and recover certificates of GLNC Cancelled Shares and Sterling
Shares, and that GLNC will cooperate in the prosecution of said actions by MMM.
GLNC represents that neither the GLNC Cancelled Shares nor Sterling Shares have
been duly authorized, validly issued and GLNC has not been paid any
consideration for issuing any of the GLNC Cancelled Shares or Sterling Shares.
For the purposes of this Purchase, the provisions of this Agreement shall be
assumed to include the Sterling Shares and exclude the GLNC Cancelled Shares,
respectively, in or from the total number of issued and outstanding shares of
Common Stock of GLNC (the "GLNC Pre-Merger Shares"), including calculations in
Section 1.2 and 1.3. In the event that any resulting legal action or dispute in
the future is resolved against the representation of GLNC with respect to the
GLNC Cancelled Shares and any of the GLNC Cancelled Shares are deemed duly
authorized, validly issued, fully paid and/or non-assessable, the consideration
set forth in Section 1.2 and Section 1.3 shall be adjusted and paid out to MMM
immediately according to a recalculated number of the GLNC Pre-Merger Shares,
which is to include any such GLNC Cancelled Shares deemed duly authorized,
validly issued, fully paid and/or non-assessable. In the event that any
resulting legal action or dispute in the future is resolved according to the
representation of GLNC with respect to the Sterling Shares and any of the
Sterling Shares are deemed not duly authorized, not validly issued and fully
paid for, GLNC shall issue and pay out proportionately to all shareholders of
Common Stock of GLNC owning stock immediately prior to the Effective Date a
number of GLNC New Shares to be determined according to the provisions of
Section 1.2 and Section 1.3, in order to adjust for these provisions.
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GLNC Cancelled Shares
Party Number of Shares Certificate No.
Emanuel Corpus 1,357,575 6229
Rose Fajardo 30,545 6231
SCHEDULE 2.6
GLNC Names, Patents and Trademarks
Southern California Interviewing Services and SCIS are fictitious business
names of Access Research Group (Fictitious Business Name Patent filed with Los
Angeles County Recorder).
SCHEDULE 2.7
GLNC Tax and Other Returns and Reports
GLNC has the following unsettled past due tax liabilities, which shall come
under the indemnification and security provisions in Section 7.4.
State of California Corporate Franchise Tax $4,369.82
State of California Corporate Franchise Tax $152.00
State of Utah Corporate Franchise Tax $134.00
SCHEDULE 2.8
GLNC Agreements, Contracts and Commitments
A. Wall Street Marketing Investor Relations Contract
B. Sycamore Financial Advisors Executive Services Agreement dated October
18, 1999 Sycamore Financial Advisors is a fictitious name for Ray Mendoza, a
Director of GLNC.
C. Phillips Management Services ("GLNC Control Shareholder") Executive
Services Agreement dated March 20, 1998
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An Executive Services Agreement between GLNC (formerly DHS Industries,
Inc.) and Phillips Management Services (the GLNC Control Shareholder) has been
terminated as of the Effective Date by mutual consent of both parties in
accordance with its provisions. In consideration of the consent for termination
of Phillips Management Services, GLNC will sign a consulting agreement with
Canby Corp., a Nevada corporation with offices and a principal place of business
at 21901 Burbank Boulevard, Suite 177, Woodland Hills, California 91367, as set
forth in Exhibit A.
SCHEDULE 2.9
GLNC Title to Properties: Liens and Encumbrances
None.
SCHEDULE 2.11
Litigation
GLNC is a party in a Superior Court of Los Angeles case # LC044679, McGowan
vs. DHS Industries, filed by Denise Duchene McGowan, a former employee. A
judgement of $20,001.17, plus interest, plus other costs, has been stipulated by
the court, with payments starting January 5th, 1998.
SCHEDULE 2.17
GLNC Insurance
None.
SCHEDULE 3.2
Outstanding Dilutive MMM Securities
None.
SCHEDULE 3.6
MMM Names, Patents and Trademarks
MMM is in the process of applying for a patent protecting its corporate name.
SCHEDULE 3.8
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MMM Agreements, Contracts and Commitments
A. MMM has received a Letter of Intent from GAIA, LLC, set forth in Exhibit
C, to acquire equity interest in GAIA, LLC, a real estate development project in
Las Vegas.
B. Letters of Agreement between MMM and Charles Weber, Michael Selsman,
Todd Roberts, Vincent Kamdar and Stephen Burgess. SCHEDULE 3.9
MMM Title to Properties: Liens and Encumbrances
None.
SCHEDULE 3.17
MMM Insurance
MMM has recently requested and received a quote on a Directors Errors and
Omissions Policy from MDM & Associates, an insurance agent located at 777 South
Figueroa Street, Los Angeles, California 90001, which is currently under
evaluation of the management.
SCHEDULE 6.9
Board of Directors Members
Illya Bond
David Peipers
Joseph Torkan
Joubin Torkan
Dennis M. Phillips
EXHIBIT A
Canby Corp. Consulting Agreement
PROFESSIONAL SERVICES AGREEMENT
28
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This agreement is made and entered into this 30tlh day of December, 1999 by
and between Millennium Multi Media Corp. (MMM), a Delaware corporation with
offices and principal place of business at 9301 Wilshire Boulevard, Suite 201,
Beverly Hills California 90210 ("Client") and Canby Corp.(CC), a Nevada
corporation with offices and a principal place of business at 21901 Burbank
Boulevard. Suite 177, Woodland Hills, California 91367 ("Consultant").
1. Qualifications: Consultant has skill and experience in certain fields
of activity in which the Client is interested. Said
fields of activity are identified as financial
consulting, mergers and acquisitions.
2. Hiring: Client hereby engages the nonexclusive services of
Consultant and Consultant hereby accepts such
engagement in the above fields of activity.
Consultant will report to and take instructions from
Illya Bond, Executive Director of the Client company,
MMM.
3. Duties: The primary duties of Consultant will be to provide
financial consulting services and present various
merger and/or acquisition candidates to Client.
Consultant will determine the method, details and
means of performing said duties.
4. Term: The term of this Agreement shall commence as of the
date of this Agreement for a period of (1) year and
shall be non-cancelable.
5. Compensation: The Client shall pay to Consultant a fee of Twenty Five
Thousand Dollars ($25,000.00) payable Twenty Five
Hundred ($2,500.00) per month commencing January 15,
2000 and continuing on the 15th day of each month
thereafter for ten months. Client grants to Consultant
or its assignee, an option to acquire 200,000 shares of
capital stock of MMM at the quoted bid price of
Glenhills Corporation as of the date of execution of
this Agreement, to wit: $0.13. Said option shall be
transferable and will expire ten (10) months from the
date of execution hereof and may be exercised in whole
or in several parts at the option of Consultant or its
transferee.
6. Devotion of Time: Consultant shall devote reasonable and adequate time to
accomplish those various duties requested by the Client
under and shall carry out said duties to the
satisfaction of the Client.
7. Warranties: Consultant represents and warrants that it has the
right to enter into this Agreement and to render
services to Client.
8. Confidentiality: Consultant may be given access to certain proprietary
information, including trade secrets of Client.
Consultant agrees to preserve in strict confidence all
such information during the term of this agreement and
for so long as the information received is not in the
public domain. Consultant will not disclose this
information except as directed.
9. Independent
Contractor: Consultant and his employees and associates are at all
times and performing hereunder as independent
contractor(s) and not as a Client employee(s).
Consultant agrees to perform those services with the
standard of care, skill and diligence normally provided
by a professional person in the performance of such
services.
10. Compliance With
Applicable Laws: In the performance of Consultant's services it shall
comply with all applicable laws of the jurisdiction in
which the services are performed.
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<PAGE>
11. Arbitration: In the event that a dispute arises, the parties do
hereby agree to settle any such dispute by arbitration
conducted through the American Arbitration Association
to be held in Los Angeles, California. Such decision of
the arbitration shall be final and binding on all
parties.
12. Entire Agreement: This document represents the complete agreement between
the parties and may be modified or amended only by a
duly executed written agreement. This agreement shall
be construed in accordance with the laws of the State
of California, which shall also be the venue and \
jurisdiction of any disputes between the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as
of the day and year noted above.
Millennium Multi Media.com Corp. Canby Corp.
