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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF
SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
NORTHSTAR NETWORK, INC.
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(Name of small business issuer in its charter)
(FORMERLY GLOBAL PRODUCTIONS, INC.)
State of Washington 75-2848251
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(State or other jurisdiction of (IRS Employer
incorporation or organization) I. D. Number)
17440 Dallas Parkway, Suite 100, Dallas, Texas 75287
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code:
(972) 735-7827
Securities to be registered pursuant to Section 12(b) of the Act:
None
Securities to be registered pursuant to Section 12(g) of the Act:
Title of Class - Common Stock, No Par Value
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TABLE OF CONTENTS
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Page
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Part I Item 1 Description of Business 3
Item 2 Management's Discussion and Analysis of 13
Financial Condition and Plan of Operation
Item 3 Description of Assets 14
Item 4 Security Ownership of Certain Beneficial 14
Owners and Management
Item 5 Directors, Executive Officers, Promoters 15
and Control Persons
Item 6 Executive Compensation 18
Item 7 Certain Relationships and Related Transactions 18
Item 8 Description of Securities 18
Part II Item 1 Market Price and Dividends of the Registrant's 19
Common Equity and Other Shareholder Matters
Item 2 Legal Proceedings 19
Item 3 Changes in and Disagreements with Accountants 20
Item 4 Recent Sales of Unregistered Securities 20
Item 5 Index of Exhibits 20
Signatures 21
Part F/S Financial Statements 22
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PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) BRIEF OVERVIEW
NorthStar Network, Inc. (referred to as either "NorthStar" or the"Company") is
a national Internet Service Provider (ISP) by virtue of the Company's contracts
for access to more than 1800 Points of Presence (POPS) belonging to AT&T/IBM
Network, Mega POP, Navinet, Level 3, and Split Rock. NorthStar's contracts
allow its Internet clients access to the world wide web through local dial-up
telephone numbers in designated cities throughout the United States. In
addition to these contracted POPS, the Company operates POPS of its own in
selected cities in Texas and Oklahoma. The company intends to expand the
availability of its Internet access service by acquiring or developing
additional POPS of its own to supplement the contracted POPS.
In addition to Internet access, the Company is engaged in other business
activities relative to the Internet and Technology fields and intends to focus
upon and expand these activities in the future as they become ancillary to the
Company's ISP business. These extended activities include, web design, computer
software development and sales, computer hardware sales, and providing Internet
and intra-net consulting services to medium and large corporations seeking to
out source certain highly specialized segments of their businesses.
As the Company grows, it will seek to expand its scope of operations
internationally as opportunities may unfold.
(a) HISTORY
Eagle Mountain Mining, Inc. ("Eagle") was incorporated under the Washington
Business Corporation Act in Spokane, Washington, USA, on May 24, 1979. The
Company was organized to acquire and explore mining properties and generally to
carry on any lawful business to promote the interest of the corporation. The
Company's initial capitalization was fifty million (50,000,000) shares of no
par value common stock. On July 5, 1988, Eagle, by action of its Board of
Directors, increased the authorized shares of the Corporation's no par value
common stock from fifty million (50,000,000) shares to one-hundred million
(100,000,000) shares. At a Special Meeting of the Shareholders held on December
31, 1990, the Company amended its capitalization to 99,000,000 shares of common
stock with no par value and 1,000,000 shares of preferred stock also with no
par value in conjunction with changing its name to Global Productions, Inc. A 1
for 50 reverse stock split was approved on December 31, 1990 and the Company
moved its headquarters to Dallas, Texas and changed its focus to energy and
entertainment.
During 1991 the Company began to shift its focus primarily to entertainment
projects and divest itself of its energy industry interests and the Company
acquired certain rights to properties in Branson, Missouri for anticipated
commercial development related to the entertainment industry.
In December 1994 the Company diversified its interests with the acquisition of
coal mining properties in Arkansas. In June 1996 the Company entered into a
joint venture agreement to attempt to continue the development of the Branson
properties which were never completely developed and subsequently lost.
On December 28, 1998 the Company's Board of Directors approved the issuance of
preferred stock with a stated value of $10.00. Approval was granted to the
board of directors to change the name of the Corporation. At this same meeting
the Company caused the issuance of 90,658 shares of its preferred stock to
certain debtors to eliminate $906,584 in notes payable, accrued interest,
accounts payable and accounts payable to shareholders. The preferred stock
issued has an interest rate of 6% per annum.
On September 22, 1999 the Company acquired certain assets, including computer
hardware and software and Internet accounts from an Internet service provider
(ISP), The North Star Network, Inc., a privately owned Texas corporation, in
exchange for 17,000,000 shares of the Company's common stock. These shares were
issued subsequent to a 1 for 3 reverse stock split of the common shares
previously approved by the shareholders on December 28, 1998. Also, at the same
shareholder meeting, shareholders authorized a corporate name change, and on
September 22, 1999 the Board implemented the name change to NorthStar Network,
Inc.
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(c) INDUSTRY OVERVIEW
The Internet is a global network of multiple private and public networks that
use standardized communication protocols to communicate with each other. The
Internet was started in 1969 by the U.S. Department of Defense, Advanced
Research Projects Agency (ARPANET), to enable scientists at universities to
share information and to develop a secure network. Use of the Internet has
grown rapidly since its initial commercialization in the early 1990's.
International Data Corporation ("IDC"), a market research organization, has
estimated that the number of Internet users worldwide will grow from
approximately 68.7 million in1997 to approximately 319.8 million by the end of
2002, a compound annual growth rate of 36.0%. Consumers and companies in the
United States have spearheaded adoption of the Internet as a communication and
commerce medium. While other regions of the world have been slower to accept
the Internet, its use is becoming a standard communications and business tool
worldwide. The Internet has become an important communication and commercial
medium and presents a significant opportunity for associations and businesses
to interact in new and different ways with a larger number of members,
customers, employees, suppliers and partners. As use of the Internet grows,
associations and businesses are increasing the breadth and depth of their
Internet product and service offerings. Pioneering Internet-based organizations
have developed Internet products and services in areas such as finance,
insurance, media, tourism, retail and advertising. Other organizations have
begun to use the Internet for an expanding variety of applications, ranging
from corporate or association publicity and advertising, to sales,
distribution, customer service, employee training and communication with
partners. Increasingly, Internet operations are becoming mission-critical for
many of these enterprises. To ensure the reliability of their Internet
operations, enterprises are requiring that these operations have high
performance standards, scalability and expert management 24 hours a day, 7 days
a week. Enterprises generally utilize two types of Internet services:
connectivity and valued-added services.
Connectivity services provide access to the Internet, while value-added
services consist of products such as Web design and hosting, electronic
commerce services, and communication services that improve the internal and
external operations of an enterprise. Internet connectivity and value-added
services represent two of the fastest growing segments of the
telecommunications services market. The availability of Internet access, the
advancements in technologies required to navigate the Internet and the
proliferation of content and applications available over the Internet have
attracted a rapidly growing number of Internet users. The following table
provides information about Internet usage in the United States.
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1995 1996 1997 2002E
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Internet users (millions) 9.7 23.2 38.7 135.9
Population (millions) 263.0 265.4 267.9 279.5
Internet users as a percent of population 3.7% 8.7% 14.4% 48.6%
PCs with internet access 11.5% 23.8% 36.3% 84.3%
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Source: IDC Corporation: population and Internet users as a percent of
population are based upon population figures provided by the U.S. Bureau of the
Census.
The Internet service provider market is segmented into large national or
multi-national providers with large high speed networks and regional or local
ISP's who enlist subscribers under their own names but typically rely upon the
larger providers for Internet access. The largest providers, like AT&T, have
what are referred to as "tier one" networks, which exchange Internet traffic
cost-free, at multiple public peering points, as well as through private
peering arrangements. As the number of ISP's has grown, the requirements to
become a tier one network have increased, resulting in a higher barrier to
achieving tier one provider status. Regional and local ISP's typically purchase
access to the Internet, and invest in equipment and personnel necessary to
provide products and services and customized hands-on support, and bear the
cost of marketing. Since regional and local ISP's often have limited financial
resources, the range of products and services which they offer is often
limited.
(d) THE COMPANY
NorthStar is an Internet Service Provider (ISP) which offers a variety of
specialized, technical support services, both hardware and software, to its
client base in addition to the ISP services typically provided by an ISP,
whether national such as AOL, Compuserve, Prodigy, etc., or by the literally
hundreds of "local" ISP's operating in cities and towns throughout America.
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NorthStar offers a variety of Internet services including connectivity,
electronic mail services, electronic commerce services, Web hosting and Web
site design. The Company intends to develop a broader range of value added
solutions and services independently, through acquisitions and through
strategic relationships with providers. NorthStar offers both analog and ISDN
dial-up Internet access at speeds up to128 Kilobytes per second ("Kbps"). The
Company provide this access at local telephone rates by means of approximately
1800 POPs in the AT&T Network, Megapop Network, and others which are located
throughout the United States and part of Canada. NorthStar also offers frame
relay dedicated connectivity at speeds up to 56 Kbps. The Company's services
accommodate connectivity requirements of Internet users ranging from the single
user with a computer in his or her home to work groups and businesses with
multiple users. NorthStar creates clear, concise and attractive Web sites that
convey its customers' marketing messages. NorthStar provides Domain Name
registration, places Website information in search engines, issues electronic
press releases and tracks the detailed use of each site. The Company also
offers co-linking of non-competing Websites, banner advertisements on Web sites
and links to cyber malls, associations and groups. NorthStar's services permit
hosting of multiple Web sites on a single server. The Company offers a series
of shared server hosting plans that allow our customers to establish a
sophisticated presence on the Internet, utilizing our equipment and expertise
to deploy an effective Web site. Our Web hosting products include shared UNIX
and NT offerings as well as dedicated services.
NorthStar provides on-going customer service and technical support to its
clients from its service center at 600 South Elm Street, Denton, Texas. This
center also supports the central billing system for NorthStar.
The Company's technical operation center is located at 120 N. Robinson, Suite
2716, Oklahoma City, Oklahoma 73102. This center houses the largest
concentration of the Company's web servers, e-mail servers and ancillary
support equipment and personnel, responsible for the company's access to the
world wide web. The Oklahoma City office also serves as the hub for the
company's corporate dedicated Internet service accounts, with sales,
installation and technical support for those clients requiring "always
connected" Internet service.
NorthStar employs a "direct sales" approach, which it operates from its
corporate office in Dallas, as its primary method of attracting new ISP
clients. This direct sales team, currently consisting of approximately 100
independent representatives who are either full or part time, are compensated
by the company as independent contractors on performance basis. The Company
intends to make every effort to expand this independent sales force as rapidly
as possible within the operational and financial growth program consistent with
the Company's expansion operation.
According to the list.com there are more than 7,900 ISP's in the United States.
NorthStar believes that most are regional or local operations that have
difficulty achieving profitability and who do not have the resources to offer a
wide variety of products and services, nor do they have the experience or
where-with-all to expand their marketing efforts. The Company sees these ISP's
as additional expansion opportunities by inviting these other ISP's, generally
smaller and located in lesser populated cities and towns, to join the NorthStar
Network through NorthStar's Affiliate Program. In doing so, an ISP would be
"acquired" by NorthStar and its operations incorporated into the NorthStar
Network, in exchange for a revenue stream consisting of a share of the future
revenues of the existing and future clients of the targeted ISP. The Company is
finding its Affiliate Program to be attractive to many struggling ISP's in
smaller cities where their client base is not sufficient to provide adequate
profits, but which could, by combining operations and eliminating duplication
of services, generate positive cash flow within the NorthStar Network while, at
the same time, utilizing the NorthStar support system and services to expand
its client base.
The Company is assembling a highly technical consulting team, to be known as
The NorthStar Group, whose goal shall be to seek out corporations with
specialized needs of an urgent nature, wishing to outsource some or all of its
requirements on short term or long term basis. NorthStar has held extensive
discussions with various individuals, partnerships and corporations, currently
engaged in this arena of technical consultation, relative to their joining The
NorthStar Group. One such team, headed by Daniel Sulzinger, a member of the
Company's board of directors, has already reached a tentative agreement,
subject to due diligence, to become a part of The NorthStar Group. The Company
believes that this division can potentially become a primary profit center.
Being supported, promoted and marketed by NorthStar's ISP divisions, The
NorthStar Group can enjoy economic benefits not afforded to consulting
competition in this highly specialized, technical and extremely competitive
venue.
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REGULATION
The Company's operations are not currently subject to direct regulation by
governmental agencies other than regulations applicable to businesses
generally. As use of the Internet continues to grow, jurisdictions in which
NorthStar operates may adopt regulations relating to prices charged users,
content, privacy, intellectual property protection, libel or other matters. If
adopted, such regulations could significantly affect the results of the
Company's operations.
RISK FACTORS
The Company's business is subject to a number of significant risk factors.
Investors should consider carefully the risks described below and other
information in this Form 10-SB. The risks and uncertainties described below are
not the only ones facing the Company. Additional risks and uncertainties not
presently known to the Company or that it may currently deem immaterial may
also impair the Company's business operations. If any of the events identified
in the following risk factors actually occur, they could materially adversely
affect NorthStar's business, financial condition and results of operations.
This Form 10-SB also 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 a variety of
factors, including the risks identified below and elsewhere in this Form 10-SB.
See "Information Regarding Forward-Looking Statements in Item 2 "Management
Discussion and Analysis of Financial Condition and Plan of Operation".
The Company is likely to incur significant additional losses in the short and
intermediate term. Even thereafter, the Company cannot be certain that it will
achieve or sustain positive cash flow or profitability from its operations. Net
losses and negative cash flow from operating activities are likely to occur
longer than currently anticipated if:
- the Company does not establish and maintain a customer base that
generates sufficient revenue;
- prices for the Company's products or services decline faster than
anticipated;
- the Company does not remain competitive in the innovation and quality of
its products;
- the Company does not attract and retain qualified personnel.
The Company's ability to achieve its objectives is subject to financial,
competitive, regulatory, legal, technical and other factors, many of which are
beyond the control of the Company. NorthStar's limited operating history makes
it difficult to assess its past performance and future prospects. The
investment community has limited historical operating and financial information
on which to base their evaluation of the Company's performance and prospects.
The Company is seeking to acquire new businesses and clients in an entirely new
industry and have disposed of, or are in the process of disposing of,
substantially all of the businesses in which NorthStar was engaged in prior
years. This limits the comparability of the Company's operating and financial
information from period to period.
