As filed with the Securities and Exchange Commission on October 28, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
MYWEB INC.COM
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(Name of Small Business Issuer in Its Charter)
Nevada 3089 88-0207089
- ------------------------------- ---------------------------- ----------------
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification
Number)
Block G, Unit G606, Phileo Damansara 1
No. 9, Jalan 16/11
Off Jalan Damansara, 46350 Petaling Jaya
Malaysia
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(Address and Telephone Number of Principal Executive Offices)
Block G, Unit G606, Phileo Damansara 1
No. 9, Jalan 16/11
Off Jalan Damansara, 46350 Petaling Jaya
Malaysia
- --------------------------------------------------------------------------------
(Address of Principal Place of Business)
Alex Jorge, Vice President
MyWeb Inc.com
595 Market Street, Suite 2500
San Francisco, California 94105
(415) 538-3728
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(Name, Address and Telephone Number of Agent For Service)
Please Send Copies of Communications to:
Michael S. Novins, Esq.
George A. Greenslade, Esq.
Baker & McKenzie
805 Third Avenue
New York, New York 10022
(212) 751-5700
Approximate Date of Commencement of Proposed Sale to the Public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ______________________________
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] __________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------------------------------------
Number of Proposed Maximum Proposed Maximum Amount of
Title of Each Class of Securities Shares to be Offering Price Aggregate Offering Registration
To Be Registered Registered Per Unit(1) Price(1) Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, $0.01 par value per 1,210,750 $19.34 $23,415,905 $6,509.62
share
- ---------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the bid and asked
prices of the common stock on the OTC Bulletin Board on October 25, 1999.
-----------------------------------
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
-----------------------------------
<PAGE>
[sidebar]
Information in this prospectus is not complete and may be changed. These
securities may not be sold until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting the offer to buy these
securities in any state where the offer or sale is not permitted.
[end sidebar]
SUBJECT TO COMPLETION, DATED OCTOBER 28, 1999
PROSPECTUS
1,210,750 SHARES
[MYWEB INC.COM LOGO]
MYWEB INC.COM
COMMON STOCK
-----------------
We are registering 1,210,750 shares on behalf of the selling
shareholders identified under the heading "Selling Shareholders" in this
prospectus. We will not receive any portion of the proceeds from the resale of
the shares registered on behalf of the selling shareholders. For information on
the methods of sale of the shares we are registering on behalf of the selling
shareholders, refer to the discussion under the heading "Plan of Distribution."
MyWeb common stock trades on the OTC Bulletin Board under the symbol
"MYWB." On October 25, 1999, the last sale price of our common stock on the OTC
Bulletin Board was $19.25 per share.
------------------------
INVESTING IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. FOR A
DISCUSSION OF SOME OF THE RISKS INVOLVED, REFER TO THE DISCUSSION UNDER THE
HEADING "RISK FACTORS" BEGINNING ON PAGE 5.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved these securities or determined if this
prospectus is truthful or complete. Any representation to the contrary is a
criminal offense.
---------------------
October ___, 1999
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information, appearing elsewhere in this prospectus, including the information
under the heading "Risk Factors" and the information contained in our Financial
Statements. All references in this prospectus to "MyWeb," "the company," "we,"
"us" or "our" are to MyWeb Inc.com and its subsidiaries, unless the context
requires otherwise. Unless otherwise indicated, all share and per share data (i)
give effect to the one-for-one hundred reverse stock split of our common stock
that took place on February 23, 1999; (ii) do not give effect to shares issuable
upon exercise of outstanding options and warrants; and (iii) do not give effect
to shares reserved for issuance under our 1999 Incentive Program and our 1999
Non-Qualified Stock Option Plan. Certain financial information in this
prospectus has been derived from data originally prepared in Malaysian Ringgits.
For purposes of this prospectus, a conversion rate of 3.80 Ringgits to $1.00 was
utilized.
Summary We are registering 1,210,750 shares of our common
stock on behalf of the selling shareholders
identified under the heading "Selling
Shareholders."
Information about MyWeb MyWeb was incorporated under the laws of Nevada
on February 20, 1985 under the name Sperzel-NV,
Inc. We are headquartered in Kuala Lumpur,
Malaysia, with offices in San Francisco,
Singapore, Malaysia, and China. Our chief
executive officer maintains an office in Kuala
Lumpur. A description of our history is set forth
under "Information about MyWeb--History of our
Development" and "--Recent Developments."
Recent Developments On February 24, 1999, we completed a reverse
merger with TecnoChannel Technologies Sdn Bhd, a
privately-held Malaysian corporation. As a result
of the reverse merger, Tecnochannel Technologies
became a wholly-owned subsidiary of MyWeb. For a
more detailed discussion about the reverse merger,
see the discussion under the heading "Information
About MyWeb--History of our Development" and
"--Recent Developments."
Our Business We are in the process of implementing the business
plan of TecnoChannel Technologies, our wholly-
owned subsidiary, which focuses on:
- marketing software and technology to
manufacturers of television set-top
internet terminals; and
- developing MyWeb Online Service family
of internet properties, which are portal
sites on the internet that offer
interactive applications, such as
e-mail, to internet users.
Set-top internet terminals are electronic devices
used to connect to the internet through a
television set. A set-top terminal is connected to
the television set and to an internet service
provider in much the same way a personal computer
is connected to a dedicated monitor and to an
internet service provider. Once connected, the
set-top internet terminal relays information
between the user, the television set and the
internet service provider to allow the user to
navigate the internet and engage in a variety of
activities, such as sending and receiving e-mail
and conducting e-commerce.
Our business plan is to expand our operations into
markets where:
- set-top internet terminals can be
introduced at a price point
2
<PAGE>
significantly below the price point of
personal computers, the principal
alternative means of connecting to the
internet; and
- the television infrastructure required
to deliver our services is already in
place.
Our principal products, besides the MyWeb Online
Service family of internet properties, are our
Thunder Software and our ThunderServe software.
Our Thunder software is an operating system
designed for use in set-top internet terminals to
interact with the internet and run internet-based
applications. Our ThunderServe software is a
software system designed for use by internet
service providers with access to customers who use
set-top internet terminals that run our Thunder
software.
Initially, we will concentrate our efforts in
Asia, particularly in China. For a more detailed
discussion about our business, see the discussion
under the heading "Information About MyWeb--Our
Products and Services" and under the heading
"Management's Discussion and Analysis."
Common Stock Outstanding At October 19, 1999, there are 10,671,628 shares
of our common stock issued and outstanding. For a
more detailed discussion about our common stock,
see the discussion under the heading "Description
of Capital Stock."
Use of Proceeds We will not receive any proceeds of the resale of
the 1,210,750 shares we are registering on behalf
of the selling shareholders. We received
approximately $3,772,500 in net proceeds from the
sale of 526,250 of the shares offered hereby to
the selling shareholders through a private
placement of our common stock in May 1999. We are
using the proceeds from the private placement for
general corporate purposes. Prior to the May 1999
private placement, we received an advance from one
of the investors in the private placement, which
we carried on our books as a loan. Upon the
closing of the private placement, we repaid the
loan with shares of our common stock based on the
purchase price for the shares issued in the May
1999 private placement.
Risk Factors A purchase of our common stock involves a high
degree of risk. You should read and carefully
consider the information set forth under "Risk
Factors" and the information contained elsewhere
in this prospectus.
Forward-Looking The discussion in this prospectus contains
Statements forward-looking statements that involve risks and
uncertainties. Actual results could differ
materially from those discussed in this
prospectus. For a discussion of important factors
that could cause actual results to differ
materially from the forward-looking statements,
see "Risk Factors" and "Cautionary Statement
Regarding Forward-Looking Statements."
3
<PAGE>
SUMMARY FINANCIAL INFORMATION
The following summary financial information sets forth certain
historical and pro forma financial data of MyWeb. The pro forma financial data
give effect to MyWeb's acquisition of TecnoChannel Technologies as if it had
occurred on TecnoChannel Technologies' date of inception (April 5, 1997). The
pro forma information is not necessarily indicative of the results which would
have occurred if MyWeb had acquired TecnoChannel Technologies on April 5, 1997,
nor is it indicative of MyWeb's future performance.
The following summary financial information should be read in
conjunction with the discussions under the headings "Capitalization," "Selected
Consolidated Financial Data," "Management's Discussion and Analysis" and
"Information About MyWeb" and the financial statements and notes thereto
included in this prospectus.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
1998 1997 1999 1998
---- ---- ---- ----
(PRO FORMA)(2) (PRO FORMA)(2) (HISTORICAL) (PRO FORMA)(2)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C>
Revenues $1,310,843 $102,367 $2,926,335 $254,996
Gross profit (loss) 1,201,960 102,367 1,975,512 197,823
Operating expenses 862,006 354,700 3,142,262 200,13
Net income (loss) 339,954 (252,333) (1,166,750) (2,312)
Net income (loss) per share (1) .04 (.03) (.12) (.00)
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
(PRO FORMA)(2) (HISTORICAL)
-------------- ------------
CONSOLIDATED BALANCE SHEET DATA:
<S> <C> <C>
Working capital $306,074 $ 3,699,363
Total assets 1,171,727 4,836,807
Total liabilities 811,712 949,196
Long-term obligations - -
Retained earnings (deficit) 123,173 (1,043,576)
Total stockholders' equity 360,015 3,887,611
</TABLE>
- --------------
(1) Based upon the weighted average number of shares outstanding during the
period, excluding shares issuable upon exercise of outstanding warrants and
options. The effect of inclusion of such warrant shares or option shares
would be anti-dilutive in such periods.
(2) The pro forma data gives effect to the acquisition of TecnoChannel
Technologies as if it had occurred on TecnoChannel Technologies' date of
inception (April 5, 1997) in order to provide comparative information.
4
<PAGE>
RISK FACTORS
You should carefully consider the following factors and the other
information contained in this prospectus before purchasing MyWeb common stock.
An investment in MyWeb common stock involves a high degree of risk and may not
be appropriate for investors who cannot afford to lose their entire investment.
BECAUSE OUR CURRENT LINE OF BUSINESS IS A RECENTLY COMMENCED OPERATION, WE ARE
SUBJECT TO RISKS TRADITIONALLY ASSOCIATED WITH START-UP COMPANIES.
Although we were incorporated over ten years ago, our existing line of
business commenced operations in April 1997. As a result, our potential should
be considered in light of the risks, expenses, and problems frequently
encountered by companies in their early stage of development, particularly
companies in new and rapidly evolving internet and software markets, and by
companies operating in international markets. Such risks include:
- our failure to anticipate and adapt to a developing market;
- the rejection of our products and services;
- development of superior products or services by competitors;
- the failure of the market to adopt the internet as a
commercial medium; and
- the inability to identify, attract, retain, and motivate the
qualified personnel we will need to expand our operations.
There can be no assurance that we will be successful in addressing such
risks. It is likely that our expenses will exceed our revenues for the
foreseeable future, and it is possible that we will not be able to generate
enough revenue to sustain our operations.
In addition, our line of business has incurred net losses from
inception. As a result, we have a deficit in our retained earnings of $1,043,576
at June 30, 1999. We expect to continue to incur net losses as we continue to
expend substantial resources on sales, marketing and administration and the
development of our products and services. In addition, we currently intend to
increase our capital expenditures and operating expenses in order to expand our
operations. There can be no assurance that we will achieve or sustain
profitability or positive cash flow from our operations.
WE MAY NOT BE ABLE TO IMPLEMENT OUR BUSINESS PLAN OR OUR GROWTH STRATEGY.
Our prospects are subject to the risks, expenses and uncertainties
frequently encountered by young companies that operate exclusively in the new
and rapidly evolving markets for internet products and services and for computer
software, including the risk that we will not be able to implement our business
plan or our growth strategy.
Successfully implementing the internet portal portion of our business
plan depends on, among other things, our ability to:
- develop and extend the MyWeb brand;
- market our internet properties to internet users;
- develop new internet properties;
- develop, maintain and increase the level of traffic on our
internet properties; and
5
<PAGE>
- effectively integrate new businesses and technologies into
our internet properties.
Successfully implementing the software portion of our business plan
depends on, among other things, our ability to:
- maintain existing relationships with manufacturers of
television set-top terminals and internet service providers;
- market our Thunder and ThunderServe software and any new
software we produce to manufacturers of television set-top
terminals and internet service providers; and
- refine our existing software and develop new software to
compete with software products produced by our competitors.
The overall success of our business plan and growth strategy depends on,
among other things, our ability to:
- react to changing business, economic, and political
environments;
- anticipate the needs of our customers and the actions of our
competitors; and
- continue to identify, attract, retain and motivate qualified
personnel.
The success of our business plan also depends on factors outside of our
control, including:
- introduction of new products or services by our competitors;
- adoption of the internet by individuals and companies;
- demand for internet advertising;
- adoption by internet users of television set-top terminals
for internet access;
- adoption of MyWeb's internet properties as an effective
advertising medium;
- relative price stability for internet-based advertising; and
- negative economic conditions and the resulting effects on
media spending, consumer spending, and internet usage.
WE WILL NEED SUBSTANTIAL CAPITAL INVESTMENTS TO FUND OUR FUTURE OPERATIONS.
Our business is very capital intensive. We expect that our capital needs
will increase as we implement our plan to expand into China and other emerging
markets. We will need substantial amounts of capital to fund:
- our capital expenditures;
- our research and development program;
- our marketing efforts; and
- our customer service and support.