/s/ Illya Bond /s/ Hal Phillips
Secretary President
EXHIBIT B
MMM Business Plan
Overview
Millennium Multi Media.com Corp. (MMM) is a modern Internet entertainment
company embracing traditional and digital communication modes to provide a new
age of entertainment content to consumers in the United States and around the
world. MMM is taking advantage of three powerful trends - demographics,
globalization and technology - to establish and maintain its status as an
entertainment industry innovator. At a time when traditional distinctions
between various entertainment segments are blurring, MMM capitalizes on its
wealth of managerial expertise in the industry and its affiliations with leading
media corporations to advance the transformation of the global entertainment
market. Entertainment industry covers all formats of recorded music and filmed
entertainment, which includes movies and series television programming.
Worldwide demand for U.S. entertainment is vigorous and continues to grow at
double-digit rates domestically, and even faster abroad. Recently, technology
developments such as the Internet have led to greater access by consumers to a
wide variety of entertainment products and services. In fact, many industry
insiders and observers, including the Motion Picture Association of America
(MPAA), believe that within a decade the Internet will play a major role in
delivering filmed entertainment and recorded music to homes all around the
world.
Market Opportunity
United States producers lead the world's entertainment industry without
dispute. Demand for U.S. entertainment, both domestically and in foreign
markets, is very vigorous and is likely to continue growing. The industry also
benefits from continual technological advancements, which offer new
opportunities for entertainment distribution. For example, at the same time that
the videocassette and cable television markets have been reaching maturity, the
Internet is offering new possibilities as a delivery system for entertainment
programming.
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The size of the industry is already enormous. Domestically, the box office
ticket sales totaled $6.9 billion in 1998, with 1.48 billion tickets sold - the
highest level in more than 40 years. In addition, it is estimated that U.S.
consumers spent $9.5 billion on video rentals and another $8 billion on the
purchase of videotapes and videodisks.
In many foreign markets U.S. films have acquired a share of box office
receipts equal to or higher than that of domestic films and the home video
sector is still growing at a fast pace. In the long term, international markets
should continue to be a growth engine for U.S. entertainment companies.
According to the Bureau of Economic Analysis of the U.S. Department of Commerce,
the total sales of filmed entertainment to foreign buyers surpassed $14 billion
in 1996. Predictions for year 2003 are $26.6 billion.
The International Federation of the Phonographic Industry, an international
trade association based in London, estimated that in 1998 total recorded music
sales worldwide surpassed $40.0 billion, of which U.S. produced albums
constituted about 50%, with over $12 billion sold domestically and about $8
million in foreign markets. Industry observers and prominent research firms,
such as Forrester Research, estimate that a significant portion of these
revenues will be attained through the Internet in the future, reaching 7.5
percent of total sales, or $1 billion, by 2002.
Merchandising related to both the movie and music sectors offers an additional
and virtually unlimited revenue potential.
Company
Millennium Multi Media is an Internet entertainment company combining years
of executive experience in film, music production and other entertainment
content development with the technology of the Internet.
MMM capitalizes on the tremendous wealth of industry experience among its
management team members, the most salient factor determining the ability of
smaller producers to join the ranks of successful entertainment companies.
Through its affiliations within the industry, MMM will produce and distribute
entertainment content in the filmed programming and recorded music sectors, as
well as facilitate other projects utilizing relationships with leading companies
in the industry. MMM's activities will also include related entertainment
merchandising of licensed and self-generated products and special direct
response marketing services.
MMM strategy will focus on development of filmed and music projects, and
creative distribution of entertainment content emphasizing the World Wide Web as
the delivery medium. The basis for MMM's success will be a multifunctional
entertainment auction Web Site, which is currently being developed by MMM's
programmers. The Web Site will serve as an excellent channel for marketing and
distribution of entertainment products and services, including merchandise. The
unique features of the Web Site include special direct response marketing
capabilities based on concepts developed by the merchandising experts within
MMM's management team. MMM has already received overwhelming interest from major
Los Angeles area studios in the marketing services provided by this unrivaled
Web Site feature.
ORGANIZATIONAL STRUCTURE
MMM is divided into content profit centers, based on the nature of products
and services. All three business units will be operated and distributed through
corresponding e-commerce Web Sites.
Movies
The film business unit will focus on production of filmed entertainment,
including feature movies and television programming, designed for domestic and
international distribution through all available traditional channels, as well
as the Internet.
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Music
The music business unit will focus on discovery and development of new
artist talent, as well as production and distribution of recorded music in
traditional formats and the Internet.
Merchandising
The merchandising business unit will concentrate on the operation of the
entertainment auction Internet Web Site, including direct response marketing
services provided to major production studios, as well as licensing, development
and marketing of entertainment related merchandise.
MANAGEMENT
Illya Bond
Illya Bond has over 20 years of experience in developing and managing
financial and real estate assets. Mr. Bond was Vice President, Syndication of
American Development Corp. In this capacity, he was responsible for the
interfacing of company syndication products with the corporate finance
departments of firms including Merrill Lynch, Dean Witter, Shearson, American
Express and Kidder Peabody. During Mr. Bond's tenure, American Development Corp.
became the third largest developer in the United States with more than $2
billion in assets and average annual syndication equity raised of $190 million.
Mr. Bond's other experience includes extensive involvement in the banking and
insurance industries through affiliations with American Diversified Savings and
Loan and American Pacific Insurance Company.
Bobby Roberts
Bobby Roberts' career in the entertainment business has spanned 35 years. He has
been a successful record executive, film producer, music publisher and personal
manager, handling the careers of successful artists such as The Mama's and The
Papa's, Ann-Margret, Mama Cass Elliott, Paul Anka, Richard Pryor, Steppenwolf,
and Jan & Dean. He began in the 50's as a member of the internationally known
dance act, the Dunhills, which was affiliated with and worked all over the world
with Danny Kaye and Milton Berle. In the 60's, Mr. Roberts co-founded Dunhill
Records with Lou Adler. The company's first discovery was The Mamas and The
Papa's. Other artists to succeed on the Dunhill label included Three Dog Night,
Steppenwolf, Johnny Rivers and Mama Cass Elliott. Thereafter, Mr. Roberts formed
Landers-Roberts Productions with Hal Landers and produced many successful motion
pictures, the first being the MGM production Gypsy Moths, starring Burt
Lancaster and Deborah Kerr. Films that followed included Monte Walsh with Lee
Marvin and Jack Palance, The Hot Rock, starring Robert Redford and Zero Mostel
and the huge box office success Death Wish starring Charles Bronson, as well as
the first sequel Death Wish II. Mr. Roberts was also President of the Lorimar
Music Group. Lorimar was responsible for Dallas, Knott's Landing and many other
successful television shows. Mr. Roberts recently produced the critically
acclaimed theatrical show "Mort Sahl's America", which enjoyed huge success both
in New York and Los Angeles. Currently Mr. Roberts is Chairman of the Board of
Santa Clarita Studios, Inc., which is a successful entertainment and media
company.
Charles J. Weber
For the past 20 years, Charles J. Weber has been a successful key executive in
the Entertainment/Communications Industry. During this time he has also been
Chairman and Chief Executive Officer of Weber Communications, Inc., an
international consulting firm providing professional management, consulting,
business development and financial services; specializing in strategic alliances
in the multimedia, technology, medical, broadcasting, entertainment, and
communications fields. In this capacity, Mr. Weber is very active in the
international marketplace and represents a number of companies in the Far East,
South America, as well as Eastern and Western Europe. Mr. Weber has been
instrumental in securing public and private corporate financing, domestic and
international distribution, mergers and acquisitions and the production
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and financing of motion pictures. He has also served in executive roles for
Fortune 500, real estate, and entertainment companies and has executive produced
a number of feature films.
Mr. Weber has been President and CEO/COO of the following companies:
Lucasfilm, Ltd.: As President and Chief Executive Officer of George Lucas'
company, Mr. Weber was responsible for all aspects of the company's operations,
including international operations, financing, negotiations, production,
licensing, merchandising, Industrial Light and Magic and THX. He was also
involved in the making of: The Empire Strikes Back, Raiders Of The Lost Ark, and
More American Graffiti.