The investment community should consider NorthStar's prospects in light of the
substantial risks, expenses, uncertainties and difficulties frequently
encountered by companies in the new and rapidly evolving markets for Internet
products and services. Such risks include the possibility that:
- the Company will be unable to increase and sustain levels of interest in
its products and services by associations, membership marketing companies
and ISPs;
- the Company will fail to sell its products successfully through its
direct sales force;
- the Company's competitors will develop services or products similar or
superior to its own;
- market prices for the Company products and services will fall as a
result of competition or other factors;
- the Company will be unable to identify, attract, motivate and retain
qualified personnel; and
- the Company will fail to fully integrate with its existing operations
the technology and operations of any of the businesses it may acquire.
NorthStar cannot be sure that it will be successful in addressing such risks,
and the failure to do so could have a material adverse impact on its business,
financial condition and results of operation. The Company is dependent on
AT&T/IBM Network, Megapop, and other tier-one providers for access to the
Internet. Its ability to offer end-user access to a tier one Internet network
on an affordable basis is dependent upon its contractual relationship for
access to AT&T/IBM Network, Megapop, and others, which charge NorthStar a fixed
monthly fee for each end-user. This enables NorthStar to offer connectivity to
tier one networks for which it pays only when end-users subscribe to its
services. If
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these contracts were to be terminated, or if the terms were to be substantially
amended, NorthStar might be required to enter into arrangements for bandwidth
with others on less favorable terms. There is no assurance that the Company
would be able to purchase connectivity on comparable terms and there is no
assurance that it would be able to pass on additional costs to its customers.
The Company's inability to obtain bandwidth on comparable terms could
materially and adversely affect its business, financial condition and results
of operations. NorthStar relies on others to market its products and services
to end-users. The Company believes that it will derive the majority of its
recurring revenues from subscription fees and fees for value added services
paid by end-users of its products and services. The amount of those revenues is
dependent upon the level of success achieved by the Company's Independent
Representatives and Network Affiliates. Most of these contractual relationships
were formed recently and have not yet generated substantial sales to end-users.
Thus, NorthStar is not yet in a position to assess whether its products and
services will gain acceptance among the targeted market of end users or whether
this Independent Representatives and Network Affiliates will invest the
resources necessary to market its products and services successfully. If sales
to end-users do not meet Company expectations, NorthStar's business would be
adversely affected and we would be required to develop alternate marketing and
sales strategies.
THE COMPANY IS SUBJECT TO RISKS AS IT MAKES ACQUISITIONS AND ENGAGES IN
STRATEGIC ALLIANCES. As part of NorthStar's business strategy, it may acquire,
make investments in, or enter into strategic alliances with companies in
complementary businesses, so as to optimize its market presence in the regions
it presently serves and expands into other regions. In particular, NorthStar
intends to acquire local and regional ISP's and e-commerce companies. Any such
future acquisitions, investments or strategic alliances would involve risks,
such as
- incorrect assessment of the value, strengths and weaknesses of
acquisition and investment opportunities;
- under estimating the difficulty of integrating the operations and
personnel of newly acquired companies;
- the potential disruption of our ongoing business, including possible
diversions of resources and management;
- the potential inability to maintain uniform standards, controls,
procedures and policies; and
- the threat of impairing relationships with employees and customers as a
result of changes in management, control or ownership.
NorthStar cannot assure anyone that it will be successful in overcoming these
risks. Moreover, it cannot be certain that any desired acquisition, investment
or strategic alliance could be made in a timely manner or on terms and
conditions acceptable to the Company. Neither can the Company assure others
that it will be successful in identifying attractive acquisition candidates.
NorthStar expects that competition for such acquisitions may be significant.
Competition for Internet companies is based on a number of factors including
price, terms and conditions, size, access to capital, and ability to offer
cash, stock or other forms of consideration. The Company may compete with
others who have similar acquisition strategies, many of whom may be larger and
have greater financial and other resources than NorthStar has. An additional
risk associated with acquisitions is that many attractive acquisition
candidates do not have audited financial statements and have varying degrees of
internal controls. Although the Company may believe that the available
financial information for a particular business is reliable, NorthStar cannot
guarantee that a subsequent audit would not reveal matters of significance,
including with respect to liabilities, contingent or otherwise. The Company
expects that, from time to time in the future, NorthStar will enter into
acquisition agreements, the pro forma effect of which is not known and cannot
be predicted.
THE COMPANY MAY HAVE DIFFICULTY MANAGING ITS POTENTIAL RAPID GROWTH.
NorthStar's growth strategy has placed, and will continue to place, a
significant strain on its customer support, sales and marketing, administrative
resources, its network and operations and its management and billing systems.
Such a strain on the Company's administrative and operational capabilities
could adversely affect the quality of its services and its ability to collect
revenues. To manage its growth effectively, NorthStar will have to enhance the
efficiency of its operational support, other back office systems and financial
systems and controls.
The Company cannot assure anyone that it will be able to maintain adequate
internal operating, administrative and financial systems, and procedures and
controls. Managing the Company's growth will become even more challenging as
NorthStar expands its target markets and its product and service offerings.
Promotion and enhancement of its products and services will depend largely on
its success in continuing to provide high quality Internet communications
services, solution and product support. NorthStar cannot guarantee that it will
be able to maintain the highest levels of quality. If the Company is unable to
do so or otherwise fails to promote and maintain its products or services, or
if it incurs excessive expenses in an attempt to improve its services or
promote and maintain its products, then its business, results of operations and
financial condition could be materially and adversely affected. In addition, as
NorthStar continues to grow it will have to expand and train its employee base
to handle the increased volume and complexities of
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its business. NorthStar cannot assure anyone that it will be able to attract,
train and manage sufficient personnel to keep pace with its growth.
SALES OF SHARES BY NORTHSTAR SHAREHOLDERS COULD DEPRESS THE COMPANY'S STOCK
PRICE. The market price of NorthStar common stock could drop as a result of
sales of a large number of its shares in the public market. The perception that
such sales may occur could have the same effect. As the Company expands its
scope of operations, it is likely that a large portion of such expansion and
growth will be accomplished through acquisition of additional businesses. If
so, it is also likely that at least a portion of any acquisition price might be
in the form of common stock of the Company. Therefore, it is reasonable to
assume that all or portions of such stock might be sold into the market as
permitted by regulations, and any such sale of large blocks or small blocks,
depending upon market conditions and volume, could conceivably depress the
market value of NorthStar shares.
THE COMPANY IS SUBJECT TO SECURITY AND FRAUD RISKS. Despite its efforts to
implement network security measures, such as limiting physical and network
access to its computers, its Internet infrastructure is vulnerable to computer
viruses, break-ins and similar disruptive problems caused by customers,
employees or other Internet users. Computer viruses, break-ins or other
disruptive or security problems could lead to interruptions, delays or
cessation in service to its Internet customers. Further, such inappropriate or
unauthorized use of the Internet could also potentially jeopardize the security
of confidential information stored in the computer systems of NorhtStar
customers and other parties connected to the Internet, which may deter
potential customers and give rise to liability to users whose security or
privacy has been violated. The security and privacy concerns of existing and
potential customers may inhibit the growth of the Internet service industry in
general and NorthStar's customer base and revenues in particular. A significant
security breach could result in a loss of customers, damage to our reputation,
direct damages, costs of repair and detection, and other expenses. In addition,
the Company's revenues for any given period may be adversely affected by fraud
or debt collection problems that it might experience. The occurrence of any of
the foregoing events could have a material adverse effect NorthStar's business,
results of operations and financial condition.
NORTHSTAR MAY BE HURT BY SYSTEM FAILURES. Our success is largely dependent upon
our ability to deliver high speed, uninterrupted access to the Internet. Any
system failure that causes interruptions in our operations could have a
material adverse effect on us. We currently rely greatly upon out tier one
Internet Network suppliers. Failures in these or any other telecommunications
network on which we rely would result in customers receiving no or diminished
access to the Internet.
NORTHSTAR COULD BE HELD LIABLE FOR INFORMATION DISSEMINATED OVER ITS NETWORK.
The law relating to liability of ISPs for information and materials carried on
or disseminated through their networks is not completely settled. The
possibility that courts could impose liability for information or material
carried on or disseminated through our network could require us to take
measures to reduce its exposure to such liability. Such measures may require
the Company to spend substantial resources or to discontinue certain product or
service offerings. Any of these actions could have a material adverse effect on
Company business, operating results and financial condition. Due to the
increasing use of the Internet, it is possible that additional laws and
regulations may be adopted, with respect to the Internet, covering issues such
as user privacy, pricing, taxes, defamation, obscenity, intellectual property
protection, consumer protection, technology export and other controls. Changes
in the regulatory environment relating to the Internet services industry could
have a material adverse effect on NorthStar's business, results of operation
and financial condition.
NORTHSTAR IS SUBJECT TO INTELLECTUAL PROPERTY RISKS. Legal standards relating
to the validity, enforceability and scope of protection of intellectual
property rights in Internet-related industries are uncertain and still
evolving, and the Company cannot be certain as to the future viability or value
of any of its intellectual property rights or those of other companies within
the industry. NorthStar cannot assure anyone that the steps it has taken to
protect its intellectual property rights will be adequate or that third parties
will not infringe or misappropriate our proprietary rights. Any such
infringement or misappropriation, should it occur, could have a material
adverse effect on the Company's business, results of operations and financial
condition. Furthermore, NorthStar cannot be certain that its business
activities will not infringe the proprietary rights of others or that such
other parties will not assert infringement claims against the Company.
NorthStar anticipates that it may be subject to claims in the ordinary course
of its business, including claims of alleged infringement of the trademarks and
other intellectual property rights of third parties due to the dissemination of
NorthStar's content or the provision of access by its online services to
content made available by third parties. Such claims and any resultant
litigation, should it occur, could subject the Company to significant liability
for damages and could result in invalidation of its property rights and, even
if not meritorious, could be time-consuming and expensive to defend, and could
result in the diversion of management time and attention, any of which could
have a material adverse effect on NorthStar's business, results of operations
and financial condition. The Company regards substantial
<PAGE> 9
elements of its products and services as proprietary and, as appropriately
determined, NorthStar will attempt to protect them by relying on trademark,
service mark, trade dress, copyright and trade secret laws and restrictions on
disclosure and transfer of title. The Company also enters into confidentiality
agreements with its employees, suppliers, distributors, consultants, vendors
and customer and license agreements with third parties and generally seek to
control access to and distribution of its technology, documentation and other
proprietary information. NorthStar will continue to periodically examine
possibility and need for the registration of its service marks, but it
currently has no patents or applications for patents pending for its products
or services. Effective service mark, copyright and trade secret protection may
not be available.
THE COMPANY IS SUBJECT TO CERTAIN RISKS ASSOCIATED WITH THE YEAR 2000. The Year
2000 problem results from the fact that many existing computer programs and
systems have used only two digits to identify the year in the date field. These
programs were designed and developed without considering the impact of a change
in the century designation. If not corrected, computer applications that use a
two-digit format could fail or create erroneous results in any computer
calculation or other process involving the Year 2000 or a later date. While
NorthStar has conducted an extensive investigation of its systems and equipment
and believes them to be Y2K compatible, the Company has identified two main
areas of concern and potential risk for its systems:
- Company's internal computer systems or embedded chips could be
disrupted or fail; causing an interruption or decrease in productivity in
Company operations; and
- Computer systems or embedded chips of third parties including (without
limitation) financial institutions, suppliers, vendors, landlords,
customers, suppliers of communications services and others could be
disrupted or fail, causing an interruption or decrease the Company's
ability to continue its operations.
Many currently installed computer systems and software products are coded to
accept only two-digit entries in the date code field and cannot distinguish
twenty-first century dates from twentieth century dates. To function properly,
these date-code fields must distinguish twenty-first century dates form
twentieth century dates and, as a result, many companies' software and computer
systems may need to be upgraded or replaced in order to comply with such "Year
2000" requirements.
The Company's future business depends on the successful operation of the
Internet following the commencement of the year 2000. If the Internet is
inaccessible for an appreciable period of time, or if customers and users are
unable to access the Company's sites, its business and revenues could be
materially adversely affected. The Company is also subject to external forces
that might generally affect industry and commerce, such as telecommunications,
utility or transportation company Year 2000 compliance failures, related
service interruptions and the economic impact that such failures may have on
the Company's customers and services.
Unlike other businesses, NorthStar does not have an installed base of legacy
systems dating back many years. Nonetheless, in order to reduce the risks of
the Year 2000 compliance problem, the Company has undertaken a two-phase
process of analyzing the impact of the Year 2000 problem. First, it has
completed an initial assessment of its primary internal systems and, based on
such assessment and our knowledge of the specific software and systems,
NorthStar currently believes that its systems are Year 2000 compliant in all
material respects or can readily be brought into compliance with the
application of corrective software modifications. In many cases, the Company
expects these modifications to be provided by the vendors of the computer and
software products NorthStar has installed. NorthStar has not incurred material
costs to date in this informal phase of the assessment process, and currently
does not believe that the cost of additional actions will have a material
effect on its results of operations or financial condition.
Second, NorhtStar is in process of performing a further assessment of both its
internal systems and the vendor-supplied items and services it employs to
determine how the Year 2000 problem will effect all aspects of its operations.
NorhtStar will complete this second phase of its assessment prior the Year
2000. This further assessment review includes the following NorhtStar systems:
- Hardware systems, including servers and systems used for data storage;
- Software systems, including applications, development tools and
proprietary codes;
- Infrastructure systems, including routers, hubs and networks;
- Facility systems, including general building functions, security, HVAC
and related operations; and
- Systems of our business partners, including content providers and
service providers.
<PAGE> 10
NorthStar is conducting its further assessment of the Year 2000 compliance by
gathering information on each aspect of its systems, reviewing each component
or application for date usage, and examining date representations. As to
NorthStar's systems, the results to date of this further assessment are
consistent with the results of its informal assessment.
With respect to vendor-supplied items and services, NorthStar is conducting a
review of product compliance information on such items and services available
online, in vendor literature and through trade group information resources,
contacting its vendors for compliance information, and maintaining
documentation of assessments that have been performed by such vendors or
outside sources. To date, NorthStar has assurances from its third party vendors
that their products and services are Year 2000 compliant. Further, such vendors
have received similar assurances regarding Year 2000 compliance from their
vendors. Finally, NorthStar has already developed some contingency plans to
cover possible failures of some third party supplier systems. However, the
failure(s) of any vendor supplied systems could have an adverse affect on the
Company's operations, and it may take some time for a conversion of the
Company's systems in order to implement any contingency plans during which time
the Company's systems may be inoperable.
As NorthStar completes its further assessment, it is creating a remediation and
contingency plan for achieving Year 2000 compliance. The Company does not
anticipate, however, undertaking an assessment of the Year 2000 compliance of
the Internet or its underlying telecommunications infrastructure, and will
therefore be unable to predict the impact of Year 2000 issues that might affect
the broader Internet business community, including NorthStar.