Our capital needs will depend on numerous factors, including:
6
<PAGE>
- our profitability;
- the release of competitive products by our competition;
- the level of our investment in research and development; and
- the amount of our capital expenditures.
It is possible that our capital expenditures and operating losses may
restrict our ability to maintain our operations. We do not expect that cash
flows from operations, if any, will be sufficient to fund our future operations
without additional substantial capital investments.
If we were to raise additional funds through the issuance of equity or
convertible debt securities, you could experience substantial dilution of the
value of your stock. Such new securities could also have rights, preferences and
privileges senior to our common stock. We cannot give you any assurance that any
additional financing will be available to us, or if available, will be on terms
favorable to us. See "Management's Discussion and Analysis--Liquidity and
Capital Resources" and "Information about MyWeb--Recent Developments."
WE HAVE HAD NET LOSSES IN RECENT FISCAL PERIODS AND OUR AUDITORS HAVE EXPRESSED
DOUBT ABOUT OUR ABILITY TO CONTINUE AS A GOING CONCERN.
We have had net losses in recent fiscal periods. Although we had net
income of $339,954 in 1998 (pro forma), we had a net loss of $252,333 in 1997
(pro forma). The pro forma amounts give effect to our acquisition of
TecnoChannel Technologies as if it had occurred on TecnoChannel Technologies'
date of inception (April 5, 1997). We also had a net loss of $1,166,750 in the
six months ended June 30, 1999 and a deficit in our retained earnings of
$1,043,576 at June 30, 1999. Our net loss in the six months ended June 30, 1999
is primarily the result of the expansion of our internet operations following
our reverse merger with TecnoChannel Technologies in February 1999. We expect to
incur losses as we expend substantial resources on sales, marketing and
administration and the development of our products and services.
Our auditors, Wlosek & Braverman, L.L.C., have stated in the opinion on
our financial statements for fiscal year 1998 that there is doubt, as of
December 31, 1998, as to whether we will be able to pay our liabilities in the
normal course of our business and thus continue as a going concern. We believe
that we have strengthened our financial position since that time by raising net
proceeds of $3,772,500 in a private placement in May 1999 and an additional
$900,000 in May 1999 through the issuance of stock upon exercise of a stock
option. However, it is possible that in the future our capital expenditures and
operating losses will limit our ability to pay our liabilities in the normal
course of business and that we may not be able to continue as a going concern.
WE RELY ON THIRD-PARTY SUPPLIERS TO PROVIDE SOFTWARE THAT IS CRITICAL TO OUR
BUSINESS.
We depend on third-party suppliers to provide us with software that is
critical to our business. For example, we have an arrangement with Sun
Microsystems to use the Java operating system platform to develop our Thunder
software. If our arrangement with Sun Microsystems expires or is terminated, we
will not be able to use Java operating system in any new software we develop or
to modify our existing Thunder software. Although termination of our arrangement
with Sun Microsystems would not affect software already installed in set-top
internet terminals which use software based on Java operating system, we would
be forced to develop our software using a different platform. This could:
- result in substantial additional costs;
- inhibit our ability to revise our software products or to
bring them to market; and
- materially adversely affect our business.
7
<PAGE>
THE TERMINATION OF ANY OF OUR RELATIONSHIPS WITH THE THIRD PARTIES UPON WHOM WE
RELY FOR ITEMS THAT ARE CRITICAL TO OUR OPERATIONS COULD ADVERSELY AFFECT MYWEB.
We depend on arrangements with third parties for a variety of goods and
services that are critical to our operations. The arrangements include:
- agreements with manufacturers to develop and manufacture
co-branded retail set-top internet terminals that use our
Thunder software;
- agreements with internet service providers and
telecommunications companies for the distribution of our
co-branded set-top internet terminals to internet users;
- agreements with internet service providers and
telecommunications companies to collect subscription fees
from their customers; and
- arrangements to create traffic and provide content in order
to make our internet properties more attractive to
advertisers and consumers.
The termination of these business relationships would negatively impact our
operations. More specifically:
- the termination of our agreements with manufacturers of
set-top internet terminals would negatively impact the
software segment of our operations by restricting sales of
set-top internet terminals using our Thunder software, which
could reduce the licensing revenues we receive from our
Thunder software;
- the termination of our agreements for the distribution of
co-branded set-top internet terminals, which help direct
internet users to our internet properties, could result in a
decrease of traffic on our internet properties and a
reduction in advertising revenues from our internet
operations;
- the termination of our fee collection agreements could
result in the decrease of our ability to collect revenue;
and
- the termination of our arrangements with certain content
providers could limit our ability to make our internet
properties attractive to consumers and advertisers.
There can be no assurance that MyWeb's existing arrangements will result
in sustained business partnerships, successful service offerings, significant
traffic on our internet properties or significant revenues for MyWeb. There can
be no assurance that these arrangements will continue in the future, nor can
there be any assurance that these arrangements would generate significant
revenues for MyWeb.
IF WE NEED ADDITIONAL CAPITAL TO FUND OUR OPERATIONS, WE MAY NOT BE ABLE TO
OBTAIN SUFFICIENT CAPITAL AND MAY BE FORCED TO LIMIT THE SCOPE OF OUR
OPERATIONS.
We may not have enough capital to fund our future operations without
additional capital investments. We cannot assure you that we will be able to
obtain capital in the future to meet our needs.
If we cannot obtain additional funding, we may be required to:
- reduce our investments in research and development;
- limit our marketing efforts;
- decrease the level of customer service and support; and
8
<PAGE>
- decrease or eliminate capital expenditures.
Such reductions could materially adversely affect our business and our ability
to compete.
Even if we do find a source of additional capital, we may not be able to
negotiate terms and conditions for receiving the additional capital that are
acceptable to us. Any future capital investments could dilute or otherwise
materially adversely affect the holdings or rights of our existing shareholders.
IF WE ARE UNABLE TO DEVELOP AND MAINTAIN A BRAND IDENTITY FOR OUR PRODUCTS AND
SERVICES, WE MAY NOT BE ABLE TO ATTRACT CUSTOMERS AND EXPAND OUR BUSINESS.
Establishing and maintaining the MyWeb brand is and will continue to be
an important aspect of our efforts to:
- attract and expand our customer base among manufacturers of
set-top internet terminals;
- increase sales of co-branded set-top internet terminals;
- increase traffic on our internet properties; and
- develop our advertising relationships.
Promotion and enhancement of the MyWeb brand will depend on our success
in providing high quality products and services. We expect the importance of
brand recognition to increase due to the growing number of competitors in both
the internet portal and software segments of our business, many of which already
have well-established brand names.
The results of our operations and our financial condition will be
materially and adversely affected if:
- we fail to promote our brand successfully;
- we incur excessive expenses in an attempt to promote and
maintain our brand;
- there is a breach or alleged breach of security or privacy
involving our products or services;
- a third party undertakes illegal or harmful actions
utilizing our products or services;
- visitors to our online properties, advertisers or other
businesses do not perceive MyWeb's existing services to be
of high quality;
- we introduce new services or enter into new business
ventures that are not favorably received;
- we are forced to alter or modify our brand image; or
- we elect or are forced to abandon or modify any of the names
or marks that we use in connection with our business.
OUR SOFTWARE PRODUCTS MAY CONTAIN ERRORS AND DEFECTS THAT WILL DAMAGE THE VALUE
OF OUR BRAND AND ADVERSELY IMPACT OUR BUSINESS.
Software products frequently contain errors or defects. Despite
extensive product testing:
9
<PAGE>
- in the past we may have released products that contain
errors or defects;
- there may be errors or defects in the software we currently
have in the market place; and
- there may be errors in any new products or software we
produce.
Any errors or defects in our software products could result in:
- a loss of market acceptance;
- damage to the value of our brand; and
- possible liabilities to our customers.
Any of these results could have a material adverse effect on our
business, operating results or financial condition.
OUR ABILITY TO UTILIZE THE INTERNET AS AN ADVERTISING MEDIUM DEPENDS ON OUR
ABILITY TO REACH A CONSUMER BASE THAT IS ATTRACTIVE TO ADVERTISERS.
Most advertising customers on MyWeb's internet properties have limited
experience with the internet as an advertising medium. Our ability to enter into
advertising contracts will depend upon:
- developing significant traffic in our properties;
- attracting users of our internet properties and our online
services that possess demographic characteristics attractive
to advertisers; and
- developing effective advertising delivery and measurement
systems.
Even if we are able to attract and retain advertisers, our business,
advertising revenues and results of operations could be materially and adversely
affected in the event that:
- advertisers determine that banner advertising, which we
expect to comprise the majority of our advertising revenues,
is not an effective advertising medium;
- our advertising customers do not accept the internal and
third-party measurements of impressions received by
advertisements;
- we are not able to effectively integrate new forms of
internetbased advertising into our internet properties; or
- we are not able to develop, sustain or increase advertising
revenues from our internet properties.
The viability of the internet portal segment of our operations may be
negatively impacted if internet users begin using currently available software
programs to limit or remove banner advertising from the web pages they view. If
filtering software is widely adopted, we would expect to experience a
significant decrease in advertising revenues on our internet properties.
WE MAY BE SUBJECT TO LEGAL LIABILITY FOR OUR ONLINE SERVICES.
We plan to offer a wide variety of services that enable individuals to
exchange information, generate content, conduct business and engage in various
online activities. The law relating to the liability of providers of these
online services for activities of their users is currently unsettled. Claims
could be brought against us for:
10
<PAGE>
- defamation;
- negligence;
- copyright or trademark infringement;
- tort (including personal injury);
- fraud; or
- other legal theories.
Third parties could bring claims against us for a variety of reasons,
including, but not limited to, damage arising from:
- third-party products, services, or content we offer under
the MyWeb brand or via distribution on our internet
properties;
- products, services or content we market, broadcast or
provide through our internet properties;
- erroneous information we provide though our internet
properties; or
- unsolicited e-mail, lost or misdirected messages, illegal or
fraudulent use of e-mail, or interruptions or delays in
e-mail service.
In the past, these types of claims have been brought against companies
with operations similar to ours. Investigating and defending any of these types
of claims can be expensive, even if the claims do not result in liability.
OUR E-COMMERCE ACTIVITIES MAY EXPOSE US TO UNCERTAIN LEGAL RISKS AND POTENTIAL
LIABILITIES.
We may enter into agreements with sponsors, content providers, service
providers and merchants under which we are entitled to receive a share of
revenue from the purchase of goods and services by users of our online
properties. These types of arrangements may expose us to potential liabilities
relating to those products and services. We do not maintain any liability
insurance. As a result, we are exposed to the risk that we could be forced to
cover the entire cost of any such claims. If such a claim result in liability,
we could suffer a material financial crisis that would require us to liquidate
some or all of our assets or cause us to become insolvent. Even to the extent
these types of claims do not result in material liability, investigating and
defending such claims can be expensive.
WE ARE HIGHLY DEPENDENT ON THE CONTINUED EXPANSION OF THE INTERNET
INFRASTRUCTURE AND COMMERCIAL USE OF THE INTERNET.
The internet has experienced, and is expected to continue to experience,
significant growth in the number of users and amount of traffic. The current
internet infrastructure may not be able to support the demands placed on it by
this continued growth. Our business, operating results or financial condition
will be materially adversely affected if:
- critical issues concerning the commercial use of the
internet are not favorably resolved;
- the necessary infrastructure is not developed; or
- the internet does not become a viable commercial
marketplace.
11
<PAGE>
Several critical issues concerning the commercial use of the internet
remain unresolved, including:
- security of information transferred via the internet;
- reliability of the internet;
- cost of using the internet;
- ease of use;
- accessibility to the internet; and
- quality of the services provided via the internet.
The internet may not continue to develop as a commercial marketplace
because of inadequate development of the necessary infrastructure, such as:
- a reliable network backbone;
- timely development of complementary services and products;
and
- a lack of widespread access to high speed communication
lines.
Use of the internet could also be adversely affected by delays in the
development or adoption of new standards and protocols, or an increase in
governmental regulation. Such issues may negatively affect the growth of
internet use or the attractiveness of commerce and communications on the
internet and, therefore impede our ability to grow.
WE ARE EXPOSED TO THE RISKS ASSOCIATED WITH PERIODIC FOREIGN ECONOMIC DOWNTURNS
AND FLUCTUATIONS IN FOREIGN CURRENCY EXCHANGE AND INTEREST RATES.
We expect that the international markets will represent most of our
business and our revenues for the foreseeable future. Revenues from outside of
the United States expose us to currency exchange rate fluctuations and to
fluctuating foreign interest rates. Past and future economic downturns in the
Asia Pacific region and the devaluation of Asian currencies against the U.S.
dollar have affected and in the future could affect our operating results. We do
not currently, but may in the future, hedge our receivables denominated in
foreign currencies. We cannot predict whether exchange rate fluctuations will
have a material adverse effect on our operations and financial results in the
future.
BECAUSE WE MAY EARN REVENUES AND INCUR COSTS IN CHINESE RENMINBI AND MALAYSIAN
RINGGIT, WE MAY BE ADVERSELY AFFECTED BY CHANGES IN THE RELATIVE VALUE OF THE
CHINESE RENMINBI AND MALAYSIAN RINGGIT.
We currently sell our products and services in Malaysia and anticipate
that we will earn a significant portion of our future revenues in the Malaysian
Ringgit. In 1998, the Malaysian government adopted policies that prevent the
movement of funds from Malaysia. Although the restrictive policies have been
relaxed recently, it is possible the Malaysian government will impose new
restrictions on the convertibility of the Malaysian Ringgit.