Embassy Communications: As President and Chief Operating Officer of Norman
Lear's and Jerry Perenchio's company, Mr. Weber was involved in corporate
development, television and motion picture production and international and
domestic distribution, cable operations, pay television services and Hispanic
broadcast stations. He was also involved in the making of Blade Runner.
Entertainment Company of America (ECA): As President and Chief Executive
Officer, Mr. Weber has led ECA's early involvement in the development of
interactive in-flight systems, developing the distribution and technical
expertise to support in-flight audio/video games, merchandising, communications
and gaming requirements on aircraft.
CanWest International Corp.: As President and Chief Executive Officer, Mr.
Weber's primary responsibility was the development and acquisition of companies
and strategic investments to add to CanWest Global Communications Corporation's
television interests outside of Canada. Mr. Weber was instrumental in the
acquisition and investigation of broadcast properties in Eastern Europe, South
America and the Far East.
Prior to his involvement in the entertainment industry, Mr. Weber had
extensive experience in real estate and with Fortune 500 companies. He was a
Senior Vice President of Sonnenblick-Goldman Corporation of California, as well
as being employed in an executive capacity by other real estate development and
syndication companies. Before relocating to Los Angeles in 1972, Mr. Weber
worked for the Celanese Corporation and General Motors Overseas Operations in
New York City.
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Mr. Weber is a member of The Academy of Motion Pictures Arts and Sciences
and The Academy of Television Arts and Sciences. Mr. Weber is a graduate of
Manhattan College, where he received a Bachelor of Business Administration
degree and went on to earn a Master's degree in Business Administration from
Hofstra University.
Sample Production Accomplishments:
FEATURE FILMS
CHIEF EXECUTIVE
OFFICER EMPIRE STRIKES BACK Lucasfilm Ltd/20th Century Fox
MORE AMERICAN GRAFFITI Lucasfilm Ltd/Universal
RAIDERS OF THE LOST ARK Lucasfilm Ltd/Paramount
EXECUTIVE IN CHARGE BLADE RUNNER Perenchio/Yorkin/Warner Brothers
BLUE SKIES AGAIN Angeles/Lantana/ Warner Brothers
SCANDALOUS Angdea/Lantana/ Orion
SWING SHIFT Angeles/Lantana/Warner Brothers
IRRECONCILABLE
DIFFERENCES Angeles/Lantana/Warner Brothers
EXECUTIVE PRODUCER CHILDREN OF THE CORN Angeles/New World
THE STONE BOY Angeles/20th Century Fox
BODY ROCK Angeles/New World
DEATH OF AN ANGEL Angeles/Sundance/ 20th Century Fox
VERA CRUZ Angeles/Sundance/20th Century Fox
CHICAGO CAB KMI
WINNEBAGO WARRIORS
CONSULTANT FLIGHT OF THE NAVIGATOR New Star/Disney
LIVE SHOWS
EXECUTIVE PRODUCER JULIE ANDREWS MEETS ANDRE PREVIN
LIZA MINELLI AT NHK SYMPHONY HALL
Michael Selsman
Michael Selsman has a wealth of diverse experience in the entertainment
industry, working in public relations, film production, publishing and numerous
other environments. Mr. Selsman started his career as a public relations and
national publicity executive, working in New York City with 20th Century Fox and
later with
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Paramount Pictures. After moving to Los Angeles, he became an Account
Executive with the Arthur P. Jacobs Company, the premiere entertainment public
relations firm, where he personally represented many well-known personalities,
including Judy Garland, Marilyn Monroe, Peter Sellers, Marlene Dietrich, Henry,
Jane and Peter Fonda, James Mason, Mervyn LeRoy, James Stewart, Lawrence Harvey,
Rock Hudson, and others. Subsequently, he joined Rogers and Cowan Public
Relations, representing the Disneyland Hotel, Ambassador Oil, The Wrather Corp.,
owners of the Lassie franchise, Muzak, and others. Later in his career, Mr.
Selsman also represented authors such as Truman Capote, Ronald Dahl and others,
while working with famed literary agent, Irving Lazar.
Mr. Selsman gained remarkable experience as a talent agent with Artists
Agency Corporation, now ICM, participating in television packaging with the
agency's client, Bing Crosby Productions. In-house shows included "Ben Casey",
"Medic", and "Hogan's Heroes." He was also involved in the early career
development of James Garner, Alan Arkin, and Robert Redford.
As the President of Group Three, Mr. Selsman co-produced the feature film,
"Dirty Little Billy", distributed by Columbia Pictures, and also developed "Bury
My Heart at Wounded Knee" by Dee Brown, "World Without End, Amen" by Jimmy
Breslin, "I, Robot" by Isaac Asimov, and "The Fortunate Pilgrim" by Mario Puzo.
Selsman and film director Charles B. Pierce also collaborated with American
International Pictures to produce several films on far locations, including
"Winterhawk" in Montana, "Bootleggers" in Texas and Arkansas, "The Norseman" in
Florida, and "Grey Eagle" in Wyoming and Colorado.
In addition, Mr. Selsman worked with Orson Welles preparing a film about
the assassination of Robert Kennedy and co-produced the feature film "Gotcha,"
which was distributed by Universal, as well as developing 18 other feature film
and television projects working for MGM.
As a professional writer, Mr. Selsman wrote the screenplay for his original
feature film idea, "Getting Even With Steven" for Hemdale Pictures Corp. He has
also been employed as a writer by MGM Studios, Robert Halmi International, New
World Pictures, Brilliant Digital Entertainment, and others.
Mr. Selsman also worked for Samuel Goldwyn, Jr. at Goldwyn Studios as Vice
President of Creative Affairs, headed the literary department at Preferred
Artists Agency in Beverly Hills, and co-founded and was Vice President of
Affiliate Relations for Transcontinental Television Network, a new 24-hour
satellite-fed UHF program source located at Glendale Studios. In addition, he
oversaw national marketing and promotion of the Los Angeles Clippers NBA
basketball franchise working for two seasons for Donald T. Sterling as Vice
President of Corporate Affairs, and managed marketing and advertising for Fred
Sands as Corporate Vice President of the California's largest privately-held
real estate company.
Mr. Selsman is considered an expert source on international entertainment
and has been quoted in such publications as Time, Newsweek, TV Guide, and in
various newspapers and books on the subjects of contracts and changing mores and
social values in the media. He has also appeared on national and international
television programs, commenting on Hollywood studio history, and has appeared as
an expert witness in court and for various Hollywood guilds. He has also
guest-lectured at schools and universities such as UCLA, USC, Pepperdine,
Middlebury, VT., Westlake School, Mount St. Mary's and Loyola.
Roger Paglia
Roger Paglia earned his Bachelor Degree in Business Administration and
Accounting from the University of California at Los Angeles (UCLA). He has over
twenty years experience as an entertainment industry executive, music publisher
and record producer. Mr. Paglia served as President of an international music
publishing company. He directed the record production activities for Lorimar. In
addition, Mr. Paglia has produced for other major record labels. Mr. Paglia
founded PEC Services, which specialized in motion picture film distribution,
postproduction services and fulfillment services. His clientele included all of
the Walt Disney Companies, including Touchstone Pictures, Hollywood Pictures,
Buena Vista Worldwide, Hollywood Records,
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Buena Vista Music Publishing, Aaron Spelling Productions, Sony / Tristar /
Columbia Pictures as well as Lorimar, ABC, NBC, and numerous independent
companies. Recently, Mr. Paglia has produced the critically acclaimed theatrical
show "Mort Sahl's America" which enjoyed huge success both in New York and Los
Angeles. Mr. Paglia is currently President of Santa Clarita Studios, Inc., a
successful entertainment and media company.
Don Baker
Don Baker has served for over 15 years in senior level management positions
in the marketing, distribution and the retail industries. Most recently, as Vice
President of Direct Response Marketing for Real Entertainment, Mr. Baker managed
the most successful direct response campaign of 1998, the Jerry Springer Too Hot
For TV Videos. This direct marketing campaign generated over 60 million dollars
in revenue for videos and related merchandise, and helped build Jerry Springer
into a nationally recognized brand.
Prior to Real Entertainment, Mr. Baker served as Director of Distribution
for Technicolor Video, the largest video duplicator in the world. During his
5-year tenure at Technicolor, he headed their direct to retail division,
servicing such prestigious clients such as Disney and Warner Brothers, with his
staff of over 500 employees. In 1996 Baker was named Technicolor Employee of the
Year from among 2000 employees.