Based on the completed initial assessment and progress on the further
assessment, NorthStar currently believes that its internal systems are or can
readily be made Year 2000 compliant in all material respects. However, it is
possible that these current internal systems contain undetected errors or
defects with Year 2000 functions. In addition, although the Company does not
anticipate problems, vendor-supplied items and services could contain
undetected errors or defects which, if not corrected, could result in serious
unanticipated negative consequences, including significant downtime for one or
more of NorthStar's Internet services or properties.
Although NorthStar is not aware of any operational issues or costs associated
with preparing its internal systems for the Year 2000, and although it has not
incurred material costs to date with respect to the Year 2000 compliance of
these internal systems, the occurrence of any of the following events could
materially and adversely affect NorthStar's business, results of operations and
financial condition:
- Errors and defects are detected after in the further assessment is
completed;
- Third-party equipment, software or content fails to operate properly
with regard to the Year 2000; or
- Company customers, web users and advertisers expend significant
resources to correct their current systems for Year 2000 compliance,
resulting in reduced funds available for sponsorship of Web services.
NORTHSTAR IS SUBJECT TO THE RISKS ASSOCIATED WITH RAPID INDUSTRY CHANGES. The
Internet services industry in which the Company operates is characterized by
rapidly changing technology, evolving industry standards, emerging competition
and frequent new service, software and other product innovations. NorthStar
cannot guarantee that it will be able to identify new service opportunities
successfully, and develop and bring new products and services to market in a
timely and cost-effective manner, or that products, software and services or
technologies developed by others will not render the Company's products and
services non-competitive or obsolete. In addition, NorthStar cannot provide any
assurance that its product or service developments or enhancements will achieve
or sustain market acceptance or be able to address effectively the
compatibility and inter-operability issues raised by technological changes or
new industry standards.
WORKING CAPITAL DEFICIENCY
Because the Company had limited revenues from January 1, 1999 until September
30, 1999, the Company has a working capital deficit. Until its operations grow
and provide positive cash flow, the Company will require additional working
capital.
DOING BUSINESS IN FOREIGN COUNTRIES
The Company may operate in underdeveloped or developing countries where the
customs and business practices are different than those in the United States.
The laws and regulations in these countries may either not be adequately
<PAGE> 11
enforced or may be changed without notice resulting in an interruption of our
service or confiscation of our and/or our Local Partner's equipment.
Furthermore, the judicial system in these countries may not provide the
preventive or remedial protections necessary to adequately protect our
interests.
RELIANCE ON EQUIPMENT
The Company's success depends on its ability to provide efficient and
uninterrupted, high-quality services. The Company's systems and operations are
vulnerable to damage or interruption from natural disasters, power loss,
telecommunication failures, physical or electronic break-ins, sabotage,
intentional acts or vandalism and similar events that may or may not be beyond
its control. The occurrence of any or all of these events could have a material
adverse effect on the Company's business.
RELIANCE ON THIRD PARTIES
In each of the foreign countries where the Company may provide service, the
Company will establish a contractual relationship with a Local Partner. This
Local Partner shall be responsible for complying with local laws and
regulation, obtaining the required licenses and permits, and maintaining and
keeping the equipment and circuits operational in that country. To the extent
that our Local Partner does not fulfill his contractual obligations, our
business may be materially adversely affected.
The Company leases circuits from first-tier telecommunications carriers. If
these carriers are unable to provide or expand their current levels of service
to the Company, our operations could be materially adversely affected. Although
leased lines are usually available from several alternative suppliers, there
can be no assurance that the Company could obtain substitute services from
other providers at reasonable or comparable prices or in a timely fashion. The
Company may be subject to risks relating to potential disruptions in such
telecommunications services. No assurance can be given that significant
interruptions of telecommunications services to the Company will not occur in
the future. Changes in tariffs, regulations, or polices by any of the Company's
telecommunications providers may adversely affect our ability to offer our
service on a commercially reasonable or profitable terms.
RELIANCE ON A SMALL NUMBER OF CUSTOMERS
The Company sells its services to a limited number of customers. The Company is
currently negotiating with additional customers. Although the Company believes
that there are a number of customers to which it can provide services to an
expanding market, changing business conditions may adversely affect us if the
Company loses or fails to attract a number of customers.
COMPETITION
The business of providing Internet connectivity services and solutions is
highly competitive and there are no substantial barriers to entry. We believe
that competition will intensify in the future and our ability to successfully
compete depends on a number of factors, including: the capacity, reliability
and security of the network with which we interconnect; the pricing structure
of our services; expansion of the variety of products and services which we
offer; our ability to adapt our products and services to new technological
developments; our ability to build and maintain a larger sales force which is
knowledgeable and effective; our ability to implement broad and effective
distribution channels; and, principal market and economic trends. Current and
prospective competitors include: national, regional and local ISPs; long
distance and local telecommunications providers; cable television companies;
Web site hosting providers and providers of other value added solutions and
services. Many of our competitors have significantly greater market presence,
established brand recognition, financial, technical and personnel resources.
Major long distance companies currently offer Internet access services and
major cable television companies and companies using wireless terrestrial and
satellite-based technologies are expected to offer Internet connectivity and
related services in the near future. Such competitors have the ability to
bundle Internet connectivity with other services such as local and long
distance telecommunications. This bundling could adversely affect our ability
to compete and could result in a downward pressure on our prices that could
adversely affect our business, financial condition and results of operations.
<PAGE> 12
DEPENDENCE ON MANAGEMENT
The Company believes that its corporate infrastructure is sufficiently in place
so that the loss of one or more key individuals in management or technical
support will not adversely effect the Company's operations with long term
negative implications.
LIMITED CAPITALIZATION AND OPERATING HISTORY
Because of its acquisition of certain assets of NorthStar Network, Inc. (Texas)
in September, 1999, the Company has limited operating history and limited
revenues. In addition to its limited operating history, the Company has limited
capitalization. Investors should be aware that companies with limited
capitalization and operating history have a high degree of risk.
POSSIBLE FLUCTUATIONS IN OPERATING RESULTS
The Company has a limited operating history. Although revenues and operating
income increased rapidly in 1999, that growth rate may not be indicative of
future growth rates. To the extent that the Company experiences any
interruption in its ability to transmit communications for any reason, the
results of operations for that quarter will be affected. For this reason, and
in view of the Company's limited operating history, the Company believes that
period-to-period comparisons of its past or future operating results may not be
meaningful. Future results of operations may fluctuate significantly based upon
numerous factors, including any foreign or domestic regulation or FCC ruling,
pricing pressures which could lessen the competitive pricing advantage of our
customers and reduce the traffic usage of its network, the Company's ability to
penetrate new markets and increases in competition. There can be no assurances
that the Company will be profitable on a quarter-to-quarter basis or at all.
FOREIGN CURRENCY
Due to the nature of the Company's potential foreign activities, portions of
the Company's operating capital may at times be held in various foreign
currencies. This subjects the Company to the risk of currency fluctuations and
changes in rates of conversion for different currencies. Additionally, revenues
generated in foreign countries in which the Company has or may acquire
interests may be subject to governmental regulations which restrict the free
convertibility of such funds, and all remittances of funds out of these
countries might require the approval of the applicable government's exchange
control agency.
FOREIGN TAXES AND UNITED STATES TAX CREDITS
The Company is currently considering opportunities outside the United States,
the Company's foreign operations could become subject to the imposition of
taxes by foreign governments upon the Company's income derived from such
foreign jurisdictions. These taxes are of various types, with differing tax
rates, and are subject to change. Generally, the Company's income from a
foreign jurisdiction will be taxed in the same manner as that for other
companies operating in the jurisdiction, but discriminatory taxation by a
particular jurisdiction may occur.
The Company's income is also subject to taxation under the United States
Internal Revenue Code of 1986, as amended (the "Code"). The Code provides that
a taxpayer may obtain a tax credit for certain taxes paid to a foreign country
or may take a deduction for such taxes. A tax credit is generally more
favorable than a deduction. However, the particular tax circumstances create
differing benefits in varying situations. The tax credit applicable to
particular foreign income arises when such income is included in the Company's
taxable income under the provisions of the Code. There are, however,
substantial restrictions and limitations on the amount of the tax credit that
can actually be claimed.
EMPLOYEES
The Company employs 32 people who serve the Company on a full time basis and 10
others as needed on a part-time basis. There are 8 full time administrative
employees, 4 full time employees in product development, 9 full time technical
employees, 5 full time sales and marketing employees, and 6 full time and 10
part time employees in the Company's customer service and technical support
call center. There are no collective bargaining agreements in effect, and the
Company believes the relations with its employees are good.
<PAGE> 13
ITEM 2. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITON AND PLAN
OF OPERATION
GENERAL DISCUSSION:
The Company gradually became less active and had limited operations during
recent years, particularly with the fall of energy prices during 1998. The
development of the Company's coal properties was not economically viable. The
Company recognized the need to restructure its debts and liabilities in order
to compete for potential acquisitions. On December 28, 1998 the shareholders
approved a plan to convert existing debts to equity through the issuance of
preferred stock. See additional disclosure in Financial Statements Note 3 (page
F-9) and Note 5 (page F-10) and Item 4 of Part II.
On September 22, 1999 the Company consummated an Asset Purchase Agreement with
The North Star Network, Inc., a private Texas corporation, for the acquisition
of certain assets in order for the Company to begin operating as an Internet
Service Provider. The Company issued 17,000,000 common shares for the purchase
of these assets. See Note 1 (page F-7) of the Financial Statements and Item 1
"The Company" and "Industry Overview".
ASSETS & LIABILITIES:
As of December 31, 1997 and 1998 the Company did not have any assets as they
had been previously written off and had a Stockholders Deficit of $5,598 on
December 31, 1998 and $906,584 on December 31, 1997. However, subsequent to the
end of the fiscal year ended December 31, 1998, the Company entered into an
agreement with NorthStar Network, Inc. and on September 30, 1999, reported
assets of $1,192,431. Of these assets $800,000 were Internet accounts, $387,186
in computer equipment and the balance was cash and accounts receivable.
The liabilities dramatically declined from $906,584 on December 31, 1997 to
$5,598 for December 31, 1998. These liabilities were corporate notes and debts
which were paid in full through the issuance of 90,658 shares preferred stock.
See Notes 3 (page F-9) and 5 ( page F-10) of the Financial Statements and Item
4 of Part II for additional disclosure regarding the conversion of this debt to
preferred stock.
INCOME AND EXPENSES:
No revenues of the Company were reported until the acquisition of the assets
from The North Star Network, Inc. was recorded on September 22, 1999. The
revenues of $14,625 were from Internet services provided from September 22,
1999 to September 30, 1999. General and administrative expenses incurred during
this period was $12,198 yielding a pretax unaudited profit of $2,427. See
Statement of Operations on page F4 of the Financial Statements
NET INCOME:
The Company reported an audited loss of $5,598 for the year ended December 31,
1998. The Company had an unaudited profit of $2,427 for the nine months ended
September 30, 1999. These profits were small, representing less than one cent
per share in earnings per share; however these profits were generated from
September 22 to September 30, 1999. The Company has 20,194,150 shares issued
and outstanding for the nine months ended September 30, 1999 and 3,194,150 for
the years ended December 31, 1997 and 1998. For additional information on the
calculation of per share data see Note 1 of the Financial Statements on page
F-8.
PLAN OF OPERATION:
NorthStar offers a variety of Internet services including connectivity,
electronic mail services, electronic commerce services, Web hosting and Web
site design. The Company intends to develop a broader range of value added
solutions and services independently, through acquisitions and through
strategic relationships with providers. NorthStar offers both analog and ISDN
dial-up Internet access at speeds up to128 Kilobytes per second ("Kbps"). The
Company provide this access at local telephone rates by means of approximately
1800 POPs in the AT&T Network, Megapop Network, and others which are located
throughout the United States and part of Canada. NorthStar also offers frame
relay dedicated connectivity at speeds up to 56 Kbps. The Company's services
accommodate connectivity requirements of Internet users ranging from the single
user with a computer in his or her home to work groups and businesses with
multiple users. NorthStar creates clear, concise and attractive Web sites that
convey its customers' marketing messages. NorthStar provides Domain Name
registration, place Website information in search engines, issue electronic
press releases and track the detailed use of each site. The Company also offers
co-linking of non-
<PAGE> 14
competing Websites, banner advertisements on Web sites and links to cyber
malls, associations and groups. NorthStar's services permit hosting of multiple
Web sites on a single server. The Company offers a series of shared server
hosting plans that allow our customers to establish a sophisticated presence on
the Internet, utilizing our equipment and expertise to deploy an effective Web
site. Our Web hosting products include shared UNIX and NT offerings as well as
dedicated services.
RECENT ACCOUNTING PRONOUNCEMENTS:
See Note 6 to the Financial Statements on pages F-10 and F11.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS:
Where this Form 10-SB includes "forward-looking" statements within the meaning
of Section 27A of the Securities Act, the Company desires to take advantage of
the "safe harbor" provisions thereof. Therefore, the Company is including this
statement for the express purpose of availing itself of the protections of such
safe harbor provisions with respect to all of such forward-looking statements.
The forward-looking statements in this Form 10-SB reflect the Company's current
views with respect to future events and financial performance. These
forward-looking statements are subject to certain risks and uncertainties that
could cause actual results to differ from those anticipated. In this Form
10-SB, the words "anticipates," "believes, "expects," "intends," "future" and
similar expressions identify forward- looking statements. The Company
undertakes no obligation to publicly revise these forward-looking statements to
reflect events or circumstances that may arise after the date hereof. All
subsequent written and oral forward-looking statements attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by this section.
YEAR 2000:
The Company has conducted a comprehensive review of its computer systems to
identify the systems that could be affected by the "Year 2000" issue. The "Year
2000" problem is the result of computer programs being written using two digits
rather than four to define the applicable year. Any programs that have
time-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. This could result in a major system failure or
miscalculations. The Company believes that all of its software and equipment
are "Year 2000" compliant and that this problem will have no affect on the
Company's internal operations. Should companies with which the Company does
business suffer significant problems within their systems, an adverse impact
could be incurred by the Company. However, the Company has no way of
anticipating or controlling such failure on the part of its customers. For
further information and expanded discussion, see Part I, Item 1, under the
"RISK FACTORS" section, "The Company is subject to certain risks associated
with the Year 2000.", on pages 9 and 10.
ITEM 3. DESCRIPTION OF ASSETS
The Company's assets consist of hardware and software utilized in its function
as an Internet service provider; client base, contracts with suppliers and
accounts receivable, all of which are more fully described in Item 1 "The
Company" and also in the financial statements and its accompanying notes as to
cost and value as of September 30, 1999.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding the beneficial ownership
of the common stock of the Company as of September 30, 1999 by each of the
Company's officers and directors, each person who is known by the Company to
own beneficially more than 5% of the outstanding common stock and all officers
and directors of the Company as a group. The title of class is common stock, no
par value.