We sell our products and services in China and anticipate that we will
earn revenues and incur costs in the Chinese Renminbi. As a result, we will be
subject to the following risks associated with Renminbi:
- China's currency, the Renminbi, is not a freely convertible
currency; and
- conversion between the Renminbi and foreign currencies is
subject to government approval.
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Prior to January 1, 1994, Renminbi earned within China were not freely
convertible into foreign currencies except with government permission. The
exchange rates were determined at swap centers, where the rates often differed
substantially from the official rates quoted by the People's Bank of China. On
January 1, 1994, the People's Bank of China introduced a managed floating
exchange rate system based on the market supply and demand and proposed to
establish a unified foreign exchange inter-bank market among designated banks.
In place of the official rate and the swap center rate, the People's Bank of
China publishes a daily exchange rate for Renminbi based on the previous day's
dealings in the inter-bank market. It is expected that swap centers will be
phased out. However, the unification of exchange rates does not imply full
convertibility of Renminbi into United States Dollars or other foreign
currencies. Payment for imported materials and remittance of earnings outside of
China are subject to the availability of foreign currency which is dependent on
official exchange rates set by the Chinese government. Approval for exchange at
the exchange center is granted to enterprises in China for valid reasons such as
the purchase of imported goods and the remittance of earnings. While conversion
of Renminbi into dollars or other foreign currencies can generally be effected
at the exchange center, there is no guarantee that it can be effected at all
times. There is still uncertainty as to how foreign enterprises will be treated
under this new system or whether the system will be changed again in the future.
In the event of shortages of foreign currency, MyWeb may be unable to convert
sufficient Renminbi into foreign currency to enable it to comply with foreign
currency payment obligations it may have.
WE WILL CONTINUE TO EXPAND OUR BUSINESS INTO INTERNATIONAL MARKETS AND THIS WILL
EXPOSE US TO THE RISKS ASSOCIATED WITH DOING BUSINESS IN EMERGING MARKETS, SUCH
AS THE RISK OF POLITICAL, CIVIL, AND ECONOMIC INSTABILITY.
A key part of our business plan is to develop MyWeb-branded online
properties in international markets. We have developed and currently operate
versions of MyWeb Online Service targeted to internet users in Malaysia, Hong
Kong, Singapore and China. To date, we have only limited experience in
developing, marketing and operating our products and services internationally.
International markets we have selected may not develop at a rate that supports
our level of investment. It is possible that international markets may not adopt
television set-top internet terminals as an accepted device and may be slower in
adopting of the internet as an advertising and commerce medium than we
anticipate.
In addition, there are certain risks inherent in doing business on an
international level, including:
- unexpected changes in regulatory requirements;
- trade barriers;
- difficulties in staffing and managing foreign operations
because of language and cultural differences;
- longer payment cycles;
- currency exchange rate fluctuations;
- problems in collecting accounts receivable;
- political and economic instability;
- import and export restrictions;
- seasonal fluctuations in business activity; and
- adverse tax consequences.
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These risks are dynamic and difficult to quantify. Many Asian
governments have liberalized their policies on international trade, foreign
ownership and development, investment, and currency repatriation. While this has
increased both international trade and investment in Asia, such policies might
change unexpectedly.
WE ARE SUBJECT TO UNITED STATES AND FOREIGN GOVERNMENT REGULATION OF THE
INTERNET, THE IMPACT OF WHICH IS DIFFICULT TO PREDICT.
There are a number of existing laws and regulations that directly impact
our operations. These existing laws and regulations, and any new laws or
regulations, could expose us to substantial liability, including significant
expenses necessary to comply with such laws and regulations, and could dampen
the growth of the internet. Although there are laws and regulations directly
applicable to the internet, the application of existing laws and regulations to
MyWeb's internet operations is unclear on issues such as:
- user privacy;
- defamation;
- pricing;
- advertising;
- taxation;
- gambling;
- sweepstakes;
- promotions;
- content regulation;
- quality of products and services; and
- intellectual property ownership and infringement.
Because many areas with high internet use have begun to experience
interruptions in phone service, local telephone carriers have petitioned the
Federal Communications Commission to regulate internet service providers and
online service providers and to impose access fees. In addition, a number of
proposals have been made at the federal, state and local level that would impose
additional taxes on the sale of goods and services over the internet. If any
such proposals are adopted, it could substantially impair the growth of the
internet and could adversely affect our business.
Several recently passed federal laws could have an impact on our
business, including:
- The Digital Millennium Copyright Act, which is intended to
reduce the liability of online service providers for listing
or linking to third-party internet sites that include
materials that infringe copyrights or other rights of
others;
- The Children's Online Protection Act, which is intended to
restrict the distribution of certain materials deemed
harmful to children;
- The Children's Online Privacy Protection Act, which is
intended to restrict the ability of online services to
collect user information from minors; and
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- The Protection of Children From Sexual Predators Act of
1998, which requires online service providers to report
evidence of violations of federal child pornography laws
under certain circumstances.
We cannot currently predict the effect, if any, that it will have on our
business. Such legislation may impose significant additional costs on our
business or subject us to additional potential liabilities.
Due to the global nature of the internet, it is possible that the
governments of other states and foreign countries might attempt to regulate its
transmissions or prosecute us for violations of their laws. Several nations,
including Germany, have taken actions to restrict the free flow of material
deemed to be objectionable on the internet, and the European Union has recently
adopted privacy and copyright directives. We might unintentionally violate such
laws. Such laws may be modified, or new laws enacted, in the future. Any such
developments could have a material adverse effect on our business, results of
operations or financial condition.
OUR OPERATIONS IN CHINA ARE SUBJECT TO CHANGES IN GOVERNMENTAL AND ECONOMIC
POLICIES.
Our operations in China are subject to the rules and restrictions
imposed by China's legal and economic system as well as general economic and
political conditions in China.
In the past, China has had a centralized economy with rigid economic
controls imposed by the Chinese government. More recently, China has begun to
pursue economic reform policies, which have improved business conditions in
China for foreign companies. There can be no assurance that the Chinese
government will continue to pursue such policies, or that such policies will be
successful. In addition, China does not have a well-developed body of laws
governing foreign enterprises, such as the permissible percentage of foreign
investment and permissible rates of equity returns. Official Chinese statements
regarding these evolving policies have been conflicting and are subject to broad
interpretation and modification.
As a result, our operations may be adversely affected by one or more of
the following:
- new laws or regulations, or different interpretation of
existing laws and regulations;
- preemption of provincial or local laws by national laws;
- our ability to timely obtain the necessary administrative
approvals;
- our ability to comply with applicable administrative
requirements;
- content restrictions on our internet properties;
- confiscatory taxation;
- restrictions on imports;
- currency devaluations;
- expropriation or nationalization of our operations, which
could result in the total loss of ownership and control of
any assets or operations that we develop in China; and
- adoption of measures intended to reduce inflation, such as
price controls.
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WE ARE SUBJECT TO REGULATION BY THE CHINESE MINISTRY OF POSTS AND
TELECOMMUNICATIONS AND OTHER GOVERNMENT AGENCIES.
The Ministry of Posts and Telecommunications regulates the
telecommunications industry in China. The Ministry of Posts and
Telecommunications directly or indirectly regulates:
- entry into the telecommunications industry;
- scope of permissible business;
- interconnection and transmission line arrangements;
- technology and equipment standards; and
- other aspects of the Chinese telecommunications industry.
This regulation may limit our ability to respond to certain development
opportunities in China. In addition, changes in existing regulations or policies
or adoption of new regulations or policies could have an adverse effect on our
operations in China.
In addition, governmental agencies in China may:
- require us to obtain licenses in order to commence our
business;
- revoke or suspend any licenses we may have;
- regulate the rates that we will be permitted to charge for
telecommunications services; or
- impose or change the tariffs or fees on our operations.
Any of these actions could have an adverse effect on our operations in
China.
WE MUST ATTRACT AND RETAIN QUALIFIED EMPLOYEES TO SUCCEED IN OUR BUSINESS PLAN.
Current economic conditions make it difficult to attract, compensate and
retain qualified employees. We expect to hire additional personnel in all
segments of our business and in all of the markets in which we conduct business.
Our success will depend on getting the right people involved in the continued
growth and development of MyWeb. Our business could be materially adversely
affected if we are not able to attract new, qualified employees, or retain and
motivate our existing employees.
WE DEPEND ON OUR KEY PERSONNEL.
Certain MyWeb employees are particularly valuable to us because:
- they have specialized knowledge about MyWeb and its
operations;
- they have specialized skills that are important to our
operations;
- they are integral to the management of our operations; or
- they would be particularly difficult to replace.
We depend on the continued service of these "key personnel." The loss of
any of these employees could dramatically affect our productivity until we find
and train a replacement.
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We do not maintain key person life insurance for any of our personnel.
As a result, we are exposed to the costs associated with the death of one or
more of our key employees.
These risks include:
- costs of finding and training a replacement;
- loss of institutional memory; and
- reduction in our productivity.
WE DEPEND ON SHORT-TERM ADVERTISING CONTRACTS FOR A PORTION OF OUR REVENUE.
We anticipate that a substantial portion of our revenue will come from
the sale of advertisements on our online properties. It is possible that the
majority of our advertising contracts will be short-term contracts. Revenues
from short-term contracts are difficult to predict accurately. The cancellation
or non-renewal of short-term contracts could have a material adverse effect on
our performance. In addition, our advertising revenue may be subject to seasonal
fluctuations. Historically, advertisers spend less in the first and third
calendar quarters and user traffic on the internet properties has historically
been lower during the summer and during year-end vacation and holiday periods.
WE COMPETE WITH BOTH ONLINE AND TRADITIONAL MEDIA FOR ADVERTISING CONTRACTS.
MyWeb not only competes with other online services for available
advertising revenue, but also with traditional offline media such as:
- television;
- radio;
- billboards;
- magazines; and
- newspapers.
We believe that the number of companies selling web-based advertising
and the available inventory of advertising space has recently increased
substantially. There is no guarantee that demand will keep up with this apparent
increase in supply. In addition, there is no guarantee that companies will
embrace web-based advertising as a superior or viable alternative to the
traditional media listed above.
We may face increased pricing pressure for the sale of advertisements,
which could reduce our advertising revenues. In addition, our sales may be
adversely affected to the extent that our competitors offer superior advertising
services that better target users or provide better reporting of advertising
results.
WE CANNOT GUARANTEE DEMAND OR MARKET ACCEPTANCE FOR OUR PRODUCTS AND SERVICES.
Our business, operating results, or financial condition could be
materially and adversely affected if:
- the market for our products and services develops more
slowly than expected; or
- our products and services do not receive market acceptance.
This is a possibility because:
- the markets for our products and services are still very
new;
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- these markets are rapidly changing; and
- there is ever increasing competition within these markets.
As a result, the ultimate demand and market acceptance for our products
and services are subject to a high level of uncertainty and risk.
CRITICAL MARKETS MAY NOT RETAIN THE CHARACTERISTICS WE NEED TO SUCCEED IN OUR
BUSINESS PLAN.
Our business plan depends in part on identifying and developing markets
for our set-top boxes that have the following characteristics:
- a high percentage of television usage;
- a high level of consumer demand for the internet;
- a low percentage of personal computer use;
- a low level of personal computer literacy;
- a high cost for personal computers; and
- a pre-existing cable and telecommunications infrastructure.
We plan on taking advantage of these characteristics and the current price
differential between personal computers and set-top internet terminals to
provide a low-cost means of internet access to meet consumer demand.
Currently, we believe that these conditions exist or will soon exist in:
- China;
- Malaysia;
- Singapore;
- Hong Kong;
- India; and
- other developing countries.
We cannot guarantee that these conditions or our current price advantage
will remain constant in all or any of these markets. Any of the following
changes could have a material adverse effect on our ability to gain market share
or establish our company in these emerging markets:
- a decrease in the price of personal computers;
- problems with providing internet content over existing
infrastructures;
- the introduction of new technologies that may erode or
reduce our current price advantage;
- a change in consumer demand for the internet in these
emerging markets; or
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- wide acceptance of the personal computer as the preferred
medium for providing internet access.
WE FACE INTENSE COMPETITION IN THE MARKET FOR INTERNET PRODUCTS AND SERVICES AND
SOME OF OUR COMPETITORS MAY BE MORE SUCCESSFUL IN ATTRACTING AND RETAINING
CUSTOMERS.
The market for internet products and services is highly competitive and
we expect that competition will continue to intensify. We compete with software
companies that provide software and technology to manufacturers of television
set-top internet terminals and with other internet companies that provide
services and content directly to consumers. Many of these companies are
intensely competitive. As a result, we will face intense competition from larger
and more established internet service providers and software manufacturers
throughout the world.
Our MyWeb Online Service may compete directly against established
companies who offer internet portal services in English or Chinese. Our
competitors in the internet portal segment of our operations include:
- Yahoo!'s China.Com (Chinese);
- Sina.Com (Chinese);
- Neteast (Chinese);
- Sohoo.net (Chinese);
- Shanghai Online (Chinese);
- ChinaByte (Chinese);
- Hong Kong Telecom's Navigator (Chinese);
- Infoseek (English);
- Lycos (English);
- Yahoo! (English);
- Microsoft Network (English);
- Alta Vista (English);
- Inktomi's HotBot (English);
- Netscape's Netcenter (English); and
- Excite (English).
In addition, we anticipate that internet service providers and other
software and internet companies will compete with us.