Prior to Technicolor, Mr. Baker was Director of Fulfillment Services for
Paramount Pictures, where he was responsible for licensing, product development,
telemarketing and fulfillment services. Mr. Baker also served as Director of
Operations for Teleflora, one of the nation's, leading floral outlets.
Consulting stints with the Franklin Mint, one the world's largest
collectible catalogers, and the production of several of Mr. Baker's scripts for
Hanah Barbera children's TV shows punctuate his creative career. Mr. Baker
graduated from the University of Oregon with a Journalism degree.
EXHIBIT C
GAIA Project Letter of Intent
Board of Directors
Millennium Multi Media. com Corp.
9301 Wilshire Boulevard
Suite 201
Beverly Hills, California 90210
Gentlemen,
This letter is to express our intent to exchange 50% of our equity interest
in GAIA, LLC, a Nevada company, for shares in Millennium Multi Media.com Corp.,
subject to a definitive agreement to be negotiated and signed in the next six
(6) months.
/s/ Fred Shakib
Fred Shakib
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Managing Member
GAIA, LLC
EXHIBIT D
Harold B. Phillips Note for Jones, Jensen & Co. Liability
Promissory Note
----------------
$5,000.00 Beverly Hills, California November 4, 1999
One Hundred Eighty (180) days from date hereof, the undersigned Phillips
Management Services promises to pay Millennium Multi Media Corporation at
Beverly Hills, California the sum of Five Thousand ($5,000.00) Dollars with no
interest.
This note shall be secured by fifty thousand (50,000) shares of common
stock of Glenhills Corporation. Said shares are owned by the undersigned
partnership and shall not be sold, transferred or hypothecated by the
undersigned until this note is paid in full. In the event this note is not paid
at its maturity, the undersigned shall have ten (10) days after said due date in
which to discharge this obligation by either selling said shares serving as
collateral hereunder, or otherwise discharging said note. Should the undersigned
fail to discharge said note, the payee shall sell said shares in satisfaction of
said obligation.
In the event the undersigned does discharge said note upon its maturity or
within said ten (10) day grace period, said shares shall be released by the
payee and shall no longer be subject to the terms hereof. The undersigned agrees
to execute such further documents as are required to document the security
arrangement set forth herein.
Phillips Management Services
By: /s/ Hal Phillips
Partner
EXHIBIT E
Phillips Management Note
Promissory Note
----------------
NOT TO EXCEED $85,000.00 Beverly Hills, California December 30, 1999
One year from date hereof, the undersigned Phillips Management Services
promises to pay Millennium Multi Media Corporation at Beverly Hills, California
a sum Not To Exceed Eighty Five Thousand ($85,000.00) Dollars with no interest.
The specific sum to be paid pursuant to the terms of this note shall be
determined in
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accordance with the terms of that certain Definitive Agreement by & between
Millennium Multi Media.com Corporation, Glenhills Corp. and Phillips Management
Services dated December 30, 1999, and specifically paragraph 7.4 thereof.
This note shall be secured by three hundred forty thousand (340,000) shares
of common stock of Glenhills Corporation. Said shares are owned by the
undersigned partnership and shall not be sold, transferred or hypothecated by
the undersigned until this note is paid in full. In the event this note is not
paid at its maturity, the undersigned shall have ten (10) days after said due
date in which to discharge this obligation by either selling said shares serving
as collateral hereunder, or otherwise discharging said note. Should the
undersigned fail to discharge said note, the payee shall sell said shares in
satisfaction of said obligation.
In the event the undersigned does discharge said note upon its maturity or
within said ten (10) day grace period, said shares shall be released by the
payee and shall no longer be subject to the terms hereof.
The undersigned agrees to execute such further documents as are required to
document the security arrangement set forth herein.
Phillips Management Services
By: /s/ Hal Phillips
Partner
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<PAGE>
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
MILLENNIUM MULTI MEDIA.COM CORPORATION
We, the undersigned natural persons of the age of twenty-one years or more,
acting as incorporators of the corporation under the provisions of the Utah
Business Corporation Act (hereinafter called the "Act"), do hereby adopt the
following Articles of Incorporation for such Corporation.
ARTICLE I
Name. The name of the Corporation is Millennium Multi Media.com Corporation.
ARTICLE II
Period of Duration. The period of duration of the Corporation is perpetual.
ARTICLE III
Purposes and Powers. The purpose for which this Corporation is organized is to
invest in all forms of investments, including real and personal property, stocks
and bonds, including but not limited to, minerals and oil, and to acquire
options to purchase such properties, and to engage in all other lawful business.
ARTICLE IV
Capitalization.
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(a) This corporation is authorized to issue two classes of shares, designated
respectively "Common Stock" and "Preferred Stock". Three hundred million
(300,000,000) shares of Common Stock of $0.001 par value may be issued. Twenty
million (20,000,000) shares of Preferred Stock of $0.001 par value may be
issued.
(b) The board of directors may divide the Preferred Stock into any number of
series. The board shall fix the designation and number of shares of each such
series. The board may determine and alter the rights, preferences, privileges,
and restrictions granted to and imposed upon any wholly issues series of the
Preferred Stock. The board of directors (within the limits and restrictions of
any resolution adopted by it, originally fixing the number of shares of any
series) may increase or decrease the number of shares of any such series after
the issue of shares of that series, but not below the number of then outstanding
shares of such series.
(c) At the effective time of this Amendment, the Corporation shall effect a
reverse split in its issued and outstanding Common Stock so that the 237,598,000
shares currently issued and outstanding shall be reverse split, or consolidated,
on a 1-for-100 basis, and stockholders shall receive one share of the
Corporation's post-split Common Stock, $0.001 par value, for each 100 shares of
Common Stock, $0.001 par value, held by them on the effective date of the
reverse split. No scrip or fractional shares will be issued in connection with
the reverse split and any fractional interests will be rounded up to the nearest
whole share. The reverse split will not result in any modification of the rights
of shareholders, and will have no effect on the shareholders' equity in the
Corporation except for a transfer of approximately $235, 222 from stated capital
to additional paid-in capital. All shares returned to the Corporation as a
result of the reverse split will be canceled and returned to the status of
authorized and unissued shares.
ARTICLE V
Incorporators. The name and post office address of each incorporator is:
<TABLE>
<S> <C> <C>
Keith Randall Don M. Jensen Jonathan W. Richards
930 Newberry Road 5551 Easton Street 450 East 100 South, #23
Salt Lake City, Utah 84108 Salt Lake City, Utah 84118 Salt Lake City, Utah 84111
</TABLE>
ARTICLE VI
Directors. The Corporation shall be governed by a Board of Directors consisting
of no less than three (3) and no more than nine (9) directors. Directors need
not be stockholders of the Corporation. The number of Directors constituting the
initial Board of Directors is three (3) and the names and post office addresses
of the persons who shall serve as Directors until their successors are elected
and qualified are:
<TABLE>
<S> <C> <C>
Keith Randall Don M. Jensen Jonathan W. Richards
930 Newberry Road 5551 Easton Street 450 East 100 South, #23
Salt Lake City, Utah 84108 Salt Lake City, Utah 84118 Salt Lake City, Utah 84111
</TABLE>
ARTICLE VII
Commencement of Business. The Corporation shall not commence business until at
least One Thousand Dollars ($1,000) has been received by the Corporation as
consideration for the issuance of its shares.
ARTICLE VIII
Preemptive Rights. There shall be no preemptive rights to acquire unissued
and/or treasury shares of the stock of the Corporation.
ARTICLE IX
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<PAGE>
Voting of Shares. Each outstanding share of common stock of the Corporation
shall be entitled to one vote on each matter submitted to a vote at the meeting
of the stockholders. Each stockholder shall be entitled to vote his or its
shares in person or by proxy, executed in writing by such stockholders, or by
his duly authorized attorney-in-fact. At each election of Directors, every
stockholder entitled to vote in such election shall have the right to vote, in
person or by proxy, the number of shares owned by him or it for as many persons
as there are Directors to be elected and for whose election he or it has the
right to vote, but the Shareholder shall have no right to accumulate his or its
votes with regard to such election.