<PAGE> 15
<TABLE>
<CAPTION>
# of Shares
Name and Beneficially Percent of
Address of Stockholder Owned Class
---------------------- ------------- ----------
<S> <C> <C>
Guiseppe Brownell -0- 0%
533 Purdue Street
Lewisville, Texas 75067
Timothy J. Buzzelli -0- 0%
3806 Lariat Road
Denton, Texas 76207
Randall Glen McClanahan -0- 0%
18308 Summerfield Drive
Dallas, Texas 75287
William R. Miertschin 25,000 0.124%
7738 Forest Lane, #102
Dallas, Texas 75230
Daniel P. Sulzinger -0- 0%
775 East Merritt Island Causeway, #110
Merritt Island, FL 32952
Robert R. Vaughan 10,000 0.050%
16815 Davenport Court
Dallas, Texas 75248
All officers and directors as a group 35,000 0.174%
</TABLE>
Note: The stockholders identified in this table have sole voting and investment
power with respect to the shares beneficially owned by them.
The owners have no rights to acquire additional shares through options,
warrants, rights, or conversion privileges within the next sixty days. However,
a compensation package for officers and directors is to be developed and
implemented by the Board of Directors during the first quarter of 2000.
Pursuant to the terms of the Asset Purchase Agreement with The North Star
Network, Inc. (a private Texas corporation) consideration of 17,000,000 common
shares of the Company's stock are to be issued pending receipt of instructions
for issuance from The North Star Network, Inc. These shares are considered
issued and outstanding and represent 84.183 percent of the issued and
outstanding shares of the Company's common stock representing change of control
of the Company.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
DIRECTORS - The Board of Directors of the Company presently consists of six
members. Each director is elected at the annual meeting of shareholders to hold
office until the next annual meeting of shareholders and until his successor
has been elected and qualified. The following table sets forth information
concerning the persons currently serving as directors of the Company.
<PAGE> 16
<TABLE>
<CAPTION>
Date First
Position With Elected
Name Age the Company as Director
---- --- ------------- -----------
<S> <C> <C> <C>
Guiseppe Brownell 29 Director 1999
Timothy J. Buzzelli 38 Director & President 1999
Randall Glen McClanahan 38 Director 1999
William R. Miertschin 52 Director 1998
Daniel P. Sulzinger 44 Director 1999
Robert R. Vaughan 61 Director & Secretary/Treasurer 1999
</TABLE>
EXECUTIVE OFFICERS - Unless otherwise specified by the Board, all executive
officers are elected for a term of one year, commencing with the date of the
first meeting of the Board following the annual meeting of shareholders, and
serve until their successors are elected or appointed and qualified, or until
their respective death, resignation, removal or disqualification. All of the
Company's officers are executive officers. The following table sets forth
certain information with respect to the persons currently serving as executive
officers of the Company.
<TABLE>
<CAPTION>
Date First
Position With Elected
Name Age the Company as Director
---- --- ------------- -----------
<S> <C> <C> <C>
Timothy J. Buzzelli 38 President and Director 1999
Robert R. Vaughan 61 Secretary & Treasurer 1999
and Director
</TABLE>
There are no family relationships between any of the officers or directors of
the Company.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Subject to the provisions of the Company Act, the directors shall cause the
Company to indemnify a director or former director of the Company and the
directors may cause the Company to indemnify a director or former director of a
corporation of which the Company is or was a member and the heirs and personal
representatives of any such person against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, actually
and reasonably incurred by him or them including an amount paid to settle an
action or satisfy a judgment in a civil, criminal or administrative action or
proceeding to which he is or they are made a party by reason of his being or
having been a director of the Company or a director of such corporation,
including any action brought by the Company or any such corporation. Each
director of the Company on being elected or appointed shall be deemed to have
contracted with the Company on the terms of the foregoing indemnity.
Subject to the provisions of the Company Act, the directors may cause the
Company to indemnify any officer, employee or agent of the Company or of a
corporation of which the Company is or was a member (notwithstanding that he is
also a director) and his heirs and personal representatives against all costs,
charges and expenses whatsoever incurred by him or them and resulting from his
acting as an officer, employee or agent of the Company or such corporation. In
addition the Company shall indemnify the Secretary or an Assistant Secretary of
the Company (if he shall not be a full time employee of the Company and
notwithstanding that he is also a director) and his respective heirs and legal
representatives against all costs, charges and expenses whatsoever incurred by
him or them and arising out of the functions assigned to the secretary by the
Company Act or these Articles and each such secretary and assistant secretary
shall on being appointed be deemed to have contracted with the Company on the
terms of the foregoing indemnity.
<PAGE> 17
RESUME OF DIRECTORS AND EXECUTIVE OFFICERS
The following are resumes of the directors and executive officers of the
Company. It is expected that these persons will serve in these offices until
the next annual meeting or until their successors are elected and qualified.
GUISEPPE BROWNELL, Director, age 29, is an entrepreneur with several business
ventures, including Guiseppe's Italian Restaurant in Denton, Texas where he has
been an influential member of the business leadership of Denton County for many
years. He is an active participant in numerous civic and church groups in
helping to develop strategic planning for the city and surrounding communities.
TIMOTHY J. BUZZELLI, President and Director, age 38, holds a BS degree in
Accounting from Northwestern State University. He is a CPA and was the founder
of Buzzelli & Company, CPA's. In addition to being an active CPA, Tim has over
sixteen years of direct business management experience. As an entrepreneur, he
has spent well over half of his professional life in the development of startup
companies. He was Treasurer and Controller of Nokita Mobile Phones prior to
founding One Source, Inc., which he served as President and CEO until One
Source was acquired by NorthStar Network, Inc. Tim and his wife Chris have
three school age daughters.
RANDAL GLEN MCCLANAHAN, Director, age 38, received his Bachelor of Science
Degree in Business Administration from the University of Arkansas in 1984. He
moved to Dallas in 1985 and , following a brief stint in the family business,
entered the real estate mortgage business in 1986 where he became Vice
President of Accu Mortgage, Inc. Randal is currently President and CEO of First
Approval Mortgage, Inc. which he founded in 1998 and which he has taken from
start-up to currently funding more than three million dollars in mortgages each
month on its way to becoming a large mortgage funding source for the North
Dallas/Plano region. He helps teach a continuing education course, in Dallas,
designed to assist first time home buyers with home purchasing/financing
processes and procedures.
WILLIAM R. MIERTSCHIN, Director, age 52, is an oil and gas consultant with
offices in Dallas, Texas. He is a 1972 graduate of The University of Texas at
Austin with a BA in Mathematics. He completed additional courses in petroleum
engineering at the University of Texas of the Permian Basin in 1978. He began
his oil and gas career in 1975 as an Engineer with the Baroid Division of NL
Industries of Odessa, Texas. From 1977 to 1979, Miertschin was Drilling
Supervisor for Gulf Oil Exploration and Production, being the first trainee to
complete Gulf Oil's drilling and production engineering training program.
Thereafter, he was employed with Mesa Petroleum (1979-1985) as Corporate
Supervisor of Regulatory and Safety in Amarillo, Texas, and as Drilling
Supervisor and Senior Drilling Engineer in Midland and Amarillo, Texas,
managing Mesa's corporate drilling and completion operations for all of the
Permian Basin Division, Texas Panhandle and Kansas. In 1986 he graduated from
the Leadership Amarillo Program of the Amarillo Chamber of Commerce. A member
of the Society of Petroleum Engineers, Miertschin has served as an expert
witness before the Kansas Corporation Commission (KCC) and the New Mexico Oil
Conservation Commission (NMOCC) on regulatory affairs, drilling and completion,
and analysis of potential production purchases. He served on the Oil and Gas
Advisory Committee to KCC to revise statewide rules in Kansas. Miertschin has
been active in the oil and gas industry as an investor and operator, and in
private practice as a consultant in the Dallas-Fort Worth area, for the last
twelve (12) years.
DANIEL P. SULZINGER, Director, age 44, the past fifteen years, Mr. Sulzinger
has served as Vice President of Operations, Senior Partner and Managing Partner
of OTJ Management Group LLP, an International high -tech consulting firm, He
has more than twenty-nine years experience in business operations, business
consulting, manufacturing, business re-engineering, sourcing, logistics, and
supply chain management, both domestically and world-wide. Dan is a recognized
expert in Global Logistics having led many multi-national companies through the
strategic planning process of defining and implementing cost effective
solutions. Mr. Sulzinger has held positions as Group Vice President of
Operations, Vice President of Manufacturing, and Vice President of Materials
for a variety of multi-national companies. He has a BSEE degree from the
University of Maryland.
ROBERT VAUGHAN, Secretary/Treasurer and Director, age 61, is a highly decorated
retired military officer who is now an award-winning novelist. His military
career included three tours in Vietnam where he was awarded the Distinguished
Flying Cross, the Air Medal with the V for Valor, The Bronze Star, the
Distinguished Service Medal and the Purple Heart. He was a helicopter pilot,
and a maintenance and supply officer. His books include The Power and the
Pride, which won the 1978 PORGIE Award for Best Paperback Original and The
Valkyrie Mandate, which was a nominee for the 1973 Pulitzer Prize. He has
managed the successful political campaign for a United States Congressman,
worked as a television news writer, as a talk show producer and as a talk show
host. He has also authored and produced several industrial training films and
VTR's. A newspaper he owned was sold to the Thompson Newspaper Chain in
<PAGE> 18
1977. Since 1977, Mr. Vaughan has focused on his writings and lecturing. The
author of more than three hundred books, including The American Chronicles, the
twelve book series novelizing the twentieth century in the United States, Mr.
Vaughan has in recent years expanded his writings to screenplays for movies and
television. In 1996 he moved from his native Sikeston, Missouri to Dallas,
Texas where he resides with his wife, Ruthie.
ITEM 6. EXECUTIVE COMPENSATION
The Company did not pay any compensation in either cash or stock in 1999 to its
officers and directors. It is anticipated that there will be no compensation
paid for remainder of 1999. However, by year end the board will adopt a
compensation plan for officers and directors for the year 2000.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Over the past several years the Company had limited activity. On December 28,
1998, the shareholders approved the issuance of preferred stock to convert the
Company's debts to equity. The largest debt holder and therefore the largest
recipient was David R. Kane, Former President and Chairman of the Board of the
Company. Mr. Kane's debt was comprised of deferred unpaid compensation and cash
advances that Mr. Kane made to the Company. Mr. Kane's debt totaled $240,000
for which Mr. Kane received 24,000 preferred shares. See Item 4 "Recent Sales
of Unregistered Securities". The elimination of debt positioned the Company for
acquisition opportunities.
The Company entered into an asset purchase agreement with The North Star
Network, Inc. (a privately held Texas corporation) for the issuance of
17,000,000 common shares for certain assets. There were no related parties
involved in this transaction.
ITEM 8. DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 99,000,000 shares of
common stock and 1,000,000 shares of preferred stock. Currently there are
20,194,150 shares of common stock issued and outstanding, and 90,658 shares of
preferred stock issued and outstanding.
Dividend Rights and Policy - The holders of the Company's shares are entitled
to share equally, share for share, in such dividends as might be approved by
the Board of Directors. The Company does not anticipate paying cash dividends
in the foreseeable future. The Company intends to retain earnings to provide
funds for its operations. Future dividend policy will be determined by the
Board of Directors.
Voting Rights - Holders of the Company's common stock are entitled to one vote
per share with respect to all matters that are required by law to be submitted
to a vote of shareholders. Cumulative voting rights are not available to the
shareholders.
Assessment and Redemption - All Company shares issued will be legally issued,
fully paid and non-assessable.
Preemptive Rights - Holders of the Company's shares have no preemptive rights.
Liquidation Rights - Upon liquidation, dissolution or winding up of the
Company, the beneficial owners of the shares would be entitled to a pro rata
share of the assets of the Company.
Preferred Shares - To date, 90,658 shares of preferred stock have been issued.
The Company has reserved the right for the Board of Directors to designate
preferred shares in one or more classes or series, and to create, define and
attach special rights and restrictions to the preferred shares of each series.
Any such series or classes of preferred stock designated by the Board in the
future may effect the rights of the holders of the common stock.
<PAGE> 19
PART II
ITEM 1. MARKET PRICE AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
The Company's common stock trades on the OTCBB under the symbol NSNW. Prior to
trading as NSNW, the Company traded as GBLP. The following table sets forth the
prices as reported to the Company by the OTCBB for the periods indicated. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1997 Bid Prices
----------
High Low
---- ---
<S> <C> <C>
First Quarter $0.843 $0.186
Second Quarter $0.468 $0.150
Third Quarter $0.360 $0.093
Fourth Quarter $0.360 $0.093
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, 1998 Bid Prices
----------
High Low
---- ---
<S> <C> <C>
First Quarter $0.330 $0.030
Second Quarter $0.210 $0.030
Third Quarter $0.210 $0.030
Fourth Quarter $0.120 $0.030
</TABLE>
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30, 1999 Bid Prices
----------
High Low
---- ---
<S> <C> <C>
First Quarter $0.270 $0.030
Second Quarter $0.060 $0.060
Third Quarter $0.270 $0.060
</TABLE>
The stock closed at $1.625 on November 26, 1999.
As of September 30, 1999, there were approximately 1,542 holders of record of
the Company's common stock plus any street name accounts.
The Company did not pay dividends on its common stock in 1997 or 1998 and it
does not anticipate paying any dividends thereon in the foreseeable future.
ITEM 2. LEGAL PROCEEDINGS
As of September 30, 1999, there were no legal proceedings to which the Company
was a party, and no legal litigation is known to be pending.
On October 22, 1996, the Arkansas Securities Department undertook a formal
investigation of Global Productions Inc. The complaint issued on that date
concerned the issuance of corporate promissory notes in 1993 and 1994 by
certain members of the previous management of the Company. The former president
of Global had been relieved of his duties in November 1994 for, among other
actions, issuing corporate notes without board approval. On May 9, 1997, the
case was closed with the issuance of a cease and desist order by the Arkansas
Securities Department against Ben R. Bush Jr., Robert Womack (an employee of
Mr. Bush) and the Company. This order prevents the Company from selling any
unregistered securities in the state of Arkansas and no other action was taken
against the Company. The Company caused the issuance of preferred stock to
settle the above mentioned debts and is further disclosed in Item 4.