Our Thunder and ThunderServe software applications compete with software
applications developed by other companies, such as:
- Microsoft Windows CE; and
- NUWA by China's Science and Research Institute.
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Both the portal and software segments of our business depend on our
ability to promote the use of television set-top internet terminals that utilize
our software products. There are a number of products and services that compete
with television set-top internet terminals in the consumer market. These
include:
- traditional computer-based connections to the internet;
- Microsoft's WebTV and Project Venus; and
- Pacific Century's Pacific Convergence.
In addition, as we expand the scope of our internet offerings, we will
compete directly with a greater number of internet sites, media companies, and
companies providing business services across a wide range of different online
services. In the near future, our competition may not be limited to the existing
internet and software companies listed above, but may grow to include both
internet and traditional retail and services companies.
Our internet properties compete for traffic principally on the basis of
ease of use and functionality. We compete for advertising revenues with other
internet properties and advertising outlets on the basis of cost and results. We
compete with other software companies on the basis of cost, functionality,
support, and reliability. Due to the inherently competitive nature of the above
mentioned industries, we may face increased pressure from our competitors, which
could reduce our revenues. In addition, our revenue may be adversely affected to
the extent that our competitors offer superior products or services.
THE STRENGTH OF OUR COMPETITION MAY INCREASE DUE TO MARKET CONSOLIDATION.
In the recent past, there have been a number of significant acquisitions
and strategic plans announced among and between certain of our competitors,
including Microsoft's acquisition of WebTV. These mergers and strategic plans
may have the effect of creating competitors who have:
- significantly greater financial resources;
- greater marketing power and presence; and
- greater technical and research and development capability
than MyWeb.
The effect on us of these completed and pending acquisitions and
strategic plans cannot be predicted with certainty, but our competitors are
aligned or may align with companies that are significantly larger or better
established than MyWeb.
OUR OPERATIONS ARE SUBJECT TO INTERRUPTION DUE TO NATURAL DISASTERS OR OTHER
CATASTROPHIC EVENTS.
Much of the infrastructure upon which our success will be based consists
of:
- the television, cable and telephone systems of developing
countries;
- electric and power utilities of developing countries; and
- the infrastructure of the internet.
As a result, our operations could be significantly interrupted due to
natural disasters or other catastrophic events such as:
- fire;
- floods;
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- earthquakes;
- loss of electrical power;
- general telecommunications failures; or
- other similar events or disasters.
We do not carry any business interruption insurance to compensate us for
losses that may occur as a result of any of these events. Such events could have
a material adverse effect on our business, operating results or financial
condition.
OUR INTELLECTUAL PROPERTY RIGHTS MAY BE DIFFICULT TO PROTECT.
We regard the following intellectual property rights as critical to our
success:
- trade dress;
- trade secrets; and
- similar intellectual property rights.
Currently, we rely upon the following to protect our proprietary rights:
- trade secret protection; and
- confidentiality or license agreements with our employees,
customers, partners and others.
We have not registered any of our trademarks in the United States or
abroad. We may in the future seek to protect our intellectual property under
applicable copyright and trademark laws in the countries in which we conduct
business. There can be no guarantee that such protections will be available in
the event we attempt to seek such protections.
We have entered into agreements with our business partners, licensees
and others which provide for certain protections of our intellectual property.
Unfortunately, we cannot guarantee that the steps we have taken to protect our
proprietary rights will be adequate because:
- effective trademark, copyright, and trade secret protection
may not be available in every country in which our products
and internet properties are distributed or made available
through the internet;
- while we try to ensure that our licensees maintain the
quality of our brand, our licensees may take actions that
could materially and adversely affect the value of our
proprietary rights or the reputation of our products and
internet properties; and
- protection of the distinctive elements of MyWeb may not be
available under copyright law.
Any failure to adequately protect MyWeb's intellectual property rights
for these or other reasons could have a material adverse effect on our business.
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WE MAY BE SUBJECT TO INTELLECTUAL PROPERTY INFRINGEMENT CLAIMS WHICH ARE COSTLY
TO DEFEND AND COULD LIMIT OUR ABILITY TO USE CERTAIN TECHNOLOGIES IN THE FUTURE.
Many parties are actively developing search, information, indexing,
e-commerce and other web-related technologies. We believe that these parties
will continue to take steps to protect these technologies, including seeking
patent protection. As a result, we believe that disputes regarding the ownership
of these technologies are likely to arise in the future. For example, we are
aware that a number of patents have been issued in the areas of:
- electronic commerce;
- online auctions;
- internet-based information indexing and retrieval;
- online direct marketing; and
- common web graphics formats.
We anticipate that additional third-party patents will be issued in the
future. In addition to patent claims, third parties may assert claims against us
alleging infringement of:
- copyrights;
- trademark rights;
- trade secret rights;
- other proprietary rights; or
- unfair competition.
In the event that we determine that licensing patents or other
proprietary rights is appropriate, we cannot guarantee that we will be able to
license such proprietary rights on reasonable terms or at all. We may incur
substantial expenses in defending against third-party infringement claims
regardless of the merit of such claims. In the event that there is a
determination that we have infringed third-party proprietary rights, we could
incur substantial monetary liability and be prevented from using the rights in
the future.
OUR PROPRIETARY INFORMATION IS NOT PATENTED AND MAY NOT BE PATENTABLE.
Our proprietary information and technology is not patented and may not
be patentable. We believe that the success of our business depends in part on
our proprietary technology, information, processes and know-how. We generally
try to protect our intellectual property rights based on trade secrets and
patents as part of our ongoing research, development, and manufacturing
activities. However, we cannot assure you that:
- we have adequately protected or will be able to adequately
protect our technology;
- our competitors will not be able to utilize our existing
technology or develop similar technology independently;
- the claims allowed on any patents held by us will be broad
enough to protect our technology; or
- foreign intellectual property laws will adequately protect
our intellectual property rights.
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THE YEAR 2000 PROBLEM COULD CAUSE MYWEB'S SOFTWARE PRODUCTS AND THOSE OF OUR
SUPPLIERS TO MALFUNCTION.
Many 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 from twentieth century
dates and, as a result, the software and computer systems of many companies may
need to be upgraded or replaced in order to comply with such Year 2000
requirements.
MyWeb is dependent on the operation of numerous systems that may be
adversely affected by the Year 2000 problem, including:
- our internal systems;
- equipment, software and content supplied to us by
third-party vendors, including providers of web-hosting
services on which we are currently dependent and which may
not be Year 2000 compliant; and
- the hardware and software used by individuals to connect to
the internet.
We are also subject to external forces that might generally affect
industry and commerce, such as:
- telecommunications failures;
- utility or transportation company Year 2000 compliance
failures;
- related service interruptions; and
- the economic impact that such failures have on our customers
and advertisers.
Our business depends on the successful operation of the internet
following the year 2000. If the internet is inaccessible for an extensive period
of time, or if customers and users are unable to access our internet properties,
our business and revenues could be materially adversely affected.
WE HAVE A LIMITED NUMBER OF PRINCIPAL CUSTOMERS, AND ACCORDINGLY A LOSS OF ONE
OR SEVERAL OF THOSE CUSTOMERS WOULD HURT OUR BUSINESS.
We have entered into business relationships with a number of
manufacturers of television set-top internet terminals, including:
- Philips Consumer Electronics B.V.;
- Xihu Electronics Group Ltd, SOYEA Ltd;
- Lang Chao Computer Co; and
- Sun Microsystems, Inc.
We have entered into business relationships with a number of internet
service providers, including:
- NetChina;
- Beijing Telecom Communication Ltd;
- HKNet Co Ltd ;
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- Masslink.
We anticipate that we will receive a significant portion of our revenues
from a limited number of principal customers. Our operating results could
materially suffer if we experience a significant reduction in, or loss of,
revenue from one or more of our principal customers.
OUR STOCK PRICE HAS BEEN, AND MAY CONTINUE TO BE, VOLATILE.
The trading price of our common stock has been very volatile in the
recent past. Our common stock is currently traded on the OTC Bulletin Board. The
OTC Bulletin Board generally does not provide the liquidity that national
securities exchanges and the Nasdaq National Market and Nasdaq SmallCap market
do, with the result that the prices of shares traded on the OTC Bulletin Board
can be very volatile. In addition, the market prices of the shares of technology
companies, particularly internet-related companies, tend to be highly volatile.
As a result of this volatility, holders of shares may not be able to sell their
shares in a short period of time or at prices which are favorable to them.
THE LIQUIDITY OF OUR COMMON STOCK WOULD BE RESTRICTED IF OUR COMMON STOCK FALLS
WITHIN THE DEFINITION OF A PENNY STOCK.
Under the rules of the SEC, if the price of our common stock on the OTC
Bulletin Board is below $5 per share, our common stock will come within the
definition of a "penny stock." As a result, it is possible that our common stock
may become subject to the "penny stock" rules and regulations.
Broker-dealers who sell penny stock to certain types of investors are
required to comply with the SEC's regulations concerning the transfer of penny
stock. These regulations require broker-dealers to:
- make a suitability determination prior to selling penny
stock to the purchaser;
- receive the purchaser's written consent to the transaction;
and
- provide certain written disclosures to the purchaser.
These requirements may restrict the ability of broker-dealers to sell
our common stock and may effect your ability to resell our common stock.
THE SUBSTANTIAL NUMBER OF SHARES OF OUR COMMON STOCK THAT ARE ELIGIBLE FOR
FUTURE SALE IN THE PUBLIC MARKET COULD ADVERSELY AFFECT PREVAILING MARKET PRICES
OF OUR COMMON STOCK OR LIMIT OUR ABILITY TO RAISE ADDITIONAL CAPITAL.
Future sales of substantial amounts of common stock in the public
market, or the perception that these sales might occur, could adversely affect
the prevailing market price of our common stock or limit our ability to raise
additional capital. We currently have 10,671,628 shares of our common stock
issued and outstanding. Prior to the date of this prospectus only 1,171,913
shares of our issued and outstanding shares of common stock were freely
transferable without restriction or further registration under the Securities
Act of 1933, as amended. The remaining 9,499,715 shares of our issued and
outstanding common stock are subject to certain transfer restrictions. Assuming
that all of the shares included in this prospectus are sold, there will be an
aggregate of 2,382,663 shares of our issued and outstanding common stock that
are freely tradable in the public market, a 103% increase. The remaining
8,288,965 shares that are outstanding will remain subject to transfer
restrictions.
The 8,288,965 shares that remain subject to the transfer restrictions
may in the future be sold without registration under the Securities Act of 1933,
as amended, to the extent permitted by Rule 144 or any applicable exemption
under the Securities Act. In general, under Rule 144 of the Securities Act a
person who has beneficially owned restricted securities for at least one year is
entitled to sell within any three month period a number of shares of common
stock that does not exceed the greater of:
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- 1% of the then outstanding shares of our common stock, and
- the average weekly trading volume of the common stock during
the four calendar weeks preceding the sale.
Sales under Rule 144 are subject to restrictions relating to manner of
sale, notice and the availability of current public information about My Web. A
person who has beneficially owned shares for at least two years and who has not
been an affiliate of My Web at any time during the 90 days preceding a sale
would be entitled to sell such shares without regard to the volume limitations,
manner of sale provisions or notice or other requirements of Rule 144.
The vast majority of the 8,288,965 shares of our common stock that will
remain subject to the transfer restrictions were issued in February 1999 in our
reverse merger with TecnoChannel Technologies. The holders of those shares could
sell in excess of 100,000 shares during each three month period between February
2000 and February 2001. As a result, a total of more than 400,000 additional
shares could become freely tradable by February 2001. In addition, we have
reserved one million shares for issuance upon the exercise of options granted
under our 1999 Incentive Program and one million shares for issuance upon
exercise of options granted under our 1999 Non-Qualified Stock Option Plan. Upon
exercise of any of the stock options that we grant pursuant to these plans, the
shares we issue to the option holders will be freely transferable without
restriction or further registration under the Securities Act.
Based on the shares transferrable under Rule 144 and the shares issuable
upon the exercise of options that have been granted or that may be granted under
our 1999 Incentive Program and our 1999 Non-qualified Stock Option Plan, there
could be in excess of 2,400,000 additional shares of our common stock that
become freely tradeable by February 2001.
No precise prediction can be made of the effect, if any, that market
sales of shares or the future availability of shares for sale will have on the
market price of our common stock from time to time. Sales of substantial amounts
of our common stock in the public market could adversely affect prevailing
market prices and limit our ability to raise additional capital.
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USE OF PROCEEDS
We will not receive any proceeds from the sale of the common stock
offered pursuant to this prospectus from the selling shareholders.
PRICE RANGE FOR OUR COMMON STOCK
Our common stock was included for quotation on the OTC Bulletin Board
under the symbol "ASMC" during fiscal 1997 and 1998. During fiscal 1997 and
1998, there was essentially no trading in the common stock. From February 23,
1999 until March 23, 1999, our common stock traded on the OTC Bulletin Board
under the symbol "ASMC(D)."
Our common stock now trades the OTC Bulletin Board under the symbol
"MYWB." The following table sets forth the high and low closing bid prices for
common stock transactions on the OTC Bulletin Board for the periods indicated.
The quotations shown reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not represent actual transactions.