ARTICLE X
Initial Registered Office and Initial Registered Agent. The address of the
initial registered office of the Corporation is 930 Newberry Road, Salt Lake
City, Utah 84108, and the initial Registered Agent at such office Keith Randall.
ARTICLE XI
Exemption. The provisions of the Utah Control Shares Acquisition Act (Utah Code
Ann. 61-6-1 et seq.) shall not apply to this corporation. ARTICLE XII
ARTICLE XII
Directors' Liability. The liability of the directors of the Corporation shall be
limited to fullest extent allowed by the Revised Business Corporation Act of the
State of Utah.
STATE OF UTAH )
: ss
COUNTY OF SALT LAKE )
/s/ Keith Randall
Keith Randall
/s/ Don M. Jenses
Don M. Jensen
/s/ Jonathan W. Richards
Jonathan W. Richards
SUBSCRIBED AND SWORN TO before me this 15th day of June, 1983.
/s/ Kathleen P. Landon
Notary Public
Residing at Salt Lake City
My Commission Expires:
3/12/85
(Seal)
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<PAGE>
EXHIBIT 3.2
BY-LAWS
OF
INTERSTATE PROTECTORS CORPORATION
ARTICLE I - OFFICES
The principal office of the corporation in the State of Utah shall be
located in the City of Salt Lake, County of Salt Lake. The corporation may have
such other offices, either within or without the State of Incorporation as the
Board of Directors may designate or as the business of the corporation may from
time to time require.
ARTICLE II - STOCKHOLDERS
1. ANNUAL MEETING.
The annual meeting of the stockholders shall be held on the 30th day of
June in each year, beginning with the year 1983, at the hour of one o'clock p.m.
for the purpose of electing directors and for the transaction of such other
business as may come before the meeting. If the day fixed for the annual meeting
shall be a legal holiday, such meeting shall be held on the next succeeding
business day.
2. SPECIAL MEETINGS. UCS S 16-10-26
Special meetings of the stockholders, for any purpose or purposes, unless
otherwise prescribed by statute, may be called by the president or by the
directors, and shall be called by the president or by the directors, and shall
be called by the president at the request of the holders of not less than ten
percent of all the outstanding shares of the corporation entitled to vote at the
meeting.
3. PLACE OF THE MEETING.
The directors may designate any place, either within or without the State
unless otherwise prescribed by statute, as the place of meeting for any annual
meeting or for any special meeting called by the directors. A waiver of notice
signed by the all stockholders entitled to vote at a meeting may designate any
place, either within or without the State unless otherwise prescribed by
statute, as the place for such holding such meeting. If no designation is made,
or if a special meeting be otherwise called place of meeting shall be the
principal office of the corporation.
4. NOTICE OF MEETING. UCA S 16-10-27
Written or printed notice stating the place, day and hour of the meeting
and, in case of a special meeting and, the purpose or purposes for which the
meeting is called shall be delivered not less than ten nor more than fifty days
before the date of the meeting, either personally or by mail, by or at the
direction of the president, or the secretary, or the officers or persons calling
the meeting, to each stockholder of record entitled to vote at such meeting. If
mailed, such notice shall be deemed to be delivered when deposited in the United
States mail. Addressed o the stockholder at his address as it appears on the
stock transfer books of the corporation, with postage thereon prepaid.
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5. CLOSING OF TRANSFER BOOKS OR FIXING OF RECORD DATE. UCA S 16-20-28
For the purpose of determining stockholders entitled to notice of or to
vote at any meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividend, or in order to make a determination
of stockholders for any other proper purpose, the directors of the corporation
may provide that the stock transfer books shall be closed for a stated period
but not to exceed, in case, fifty days. If the stock transfer books shall be
closed for the purpose of determining stockholders entitled to notice of or to
vote at a meeting of stockholders, such books shall be close for at least ten
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the director may fix in advance a date as the record date for any such
determination of stockholders. When a determination of stockholders entitles to
vote at any meeting of stockholders has been made as provided in this section,
such determination shall apply to any adjournment thereof.
6. VOTING LISTS. UCA S 16-10-29
The officer or agent having charge of the stock transfer books for shares
of the corporation shall make, at least ten days before each meeting of
stockholders, a complete list of the stockholders entitled to vote at such
meeting, or any adjournment thereof, arranged in alphabetical order, with the
address f and the number of shares held by each, shall be kept on file at the
principal office of the corporation and shall be subject to inspection by any
stockholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting and shall be subject
to the inspection of any stockholder during the whole time of the meeting. The
original stock transfer book shall be prima facie evidence as to who are the
stockholders entitled to examine such list of transfer books or to vote at the
meeting of stockholders.
7. QUORUM. UCA S 16-10-30
At any meeting of stockholders a majority of the outstanding shares of the
corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of stockholders. If less than said number of
the outstanding shares are presented at a meeting, a majority of the shares so
represented may adjourn the meeting form time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough stockholders to leave less than a quorum.
8. PROXIES. UCA S 16-10-30
At all meeting of stockholders, a stockholder may vote by proxy executed in
writing by the stockholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary of the corporation before or at the time
of the meeting.
9. VOTING. UCA S 16-10-30
Each stockholder entitled to vote in accordance with the terms and
provisions of the Certificate of Incorporation and these By-Laws shall be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such stockholders. Upon the demand of any stockholder, the vote for
directors and upon any question before the meeting shall be by ballot. All
elections for directors shall be decided by majority vote except as otherwise
provided by the Certificate of Incorporation of the Laws of this State.
10. ORDER OF BUSINESS.
The order of business at all meetings of the stockholders shall be as
follows:
Roll call.
Proof of notice of meeting or waiver of notice.
Reading of minutes of preceding meeting.
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<PAGE>
Reports of Officers.
Reports of Committees.
Election of Directors.
Unfinished Business.
New Business.
11. INFORMAL ACTION BY STOCKHOLDERS. UCA S 16-10-138
Unless otherwise provided by law, any action required to be taken at a meeting
of the shareholders, or any other action which may be taken at a meeting of the
shareholders, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the shareholders entitled
to vote with respect to the subject matter thereof.
ARTICLE III - BOARD OF DIRECTORS
1. GENERAL POWERS. UCA S 16-10-33
The business and affairs of the corporation shall be managed by its Board
of Directors. The directors shall be in all cases act as a board, and they may
adopt such rules and regulations for the conduct of their meetings and the
management of the corporation, as they may deem proper, not inconsistent with
these By-laws and the laws of this State.
2. NUMBER, TENURE AND QUALIFICATIONS.
The number of the directors of the corporation shall be not more than nine
(9) or less than three (3). Each director shall hold office until the next
annual meeting of stockholders and until is successor shall have been elected
and qualified.
3. REGULAR MEETINGS. UCA S 16-10-40
A regular meeting of the directors shall be held without other notice
than this By-law immediately after, and at the same place as, the annual meeting
of the stockholders. The directors may provide by resolution, the time and place
for the holding of additional regular meetings without other notice than such
resolution.
4. SPECIAL MEETINGS.
Special meetings of the directors may be called by or at the request of
the president or any two directors. The person or persons authorized to call
special meetings of the directors may fix the place for holding any special
meeting of the directors called by them.
5. NOTICE. UCA S 16-10-40
Notice of any special meeting shall be given at least two days
previously thereto by written notice delivered personally, or by telegram or
mailed to each director at his business address. If mailed, such notice shall be
deemed to be delivered when deposited in the United States mail so addressed,
with postage thereon prepaid. If notice be given by telegram such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meeting is not lawfully called or convened.
6. QUORUM. UCA S 16-10-38
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<PAGE>
At any meeting of the directors a majority shall constitute a quorum for
the transaction of business, but if less than said number is present at a
meeting, a majority of the directors present may adjourn the meeting form time
to time without further notice.
7. MANNER OF ACTING.
The act of the majority of the directors present at a meeting at which a
quorum is present shall be the act of the directors.
8. NEWLY CREATED DIRECTORS AND VACANCIES.
Newly created directorships resulting form the an increase n the number of
directors and vacancies occurring in the board for any reason except the removal
of directors without cause may be filled by a vote of a majority of the
directors then in office, although less than a quorum exists. Vacancies
occurring by reason of the removal of directors without cause shall be filled by
vote of the stockholders. A director elected to fill a vacancy caused by
resignation, death or removal shall be elected to hold office for the unexpected
term of his predecessor.