<PAGE> 20
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
There are no disagreements between the Company and its auditor, Jackson &
Rhodes P.C., regarding accounting and/or financial disclosure.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
The Company has not had any sales of its unregistered securities for its common
stock during the past two years, however, during December,1998, the company did
issue 90,658 shares of its preferred stock to eliminate certain debts of the
Company. The following is a list of the debtors that converted their debt to a
preferred shares position:
<TABLE>
<CAPTION>
Debtor's Name Amount of Debt Number of Preferred Shares
------------- -------------- --------------------------
<S> <C> <C>
David R. Kane 240,000 24,000
Gatlin Enterprises 92,000 9,200
Sherry Rozell 78,750 7,875
Margie Frippen 62,000 6,200
R.F. and Mayne Griffin 66,000 6,600
Cecil Thompson 87,131 8,713
Jim Harris 60,000 6,000
David Jernigan 57,500 5,750
David Osterblad 25,000 2,500
Robert Brito 25,000 2,500
Harold Momany 20,000 2,000
Betty Colcomp 20,000 2,000
Gary Clark 12,000 1,200
Beatrice Brown 10,000 1,000
David Smith Farms 10,000 1,000
Paul Minton 10,000 1,000
Louise Rose (Wagnor) 9,000 900
Terri Thompson 5,000 500
Sharon Thompson 5,000 500
Frank Watkins 5,000 500
Cletus Thacher, Jr. 5,000 500
Raynor T. Smith 2,000 200
Tanner Womack 200 20
</TABLE>
ITEM 5. INDEX OF EXHIBITS
3.1. Articles of Incorporation
3.2. Amendment to Articles to change name and capital structure - July 1988
3.3. Amendment to Articles to change capital structure - January 22, 1991
3.4. Amendment to Articles to change name - August 4, 1999
3.5. By-Laws
10.1. Asset Purchase Agreement
27.1. Financial Data Schedule
<PAGE> 21
SIGNATURES
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
NORTHSTAR NETWORK, INC.
Date: November 29, 1999 /s/ TIMOTHY J. BUZZELLI
-------------------------------------
Timothy J. Buzzelli, President and
Director
/s/ ROBERT R. VAUGHAN
-------------------------------------
Date: November 29, 1999 Robert VAUGHAN, Secretary and Director
PART F/S
The financial statements information for NorthStar Network, Inc. is set forth
in the following:
Report of Independent Certified Public Accountants
Balance Sheet
Statement of Operations
Statement of Changes in Stockholders' Equity
Statement of Cash Flows
Notes to Financial Statements
<PAGE> 22
NORTHSTAR NETWORK, INC.
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report for December 31, 1998 and 1997................ F-2
Balance Sheets at September 30, 1999 (Unaudited)
and December 31, 1998 and 1997........................................ F-3
Statements of Operations for the Nine Months Ended
September 30, 1999 and 1998 (Unaudited) and for the Years Ended
December 31, 1998 and 1997............................................ F-4
Statements of Changes in Stockholders' Equity (Deficit)
for the Nine Months Ended September 30, 1999 and 1998 (Unaudited)
and the Years Ended December 31, 1998 and 1997........................ F-5
Statements of Cash Flows for the Nine Months Ended
September 30, 1999 and 1998 (Unaudited) and the Years Ended
December 31, 1998 and 1997............................................ F-6
Notes to Financial Statements.............................................. F-7
</TABLE>
F-1
<PAGE> 23
INDEPENDENT AUDITORS' REPORT
Board of Directors
NorthStar Network, Inc.
We have audited the accompanying balance sheets of NorthStar Network, Inc. as of
December 31, 1998 and 1997 and the related statements of operations, changes in
stockholders' equity (deficit) and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of NorthStar Network, Inc. as of
December 31, 1998 and 1997, and the results of its operations and its cash flows
for the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
financial statements, the Company has suffered recurring losses that raise
substantial doubt about its ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 1. The financial
statements do not include any adjustments that might result from the outcome of
this uncertainty.
Jackson & Rhodes P.C.
Dallas, Texas
November 10, 1999
F-2
<PAGE> 24
NORTHSTAR NETWORK, INC.
BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31, December 31,
1999 1998 1997
------------- ------------ ------------
(Unaudited)
<S> <C> <C> <C>
Current assets:
Cash $ 2,529 $ -- $ --
Accounts receivable 2,716 -- --
----------- ----------- -----------
5,245 -- --
Furniture and equipment:
Computer equipment 387,186 -- --
Other assets:
Internet accounts 800,000 -- --
----------- ----------- -----------
$ 1,192,431 $ -- $ --
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities (Note 5):
Notes payable (Note 3) $ -- $ -- $ 160,000
Accrued interest -- -- 91,753
Accounts payable 5,598 5,598 354,831
Due to shareholder -- -- 300,000
----------- ----------- -----------
Total current liabilities 5,598 5,598 906,584
Commitments and contingencies (Note 6) -- -- --
Stockholders' equity (deficit):
Preferred stock, $10 par value, 100,000 shares authorized,
90,658 issued and outstanding 906,584 906,584 --
Common stock, no par value, 99,000,000 shares authorized,
20,194,150, 3,194,150 and 3,194,150 shares
issued and outstanding 6,474,331 5,284,327 5,284,327
Accumulated deficit (6,194,082) (6,196,509) (6,190,911)
Accumulated other comprehensive income -- -- --
----------- ----------- -----------
Total stockholders' equity (deficit) 1,186,833 (5,598) (906,584)
----------- ----------- -----------
$ 1,192,431 $ -- $ --
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE> 25
NORTHSTAR NETWORK, INC.
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Nine Months Ended Years Ended
September 30, December 31,
1999 1998 1998 1997
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues $ 14,625 $ -- $ -- $ --
Expenses:
General and administrative 12,198 -- 5,598 --
---------- ---------- ---------- ----------
Net income (loss) 2,427 -- (5,598) --
Dividends on preferred stock (40,796) (40,796) (54,395) --
---------- ---------- ---------- ----------
Net loss applicable to common stock $ (38,369) $ (40,796) $ (59,993) $ --
========== ========== ========== ==========
Net loss per common share $ (0.01) $ (0.01) $ (0.02) $ 0.00
========== ========== ========== ==========
Weighted average common shares outstanding 4,728,133 3,194,150 3,194,150 3,194,150
========== ========== ========== ==========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE> 26
NORTHSTAR NETWORK, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
FOR THE NINE MONTH PERIOD ENDED SEPTEMBER 30, 1999 (UNAUDITED), THE YEARS ENDED
DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
Preferred Stock Common Stock Accumulated
Shares Amount Shares Amount Deficit Total
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1996 -- $ -- 3,194,150 $ 5,284,327 $(6,190,911) $ (906,584)
Net loss -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- -----------
Balance, December 31, 1997 -- -- 3,194,150 5,284,327 (6,190,911) (906,584)
Issuance of preferred stock for debt 90,658 906,584 -- -- -- 906,584
Net loss -- -- -- -- (5,598) (5,598)
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- -----------
Balance, December 31, 1998 90,658 906,584 3,194,150 5,284,327 (6,196,509) (5,598)
Issuance of common stock -- -- 17,000,000 1,190,004 -- 1,190,004
Net income -- -- -- -- 2,427 2,427
----------- ----------- ----------- ----------- ----------- -----------
Balance, September 30, 1999
(Unaudited) 90,658 $ 906,584 20,194,150 $ 6,474,331 $(6,194,082) $ 1,186,833
=========== =========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE> 27
NORTHSTAR NETWORK, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Nine Months Ended Year Ended
September 30, December 31,
1999 1998 1998 1997
------- ------- ------- -------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net income (loss) $ 2,427 $ -- $(5,598) $ --
Adjustments to reconcile net loss to net
cash used in operating activities:
Changes in assets and liabilities:
Accounts payable -- -- 5,598 --
Accounts receivable (2,716) -- -- --
------- ------- ------- -------
Net cash provided by (used in) operating activities (289) -- -- --
------- ------- ------- -------
Cash flows from investing activities:
Cash acquired in NSNW acquisition 2,818 -- -- --
------- ------- ------- -------
Net increase in cash 2,529 -- -- --
Cash at beginning of period -- -- -- --
------- ------- ------- -------
Cash at end of period $ 2,529 $ -- $ -- $ --
======= ======= ======= =======
Non-cash transactions:
The Company issued preferred stock to settle debt of $906,584 during 1998.
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE> 28
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997 AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1999 AND 1998 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Description of Business
NorthStar Network, Inc. ("NSNW" or the "Company") is a Washington
corporation located in Dallas, Texas. The Company changed its name in
August 1999 from Global Productions, Inc. ("GPI"). The Company's
principal business operations, in prior years, have included the
ownership and development of commercial real estate located in Branson,
Missouri and the investment in a coal mine in Arkansas.
On September 22, 1999, the Company acquired certain assets, including
computer hardware and software and internet accounts from an internet
service provider ("ISP"), NorthStar Network, Inc. (TX) ("NSN") for
17,000,000 shares of the Company's common stock. The Company considers
that it purchased assets only and not a business; therefore, no pro forma
operating information is available. With this purchase, the Company began
operating as an ISP and various ancillary activities thereto, including
website development, computer sales, advertising and promotion and
e-commerce. The Company has valued the purchase at $.07 per common share,
the price the Company's shares were trading on the over-the-counter
market at the time, less a 20% discount for the restricted nature of the
shares (Rule 144) and the thin market at the time.
Basis of Presentation
The accompanying financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has suffered
recurring losses that raise substantial doubt about its ability to
continue as a going concern. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
Management intends to file a Form 10 with the Securities and Exchange
Commission ("SEC") in the fourth quarter of 1999, in order to become a
"fully reporting" company. The Company plans to complete the divestiture
of its mineral resource holdings in December 1999 in an equity exchange
wherein the Company will transfer ownership of the properties to a
private corporation in exchange for assumption and relief of the
obligation represented by the Company's outstanding preferred stock with
the balance of the equity taken by the Company in common stock of the
private corporation.
F-7
<PAGE> 29
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basis of Presentation (Continued)
The Company intends to take steps to enhance and expand its technology
business through growth and acquisitions and expects to conclude much of
its initial expansion activity during the fourth quarter of 1999 with the
belief that its audited financial statements for the period ended
December 31, 1999 will accurately reflect both the financial status and
operational aspects of the Company.
Use of Estimates and Assumptions
Preparation of the Company's financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect certain reported amounts and
disclosures. Accordingly, actual results could differ from those
estimates.
Cash and Cash Equivalents
The Company considers all liquid investments, with an original maturity
of three months or less when purchased, to be cash equivalents.
Income Taxes
The Company has adopted Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes" ("SFAS 109"). SFAS 109 requires the
use of the asset and liability method of computing deferred income taxes.
The objective of the asset and liability method is to establish deferred
tax assets and liabilities for the temporary differences between the
financial reporting basis and the tax basis of the Company's assets and
liabilities at enacted tax rates expected to be in effect when such
amounts are realized or settled.
Basic Earnings (Loss) Per Share and Reverse Split
In March 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128"). SFAS 128 provides a different method of calculating earnings per
share than was formerly used in APB Opinion 15. SFAS 128 provides for the
calculation of basic and diluted earnings per share. Basic earnings per
share includes no dilution and is computed by dividing income available
to
F-8
<PAGE> 30
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
Basic Earnings (Loss) Per Share and Reverse Split (Continued)
common stockholders by the weighted average number of common shares
outstanding for the period. Dilutive earnings per share reflects the
potential dilution of securities that could share in the earnings of the
Company. Because the Company has no potential dilutive securities, the
accompanying presentation is only of basic loss per share. All share and
per share information in the accompanying financial statements has been
retroactively adjusted to reflect the effects of a 1-for-3 reverse split
of the Company's common shares in August 1999.
2. INCOME TAXES
At December 31, 1998, the Company has net operating loss carryforwards of
approximately $580,000 for both financial statement and tax reporting
purposes. Unused operating loss carryforwards may provide future tax
benefits, although there can be no assurance that these net operating
losses can be recognized in the future. These losses may be used to
offset future taxable income, subject to the provisions of Internal
Revenue Code Section 382, and if not fully utilized, expire starting in
2005 through 2008.
The Company has deferred tax assets amounting to approximately $195,000,
$195,000 and $190,000 at September 30, 1999, and December 31, 1998 and
1997, respectively, related to the net operating loss carryovers. The
realization of the benefits from these deferred tax assets appears
uncertain due to recurring losses. Accordingly, a valuation allowance has
been recorded which offsets the deferred tax assets at the end of each
period.
3. NOTES PAYABLE
Notes payable consists of 10% notes payable to individuals which matured
in 1994 and remained unpaid until converted to preferred stock in 1998
(Note 5).
4. COMMITMENTS AND CONTINGENCIES
Fair Value of Financial Instruments
The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated
fair value amounts have been determined by the Company, using available
market information and appropriate valuation methodologies.
F-9
<PAGE> 31
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
4. COMMITMENTS AND CONTINGENCIES (CONTINUED)
Fair Value of Financial Instruments (Continued)
The fair value of financial instruments classified as current assets or
liabilities including cash and cash equivalents and notes and accounts
payable approximate carrying value due to the short-term maturity of the
instruments.
Uncertainty Due to the Year 2000 Issue
The Year 2000 issue arises because many computerized systems use two
digits rather than four to identify a year. Date-sensitive systems may
recognize the year 2000 as 1900 or some other date, resulting in errors
when information using year 2000 dates is processed.
In addition, similar problems may arise in some systems which use certain
dates in 1999 to represent something other than a date. The effects of
the Year 2000 issue may be experienced before, on, or after January 1,
2000 and, if not addressed, the impact on operations and financial
reporting may range from minor errors to significant systems failure
which could impact the Company's ability to conduct normal business
operations. It is not possible to be certain that all aspects of the Year
2000 issue affecting the Company will be fully resolved.
5. STOCKHOLDERS' EQUITY
In December 1998, the Company issued 90,658 preferred shares to convert
certain liabilities of the Company:
<TABLE>
<S> <C>
Notes payable (Note 3) $160,000
Accrued interest 91,753
Accounts payable 354,831
Accounts payable to shareholders 300,000
--------
$906,584
========
</TABLE>
The shares were valued at their $10 par value. The preferred shares carry
a 6% annual dividend rate. Unpaid dividends amounted to $95,191 and
$54,395 at September 30, 1999 and December 31, 1998, respectively.
F-10
<PAGE> 32
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
6. NEW ACCOUNTING PRONOUNCEMENTS
SFAS 129
Statement of Financial Accounting Standards No. 129, "Disclosure of
Information about Capital Structure" ("SFAS 129"), effective for periods
ending after December 15, 1997, establishes standards for disclosing
information about an entity's capital structure. SFAS 129 requires
disclosure of the pertinent rights and privileges of various securities
outstanding (stock, options, warrants, preferred stock, debt and
participating rights) including dividend and liquidation preferences,
participant rights, call prices and dates, conversion or exercise prices
and redemption requirements. Adoption of SFAS 129 has had no effect on
the Company as it currently discloses the information specified.