QUARTER HIGH BID PRICE LOW BID PRICE
1997 1Q (1/1 - 3/31) $ 2.00 $ 0.05
2Q (4/1 - 6/30) 2.00 0.06
3Q (7/1 - 9/30) 2.00 0.06
4Q (10/1 - 12/31) 2.00 0.03
1998 1Q (1/1 - 3/31) 2.00 0.03
2Q (4/1 - 6/30) 2.00 0.03
3Q (7/1 - 9/30) 0.00 0.06
4Q (10/1 - 12/31) 0.06 0.06
1999 1Q (1/1 - 3/31) 27.25 0.06
2Q (4/1 - 6/30) 23.00 8.25
3Q (7/1 - 9/30) 14.50 8.25
4Q (through 10/26) 19.81 10.78
As of October 19, 1999, there were 152 holders of record of our common
stock.
OUR DIVIDEND POLICY
We did not declare any cash dividends on our common stock during the
most recent two fiscal years. It is our present policy not to pay cash dividends
on our common stock. We expect to retain earnings, if any, to fund our growth
and expansion. Any payment of cash dividends on the common stock in the future
will be dependent upon our financial condition, results of operations, current
and anticipated cash requirements and plans for expansion, as well as other
factors that our Board of Directors deems relevant.
26
<PAGE>
CAPITALIZATION
The following table sets forth our capitalization as of June 30, 1999.
The data presented in this table has been derived from financial information
appearing elsewhere in this prospectus.
JUNE 30, 1999
Shareholders' Equity:
Common stock, par value $.01; 100,000,000 shares
authorized; 10,679,319 shares issued; 10,671,606 shares $ 106,717
outstanding
Additional paid-in capital 5,558,247
Retained earnings (deficit) (1,043,576)
Currency translation adjustment (56)
-----------
4,621,332
Less: Treasury stock, at cost 733,721
-----------
Total Shareholders' Equity $ 3,887,611
===========
27
<PAGE>
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
The following statements are or may constitute forward-looking
statements:
- statements in this prospectus setting forth possible or
assumed future results of our operations, including but not
limited to, any statements concerning:
- the implementation of our business plan, including the
features we intend to include in products under
development;
- our expectations regarding our revenues or
profitability in the future;
- our liquidity and capital expenditures in the future,
as well as our ability to raise funds to expand our
operations;
- the status, effectiveness, and projected completion of
our Year 2000 efforts;
- any statements preceded by, followed by or that include the
words "believes," "expects," "predicts," "anticipates,"
"intends," "estimates," "should," "may" or similar
expressions; and
- other statements contained in this prospectus regarding
matters that are not historical facts.
Because such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by such
forward-looking statements. Factors that could cause actual results to differ
materially include, but are not limited to:
- demand for our products and services;
- demand for internet access generally;
- changes in the pricing environment for our products and
services;
- general economic conditions in the Asia Pacific region and
China;
- changes in financial market conditions;
- our competitors' actions;
- the status and effectiveness of our Year 2000 efforts;
- changes in interest and exchange rates; and
- the factors discussed above under the heading "Risk
Factors."
You should not place undue reliance on such statements, which speak only
as of the date on which they are made. Our independent public accountants have
not examined or compiled the forward-looking statements and, accordingly, do not
provide any assurance with respect to such statements. We do not undertake any
obligation to release publicly any revisions to such forward-looking statements
after the date of this prospectus to reflect later events or circumstances or to
reflect the occurrence of unanticipated events.
28
<PAGE>
SELECTED CONSOLIDATED FINANCIAL INFORMATION
The following selected consolidated financial data and pro forma
financial data should be read in conjunction with Management's Discussion and
Analysis, the consolidated financial statements, related notes and other
information included elsewhere in this prospectus. The consolidated pro forma
data set forth below for the year ended December 31, 1998 and 1997 are derived
from the financial statements of MyWeb and TecnoChannel Technologies, which
financial statements have been audited by Wlosek & Braverman, L.L.C.,
independent certified public accountants, and Arthur Andersen, independent
certified public accountants, respectively, and give effect to the acquisition
of TecnoChannel Technologies as if it had occurred on TecnoChannel Technologies'
date of inception (April 5, 1997). The consolidated financial data set forth
below for the six month periods ended June 30, 1999 (historical) and June 30,
1998 (pro forma) are derived from the unaudited consolidated financial
statements of the company that include, in the opinion of management, all
adjustments, consisting only of normal recurring accruals, that the company
considers necessary for a fair presentation of its results of operations for
such periods and balance sheet data as of the end of such periods. The results
of operations for the six month periods ended June 30, 1999 and 1998 are not
necessarily indicative of the results to be expected for the entire year or for
future periods.
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31, SIX MONTHS ENDED JUNE 30,
1998 1997 1999 1998
---- ---- ---- ----
(PRO FORMA) (PRO FORMA) (HISTORICAL) (PRO FORMA)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
<S> <C> <C> <C> <C>
Revenues $1,310,843 $102,367 $ 2,926,335 $254,996
Cost of sales 108,883 - 950,823 57,173
Gross profit (loss) 1,201,960 102,367 1,975,512 197,823
Selling and product development 536,950 - 2,522,991 113,955
General and administrative expenses 325,056 354,700 619,271 86,180
Total operating expenses 862,006 354,700 3,142,262 200,135
Net income (loss) 339,954 (252,333) (1,166,750) (2,312)
Net income (loss) per share .04 (.03) (.12) (.00)
Weighted average common shares and
common equivalent shares outstanding 8,555,356 8,555,356 9,730,773 8,555,356
</TABLE>
<TABLE>
<CAPTION>
DECEMBER 31, 1998 JUNE 30, 1999
----------------- -------------
(PRO FORMA) (HISTORICAL)
CONSOLIDATED BALANCE SHEET DATA:
<S> <C> <C>
Working capital $306,074 $3,699,363
Cash 11,118 3,815,517
Accounts receivable, net 1,100,492 430,541
Inventories - 43,338
Total current assets 1,117,786 4,648,559
Total assets 1,171,727 4,836,807
Accounts payable 774,441 874,034
Due to related parties 37,271 75,162
Total current liabilities 811,712 949,196
Total liabilities 811,712 949,196
Total stockholders' equity 360,015 3,887,611
</TABLE>
29
<PAGE>
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
MyWeb's unaudited pro forma consolidated balance sheet as of December
31, 1998 and its unaudited pro forma consolidated statements of operations and
cash flows for the years ended December 31, 1998 and 1997 and the six months
ended June 30, 1999 give effect to the acquisition of TecnoChannel Technologies
as if it had occurred on TecnoChannel Technologies' date of inception (April 5,
1997). The pro forma information is not necessarily indicative of the results
which would have occurred if MyWeb had acquired TecnoChannel Technologies on
April 5, 1997, nor is it indicative of MyWeb's future performance.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
JUNE 30, DECEMBER 31,
1999 1998
---- ----
(HISTORICAL) (PRO FORMA)
ASSETS:
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 3,815,517 $ 11,118
Accounts receivable, net 430,541 1,100,492
Inventories 43,338 --
Prepaid expenses and other current assets 359,163 6,176
----------- -----------
Total Current Assets 4,648,559 1,117,786
----------- -----------
Property and equipment, net 188,248 53,941
----------- -----------
$ 4,836,807 $ 1,171,727
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable, trade $ 585,905 $ 419,154
Other accounts payable 288,129 355,287
Due to directors 75,162 37,271
----------- -----------
Total Current Liabilities 949,196 811,712
----------- -----------
Shareholders' Equity:
Common stock, par value $.01; authorized
100,000,000 shares; issued, 10,679,319 shares
in 1999 and 8,563,069 shares in 1998; outstanding,
10,671,606 shares in 1999 and 8,555,356 in 1998 106,717 85,554
Additional paid-in capital 5,558,247 885,009
Retained earnings (deficit) (1,043,576) 123,173
Currency translation adjustment (56) --
----------- -----------
4,621,332 1,093,736
Less: Treasury stock, at cost 733,721 733,721
----------- -----------
Total Shareholders' Equity 3,887,611 360,015
----------- -----------
$ 4,836,807 $ 1,171,727
=========== ===========
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1999 1998 1998 1997
---- ---- ---- ----
(HISTORICAL) (PRO FORMA) (PRO FORMA) (PRO FORMA)*
<S> <C> <C> <C> <C>
Revenues:
Net sales and licensing $ 2,884,634 $ 254,996 $ 1,310,843 $ 102,367
Interest 40,423 -- -- --
Other 1,278 -- -- --
----------- ----------- ----------- -----------
Total Revenues 2,926,335 254,996 1,310,843 102,367
----------- ----------- ----------- -----------
Costs and Expenses:
Cost of sales 950,823 57,173 108,883 --
Sales and marketing 2,467,256 86,250 223,818 37,414
Product development 55,735 27,705 313,132 203,574
General administration 619,271 86,180 325,056 113,712
----------- ----------- ----------- -----------
Total Costs and
Expenses 4,093,085 257,308 970,889 354,700
----------- ----------- ----------- -----------
Net Income (Loss) $(1,166,750) $ (2,312) $ 339,954 $ (252,333)
----------- ----------- ----------- -----------
Income (Loss) per share $ (.12) $ (.00) $ .04 $ (.03)
=========== =========== =========== ===========
Average number of common
shares outstanding (post
split) 9,730,773 8,555,355 8,555,355 8,555,356
=========== =========== =========== ===========
</TABLE>
- --------------
* The operation in 1997, consisting solely of Tecnochannel Technologies Sdn
Bhd (a Malaysian corporation), commenced on April 5, 1997, the inception
date of TecnoChannel Technologies.
31
<PAGE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED FOR THE YEARS ENDED
JUNE 30, JUNE 30, DECEMBER 31, DECEMBER 31,
1999 1998 1998 1997
---- ---- ---- ----
(HISTORICAL) (PRO FORMA) (PRO FORMA) (PRO FORMA)*
<S> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss) $(1,166,750) $ (2,312) $ 339,954 $ (252,332)
Adjustments:
Depreciation 8,684 5,967 11,934 8,677
Currency exchange - unrealized 1,450 -- 12,977
Common stock issuance for consulting 4,400 --
services
Disposition of equipment 3,251 --
Shareholder debt forgiveness -- -- (14,448)
Working Capital Adjustments:
(Increase) Decrease in inventories (43,338) --
(Increase) Decrease in accounts 670,258 (90,503) (1,013,468) (106,176)
receivable, trade
(Increase) Decrease in prepaids and (352,702) --
other
Increase in accounts payable 112,954 61,219 562,112 212,330
----------- ----------- ----------- -----------
Cash Flows from Operating Activities (761,793) (25,629) (100,939) (137,501)
----------- ----------- ----------- -----------
Cash Flows from Investing Activities:
Acquisition of property and equipment (146,232) (19,444) (19,972) (54,583)
----------- ----------- ----------- -----------
Cash Flows from Financing Activities: 50,000
Proceeds on issuance of common stock 4,690,000 210,526 210,526 26,316
Repayments on due to directors 22,424 (157,835) (134,153) 171,424
----------- ----------- ----------- -----------
Cash Flows from Financing Activities 4,712,424 52,691 76,373 247,740
----------- ----------- ----------- -----------
Increase in cash and cash equivalents 3,804,399 7,618 (44,538) 55,656
Cash balance, beginning 11,118 55,656 55,656 --
----------- ----------- ----------- -----------
Cash balance, end $ 3,815,517 $ 63,274 $ 11,118 $ 55,656
=========== =========== =========== ===========
Supplementary Data:
Interest income received in operations $ 40,423 $ -- $ -- $ --
=========== =========== =========== ===========
</TABLE>
- --------------
* The operation in 1997, consisting solely of TecnoChannel Technologies Sdn
Bhd (a Malaysian corporation), commenced on April 5, 1997, the inception
date of TecnoChannel Technologies.
32
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
The following discussion should be read in conjunction with our
financial statements and the notes thereto which appear elsewhere in this
prospectus.
OVERVIEW
We were essentially inactive in 1997 and 1998. In February 1999 we
acquired all of the capital stock of TecnoChannel Technologies. Our current
business plan is to devote all of our resources to the development and expansion
of TecnoChannel Technologies' business in China and in other emerging markets
that have the following characteristics:
- a high percentage of television usage;
- a high level of consumer demand for the internet;
- a low percentage of personal computer use;
- a low level of personal computer literacy;
- a high cost for personal computers; and
- a pre-existing cable and telecommunications infrastructure.
As discussed below, during the six month period ended June 30, 1999, we
generated increasing revenues from our operations and incurred increasing
expenses as a result of our expansion into China. As part of our expansion
strategy, we have entered into strategic relationships with:
- Chinese manufacturers of set-top internet terminals;
- Chinese content providers; and
- Chinese internet service providers.
We expect these strategic relationships to help us attract an increasing
number of Chinese internet users to our internet properties, which should lead
to increasing advertising revenues from our internet properties. We also have
implemented a brand development and promotion strategy that we expect to attract
additional internet users to our internet properties. As part of our brand
development and promotion strategy, we increased our advertising and brand
development expenditures during the six month period ended June 30, 1999. Our
expenditures during the six month period ended June 30, 1999 exceeded our
revenues and, as a result, we generated a net operating loss during that period.
We expect to continue to incur operating losses during the rollout of our
products and services in China.
We have a limited operating history upon which to base an evaluation of
our business and prospects. We have yet to achieve significant revenues, and our
ability to generate significant revenues in the future is uncertain. Further, in
view of the rapidly evolving nature of our business and our limited operating
history, it is not possible to forecast future revenues. We believe, therefore,
that period-to-period comparisons of our financial results are not necessarily
meaningful, and you should not rely upon them as an indication of future
performance.