9. REMOVAL OF DIRECTORS.
Any or all of the directors may be removed for cause by vote of the
stockholders or by action of the board. Directors may be removed without cause
only by vote of the stockholders.
10. RESIGNATION.
A director may resign at any time by giving written notice to the board,
the president or the secretary of the corporation. Unless otherwise specified in
the notice, the resignation shall take effect upon receipt thereof by the board
of such officer, and the acceptance of the resignation shall not be necessary to
make it effective.
11. COMPENSATION.
No compensation shall be paid to directors, as such, for their services,
but by resolution for the board a fixed sum and expenses for actual attendance
at each regular or special meeting of the board may be authorized. Nothing
herein contained shall be construed to preclude any director form saving the
corporation in any other capacity and receiving compensation therefore.
12. PRESUMPTION OF ASSENT.
A director of the corporation who is present at a meeting of the directors
at which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his dissent shall be entered in the minutes
of the meeting or unless he shall file his written dissent to such action with
the person acting as the secretary of the meeting before the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
13. EXECUTIVE AND OTHER COMMITTEES.
The board, by resolution, may designate form among its members am executive
committee and other committees, each consisting of three or more directors. Each
such committee shall serve at the pleasure of the board.
14. ACTION WITHOUT A MEETING. UCA S 16-10-40
Any action that may be taken by the Board of Directors at a meeting may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, shall be signed before such action by all of the directors.
ARTICLE IV - OFFICERS
4
<PAGE>
1. NUMBER.
The officers of the corporation shall be president, a vice-president, a
secretary and a treasurer, each of whom shall be elected by the directors. Such
other officers and Assistant officers as may be deemed necessary may be elected
or appointed by the directors.
2. EXECUTIION AND TERM OF OFFICE.
The officers of the corporation to be elected by the directors shall be
elected annually at the first meeting of the directors held after each annual
meeting of the stockholders. Each officer shall hold office until his successor
shall have been duly elected and shall have qualified or until his death or
until he shall resign or shall have been removed in the manner hereinafter
provided.
3. REMOVAL.
Any officer or agent elected or appointed by the directors may be removed
by the directors whenever in their judgment the best interests of the
corporation would be served thereby, but such removal shall be without prejudice
to the contract rights, if any of the person removed.
4. VACANCIES.
A vacancy in any office because of death, resignation, removal,
disqualification or otherwise, may be filled by the directors for the unexpired
portion of the term.
5. PRESIDENT.
The president shall be the principal executive officer of the corporation
and, subject to the control of the directors, shall in general supervise and
control all of the business and affairs of the corporation. He shall, when
present, preside at all meetings of the stockholders and of the directors. He
may sign, with the secretary or any other proper officer of the corporation
thereunto authorized by the directors, certificates for shares of the
corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the directors have authorized to be executed, except in cases where the signing
and execution thereof shall be expressly delegated by the directors or by these
By-Laws to some other officer or agent of the corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of president and such other duties as may be
prescribed by the directors from time to time.
6. VICE-PRESIDENT.
In the absence of the president or in the event of his death, inability or
refusal to act, the vice-president shall perform the duties of the president,
and when so acting, shall have all powers of and be subject to all the
restrictions upon the president. The vice-president shall perform such other
duties as from time to time may be assigned to him by the president or by the
directors.
7. SECRETARY.
The secretary shall keep the minutes of the stockholders' and of the
directors' meetings in one or more books provided for that purpose, so that all
notices are duly given in accordance with the provisions of these by laws or as
required, by custodian of the corporate records and of the seal of the
corporation and keep a register of the post office address of each stockholder
which shall be furnished to the secretary by such stockholders, have general
charge of the stock transfer books of the corporation and in general perform all
duties incident to the office of secretary and such other duties as from time to
time may be assigned to him by the president or by the directors.
8. TREASURER.
If required by the directors, the treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such surety or sureties as
the directors shall determine. He shall have charge and custody of and
5
<PAGE>
be responsible for all funds and securities of the corporation; receive and give
receipts for monies due and payable to the corporation from any source
whatsoever, and deposit all such monies in the name of the corporation in such
banks, trust companies or other depositories as shall be selected in accordance
with these By-Laws and in general perform all of the duties incident to the
office of treasurer and such other duties as from time to time may be assigned
to him by the president or by the directors.
9. SALARIES.
The salaries of the officers shall be fixed from time to time by the
directors and no officer shall be prevented form receiving such salary by reason
of the fact that he is also a director of the corporation.
ARTICLE V - CONTRACTS, LOANS, CHECKS AND DEPOSITS
1. CONTRACTS
The directors may authorize any office or officers, agent or agents, to
enter into any contract or execute and deliver and instrument in the name of and
on behalf of the corporation, and such authority may be general or confined to
specific instances.
2. LOANS.
No loans shall be contracted on behalf of the corporation and no evidence
of indebtedness shall be issued in its name unless authorized by a resolution of
the directors. Such authority may be general or confined to specific instances.
3. CHECK, DRAFTS, ETC.
All checks, drafts or other orders for the payment of money, notes or other
evidences of indebtedness issued in the name of the corporation, shall be signed
by such officer of officers, agent or agents of the corporation and in such
manner as shall from time to time be determined by resolution of the directors.
4. DEPOSITS.
All funds of the corporation not otherwise employed shall be deposited form
time to time to the credit of the corporation in such banks, trust companies or
other depositories as the directors may select.
ARTICLE VI - CERTIFICATES FOR SHARES AND THEIR TRANSFER
1. CERTIFICATE FOR SHARES.
Certificates representing shares of the corporation shall be in such form
as shall be determined by the directors. Such certificates shall be signed by
the president and by the secretary or by such other officers authorized by law
and by the directors. All certificates for shares shall be consecutively
numbered or otherwise identified. The name and address of the stockholders, the
number of shares and date of issue, shall be entered on the stock transfer books
of the corporation. All certificates surrendered to the corporation for transfer
shall be cancelled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
cancelled, except that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefore upon such terms and indemnity to the corporation
as the directors may prescribe.
2. TRANSFER OF SHARES.
Upon the surrender of the corporation of 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 new certificate to the person entitled
thereto, and cancel the old certificate;
6
<PAGE>
every such transfer shall be entered on the transfer book of the corporation
which shall be kept at its principal office.
The corporation shall be entitled to treat the holder of record of any
share as the holder in fact thereof, and, accordingly, shall not be bound to
reorganize an equitable or other claim to or interest in such share on the part
of any other person whether or not it shall have express or other notice
thereof, except as expressly provided by the laws of this state.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall begin on the first day of January
in each year.
ARTICLE VIII - DIVIDENDS
The directors may form time to time declare, and the corporation may pay,
dividends on its outstanding shares in the manner and upon the terms and
conditions provided by law.
ARTICLE IX - SEAL
The directors may provide a corporate seal which shall be circular in form
and shall have inscribed thereon the name of the corporation, the state of
incorporation, year of incorporation and the words, "Corporate Seal."
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any shareholder or director of the corporation under the provisions of
these By-laws or under the provisions of the Articles of Incorporation, a waiver
to such notice, whether before or after the time stated wherein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI - AMENDMENTS
These By-laws may be altered, amended or repealed and new By-laws may be
adopted by a vote of the stockholders representing a majority of all the shares
issued and outstanding, at any annual stockholders; meeting or at any special
stockholders' meeting when the proposed amendment has been set out in the notice
of such meeting.
7
<PAGE>
EXHIBIT 10.1
EXHIBIT 10.1 - MATERIAL CONTRACTS - PHILLIPS MANAGEMENT SERVICES CONSULTING
AGREEMENT
EXECUTIVE SERVICES AGREEMENT
This Agreement is made between DHS Industries, Inc., a Utah corporation,
with its principal place of business at 17277 Ventura Blvd. Suite 200, Encino,
CA 91316 ("Client" or "DHS") and Phillips Management Services, a general
partnership, with its principal place of business at 17277 Ventura Blvd.. Suite
200, Encino,
1
<PAGE>
CA 91316 ("PMS"), as of March 20, 1998. In consideration of the mutual covenants
contained herein, the parties do hereby agree as follows:
1. QUALIFICATIONS: PMS has skill and experience in certain fields of activity
in which the Client is interested. Said fields of activity are identified
as executive administration, accounting, market research, public relations
and marketing.