SFAS 130
In June 1997, the Financial Accounting Standards Board issued two new
disclosure standards. Results of operations and financial position are
unaffected by implementation of these new standar Statement of Financial
Accounting Standards (SFAS) 130, "Reporting Comprehensive Income,"
establishes standards for reporting and display of comprehensive income,
its components and accumulated balances. Comprehensive income is defined
to include all changes in equity except those resulting from investments
by owners and distributions to owners. Among other disclosures, SFAS 130
requires that all items that are required to be recognized under current
accounting standards as components of comprehensive income be reported in
a financial statement that is displayed with the same prominence as other
financial statements. The pronouncement has had no effect on the
Company's financial statements.
SFAS 131
SFAS 131, "Disclosure About Segments of a Business Enterprise,"
establishes standards for the way that public enterprises report
information about operating segments in annual financial statements and
requires reporting of selected information about operating segments in
interim financial statements issued to the public. It also establishes
standards for disclosures regarding products and services, geographic
areas and major customers. SFAS 131 defines operating segments as
components of an enterprise about which separate financial information is
available that is evaluated regularly by the chief operating decision
maker in deciding how to allocate resources and in assessing performance.
This accounting pronouncement has had no effect on the Company's
financial statements for the periods presented.
F-11
<PAGE> 33
NORTHSTAR NETWORK, INC.
NOTES TO FINANCIAL STATEMENTS
6. NEW ACCOUNTING PRONOUNCEMENTS (CONTINUED)
SFAS 132
Statement of Financial Accounting Standards (SFAS) 132, "Employers'
Disclosure about Pensions and Other Postretirement Benefits," revises
standards for disclosures regarding pensions and other postretirement
benefits. It also requires additional information on changes in the
benefit obligations and fair values of plan assets that will facilitate
financial analysis. This statement does not change the measurement or
recognition of the pension and other postretirement plans. The financial
statements are unaffected by implementation of this new standard.
F-12
<PAGE> 34
INDEX OF EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------ -----------
<S> <C>
3.1 Articles of Incorporation
3.2 Amendment to Articles to change name and capital structure -
July 1988
3.3 Amendment to Articles to change capital structure - January 22, 1991
3.4 Amendment to Articles to change name - August 4, 1999
3.5 By-Laws
10.1 Asset Purchase Agreement
27.1 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
EAGLE MOUNTAIN MINING, INC.
We, the undersigned persons of the age of eighteen years or more, as
incorporators of a corporation under the Washington Business Corporation Act,
adopt the following Articles of Incorporation for such consideration.
1. NAME
The name of the corporation shall be: EAGLE MOUNTAIN MINING, INC.
2. PURPOSE
The purposes for which this corporation is formed are as follows:
(a) The corporation shall have the capacity to act the same as a
natural person, but shall have authority to perform only such actions as are
necessary and proper to accomplish its purposes and which are not repugnant to
law. All of the purposes and objects which are set forth below shall be
construed in the broadest sense.
(b) To acquire and explore mining properties.
(c) To purchase, or otherwise acquire, so far as permitted by law, the
whole or any part of the undertaking and business of any person, firm or
corporation engaged in a business of the same general character as that for
which this corporation is organized, and the property and liabilities, including
the goodwill, assets and stock in trade thereof, and to pay for the same either
in cash or in shares, or partly in cash and partly in shares.
(d) In general, to carry on any lawful business, or any nature
whatsoever, in connection with the foregoing, or which is calculated, directly
or indirectly, to promote the interest of the corporation or to enhance the
value of its property.
3. DURATION
This corporation shall be of perpetual duration.
4. SHARES
The authorized capital stock of the corporation shall be $50,000.00,
consisting of 50,000,000 shares of common stock having no par value. All of the
capital stock authorized herein shall have equal voting rights and powers
without restrictions in preference.
<PAGE> 2
5. SHARES NONASSESSABLE
All of the authorized stock of the corporation, as set forth in the
preceding paragraph, shall be forever nonassessable.
6. PAID-IN CAPITAL
The amount of paid-in capital with which the corporation shall commence
business is the sum of $1,000.00
7. DIRECTORS
The number of directors of this corporation, who need not be
shareholders, shall be not less than three, except that in cases where all
shares of the corporation are owned of record by fewer than three shareholders,
the number of directors may be less than three, but not less than the number of
shareholders. In no event shall the number of directors exceed nine. The number,
qualifications, terms of office, manner of election, time and place of meeting,
and the powers and duties of the directors shall be such as are prescribed by
the Bylaws of this corporation.
8. INITIAL DIRECTORS
The names and post offices addresses of the initial directors, who
shall hold office and manage the affairs of the corporation until the first
annual meeting or until their successors are elected and qualified, are as
follows:
Victor E. Lovejay 508 N. Third East
Chewelah, Washington 99109
R. James Colling N. 7612 Panorama
Spokane, Washington 99208
Mitchell J. Wolfe W. 104 Sumner
Spokane, Washington 99204
9. INCORPORATORS
The names and post office addresses of the incorporators are:
Chalmer West McWhorter E. 3021 - 13th
Spokane, Washington 99202
R. James Colling N. 7612 Panorama
Spokane, Washington 99208
<PAGE> 3
Michael J. Crabb Route 2, Box 111-B
Cheney, Washington 99004
Donald L. Galbraith N. 6205 Nevada
Spokane, Washington 99207
Victor Lovejoy 508 N. Third East
Chewelah, Washington 99109
10. BYLAWS
Subject to the power of shareholders to amend, alter or repeal, the
Board of Directors of this corporation shall have the power to enact such Bylaws
defining the powers and duties of the officers of the corporation and providing
for such other matters in relation to its affairs as they may deem necessary and
convenient, provided the same are not out of harmony with the laws of the State
of Washington or these Articles of Incorporation.
11. AMENDMENTS
The corporation reserves the right to amend, alter, change or repeal
any provision contained in these Articles of Incorporation in the manner now or
hereafter prescribed by statute, and all rights conferred on the shareholders
herein are granted subject to this reservation. An amendment altering the
Articles of Incorporation of this corporation, in any respect, may be adopoted
by vote of the holders of a majority of the outstanding shares unless
specifically prohibited by law, then by such vote as the law requires.
12. COMMENCEMENT
The corporation will not commence business until consideration of the
value of at least $500.00 has been received for the issuance of shares.
13. PREEMPTIVE RIGHTS
No shareholder shall have a preemptive right to acquire additional
shares of the corporation.
14. INITIAL REGISTERED AGENT
The name of the initial registered agent of this corporation is:
GREGORY B. LIPSKER.
15. REGISTERED OFFICE
The post office address of the initial registered office of this
corporation is N. 711 Lincoln, P. O. Box 324, Spokane, Washington 99210.
DATED at Spokane, Washington this _____ day of May, 1979.
<PAGE> 4
/s/ CHALMER WEST MCWHORTER /s/ R. JAMES COLLING
- --------------------------------- --------------------------
Chalmer West McWhorter R. James Colling
/s/ MICHAEL J. CRABB /s/ DONALD L. GALBRAITH
- --------------------------------- --------------------------
Michael J. Crabb Donald L. Galbraith
/s/ VICTOR LOVEJOY
- ---------------------------------
Victor Lovejoy
<PAGE> 1
EXHIBIT 3.2
AMENDMENT TO THE ARTICLES OF INCORPORATION
OF
EAGLE MOUNTAIN MINING, INC.
Articles of Amendment to the Articles of Incorporation of Eagle Mountain Mining,
Inc., are herein executed by said Corporation pursuant to the Revised Code of
Washington, 23A.16.020, as follows:
1. The name of the corporation is: Eagle Mountain Mining, Inc.
2. The amendment so adopted changes Article 4 to read as follows:
ARTICLE 4
"The authorized capital stock of the Corporation shall be $50,000.00,
consisting of 100,000,000 shares of common stock having no par value.
All of the capital stock authorized herein shall have equal voting
rights and powerrs without restrictions in preference."
3. The amendment was adopted by the Board of Directors at a special
meeting called for that purpose duly called and held on the 5th day of
July, 1988, without shareholders' approval.
4. The increase in capitalization was unanimously adopted by the Board of
Directors of the said Corporation.
5. No shares were voted against such amendment as it was adopted by the
unanimous vote of the Board of Directors.
/s/ W. L. CAMPBELL, JR.
--------------------------
President
/s/ WILLIAM E. CULLEN
---------------------------
Asst. Secretary
<PAGE> 1
EXHIBIT 3.3
State of Washington
Corporation Division
Office of the Secretary of State
ARTICLES OF AMENDMENT
Pursuant to RCW 23B.10.060 of the Washington Business Corporation Act, the
undersigned corporation hereby submits the following amendment(s) to the
corporation's Articles of Incorporation.
1. The name of the corporation is: EAGLE MOUNTAIN MINING, INC.
2. The text of each amendment(s) as adopted is (are) as follows:
Article I is changed to read as follows: The name of the corporation shall
be GLOBAL PRODUCTIONS, INC.
Article 4 is changed to read as follows:
The authorized capital stock of the Corporation shall be $50,000.00,
consisting of 100,000,000 shares having no par value, consisting of two
classes, being common and preferred stock of which 99,000,000 shares shall
be authorized as common stock, and 1,000,000 shares authorized as preferred
stock. All of the common stock authorized herein shall have equal voting
rights and powers without restrictions in preference. The Board of Directors
shall have the authority to divide the preferred class into series and to
fix and determine the relative rights and preferences of the shares of any
series so established.
3. If an amendment provides for an exchange, reclassification, or cancellation
of issued shares, provisions for implementing the amendment, if not
contained in the text of the amendment itself, are as follows: No Change
4. The date of adoption of each amendment(s) was: Amendment to Article 1 was
adopted on December 31, 1990. Amendment to Article 4 was adopted on December
31, 1990.
5. The amendment(s) was (were) adopted by:
( ) The incorporators. Shareholder action was not required.
( ) The board of directors. Shareholder action was not required.
(X) Duly approved shareholder action in accordance with the provisions of
RCW 23B.10.030 and RCW 23B.10.040.
6. These Articles will be effective upon filing, unless an extended date and/or
time appears here: .
---------------
Dated: January 17, 1991 /s/ W. L. CAMPBELL, JR.
--------------------------------
W. L. Campbell, Jr., President
<PAGE> 1
EXHIBIT 3.4
BYLAWS
OF
EAGLE MOUNTAIN MINING, INC.
ARTICLE I. OFFICES
1.1 Principal. The principal office, in the state of Washington, shall be
located in the city of Spokane, county of Spokane.
1.2 Registered. Registered offices shall be maintained in all states where
required by the business of the corporation. A registered office may be, but
need not be, identical with the principal office. The address of the registered
office may be changed from time to time by the Board of Directors.
1.3 Other. 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 require.
ARTICLE II. SHAREHOLDERS
2.1 Annual Meetings.
(a) Day. The annual meeting of the shareholders shall be on the second
Monday of January of each year, if not a holiday.
(b) Holidays. If the day fixed for the annual meeting is a legal
holiday in the state where the meeting is to be held, the meeting shall be held
on the next business day.
(c) Purpose. Annual meetings shall be for the purpose of electing
directors and for the transaction of any other business as may come before the
meeting.
(d) Substitute. If the annual meeting is not held on the day
designated, or if the directors are not elected at the annual meeting or at an
adjourned meeting, the directors shall cause a substitute annual meeting of
shareholders to be held as soon as convenient. The substitute annual meeting
shall be called in the same manner as provided for annual shareholders'
meetings. Any business transacted or elections held at the substitute annual
meeting shall be as valid as if transacted or held at the annual meeting.
(e) Notice. Written notice of the date, time, place and purpose of the
annual meeting shall be given by the secretary to all shareholders entitled to
vote in the form and manner as provided in 2.4. No change in the time or place
of the annual shareholders' meeting for election of directors shall be made
within 60 days next before the election is to be held. Notice of any change in
the time or place of the meeting to elect directors shall be given each
shareholder not less than 30 days before
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the election is held. If the secretary is absent or is unable or refuses to act,
notice shall be given by the president, or, in his absence or inability to act,
by the vice-president.
2.2 Special Meetings.
(a) Purpose. Unless otherwise prescribed by statute, special meetings
of shareholders may be called for any purpose.
(b) On Call of President or Directors. Special meetings of shareholders
may be called at any time by the president or by a majority of the Board of
Directors upon the same notice as required for annual meetings of shareholders.
(c) On Call of Director or Shareholders. At any time, upon written
request of any director or of any shareholder or shareholders holding in the
aggregate not less than one-tenth of the voting power of all shareholders, it
shall be the duty of the secretary to call a special meeting of shareholders to
be held at such time as the secretary may fix, not less than 10 nor more than 50
days after the receipt of the request. If the secretary neglects or refuses to
issue the call, the director or shareholder or shareholders making the request
may do so. Written notice of special meetings shall be given as provided in 2.4.
(d) Scope of Business. Business transacted at any special meeting of
shareholders shall be limited to the purposes stated in the notice.
2.3 Place of Meetings. Unless otherwise directed by the Board of Directors,
all meetings shall be held at the principal office. The Board may designate any
other place, either within or without the state in which the principal office is
located, as the place of meeting for any annual meeting or for any special
meeting of the shareholders.
2.4 Notice of Meetings. Written notice stating the place, date and hour of
the meeting, and in case of a special meeting, the purpose or purposes for which
the meeting is called, shall be delivered not less than 10 nor more than 50 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 officer or persons calling
the meeting, to each shareholder of record entitled to vote. If mailed, such
notice is deemed delivered when deposited in the United States mail, addressed
to the shareholder at his address as it appears on the stock transfer books,
with postage thereon prepaid.
2.5 Waiver of Notice. Notice of any shareholders' meeting may be waived in
writing by any shareholder at any time. Notice is deemed waived by any
shareholder who affixes his signature of approval to the minutes of any
shareholders' meeting.
2.6 Conduct of Meetings.
(a) Quorum. A majority of the outstanding shares of the corporation
entitled to vote,
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represented in person or by proxy, shall constitute a quorum at a meeting of
shareholders, except as otherwise provided by statute, by the Articles of
Incorporation or by these Bylaws.
(b) Effect of Withdrawals. The shareholders present at a duly organized
meeting may continue to transact business until adjournment, notwithstanding the
withdrawal of enough shareholders to leave less than a quorum.
(c) Adjournments in Absence of Quorum. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares
represented may adjourn the meeting from time to time without further notice,
except that any meeting at which directors are to be elected shall be adjourned
from day to day until the directors are elected. In the case of any meeting
called for the election of directors, those who attend the second adjourned
meeting, although less than a quorum, shall constitute a quorum for the purpose
of electing directors. At all adjourned meetings at which a quorum is
represented, any business may be transacted which might have been transacted at
the meeting as originally notified.