Our business and prospects must be considered in light of the risks,
expenses and difficulties frequently encountered by companies in their early
stages of development, particularly companies in new and rapidly evolving
markets such as the internet and e-commerce. In addition, our revenues depend
substantially upon the level of activity on our internet properties and our
ability to successfully create brand name awareness and market recognition for
our products and services. Although we have experienced growth in our revenues
since our merger with TecnoChannel in February 1999, there can be no assurance
that our revenues will continue at their current rate of growth or that we will
be able to operate profitably.
33
<PAGE>
Presented below is a discussion and analysis of (i) our actual results
for the six month period ended June 30, 1999 and our pro forma results for the
six month period ended June 30, 1998 and (ii) our unaudited pro forma
consolidated results of operations for the fiscal years ended December 31, 1998
and December 31, 1997. The pro forma information assumes that MyWeb acquired
TecnoChannel Technologies on the date of inception of TecnoChannel Technologies
(April 5, 1997) rather than on February 24, 1999. Management believes that a
comparison of such financial information is more meaningful than a comparison of
historical data for such periods because MyWeb was essentially inactive until
February 24, 1999, when it acquired TecnoChannel Technologies. However, the pro
forma information is not necessarily indicative of the results which would have
occurred if MyWeb had acquired TecnoChannel Technologies on April 5, 1997, nor
is it indicative of MyWeb's future performance.
COMPARISON OF THE SIX MONTH PERIOD ENDED JUNE 30, 1999 TO THE SIX MONTH PERIOD
ENDED JUNE 30, 1998
Total Revenue
Revenues increased from $254,996 in the six month period ended June 30,
1998 (the "1998 Period") to $2,926,335 in the six month period ended June 30,
1999 (the "1999 Period"), an increase of 1,048%. This increase was attributable
to software licensing revenue and e-commerce transactions which commenced in
1999. Two customers, NetChina and HKNet, accounted for approximately 51% and
17%, respectively, of revenues during the 1999 Period, while one customer,
Philips Consumer Electronics (and subsidiaries thereof), accounted for
approximately 33% of revenue during the 1998 Period.
Cost of Revenue
Cost of revenue increased from $57,173 in the 1998 Period to $950,823 in
the 1999 Period, an increase of 1,563%. The increase in cost of revenue was
primarily due to the cost of goods for the e-commerce transactions and software
licensing costs in the 1999 Period.
Total Operating Expenses
Total operating expenses increased 1,470% from $200,135 in the 1998
Period to $3,142,262 in the 1999 Period. The increase was primarily attributable
to an increase in sales and marketing expenses from $86,250 in the 1998 Period
to $2,467,256 in the 1999 Period, an increase of 2,760%.
The sales and marketing expenses consist primarily of the cost of
acquiring internet users in Hong Kong and China, advertising, and other
promotion and marketing expenses. The increase in absolute dollars from the 1998
period is primarily attributable to the costs associated with our brand-building
strategy in China and an increase in advertising, promotion and marketing
related expenses.
Product development expenses increased 291% from $27,705 in the 1998
Period to $108,367 in the 1999 Period. Product development expenses consist
primarily of employee compensation relating to developing and enhancing features
of our online service properties and our products. The increase in absolute
dollars is primarily a result of the increase in the number of engineers
responsible for the product development. The company has expensed, as incurred,
all internal product development costs and expects to incur increased product
development costs in absolute dollars in future periods to remain competitive.
General administration expenses increased 658% from $86,180 in the 1998
Period to $566,639 in the 1999 Period. General administration expenses consist
primarily of employee compensation and fees for professional services. The
increase in absolute dollars is primarily a result of an increase in personnel
and increased fees for professional services during the 1999 Period.
Net Loss
The company recorded a net loss of $1,166,750, or $0.12 per share, for
the 1999 Period compared to a net loss of $2,312, or $0.00 per share, for the
1998 Period. The increase in net loss was primarily attributable to:
34
<PAGE>
- the increase in cost of revenues;
- general administration expenses;
- advertising, promotion and marketing expenses; and
- investments in our brand-building strategy in China.
This was offset by the increase in revenue in the 1999 period compared
to the 1998 Period.
COMPARISON OF THE FISCAL YEAR ENDED DECEMBER 31, 1998 TO NINE MONTH PERIOD ENDED
DECEMBER 31, 1997
Total Revenue
Revenues increased from $102,367 in the nine month period beginning on
TecnoChannel Technologies' date of inception (April 5, 1997) and ending on
December 31, 1997 (the "1997 Period") to $1,310,843 in the fiscal year ended
December 31, 1998 (the "1998 Period"), an increase of 1,281%. This increase was
attributable to [the increasing acceptance in the marketplace of the products
and services of TecnoChannel Technologies, which were introduced in late fiscal
1997]. One customer, Wizoffice Pte Ltd., accounted for approximately 90%
of revenues during the 1997 Period, while one customer, Philips Consumer
Electronics (and subsidiaries thereof), accounted for approximately 77% of
revenue during the 1998 Period.
Cost of Revenue
Cost of revenue increased from $0 in the 1997 Period to $108,883 in the
1998 Period. The increase in cost of revenue was primarily due to the increase
in sales of our products and services during such period.
Total Operating Expenses
Total operating expenses increased 243% from $354,700 in the 1997 Period
to $862,006 in the 1998 Period. The increase was primarily attributable to an
increase in sales and marketing expenses from $0 in the 1997 Period to $223,818
in the 1998 Period, and to an increase in product development expenses from $0
in the 1997 Period to $313,132 in the 1998 Period.
The sales and marketing expenses consist primarily of employee
compensation relating to marketing and promotion activities, advertising, and
other promotion and marketing expenses. The increase in absolute dollars from
the 1997 period is primarily attributable to the costs associated with the
increased marketing activities in connection with the promotion of our products
and services.
Product development expenses consist primarily of employee compensation
relating to developing and enhancing features of our online service properties
and our products. The increase in absolute dollars from the 1997 Period is
primarily a result of the increase in the number of engineers responsible for
product development. The company has expensed, as incurred, all internal product
development costs and expects to incur increased product development costs in
absolute dollars in future periods to remain competitive.
General administration expenses increased 186% from $113,712 in the 1997
Period to $325,056 in the 1998 Period. General administration expenses consist
primarily of employee compensation and fees for professional services.
Net Income (Loss)
The company recorded net income of $339,954, or $.04 per share, for the
1998 Period compared to a net loss of $252,333, or $.03 per share, for the 1997
Period. This was primarily attributable to an increase in sales revenue that was
greater than the increase in our cost of sales and operating expenses
35
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the company had cash and cash equivalents totaling
$3,815,517 compared to $63,724 at June 30, 1998. For the six months ended June
30, 1999, cash used in operating activities of $761,793 was primarily due to the
net loss of $1,166,750 for the 1999 period.
Cash used in investing activities was $146,232 for the 1999 Period
compared to $19,444 for the 1998 Period. The capital expenditure of $146,232 for
the 1999 Period consisted of the purchase of computer hardware and software and
other office equipment.
For the 1999 Period, cash provided by financing activities of $4,712,424
was derived primarily from the private placement of shares of common stock, from
which we received net proceeds of $3,772,500, and the issuance of 150,000 shares
of our common stock upon the exercise of a stock option, for which we received
$900,000. As the company experienced negative cash flow from operations in the
1999 Period and anticipates that it will continue to incur negative cash flow
during the rollout of its products and services to China, the company may
require additional capital. The sale of additional equity or convertible debt
securities, if required, may result in additional dilution to the holders of our
common stock. There can be no assurance that additional financing, if required,
will be available on terms and conditions acceptable to the company, if
available at all.
36
<PAGE>
INFORMATION ABOUT MYWEB
HISTORY OF OUR DEVELOPMENT
We were incorporated under the laws of the State of Nevada on February
20, 1985 under the name Sperzel-NV, Inc. From 1985 until 1992, we manufactured,
distributed and sold a proprietary line of accessories for use by handicapped
individuals.
On May 21, 1992, we filed a petition for relief under Chapter 11 of the
federal bankruptcy laws in the United States Bankruptcy Court for the District
of Nevada. The Bankruptcy Court confirmed our plan of reorganization on January
31, 1994. Pursuant to our plan of reorganization, we purchased the assets of
Asia Media Communications, Ltd. and changed our name from Sperzel-NV, Inc. to
Asia Media Communications, Ltd. The assets we purchased consisted primarily of a
video library that was intended to be distributed in the Far East. The video
library proved commercially unexploitable during 1995. From 1995 until March
1996, our principal activity consisted of seeking opportunities in other
business ventures.
In March 1996, we completed a merger with Kremlyovskaya Group, Inc., a
privately-held Delaware corporation. Kremlyovskaya Group, through a wholly-owned
subsidiary in Belgium, was a distributor of vodka and other products in foreign
markets, primarily Russia. In August 1996, by mutual consent, we agreed with the
former shareholders of Kremlyovskaya Group to rescind the merger.
On October 30, 1996, some of our shareholders entered into a stock
purchase agreement with D-Vine Investment Partners, a Delaware general
partnership. Pursuant to the stock purchase agreement, the shareholders sold
36,567 shares of our common stock to D-Vine Investment Partners for $150,000
(approximately $4.00 per share). The shares represented approximately 76.4% of
our then issued and outstanding capital stock. Immediately following the
transaction, we entered into a consulting agreement with Ian Rice, who was our
Chairman and a significant shareholder immediately prior to the transaction. The
consulting agreement required Mr. Rice to help us identify and locate suitable
business opportunities for us for a period of 90 days in exchange for 7,500
shares of our common stock.
On December 31, 1996, we purchased all of the issued and outstanding
capital stock of IPC Corporation (Australia) Pty Ltd., an Australian
corporation, from IPC Corporation, Ltd., a Singapore corporation. The purchase
was undertaken by our wholly-owned subsidiary, AMC International Holdings Ltd.,
a British Virgin Islands corporation, and was effective as of January 1, 1996.
We paid IPC Corporation $1.00 in cash and issued IPC Corporation 25 preference
shares of AMC Holdings. Each preference share has a stated value of $1,000,000
and these shares are exchangeable at the holder's option into shares of our
common stock, on the basis of one share of common stock for each $2.00 of the
stated value of each preference share or part thereof so exchanged, as adjusted
for certain events, including stock splits and recapitalizations. As a result of
the one-for-one hundred reverse stock split that we effected in February 1999,
each preference share is exchangeable into shares of our common stock on the
basis of one share of common stock for each $200 of the stated value of each
preference share or part thereof so exchanged. As part of the transaction, IPC
Corporation assigned to AMC Holdings all of the indebtedness of IPC Australia to
IPC Corporation. The assigned indebtedness was approximately $25,000,000. In
order to effect the exchange of the preference shares for shares of our common
stock, we granted an option to AMC Holdings to acquire, for no consideration,
such number of shares of our common stock as may be required for the exchange of
the preference shares. In April 1997, AMC Holdings executed an agreement with
IPC Corporation in which IPC Corporation agreed not to exercise its rights, as a
holder, to exchange the preference shares for shares of our common stock. We are
uncertain whether the agreement with IPC Corporation would be binding upon an
innocent purchaser for value of the preference shares. On September 1, 1997, we
sold, for nominal cash consideration, all of the capital stock of AMC Holdings
to an unrelated party effective as of December 31, 1996, the date of the
acquisition of the capital stock of IPC Australia. The purchaser assumed all of
our obligations under the agreement pursuant to which AMC Holdings acquired the
capital stock of IPC Australia. The effect of the sale was to negate
37
<PAGE>
the acquisition of IPC Australia, except for the possible exchange of any
preference shares acquired by an innocent purchaser for value.
On August 1, 1997, we sold a warrant to purchase 1,000,000 shares of our
common stock to Ocean Strategic Holdings, Limited, an unrelated third party, for
$50,000 in cash. The exercise price of the warrant is $.01 per share. Both the
exercise price per share and the number of shares issuable upon exercise of the
warrant are subject to adjustment if certain events occur. However, the warrant
provides that neither the number of shares to be issued upon exercise nor the
purchase price per share are subject to adjustment in the event of a reverse
stock split. The warrant is exercisable between August 1, 1998 and August 1,
2001. On February 25, 1999 Ocean Strategic Holdings exercised its rights under
the warrant to purchase 500,000 shares of our common stock; on April 1, 1999
Ocean Strategic Holdings exercised its rights under the warrant to purchase an
additional 400,000 shares of our common stock; and on August 4, 1999 Ocean
Strategic Holdings exercised its rights under the warrant to purchase an
additional 100,000 shares of our common stock.
RECENT DEVELOPMENTS
On February 23, 1999, we effected a one-for-one hundred reverse split of
our outstanding common stock, so that each one hundred shares of our common
stock issued and outstanding on such date was deemed to be one share of common
stock.
On February 24, 1999, we completed a reverse merger with TecnoChannel
Technologies Sdn Bhd, a privately-held Malaysian corporation, that was formed in
April 1997. Through the transaction we acquired all of the issued and
outstanding capital stock of TecnoChannel Technologies, in exchange for
8,500,000 shares of our common stock. In connection with our acquisition or
TecnoChannel Technologies, we issued 440,000 shares of our common stock to GEM
Ventures Ltd. for its services as our financial advisor. TecnoChannel
Technologies is now a wholly-owned subsidiary of MyWeb.
In April 1999, following our acquisition of TecnoChannel Technologies,
we changed our name from Asia Media Communications, Ltd. to MyWeb Inc.com, and
we revised our business plan to focus on the business of TecnoChannel
Technologies.