2. HIRING: Client hereby engages the services of PMS and PMS hereby accepts
such engagement in the above fields of activity. PMS will report to and
take instructions from Frederick T Manlunas, the President of the Client
company.
3. DUTIES: The primary duties of PMS will be to provide to Client senior
public company management services including, but not limited to executive
services, accounting services, fulfillment of governmental compliance
requirements, preparation of offering documents in conjunction with
Client's counsel, and public relation services. Additionally, PMS will
provide the services of Jeffrey J. Sacher, President of the Company's
marketing research subsidiary. PMS will determine the method, details and
means of performing said duties.
4. TERM: The term of this Agreement shall commence as of the date of this
Agreement for a period of five (5) years and shall be ongoing until and
unless terminated pursuant to Paragraph 11 below.
5. COMPENSATION: The Client shal1 pay to PMS a fee of $15,500 per month.
6. DEVOTION OF TIME: PMS shall devote reasonable and adequate time to
accomplish those various duties requested by the Client under this
Agreement and shall carry out said duties to the satisfaction of Client.
7. WARRANTIES: PMS represents and warrants that it has the right to enter into
the Agreement and to render services to C1ient.
8. CONFIDENTIALITY: PMS may be given access to certain proprietary
Information, including trade secrets of Client. PMS agrees to preserve in
strict confidence all such information during the term of this Agreement
and for as long thereafter as the information received is not in the public
domain. PMS will not disclose this information except as directed.
9. INDEPENDENT CONTRACTOR: PMS and his employees and associates are at all
times acting end performing hereunder as independent contractor(s) and not
as a Client employee(s). PMS agrees to perform those services with the
standard of care, skill and diligence normally provided by a professional
person in the performance of such services.
10. COMPLIANCE WITH APPLICABLE LAWS: In the performance of PMS' services it
shall comply with all applicable laws of the jurisdictions in which his
services are performed.
11. TERMINATION: This Agreement shall terminate upon expiration of the term of
this Agreement; or upon earlier mutual consent of the parties.
12. ARBITRATION: In the event that a dispute arises, the parties do hereby
agree to settle any dispute by arbitration conducted through the American
Arbitration Association to be held in Los Angeles, California. Such
decision of the arbitration shall be final and binding on all parties.
13. ENTIRE AGREEMENT: This document represents the complete agreement between
the parties and may be modified or amended only by duly executed written
agreements. This Agreement shall be construed in accordance with the laws
of the State of California, which shall also be both the venue and
jurisdiction of any disputes between the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and year noted above.
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<PAGE>
/s/ Frederick T. Manlunas
Frederick T. Manlunas, President
DHS Industries, Inc.
/s/ Jefferey J. Sacher
Jefferey J. Sacher, Partner
Phillips Management Services
3
<PAGE>
EXHIBIT 10.2
MATERIAL CONTRACTS - TECHNICAL MANAGEMENT CONSULTANTS FINDERS' FEE AGREEMENT
TECHNICAL MANAGEMENT CONSULTANTS (TMC)
--------------------------------------
3264 Westfall Drive. Encino, CA 91436 Phone (818) 784-0626. Fax (818) 501-7268
CONSULTING AGREEMENT
This AGREEMENT is made and entered into this 24 day of SEPT 1999 by and between
Millenniu Multi Media ("CLIENT") with principal offices at 3660 Wilshire Blvd.,
Suite 1104, Los Angeles, CA 90010, and TECHNICAL MANAGEMENT CONSULTANTS ("TMC")
with its principal offices at 3264 Westfall Drive, Encino, CA 91436.
WITNESSETH
WHEREAS, CLIENT is an active California Corporation; and
WHEREAS, TMC is a privately held California company; and
WHEREAS, CLIENT and TMC desire to set forth the terms and conditions upon which
TMC will perform services for CLIENT.
THEREFORE, it is agreed as follows:
1. Engagement of TMC: Subject to the terms and conditions of this Agreement,
CLIENT hereby engages TMC on a non-exclusive basis, and TMC hereby accepts
such engagement to perform the services set forth.
2. Services: TMC will provide consulting services for CLIENT to locate shell
corporation for reverse merger with CLIENT.
3. Term: The term of this Agreement will be for services as requested for s
long as needed. The agreement may be terminated by either party with 30
days written notice. However, for mergers which take place within one year
from date of termination of this agreement with previously introduced shell
corporations, fees shall be due in accordance with this agreement.
4. Compensation: CLIENT shall compensate TMC with a success fee of five
percent (5%) of the issued and outstanding stock of the merged companies,
paid proportional to ownership by both parties. CLIENT and
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shell corporation, e.g. for an 80/20 deal, 4% from CLIENT and 1% from shell
corporation (free trading if available). TMC will share this fee with
Compound Capital Group, Inc. (Brad Stewart) and with Phillip Fox, and
others and these parties shall receive no other compensation.
5. Expenses: TMC and CLIENT shall bear their own expenses.
6. Independent Contractor: TMC is being retained by CLIENT for the purpose and
to the extent set forth in this Agreement and TMC's relationship to Client
will be that of an independent contractor.
7. Standards of Conduct: CLIENT and TMC will at all times conduct themselves,
both with respect to their activities under this Agreement and with respect
to their business activities, generally in compliance with all applicable
Federal and State laws.
8. Indemnification: CLIENT and TMC will indemnify and hold each other harmless
from and against any and all losses, costs, expenses, damages or
obligations either incur as a result of, arising from, or in conjunction
with any violations of Federal or State laws.
9. Arbitration: Any controversy or claim arising out of or relating to this
Agreement, or breach thereof, will be settled by arbitration accordance
with the Commercial Arbitration Board Rules of the American Arbitration
Association, and judgment of the award rendered by the Arbitrator(s) may be
entered in any court having jurisdiction thereof.
10. Governing Law: The validity of this Agreement and any of its terms and
provisions, as well as the rights and duties hereunder, will be governed by
the laws of the State of California.
This proposal is valid for 30 days
TECHNICAL MANAGEMENT CLIENT
CONSULTANTS
/s/ Bob Stuckelman /s/ Illya Bond
Robert Stuckelman, President Illya Bond, Secretary
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EXHIBIT 10.3
MATERIAL CONTRACTS - OFFICE SPACE LEASE AGREEMENT
COMMERCIAL LEASE
This Lease is made between Regal Group, L.L.C. of 9301 Wilshire Blvd.,
Suite 203, Beverly Hills, California 90210, herein called Lessor, and Millennium
Multi Media.com Corp. of Utah, herein called Lessee.
Lessee hereby offers to lease from Lessor the premises situated in the City
of Beverly Hills, County of Los Angeles, State of California, described as 9301
Wilshire Blvd. Suite 201 and Suite 202, upon the following TERMS and CONDITIONS:
1. Term and Rent. Lessor demises the above premises for a term of 2.5 years,
commencing November 1, 1999, and terminating on May 31, 2002, or sooner as
provided herein, at the annual rental of four thousand three hundred thirty four
Dollars and forty Cents ($4,334.40) for the first twelve months, increasing by
three percent (3%) per annum thereafter, payable in equal installments in
advance on the first day of each month for that month's rental, during the term
of this lease. All rental payments shall be made to Lessor, at the address
specified above.
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2. Use. Lessee shall occupy and use the premises for professional business. The
premises shall be used for no other purpose. Lessor represents that the premises
may lawfully be used for such purpose.
3. Care and Maintenance of Premises. Lessee acknowledges that the premises are
in good order and repair, unless otherwise indicated herein. Lessee shall, at
his own expense and at all times, maintain the premises in good and safe
condition, including plate glass, electrical wiring, plumbing and heating
installations and any other system or equipment upon the premises and shall
surrender the same, at termination hereof, in as good condition as received,
normal wear and tear excepted. Lessee shall be responsible for all repairs
required, excepting the roof, exterior walls, and structural foundations, which
shall be maintained by Lessor. Lessee shall also maintain in good condition such
portions adjacent to the premises, such as sidewalks, driveways, lawns and
shrubbery, which would otherwise be required to be maintained by Lessor.