(d) Presiding Officer. The president, and, in his absence, the
vice-president, shall preside at all shareholders' meetings. If both are absent,
the shareholders present shall elect a presiding officer. The secretary shall
act as secretary at all shareholders' meetings. In his absence or failure to
act, the presiding officer may appoint any person to act as secretary of such
meeting.
(e) Rules of Order. Roberts' Rules of Order, as revised, shall govern
the conduct of all meetings, except as they may conflict with the Articles of
Incorporation or Bylaws.
2.7 Determination of Shareholders. Shareholders eligible to vote shall be
determined as provided in 6.2.
2.8 Voting Lists. If there are more than 15 shareholders, the officer or
agent having charge of the stock transfer records shall make, at least 10 days
before each meeting of shareholders, a complete list of the shareholders
entitled to vote at the meeting, or any adjournment, arranged in alphabetical
order, with the address of and the number of shares held by each, which list,
for a period of 10 days prior to the meeting, shall be kept on file at the
principal office and shall be subject to inspection by any shareholder at any
time during usual business hours. The 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 shareholder during the whole time of the meeting. The original stock
transfer records shall be prima facie evidence as to who are the shareholders
entitled to examine such list or transfer records or to vote at any meeting of
shareholders.
2.9 Proxies. At all meetings, a shareholder may vote by proxy executed in
writing by the shareholder or by his duly authorized attorney in fact. Such
proxy shall be filed with the secretary before or at the time of the meeting. No
proxy shall be valid after eleven months from the date of its execution, unless
otherwise provided in the proxy.
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2.10 Voting Rights. Subject to the provisions of 2.12, each outstanding
share entitled to vote shall be entitled to one vote upon each matter submitted
to a vote at a meeting of shareholders.
2.11 Voting by Certain Holders. Shares held by the following types of
holders shall be voted as follows:
(a) Corporate Holders. Shares standing in the name of another
corporation may be voted by the officer, agent or proxy as the Bylaws of the
holding corporation may prescribe, or, in the absence of such provision, as its
Board of Directors may direct, or, in the absence of such provision, by its
president or his authorized proxy.
(b) Fiduciary Holders. Shares held by an administrator, executor,
guardian, or conservator may be voted by him, either in person or by proxy,
without a transfer of such shares into his name. Shares standing in the name of
a trustee may be voted by him, either in person or by proxy, but no trustee
shall be entitled to vote shares held by him without a transfer of such shares
into his name.
(c) Receivers. Shares standing in the name of a receiver may be voted
by the receiver, and shares held by or under the control of a receiver may be
voted by the receiver without transfer into his name if authority is contained
in an appropriate order of the court by which such receiver was appointed.
(d) Pledgees. A shareholder whose shares shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and, thereafter, the pledgee shall be entitled to vote the shares so
transferred.
(e) Treasury, etc. Shares of its own stock belonging to the or
indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares at any given time.
2.12 Cumulative Voting. At each election for directors, every shareholder
entitled to vote shall have the right to vote, in person or by proxy, the number
of shares owned by him for as many persons as there are directors to be elected
and for those whose election he has a right to vote. There shall be no
cumulative voting.
2.13 Waiver of Meeting. 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 the shareholders entitled to
vote with respect to the subject matter.
ARTICLE III. DIRECTORS
3.1 Powers. The business and affairs of the corporation shall be managed by
its Board of Directors.
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3.2 Number. The number of directors shall be not less than three, except
that in cases where all shares of the corporation are owned of record by fewer
than three shareholders, the number of directors may be less than three, but not
less than the number of such shareholders. In no event shall the number of
directors exceed nine.
3.3 Election. A Board of Directors shall be chosen by vote at the annual
meeting of the shareholders or at any meeting held in the place thereof as
provided by law.
3.4 Term. Each director shall hold office until the next annual meeting of
shareholders and until his successor is elected and qualified.
3.5 Qualifications. Directors need not be residents of the state of
incorporation nor of the state in which the principal office is located.
Directors need not be shareholders and, except as limited in 4.2, may be elected
to one or more offices.
3.6 Regular Meetings. A regular meeting of the Board of Directors shall be
held without other notice than this Bylaw immediately after, and at the same
place as, the annual meeting of shareholders. The Board of Directors may
provide, by resolution, the time and place for the holding of additional regular
meetings without other notice than such resolution, either within or without the
state in which the principal office is located.
3.7 Special Meetings. Special meetings of the Board of Directors may be
called as follows:
(a) On Call of President. The president may call a special meeting of
the Board of Directors at any time. In his absence, or in his inability to act,
the vice-president may call a special meeting.
(b) On Call of Two Directors. Any two directors may call a special
meeting by written request to the secretary, who shall forthwith give notice to
all members of the Board of the time and place of the meeting, which shall be
not less than 10 days nor more than 20 days after the request is delivered to
the secretary. If the secretary fails to give the notice within 10 days after
receipt of the request, the two directors may give the notice.
(c) Date and Time. The person or persons calling the meeting shall fix
the date and time.
3.8 Place of Meetings. All meetings of directors shall be held at the
principal office unless the majority of the directors designate that any meeting
be held at some other place.
3.9 Notice of Meetings. Notices of all directors' meetings shall be in
writing and shall be given as provided in 2.4 for meetings of shareholders, or
by telegram. The notices shall be given in sufficient time to enable each
director to arrive at the place of meeting by the customary modes of
transportation.
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3.10 Waiver of Notice. Any director may waive notice of any directors'
meeting by:
(a) Signing a written waiver;
(b) Signing the written minutes; or
(c) Attending the meeting, unless attendance is for the express
purpose of objecting to the transaction of any business because the meeting is
not lawfully called or convened.
3.11 Waiver of Meeting. Any action required or permitted to be taken at any
meeting of the Board of Directors, or of any committee thereof, may be taken
without a meeting if a Consent, in writing, setting forth the action so taken,
is signed by all of the directors entitled to vote with respect to the subject
matter.
3.12 Conduct of Meetings.
(a) Quorum. A majority of the number of directors fixed by 3.2 shall
constitute a quorum for the transaction of business at any meeting of the Board
of Directors, but, if less than such majority is present at a meeting, a
majority of the directors present may adjourn the meeting from time to time
without further notice.
(b) Presiding Officer. The president shall preside at all directors'
meetings unless the directors have previously designated a different person as
chairman of the Board. In the absence of the president or any chairman of the
Board, the vice-president shall preside.
(c) 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 Board of
Directors.
(d) Presumption of Assent - Dissents. A director of the corporation
who is present at a meeting of the Board of Directors at which action on any
corporate matter is taken shall be presumed to have assented to the action taken
unless his dissent shall be entered in the minutes of the meeting or unless he
files a written dissent to the action with the secretary before the adjournment
or forwards his dissent by certified mail to the secretary immediately after the
adjournment of the meeting. The right to dissent shall not apply to a director
who voted in favor of the action.
3.13 Committees. The Board of Directors may, by resolution adopted by a
majority of the whole Board, designate one or more committees, each committee to
consist of two or more of the directors, which, to the extent provided in the
resolution, shall have and may exercise the powers of the Board of Directors in
the management of the business and affairs of the corporation and may authorize
the seal to be affixed to all papers which may require it. Such committee or
committees shall have such name or names as may be determined from time to time
by resolution adopted by the Board of Directors.
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3.14 Removal. The entire Board of Directors or any individual director may,
at a special meeting of the shareholders called for that purpose, in the manner
provided in 2.4, be removed, with or without cause, from office by a vote of
shareholders holding a majority of the outstanding shares entitled to vote at an
election of directors. If the whole Board or any one or more directors are
removed, new directors may be elected at the same meeting.
3.15 Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors participate. A director elected to
fill a vacancy shall be elected for the unexpired term of his predecessor in
office. Any directorship to be filled by reason of an increase in the number of
directors shall be filled by election at an annual meeting or at a special
meeting of shareholders called for that purpose.
3.16 Compensation. The directors may be paid their expenses of attendance
at each meeting of the Board of Directors and may be paid a fixed sum for
attendance at each meeting of the Board of Directors or a stated salary as
director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like reimbursement and
compensation for attending committee meetings.
ARTICLE IV. OFFICERS
4.1 Number. The officers of the corporation shall be a president, one or
more vice-presidents (the number to be determined by the Board of Directors), a
secretary, and a treasurer, each of whom shall be elected by the Board of
Directors. The Board of Directors may elect a chairman of the Board, who, when
present, shall preside at all meetings of the Board of Directors, and who shall
have any other powers as the Board prescribes. The Board may elect or appoint
any other officers and assistant officers as deemed necessary.
4.2 Qualifications. The president, and the chairman of the Board of
Directors, if any, need not be shareholders, but shall be directors. The
vice-presidents, secretary, treasurer, and other officers need not be
shareholders or directors. Any two or more offices may be held by the same
person except the offices of president and secretary. However, a sole
shareholder may hold all corporate offices if he or she desires.
4.3 Election and Term. The officers of the corporation to be elected by the
Board of Directors shall be elected annually by the Board of Directors at the
first meeting of the Board of Directors held after each annual meeting of the
shareholders. If the election of officers is not held at such meeting, the
election shall be held as soon thereafter as conveniently possible. Each officer
shall hold office until his successor is duly elected and qualified or until his
death or until he resigns or is removed.
4.4 Removal. Any officer or agent elected or appointed by the Board of
Directors may be removed by the Board of Directors whenever, in its judgment,
the best interests of the corporation
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would be served thereby, but such removal shall be without prejudice to the
contract rights, if any, of the person so removed. Election or appointment of an
officer or agent shall not of itself create contract rights.
4.5 Resignations. Any director or officer of the corporation may resign at
any time by giving written notice to the corporation, to the Board of Directors,
or to the chairman of the Board, or to the president or to the secretary. Any
resignation shall take effect at the time fixed in the resignation, or, if no
time is fixed, upon its acceptance by the Board of Directors.
4.6 Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification, or otherwise, may be filled by the Board of Directors
for the unexpired portion of the term.
4.7 President. The president shall be the principal executive officer and,
subject to the control of the Board of 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 shareholders and of the Board of
Directors unless a chairman of the Board is designated. He may sign, with the
secretary or any other officer authorized by the Board of Directors,
certificates for shares, any deeds, mortgages, bonds, contracts, or other
instruments which the Board of Directors has authorized to be executed, except
in cases where the signing and execution is expressly delegated by the Board of
Directors or by these Bylaws to some other officer or agent, or is required by
law to be otherwise signed or executed, and, in general, shall perform all
duties incident to the office of the president and such other duties as may be
prescribed by the Board of Directors from time to time.
4.8 Vice-Presidents. The vice-presidents shall act under the direction of
the president, and, in the absence of the president or in the event of his
death, inability or refusal to act, the vice-president (or if there be more than
one vice-president, the vice-presidents in the order designated at the time of
their election, or in the absence of any designation, then in the order of their
election) 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.
Any vice-president may sign, with the secretary or an assistant secretary,
certificates for shares of the corporation, and shall perform such other duties
as from time to time may be assigned to him by the president or by the Board of
Directors.
4.9 Secretary. The secretary shall:
(a) Keep the minutes of the shareholders' and the Board of Directors'
meetings in one or more books provided for that purpose.
(b) See that all notices are duly given in accordance with the
provisions of these Bylaws or as required by law.
(c) Be custodian of the corporate records and of the seal and see that
the seal of the corporation is affixed to all documents, the execution of which,
on behalf of the corporation, under its seal, is duly authorized.
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(d) Keep a register of the post office address and Internal Revenue
identification number of each shareholder, which shall be furnished to the
secretary by such shareholder.
(e) Sign, with the president or a vice-president, certificates for
shares, the issuance of which shall have been authorized by resolution of the
Board of Directors.
(f) Have general charge of the stock transfer records.
(g) 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 Board of Directors.
4.10 Treasurer. If required by the Board of 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 Board of Directors shall determine. He shall have
charge and custody of, and be responsible for, all funds and securities of the
corporation; receive and give receipts for moneys due and payable to the
corporation from any source whatsoever, and deposit all such moneys in the name
of the corporation in such banks, trust companies or other depositories as shall
be selected in accordance with the provisions of Article V of these Bylaws; and,
in general, perform all of the duties incident to the office of the treasurer
and such other duties as from time to time may be assigned to him by the
president or the Board of Directors.
4.11 Assistant Secretaries and Treasurers. The assistant secretaries, when
authorized by the Board of Directors, may sign, with the president or a
vice-president, certificates for shares, the issuance of which shall have been
authorized by a resolution of the Board of Directors. The assistant treasurers
shall, respectively, if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties as the
Board of Directors shall determine. The assistant secretaries and assistant
treasurers, in general, shall perform such duties as shall be assigned to them
by the secretary or the treasurer, respectively, or by the president or the
Board of Directors.
4.12 Salaries. The salaries of the officers shall be fixed from time to
time by the Board of Directors, and no officer shall be prevented from receiving
a salary by reason of the fact that he is also a director.
ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS
5.1 Contracts. The Board of Directors may authorize any officer or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the corporation, and such authority
may be general or confined to specific instances.
5.2 Loans. No loans shall be made by the corporation to its officers or
directors, unless first
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approved by the holders of two-thirds of the voting shares, and no loans shall
be made by the corporation secured by its shares.
5.3 Checks, 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 or officers, agent or agents, and in
such manner as shall from time to time be determined by resolution of the Board
of Directors.
5.4 Deposits. All funds of the corporation not otherwise employed shall be
deposited from time to time to the credit of the corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER
6.1 Reliance on Records. The corporation shall be entitled to recognize the
exclusive right of a person registered on its books as the owner of shares to
receive dividends, and to vote as such owner.
6.2 Determination of Shareholders. For the purposes of determining
shareholders entitled to notice of, or to vote at, any meeting of the
shareholders or at any adjournment, or shareholders entitled to receive payment
of any dividend, or in order to make a determination of shareholders for any
other proper purpose, the Board of Directors may provide that the stock transfer
records be closed for a stated period but not to exceed, in any case, 50 days.
If the stock transfer records are closed to determine the shareholders entitled
to notice of or to vote at a meeting of shareholders, the records shall be
closed for at least 10 days immediately preceding the meeting. In lieu of
closing the stock transfer records, the Board of Directors may fix in advance a
date as the record date for any determination of shareholders, the date in any
case to be not more than 50 days and, in case of a meeting of shareholders, not
less than 10 days prior to the date on which the particular action, requiring
such determination of shareholders, is to be taken. If the stock transfer
records are not closed and no record date is fixed for the determination of
shareholders entitled to notice of or to vote at a meeting of shareholders, or
shareholders entitled to receive payment of a dividend, the date on which the
resolution of the Board of Directors declaring such dividend is adopted, as the
case may be, shall be the record date for such determination of shareholders.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment of the meeting.