In September 1999, we settled a dispute with a firm that we had
retained to perform public relations work for us. The public relations firm
claimed that we had breached our contract with it. The terms of the settlement
required us to pay the public relations firm $30,000 and to issue it 30,000
shares of our common stock.
In May 1999, we received $900,000 upon the exercise of an option
entitling the holder thereof to purchase 150,000 shares of our common stock for
$6.00 per share. In addition, in May 1999 we completed a private placement of
526,250 of shares of our common stock. These shares are among the shares covered
by this prospectus. We received $3,780,000 in aggregate proceeds and $3,772,500
in net proceeds from the private placement. We are using the proceeds to finance
our expansion into China.
OUR PRODUCTS AND SERVICES
Our goal is to become a total solutions provider for companies involved
in providing internet access to consumers through their television sets. We are
in the process of implementing a three-prong business strategy that we believe
will allow us to achieve our goal. Our operations focus on three distinct
business segments:
- co-branding set-top internet terminals with manufacturing
companies;
- providing our Thunder and ThunderServe software products to
manufacturers in the rapidly expanding set-top internet
terminal market and to internet service providers that
provide internet access to users of set-top internet
terminals; and
- operating our MyWeb Online Service internet properties.
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Our efforts are focused on certain emerging markets that we believe have
the potential for significant growth. At the present time, we anticipate that
the most significant growth will occur in the Chinese market. According to the
Far Eastern Economic Review, China's current internet user base is estimated at
2.2 million users. The Far Eastern Economic Review estimates that there will be
an additional 7.6 million internet users in China by the end of the year 2000.
The estimates are based in part on the Chinese government's strong emphasis on
promoting internet access. There are approximately 11 million personal computers
and over 300 million television sets in China. Our co-branded set-top internet
terminals are priced at roughly one-third of the price for a low end personal
computer in China. We believe our business strategy will take advantage of the
growth potential of the Chinese internet market by promoting a low cost method
of providing individuals with access to the internet that also directs each new
internet user to our online properties. Through this strategy, we hope to
attract a loyal base of visitors to our internet properties that will allow us
to significantly increase our advertising revenues from these properties.
Co-Branded Set-Top Internet Terminals
We have entered into strategic relationships with several electronics
and home appliance manufacturers who produce and sell set-top internet
terminals. A set-top internet terminal is a device that connects a standard
television set to an internet service provider and thus allows users to access
the internet via the television set. We do not design, manufacture, or sell the
set-top internet terminals, but have entered into contractual relationships
whereby manufacturing companies produce set-top internet terminals according to
our hardware specifications and incorporate our Thunder software. The set-top
internet terminals are then co-branded (for example, Philips MyWeb or Haier
MyWeb).
The first generation of our co-branded set-top internet terminals, which
incorporate our Thunder 1.0 software, is already available to consumers. As of
September 30, 1999, approximately 25,000 units have been sold in Malaysia and
Singapore since we introduced the set-top terminals there in September 1997, and
10,000 units have been sold in China since we introduced the set-top terminals
there in July 1999. We expect the second generation of our co-branded set-top
internet terminals, which will incorporate our Thunder 2.0 software, to be
available by the end of 1999.
Our Thunder and ThunderServe Software
We have entered into licensing arrangements for the use of our Thunder
software with a number of manufacturers of television set-top internet
terminals, including:
- Philips Consumer Electronics;
- Qingdao Haier Computer Co., Ltd.;
- Xihu Electronics Group Ltd, SOYEA Ltd; and
- Lang Chao Computer Co.
We receive a license fee from manufacturers who use our Thunder software
in their set-top internet terminals, including the manufacturers with whom we
have entered into co-branding arrangements.
We have entered into licensing arrangements for our ThunderServe
software with a number of internet service providers, including:
- NetChina (China);
- Beijing Telecom Communication Ltd (China);
- HKNet Co Ltd (China);
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<PAGE>
- Masslink (China).
We receive a licensing fee from the internet service providers that use
our ThunderServe software and a share of the usage fee that the internet service
providers receive for the time each internet user spends on our internet
properties.
Thunder 1.0, which is presently available, has the following
specifications:
- HTML 3.2 compliant with support for HTTP 1.0;
- Basic and Digest Authentication;
- Animated GIFs;
- Image Maps;
- Cookies;
- POP and SMTP Internet Messaging;
- SSL 2.0 and 3.0 ready;
- Printer support; and
- Dial-up software.
Thunder 2.0, which we expect to be available by the end of 1999, will
have the following specifications:
- HTML 4.0 compliant with support for HTTP 1.1;
- Basic and Digest Authentication;
- Animated GIFs;
- Image Maps;
- Cookies;
- Dynamic HTML;
- POP and SMTP Internet Messaging;
- SSL 2.0 and 3.0 ready;
- Printer support;
- Dial-up software;
- Ethernet ready;
- Personal Java;
- Support for plug-ins like Real Audio/Video and others;
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- Picture-in-Picture; and
- Support for Smart Card applications.
ThunderServ 1.0, which is presently available, incorporates the
following features:
- Integrated electronic billing module for completely
automated and paper-free billing;
- User access control for restricting access based on password
or for unauthorized usage;
- Personalisation module to allow personalisation of MyWeb
Online Service for subscribers;
- Remote upgrade module to allow remote online upgrading of
client software; and
- Parental control for blocking access to specified sites.
ThunderServ 2.0, which we expect to be available by the end of 1999,
will have the following features:
- Proxy and look-ahead modules for faster download of selected
sites;
- Communications module to enable IP telephony;
- Picture-in-Picture module to provide tightly integrated
Net-TV programming; and
- Java extensibility to provide for faster processing of Java
applets.
MyWeb Online Service
When a consumer purchases one of the MyWeb co-branded set-top internet
terminals and connects to the internet, the set-top internet terminal takes the
consumer to one of our country-specific internet properties, which is set as the
default home page. The current internet properties in the MyWeb Online Service
family are:
- www.mywebinc.com;
- www.myweb.com.sg (Singapore);
- www.mywebinc.com.hk (Hong Kong);
- www.myweb.com.cn (China); and
- www.myweb.com.my (Malaysia).
We are in the process of launching several new internet properties that
will join our existing family of MyWeb Online Service properties.
Each of the internet properties in the MyWeb Online Service family
offers:
- local language content;
- e-commerce;
- e-mail;
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<PAGE>
- chat rooms;
- country specific news, information, and entertainment;
- stock quotes from local stock exchanges; and
- educational information related to the English language and
e-commerce.
By offering country-specific content and setting the MyWeb Online
Service as the default home page on our co-branded set-top internet terminal, we
expect to attract increased traffic to our internet properties and to increase
the amount of time internet users spend on our internet properties.
Although we do not receive any direct revenue from internet users who
access our internet properties, we anticipate traffic on our internet properties
to increase, which will make it possible for us to generate an increased amount
of revenue from advertisers on our internet properties and from e-commerce
conducted through our internet properties.
DISTRIBUTION METHODS
We distribute our Thunder software through licensing and co-branding
agreements with manufacturers of existing set-top internet terminals. These
arrangements allow us to generate licensing revenues from our software and
develop brand recognition with consumers in our target markets. In conjunction
with our co-branding efforts and the licensing arrangements for our Thunder
software, we distribute our ThunderServe software to internet service providers
in our target markets. The ThunderServe software will allow these internet
service providers to provide internet services to consumers who want to use
MyWeb set-top boxes to access the internet.
We create awareness of our MyWeb Online Service through joint marketing
and promotional activities with manufacturers, internet service providers, as
well as content and application providers. This allows us to market directly to
the existing customers of our business partners, and since our partners are
typically established companies in their respective industries, this customer
base is typically large. Also, every user of our set-top box automatically
accesses the MyWeb Online Service upon using the set-top device. Therefore, the
distribution strategy for our products is multi-pronged and each product
complements and helps promote the other product offerings.
COMPETITION
We believe that Microsoft's WebTV is the only business that has a
business strategy similar to ours. WebTV was the first company to target the
market for set-top internet terminals through a combination of:
- software applications for use in set-top internet terminals;
- co-branding of set-top internet terminals with manufacturers
of set-top internet terminals; and
- branded internet properties targeted towards users of
set-top internet terminals.
WebTV is not currently available in any of our target markets in Asia.
We understand that Microsoft is in the process of implementing its project
Venus, which will involve the expansion of WebTV into China and other Asian
countries. We cannot anticipate the impact that project Venus, or other
competing goods and services, will have on our operations.
In addition to the existing and anticipated future competition from
WebTV and Microsoft, we are subject to existing competition in both segments of
our operations.
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Branded Set-Top Internet Terminals
Our co-branded set-top internet terminals, which are manufactured and
distributed by set-top internet terminal manufacturers with whom we have entered
into strategic partnerships, compete with:
- set-top internet terminals manufactured by or co-branded
with other companies; and
- other electronic devices that allow users access to the
internet, including personal computers and palm-top
computers.
There are a number of competitors in the set-top internet terminal
market, including WebTV and more than twenty China-based manufacturers of
set-top internet terminals. Of these competitors, we believe that only WebTV
offers the set-top internet terminal hardware in conjunction with the types of
products and services we offer. Of the competing manufacturers of set-top
internet terminals, we believe that while these competitors may offer some
competition for set-top internet terminal hardware, only WebTV is in a position
to compete with our operations.
Thunder and ThunderServe
Our Thunder and ThunderServe software applications compete against
several other software systems including:
- Microsoft Windows CE; and
- NUWA by China's Science and Research Institute.
Thunder competes with Windows CE and NUWA in the set-top box deployment
space. Though the software features are comparable, the ability of Thunder to
support Java application allows it to run more programs on the internet than our
competitors, thus giving set-top box manufacturers an added advantage if they
use Thunder. ThunderServe provides full control of the configuration of the
set-top box and allows the internet service providers to monitor remotely the
performance of the set-top box.
MyWeb Online Service
Our MyWeb Online Service family of internet properties operates in a
highly competitive product market. Our competitors for internet traffic and
advertising include other existing internet portal sites. A portal site is a
site on the internet with a hierarchical, topical directory, a search window,
and added features like news headlines and stock quotes. The term "portal site"
is often used to describe the default pages that are loaded upon connection to
the internet and popular branded sites that offer portal services and content.
We believe the principal competitive factors in the consumer online
services industry include:
- product features;
- quality of content;
- ease of use;
- brand recognition;
- types and manner of advertising; and
- ease of access through distribution channels, such as
internet search engines and links on other internet
properties.
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We believe that our internet properties currently compete effectively in
these areas and that we have a competitive advantage over our competition. Our
competitive advantage comes from two main sources:
- we have strategic partnerships with companies that will help
direct traffic to our online properties; and
- we customize our internet properties for each of our target
markets.
Our most significant existing competition in our target markets comes
from existing Chinese language internet portal sites, including:
- Yahoo!'s China.com;
- Sina.Com;
- Online.sh;
- 163.net;
- 263.net;
- yeah.net;
- cpcw.com;
- Neteast;
- Sohoo.net;
- Szonline.com;
- Shanghai Online; and
- ChinaByte.com.
In addition to our internet based competition, we compete with
traditional offline media such as:
- television;
- radio;
- billboards;
- magazines; and
- newspapers.
SOURCES OF RAW MATERIALS
The only raw material upon which we rely is the information and content
for our online properties. We rely on third parties to supply us with:
- financial information;
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- local news;
- international news; and
- educational information.
MAJOR CUSTOMERS
Thunder and ThunderServe
The major customers are NetChina and HKNet Co Ltd.
Our existing partners for ThunderServe are:
- Beijing Telecom Communication Ltd;
- NetChina;
- HKNet Co Ltd; and
- Masslink.
Our existing partners for Thunder are:
- Philips Consumer Electronics;
- Qingdao Haier Computer Co., Ltd.; and
- Lang Chao Computer Co.
MyWeb Online Service
For the period of January 1, 1999 to June 30, 1999, each of the
following MyWeb Online Service customers accounted for more than 10% of the
revenues of MOS:
- Pemasaran Jaya Mas;
- Saw Beng Swee Sdn Bhd;
- Sunshine Marketing; and
- Visan Holdings Sdn Bhd.
Our existing MyWeb Online Service partners are as follows:
- Qingdao Haier Computer Co., Ltd. (China);
- Xin Hua Organization (China);
- China Sci-Technologies International Trust and Investment
Co. Ltd. (China); and
- Unilever - Online Shopping (Malaysia).
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OUR INTELLECTUAL PROPERTY
Although our success depends on maintaining and protecting our
intellectual property, including our software and our trademarks and tradenames,
we have not registered any of our trademarks in the United States or abroad. We
may in the future seek to protect our intellectual property under applicable
copyright and trademark laws in the countries in which we conduct business. We
may prosecute litigation against infringes of our intellectual property. In
order to protect our trade secrets and other intellectual property, we have
required some, and we may in the future require all of, our employees,
consultants, advisors and collaborators to enter into confidentiality agreements
which prohibit the disclosure of proprietary information to third parties or the
use of proprietary information for commercial purposes.
We currently license the use of Sun Microsystems, Inc.'s Java operating
system. Our license agreement with Sun Microsystems, Inc. allows us to
incorporate Java technology into our Thunder software and to distribute the Java
technology that we incorporate into our Thunder Software. The license agreement
expires in March 2001, unless earlier terminated by us or by Sun Microsystems,
Inc. The license agreement may be terminated by either party on 30 days' notice
in the event of a material breach of the terms of the license agreement. We pay
Sun Microsystems, Inc. a fee for the right to use its Java technology.