4. Alterations. Lessee shall not, without first obtaining the written consent of
Lessor, make any alterations, additions, or improvements, in, to or about the
premises.
5. Ordinances and Statutes. Lessee shall comply with all statutes, ordinances
and requirements of all municipal, state and federal authorities now in force,
or which may hereafter be in force, pertaining to the premises, occasioned by or
affecting the use thereof by Lessee.
6. Assignment and Subletting. Lessee shall not assign this lease or sublet any
portion of the premises without prior written consent of the Lessor, which shall
not be unreasonably withheld. Any such assignment or subletting without consent
shall be void and, at the option of the Lessor, may terminate this lease.
7. Utilities. All applications and connections for necessary utility services on
the demised premises shall be made in the name of the Lessee only, and Lessee
shall be solely liable for utility charges as they become due, including those
for sewer, water, gas, electricity, and telephone services.
8. Entry and Inspection. Lessee shall permit Lessor or Lessor's agents to enter
upon the premises at reasonable times and upon reasonable notice, for the
purpose of inspecting the same, and will permit Lessor at any time within sixty
(60) days prior to the expiration of this lease, to place upon the premises any
usual "To Let" or "For Lease" signs, and permit persons desiring to lease the
same to inspect the premises thereafter.
9. Possession. If Lessor is unable to deliver possession of the premises at the
commencement hereof, Lessor shall not be liable for any damage caused thereby,
nor shall this lease be void or voidable, but Lessee shall not be liable for any
rent until possession is delivered. Lessee may terminate this lease if
possession is not delivered within 30 days of the commencement of the term
hereof.
10. Indemnification of Lessor. Lessor shall not be liable for any damage or
injury to Lessee, or any other person, or to any property, occurring on the
demised premises or any part thereof, and Lessee agrees to hold Lessor harmless
form any claims for damages, no matter how caused.
11. Insurance. Lessee, at his expense, shall maintain plate glass and public
liability insurance including bodily injury and property damage insuring Lessee
and Lessor with minimum coverage as follows:
Lessee shall provide Lessor with a certificate of Insurance showing Lessor
as additional insured. The Certificate shall provide for a ten-day written
notice to Lessor in the event of cancellation or material change of coverage. To
the maximum extent permitted by insurance policies, which may be owned by Lessor
or Lessee, Lessee and Lessor for the benefit of each other, waive any and all
rights of subrogation which might otherwise exist.
12. Eminent Domain. If the premises or any part thereof or ant estate therein,
or any other part of the building materially affecting Lessee's use of premises,
shall be taken by eminent domain, this lease shall terminate on the date when
title vests pursuant to such taking. The rent, and any additional rent, shall be
apportioned as of the termination date, and any rent for any period beyond that
date shall be repaid to Lessee. Lessee shall not be entitled to any part of the
award for such taking or any payment in lieu thereof, but Lessee may file a
claim for taking of fixtures and improvements owned by Lessee, and for moving
expenses.
13. Destruction of Premises. In the event of a partial destruction of the
premises during the term hereof, form any cause, Lessor shall forthwith repair
the same, provided that such repairs can be made within sixty (60) days under
existing governmental laws and regulations, but such partial destruction shall
not terminate this lease, except that Lessee shall be entitled to a
proportionate reduction of rent while such repairs are being made based upon the
extent to which the making of
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such repairs shall interfere with the business of Lessee on the premises. If
such repairs cannot be made within said sixty (60) days, Lessor, at his opinion,
may make the same within a reasonable time, this lease continuing in effect with
the rent proportionately abated as aforesaid, and in the event that Lessor shall
not elect to make such repairs which cannot be made within sixty (60) days, this
lease may be terminated at the option of either party. In the event that the
building in which the demised premises may be situated is destroyed to an extent
of not less than one-third of the replacement costs thereof, Lessor may elect to
terminate this lease whether the demised premises be injured or not. A total
destruction of the building in which the premises may be situated shall
terminate this lease.
14. Lessor's Remedies and Default. If lessee defaults in the payment of rent, or
any additional rent, or defaults in the performance of any other covenants or
conditions hereof, Lessor may give Lessee notice of such default and if Lessee
does not cure any such default within 30 days, after the giving of such notice
(or if such other default is of such nature that it cannot be completely cured
within such period, if Lessee does not commence such curing within such 30 days
and thereafter proceed with reasonable diligence and in good faith to cure such
default), then Lessor may terminate this lease on not less than 15 days' notice
to Lessee. On the date specified in such notice the term of this lease shall
terminate, and Lessee shall then quit and surrender the premises to Lessor, but
Lessee shall remain liable as hereinafter provided. If this lease shall have
been so terminated by Lessor, Lessor may at any time thereafter resume
possession of the premises by any lawful means and remove Lessee or other
occupants and their effects. No failure to enforce any term shall be deemed a
waiver.
15. Security Deposit. Lessee shall deposit with Lessor on the signing of this
lease the sum of two thousand sixty seven Dollars and forty eight Cents
($2,067.48) as security for the performance of Lessee's obligation under this
lease, including without limitation the surrender of possession of the premises
to Lessor as herein provided. If Lessor applies any part of the deposit to cure
any default of Lessee, Lessee shall on demand deposit with Lessor the amount so
applied so that Lessor shall have the full deposit on hand at all times during
the term of the lease.
16. Tax Increase. In the event there is any increase during any year of the term
of this lease in the City, County or State real estate taxes over and above the
amount of such taxes assessed for the tax year during which the term of this
lease commences, whether because of increased rate or valuation, Lessee shall
pay to Lessor upon presentation of paid tax bills an amount equal to 0% of the
increase in taxes upon the land and building in which the leased premises are
situated. In the event that such taxes are assessed for a tax year extending
beyond the term of the lease, the obligation of Lessee shall be proportionate to
the portion of the lease term included in such year.
17. Common Area Expense. In the event the demised premises are situated in a
shopping center or in a commercial building in which there are common areas,
Lessee agrees to pay his pro-rate share of maintenance, taxes, and insurance for
the common area.
18. Attorney's Fees. In case suit should be brought for recovery of the
premises, or for any sum due hereunder, or because of any act which may arise
out of the possession of the premises, by either party, the prevailing party
shall be entitled to all costs incurred in connection with such action,
including a reasonable attorney's fee.
19. Waiver. No failure of Lessor to enforce any term hereof shall be deemed to
be a waiver.
20. Notices. Any notice which either party may or is required to give, shall be
given by mailing the same, postage prepaid, to Lessee at the premises, or Lessor
at the address shown below, or at such other places as may be designated by the
parties form time to time.
21. Heirs, Assigns, Successors. This lease is binding upon and inures to the
benefit of the heirs, assigns and successors in interest to the parties.
22. Subordination. This lease is and shall be subordinated to all existing and
future liens and encumbrances against the property.
23. Entire Agreement. The foregoing constitutes the entire agreement between the
parties and may be modified only by a writing signed by both parties.
Signed this 25th day of October, 1999
/s/ Illya Bond /s/ Joseph Torkan
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By: Illya Bond By: Joseph Torkan
Lessee Lessor
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EXHIBIT 10.4
MATERIAL CONTRACTS - PROMISSORY NOTE PAYABLE TO REGAL GROUP, L.L.C.
Promissory Note
$100,000.00 Beverly Hills, California December 29, 1999
One (1) year from date hereof, the undersigned Millennium Multi Media.com Corp.,
a Delaware corporation, promises to pay to Regal Group LLC, a California limited
liability company, a sum of One Hundred Thousand Dollars ($100,000), along with
interest compounded at an annual rate of Five Percent (5%).
/s/ Illya Bond
Millennium Multi Media.com Corp.
Name: Illya Bond
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EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
The Company owns 100% of Millennium Multi Media.com Corp., a Delaware
corporation.
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EXHIBIT 23.1
CONSENT OF JONES, JENSEN & COMPANY, INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The undersigned independent public accounting firm hereby consents to the
inclusion of its report on the financial statements of Millennium Multi
Media.com Corp. for the years ending December 31, 1997 and December 31, 1998.
/s/ Jones, Jensen & Company
Jones, Jensen & Company
Salt Lake City, Utah
March 29, 1999