6.3 Certificates Representing Shares. The shares of the corporation shall
be represented by certificates signed by the president or a vice-president and
the secretary or an assistant secretary of the corporation, and may be sealed
with the seal of the corporation or a facsimile thereof. The signatures of the
president or vice-president and the secretary or assistant secretary upon a
certificate may be facsimiles if the certificate is countersigned by a transfer
agent, or registered by a registrar, other than the corporation itself or an
employee of the corporation. In case any officer who has signed or whose
facsimile signature has been placed upon such certificate shall have ceased to
be
10
<PAGE> 11
such officer before such certificate is issued, it may be issued by the
corporation with the same effect as if he were such officer at the date of its
issue.
Every certificate representing shares issued by the corporation which
is authorized to issue shares of more than one class shall set forth upon the
face or back of the certificate, or shall state that the corporation will
furnish to any shareholder, upon request and without charge, a full statement of
the designations, preferences, limitations, and relative rights of the shares of
each class authorized to be issued, and if the corporation is authorized to
issue any preferred or special class in series, the variations in the relative
rights and preferences between the share of each such series so far as the same
have been fixed and determined and the authority of the Board of Directors to
fix and determine the relative rights and preferences of subsequent series.
Each certificate representing shares shall state upon the face thereof:
(1) That the corporation is organized under the laws of this state.
(2) The name of the person to whom issued.
(3) The number and class of shares, and the designation of the series,
if any, which such certificate represents.
(4) The par value of each share represented by such certificate, or a
statement that the shares are without par value.
No certificate shall be issued for any share until such share is fully
paid.
6.4 Dividends. The Board of Directors may from 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 and its Articles of Incorporation.
6.5 Loss of Certificates. In case of the loss, mutilation or destruction of
a certificate of stock, a duplicate certificate may be issued upon such terms as
the Board of Directors shall prescribe.
6.6 Consideration for Shares. Subscriptions to capital stock shall be paid
in full unless otherwise authorized by the Board of Directors and shall be paid
in lawful money or in real or personal property or labor performed in the manner
and upon the terms and conditions provided by law and its Articles of
Incorporation.
6.7 Transfer of Shares. Transfer of shares of the corporation shall be made
only on the stock transfer records of the corporation by the holder of record or
by his legal representative, who shall furnish proper evidence of authority to
transfer, or by his attorney authorized by power of attorney duly executed and
filed with the secretary, and on surrender for cancellation of the certificate
for
11
<PAGE> 12
such shares. The person in whose name shares stand on the books thereof of the
corporation shall be deemed by the corporation to be the owner thereof for all
purposes.
ARTICLE VII. MISCELLANEOUS
7.1 Fiscal Year. The fiscal year of the corporation shall begin on the
first day of January and end on the 31st day of December in each year.
7.2 Reserves. There may be set aside out of any funds available for
dividends such sum or sums as the directors from time to time, in their absolute
discretion, think proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property of the
corporation, or for the purchase of additional property, or for such other
purposes as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve.
7.3 Indemnity.
(a) Right To. Any person made a party to any civil or criminal action,
suit or proceeding by reason of the fact that he, his testator or intestate, is
or was a director, officer or employee of this corporation or of any corporation
which he served as such at the request of this corporation, shall be indemnified
by the corporation against the reasonable expenses, including, without
limitation, attorneys' fees and amounts paid in satisfaction of judgment or in
settlement other than amounts paid to the corporation by him, actually and
necessarily incurred by or imposed upon him in connection with, or resulting
from the defense of such civil or criminal action, suit or proceeding, or in
connection with or resulting from any appeal therein, except in relation to
matters as to which it shall be adjudged in such civil or criminal action, suit
or proceeding, that such officer, director or employee is liable for negligence
or misconduct in the performance of his duties.
(b) Criminal Cases. In the case of a criminal action, suit, or
proceeding, a conviction (whether based on a plea of guilty or nolo contendere
or its equivalent, or after trial) shall not of itself be deemed an adjudication
that such officer, director or employee is liable for negligence or misconduct
in the performance of his duties to the corporation.
(c) Payment. Any amount payable pursuant to this article may be
determined and paid, at the option of the person to be indemnified, pursuant to
procedure set forth from time to time in the Bylaws or by any of the following
procedures:
(1) Order of the court having jurisdiction of any such civil or
criminal action, suit or proceeding;
(2) Resolution adopted by a majority of a quorum of the Board of
Directors of the corporation without counting in such majority or quorum any
interested directors;
12
<PAGE> 13
(3) Resolution adopted by the holders of record of a majority of
the outstanding shares of capital stock of the corporation having voting power;
or
(4) Order of any court having jurisdiction over the corporation.
(d) Other Rights. Right of indemnification shall not be exclusive of
any other right which such officers, directors and employees of the corporation,
and the other persons above mentioned, may have or hereafter acquire, with,
without limiting the generality of such statement, they shall be entitled to
their respective rights of indemnification under any bylaw, agreement, vote of
shareholders, provisions of law, or otherwise, as well as their rights under
this section.
7.4 Seal. The Board of Directors shall provide a corporate seal which shall
be circular in form and shall have inscribed thereon the name of the corporation
and the state of incorporation, and the words "Corporate Seal."
7.5 Waiver of Notices. Whenever any notice is required to be given to any
shareholder or director under the provisions of these Bylaws or under the
provisions of the Articles of Incorporation or under the provisions of the laws
of the state of incorporation, a waiver thereof, in writing, signed by the
person or persons entitled to the notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of such notice.
7.6 Amendments. These Bylaws may be amended, repealed or altered, in whole
or in part, by the Board of Directors, except that they shall not make or alter
any Bylaws fixing their qualifications, terms of office, or compensation. The
shareholders may make, alter and repeal Bylaws not inconsistent with law, or
with the Articles of Incorporation, including Bylaws made or altered by the
Board of Directors.
7.7 I.R.S. Expense Disallowance. Any payments made to an officer of the
corporation, such as salary, commission, bonus, interest, or rent, or
entertainment expense incurred by him, which shall be disallowed in whole or in
part as a deductible expense by the Internal Revenue Service, shall be
reimbursed by such officer to the corporation to the full extent of such
disallowance. It shall be the duty of the directors, as a Board, to enforce
payment of each such amount disallowed. In lieu of payment by the officer,
subject to the determination of the directors, proportionate amounts may be
withheld from his future compensation payments until the amount owed to the
corporation has been removed.
13
<PAGE> 14
CERTIFICATION
The undersigned secretary of the above corporation hereby certifies that
the foregoing is a full, true and complete copy of the Bylaws of said
corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and the seal of said
corporation this ___ day of _______________, 1979.
/s/ MITCHELL J. WOLFE
----------------------------
Mitchell J. Wolfe, Secretary
14
<PAGE> 1
EXHIBIT 3.5
MINUTES OF SPECIAL MEETING
OF BOARD OF DIRECTORS
OF
GLOBAL PRODUCTIONS, INC.
Pursuant to notice duly given, a special meeting of the Board of Directors
of Global Productions, Inc. was held on the 4th day of August, 1999 at 11:00 AM
at 17440 Dallas Parkway, Suite 100, Dallas, TX 75287.
The meeting was called to order by David R. Kane, Chairman and CEO of the
company who served as chairman of the meeting.
The following directors were present in person or by conference call:
Robert Vaughan, Ivan Webb, Timothy Buzzelli, James W. Tolbert, and Bill
Miertschin.
The reading of the minutes of the previous meeting of the Board of
Directors was suspended by unanimous vote.
By unanimous vote, the following actions were taken by the directors:
The Board accepted the resignations of David Kane and Charles Cook, as
directors and officers.
The following slate of officers was elected to serve until the annual
meeting of the corporation:
President - Timothy J. Buzzelli
Vice President - James W. Tolbert
Secretary-Treasurer - Robert R. Vaughan
Acting upon specific authority granted by the shareholders at the Annual
Meeting of December 31, 1998, the board changed the name of the company to
NorthStar Network, Inc.; approved an acquisition proposal submitted by
management whereby the company acquired certain assets enabling the company to
engage in the business of a nationwide Internet service provider with related
support divisions; implemented a 1 share for 3 share reverse split; and
instructed the company's management, attorney, and its transfer agent,
Interwest Transfer Co., to take all necessary steps to reflect these actions,
including securing a new CUSIP number, new trading symbol, and new stock
certificates.
<PAGE> 2
There being no further business to come before the meeting, upon motion
duly made, seconded and unanimously approved, it was adjourned.
------------------------------------------
Robert Vaughan
Secretary
Attest:
- ------------------------------
Tim Buzzelli
President
<PAGE> 1
EXHIBIT 10.1
ACQUISITION AGREEMENT
NSN/GBLP
This Acquisition Agreement ("AGREEMENT"), dated this 9th day of June 1999, is by
and between The North Star Network, Inc. ("NSN") a Texas corporation, having its
principal place of business at 17440 North Dallas Parkway, Suite 100, Dallas, TX
75287; and Global Productions, Inc. ("GBLP") a Washington corporation, having
its principal office at 325 North St. Paul St., Dallas, TX 72001.
RECITALS
NSN is a corporation engaged in the business of acquiring existing Internet
service providers, acquiring Internet subscribers, securing equipment and
facilities including telecommunications facilities, and Internet points of
presence (POP's), and otherwise organizing, developing and operating a business
as a national Internet service provider (ISP) and various related ancillary
activities related thereto, including Website development, computer sales,
advertising and promotion, and e-commerce. NSN currently has a dial up list of
approximately 4,800 subscribers, equipment and hardware to serve these
subscribers plus moderate expansion, and approximately 2,000 POP's under
contract, giving NSN one of the largest footprints in the country. NSN's primary
marketing and expansion is by direct sales marketing plan.
GBLP is a publicly traded corporation (OTC BB-GBLP) and is in the natural
resource business. GBLP is currently working to remain in compliance with recent
regulations enacted by NASD designed to require that corporations traded on the
OTCBB are fully reporting companies. GBLP foresees no undue delay in the
conclusion of the reverse merger and believes that the transactions can be
concluded within the month of July 1999.
CONSIDERATION
Through a series of negotiations, it has been agreed that GBLP shall acquire all
of the hardware, software, subscriber base, marketing plan and facilities, and
other assets, both tangible and intangible relative to NSN's business as an
Internet service provider, in consider for the issuance of Seventeen Million
(17,000,000) Shares, post split, of the common stock, subject to Rule 144, of
GBLP. This transaction shall be concluded subsequent to a 1 for 3 GBLP reverse
split of stock and name change to NorthStar Network, Inc. Said shares shall be
issued to NSN or its assigns in such certificates as shall be requested by NSN.
<PAGE> 2
NSN/GBLP
June 9, 1999
Page 2
NSN has provided GBLP with background and information relative to its formation
and operation, and GBLP has conducted its own due diligence in that regard. GBLP
is not relying on any additional statements or representations of NSN. Rather,
GBLP is relying solely upon its own due diligence process in making the decision
to enter into this AGREEMENT.
GBLP has provided NSN with background and information relative to its formation
and operation and NSN has conducted its own due diligence in that regard. NSN is
not relying on any additional statements or representations of GBLP. Rather, NSN
is relying solely upon its own due diligence process in making the decision to
enter into this AGREEMENT.
No representations have been made by GBLP or its officers and directors as to
the value or potential market value of GBLP stock, now or at any time in the
future.
No representations have been made by NSN or its officers and directors as to the
value or potential market value of its assets that are being acquired by GBLP
pursuant to this AGREEMENT.
OPERATIONS OF NSN
It is understood that, upon the conclusion of the acquisition, NSN will cease
operations as an Internet service provider and will transfer and assign such
operations to GBLP. Furthermore, NSN agrees that it will not engage in any
business activity in competition with GBLP but will assist GBLP in the
furtherance of its business operations and will cooperate fully with GBLP in the
smooth transition of the operations of NSN's Internet service provider business
into GBLP.
NSN is also aware that GBLP, upon conclusion of the acquisition, intends to
operate its business as an Internet service provider under the name of NorthStar
Network, Inc. NSN agrees that it will execute any and all documents necessary in
support of such action and will change its name, if necessary, in order that
GBLP shall have access to the name NorthStar Network, Inc. in the State of Texas
and elsewhere.
CONFIDENTIALITY
Each party agrees for itself and its respective affiliates, agents,
representatives and consultants to hold the scope and terms of this AGREEMENT in
the strictest confidence and not to disclose to any person, entity, party, firm
or corporation, other than agents or representatives of either party who are
also bound by this paragraph without the prior express written consent of the
other party.
<PAGE> 3
NSN/GBLP
June 9, 1999
Page 3
LEGAL COMPLIANCE
Parties to this AGREEMENT represent that they have no agreements in effect that
would prevent them from entering into and complying with this AGREEMENT. At all
times during the term of this AGREEMENT and any related agreements, all parties
agree that their actions and those of their representatives, agents, and
consultants will be entirely in accordance with all applicable laws, rules,
ordinances and regulations of all states, counties, districts and municipalities
in which such party conducts business related to the projects of NSN and BGLP,
and also will follow applicable international and federal laws, rules and
regulations. The parties agree to file all information with the regulatory
bodies in timely fashion.
This document shall be interpreted under and in compliance with the laws of the
State of Texas, under whose jurisdiction any and all disputes arising hereunder
shall be decided.
At all times stated herein, time shall be of the essence.
Each party hereto agrees to cooperate in the preparation and execution of any
necessary documentation in order to comply fully with the scope and intent of
this AGREEMENT.
NOTICES
Any notice to any party pursuant hereto shall be in writing and shall be deemed
delivered after five (5) business days if sent postage paid or faster services
addressed to each as follows:
The North Star Network, Inc. Global Productions, Inc.
17440 North Dallas Parkway, Suite 100 325 N. St. Paul Street
Dallas, TX 75287 Dallas, TX 75001
Each party shall bear sole responsibility for keeping all other parties aware of
changes in address.
<PAGE> 4
NSN/GBLP
June 9, 1999
Page 4
MULTIPLE COUNTERPARTS
This AGREEMENT may be executed in multiple counterparts, each of which shall be
deemed an original.
ACKNOWLEDGED AND AGREED TO AS OF THIS 9th DAY OF JUNE 1999.
THE NORTH STAR NETWORK, INC. GLOBAL PRODUCTIONS, INC.
By by
--------------------------- --------------------------
Jim C. Harris William Miertschin
President President
Date: Date:
------------------------- ------------------------
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