GOVERNMENTAL REGULATION
We are subject to governmental regulation in the countries in which we
conduct business. The countries currently include:
- China;
- Malaysia; and
- Singapore
The types of governmental regulation to which our business is subject
include
- regulation of currency conversion;
- regulation of telecommunications services;
- regulation of information and content; and
- regulation of electronic commerce.
For a discussion of the risks associated with the existing governmental
regulations and the risks associated with potential future governmental
regulation, see the discussions under the heading "Risk Factors."
RESEARCH AND DEVELOPMENT ACTIVITIES
To date, engineering and development have been a significant focus of
MyWeb. Development of the MyWeb Online Service Solution Suite has required
combining technical experience and knowledge from two historically separate
industries, the internet and television, as well as two years of intensive
efforts. The principal elements of our engineering and development activities
are as follows:
Portal Development
MyWeb has been developing and will continue to develop the systems and
hardware necessary to establish a portal site that will offer services like
online stock trading, web-based e-mail, multimedia on demand, and online bill
payment.
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Feature Enhancements
MyWeb intends to continue to expand features of the server and client
set-top boxes to integrate newly developed web features, accessories, and tools.
MyWeb also intends to support picture-in-picture capability to allow web pages
and television programs to be viewed at the same time. We are working to develop
system enhancements that will enable consumers to listen to audio while browsing
the web. We are also currently working to integrate Java application environment
into our set-top boxes to allow various Java programs, such as chat and ICQ, to
run on thin client set-top boxes. To implement its engineering and development
strategy, MyWeb has assembled an engineering team with extensive experience in
real-time data communications hardware and software, client-server software,
Unix operating systems, computer networking, and circuit design.
PERSONNEL
We currently employ a total of approximately 100 people. We presently
plan to expand our personnel base in such areas as management, marketing,
research and development, and multimedia designers. We do not foresee any
serious difficulties in hiring these additional employees. None of our employees
are covered by a collective bargaining agreement, and we believe our employee
relations are good.
OUR FACILITIES
We lease our principle executive offices in Kuala Lumpur, Malaysia. We
have entered into lease arrangements with Woi Seen Chin Enterprises Sdn Bhd and
Selekta Bakti Sdn Bhd. Our lease with Woi Seen Chin Enterprises is for
approximately 5,000 square feet of commercial office space located at Unit G506
& G606, Blk G, Phileo Damansara I, Jalan Damansara, Malaysia. Our lease with
Selekta Bakti is for approximately 5,000 square feet of commercial office space
located at G505 & G605, Blk G, Phileo Damansara I, Jalan Damansara, Malaysia. We
have also entered into lease arrangements with Beijing Chongwen-New World
Properties Development Co. Ltd. for our Beijing office. In addition, we have
entered into lease arrangements with Alliance/Interoffice San Francisco, LLC for
our offices in San Francisco. For our Singapore offices, we use office space on
a rent-free basis, provided to us by a personal associate of the chief operating
officer of TecnoChannel Technologies Sdn Bhd, Danny Toe Teow Teck. We believe
that our existing facilities are sufficient for our current needs and provide us
with sufficient space to expand our operations.
OUR YEAR 2000 EFFORTS
In order to reduce the risks of the Year 2000 problem, we have
undertaken a two-phase process of analyzing the impact of the Year 2000 problem
on our operations.
First, we have completed an informal assessment of our primary internal
systems. Based on that assessment and our knowledge of the specific software and
systems, we currently believe that our 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, we expect these
modifications to be provided by the vendors of the computer and software
products we use. We have not incurred material costs to date in this informal
phase of the assessment process, and currently do not believe that the cost of
additional actions will have a material effect on our operations or financial
condition.
Second, we have completed a formal assessment of both our internal
systems and the vendor-supplied items and services we employ to determine how
the Year 2000 problem will affect all aspects of our operations. The formal
process involves assessment of the following MyWeb systems:
- hardware systems, including servers and systems used for
date storage;
- software systems, including applications, development tools
and proprietary code;
- infrastructure systems, including routers, hubs and
networks;
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- facility systems, including general building functions,
security, HVAC and related operations; and
- the systems of our customers, including manufacturers of
television set-top internet terminals and internet service
providers.
We have conducted our formal assessment of Year 2000 compliance by
gathering information on each aspect of our systems, reviewing each component or
application for date usage, and examining date representations. The results of
this formal assessment are consistent with the results of our informal
assessment. With respect to vendor-supplied items and services, we have
conducted an extensive review of product compliance information on such items
and services available online, in vendor literature and through trade group
information resources, as well as contacting our vendors for compliance
information and maintaining documentation of assessments that have been
performed by such vendors or outside sources. Based on our formal assessment, we
are in the process of creating a formal remediation and contingency plan for
achieving Year 2000 compliance. We do not anticipate undertaking a formal
assessment of the Year 2000 compliance of the internet or its underlying
telecommunications infrastructure, and will therefore be unable to predict the
impact of the Year 2000 issues that might affect the broader internet business
community, including MyWeb.
Based on the completed informal assessment and progress on the formal
assessment, we currently believe that our internal systems are or can readily be
made Year 2000 compliant in all material respects. However, it is possible that
our current internal systems contain undetected errors or defects with Year 2000
date functions. In addition, although we do 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.
Although we are not aware of any material operational issues or costs
associated with preparing our internal systems for the year 2000, and have not
incurred material costs to date with respect to the Year 2000 compliance of our
internal systems, the occurrence of any significant Year 2000 interruptions
could materially and adversely affect MyWeb's business.
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EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth, as of September 30, 1999, the names,
ages and positions of our executive officers and directors. Their respective
backgrounds are described below.
NAME AGE CAPACITIES
- ---- --- ----------
T.S. Wong 28 Director, President, Chief Executive
Officer
Victor Ng 51 Director and Chief Financial Officer
595 Market Street, Suite 2500
San Francisco, CA 94105
Danny Toe Teow Teck 29 Chief Operating Officer of
TecnoChannel Technologies
NAME OF
OFFICER/DIRECTOR EMPLOYMENT HISTORY
- ---------------- ------------------
T.S. Wong Mr. Wong is a co-founder of TecnoChannel Technologies
Sdn Bhd. From 1997 to the present, Mr. Wong has been a
director and the chief executive officer of
TecnoChannel. From 1996 until 1997, Mr. Wong was the
executive director of Cybersource Pte. Ltd., a
privately-held internet consulting firm. In 1996, Mr.
Wong graduated from the National University of
Singapore with a Bachelor of Electrical Engineering
degree.
Victor Ng From 1989 until June 1999, Mr. Ng was the general
manager (institutional sales) of J.M. Sassoon, a
regional securities brokerage firm headquartered in
Singapore. Mr. Ng is on the Board of Directors of The
Nanyang Insurance Company Limited, Asiacabletv.com Inc.
and Asiapower Investments Limited. Mr. Ng holds a
Bachelor of Science (economics) degree and a Masters of
Science (economics) degree from the University of
London.
Danny Toe Teow Teck Prior to co-founding TecnoChannel Technologies in April
1997, Mr. Toe was a Senior Investment Officer at the
Economic Development Board of Singapore, where he was
responsible for attracting foreign investors to
Singapore. He has also held senior marketing positions
with 3M Inc. in Singapore. Mr. Toe holds a degree in
Electronics Engineering from the National University of
Singapore.
Our Articles of Incorporation and By-laws require us to have three
directors. At the present time, we have two directors. We anticipate that we
will appoint one or more directors in the near future. We have not yet
determined the identity of such individual(s).
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EXECUTIVE COMPENSATION
The following table sets forth the total compensation paid to our chief
executive officer for the last three completed fiscal years and the current
fiscal year. No executive officer of the company received compensation of
$100,000 or more during any such year.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------------------ -----------------------------------------------
AWARDS PAYOUTS
------------------------ ---------------------
RESTRICTED SECURITIES
OTHER STOCK UNDERLYING LTIP
NAME AND PRINCIPAL ANNUAL AWARDS OPTIONS/SARS PAYOUTS ALL OTHER
POSITION YEAR SALARY BONUS COMPENSATION ($) (#) ($) COMPENSATION
------------------ ---- ------ ----- ------------ ---------- ------------ ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
T.S. Wong, 1999(1) $38,000 $0 $0 $0 100,000 $0 $0
Chief Executive Officer
1998 $25,263 $2,105 $31,579(2) $0 0 $0 $0
1997 $18,947 $0 $0 $0 0 $0 $0
</TABLE>
- --------------
(1) Through September 30, 1999
(2) Represents Mr. Wong's fees for services as a director of TecnoChannel
Technologies.
Neither our chief executive officer nor any our four most highly
compensated officers exercised any stock options or stock appreciation rights
during the last fiscal year.
EMPLOYMENT AGREEMENT
In April 1997, we entered into an employment agreement with T.S. Wong.
The agreement does not specify Mr. Wong's term of employment. Either party to
this agreement can terminate it by providing the other party with one-month
written notice.
STOCK OPTION PLANS
In February 1999, our stockholders approved the adoption of the
company's 1999 Incentive Program, pursuant to which various types of awards may
be made. The aggregate number of shares of common stock that may be issued or
transferred under the Program is 1,000,000, subject to certain adjustments. No
award may be made under the Program if the total of all outstanding awards under
the Program would be number of shares of common stock
outstanding at the time.
We have made three awards under the Program. In May 1999, we granted an
option under the Program to purchase 150,000 of our shares at $6.00 per share.
This option was exercised in May 1999 and we received proceeds of $900,000. In
addition, in May 1999, two options were granted for 125,000 shares each, one
exercisable in May 1999 at $17.00 per share (120% of the bid price), and the
second exercisable in November 1999 at 120% of the then bid price. As of the
date of this prospectus, neither of these options has yet been exercised.
In June 1999, the directors of the company adopted the company's 1999
Non-Qualified Stock Option Plan, pursuant to which non-qualified stock options
may be granted. The aggregate number of shares of common stock that may be
issued or transferred under the Plan is 1,000,000, subject to certain
adjustments. No option may be granted under the Plan if the total of all
outstanding shares subject to stock options under the Plan would be more
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than 15% of the total number of shares of common stock outstanding at the time.
As of the date of this prospectus, we have granted seven individuals options to
purchase an aggregate of 675,000 shares pursuant to the Plan. Each of these
options is exercisable for five years, commencing in September 1999, at $6.00
per share.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997, 1998 and 1999 some of our directors and significant
shareholders made loans to us for working capital purposes. As of September 30,
1999, we owed $50,847 to T.S. Wong (our chief executive officer), $911 to Dr.
Ahmad Mustaffa Babjee (a significant shareholder), and $20,990 to Cheah Meng Fui
(a significant shareholder and a selling shareholder). These loans were made to
us on an interest-free basis, and have no specified repayment terms.
We have entered into an employment agreement with our chief executive
officer, T.S. Wong. Please see "Executive Compensation--Employment Agreement."
With respect to our office arrangements, we use space for our Singapore
offices on a rent-free basis, provided to us by a personal associate of the
chief operating officer of TecnoChannel Technologies, Danny Toe Teow Teck. Until
September 1999, we had offices in New York. Our former chairman and director
allowed us to use this space on a rent-free basis.
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SELLING SHAREHOLDERS
The following table sets forth certain information, as of the date of
this prospectus, with respect to the number of shares of common stock owned by
the selling shareholders named below. As used in this prospectus, "selling
shareholders" includes the pledgees, donees, transferees or others who may later
hold the selling shareholders' interests in the shares of our common stock. The
common stock is being registered to permit public secondary trading of the
shares.
The common stock being offered by the selling shareholders was acquired
from MyWeb either in our reverse merger with TecnoChannel Technologies in
February 1999 or in a private placement of our common stock that was completed
in May 1999. The shares of common stock offered by the selling shareholders were
issued pursuant to exemptions from the registration requirements of the
Securities Act. The selling shareholders represented to us that they were
accredited investors and were acquiring our common stock for investment and with
no present intention of distributing the common stock. We have agreed to file a
registration statement covering the common stock received by the selling
shareholders. In the past three years, none of the selling shareholders has had
a material relationship with us or our subsidiaries, except that Cheah Meng Fui
has been, since April 1997, an Executive Director of TecnoChannel Technologies,
our wholly-owned subsidiary.
We have filed with the Securities and Exchange Commission, under the
Securities Act of 1933, a registration statement on Form SB-2 with respect to
the resale of the common stock from time to time on the OTC Bulletin Board, or
on any public market on which our common stock is then trading, or in privately
negotiated transactions. This prospectus forms a part of the registration
statement on Form SB-2.
The common stock covered by this prospectus may be offered from time to
time by the selling shareholders named below:
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<TABLE>
<CAPTION>
AMOUNT OF NUMBER OF PERCENTAGE OF
COMMON STOCK SHARES COMMON STOCK
OWNED PRIOR TO THE REGISTERED IN OWNED AFTER THE
SELLING SHAREHOLDER OFFERING THIS OFFERING OFFERING(1)
------------------- -------- ------------- -----------
<S> <C> <C> <C>
Tao Ying 500 500 *
Alvin Granoff 14,000 14,000 *
Jonathan Kaye 1,000 1,000 *
Ah Kee Tay 10,000 10,000 *
John Lim Kok Min 20,000 20,000 *
PT Portola Konsultindo 204,250 204,250 *
Tee-Jin Gan 50,000 50,000 *
Tee-Kian Gan 50,000 50,000 *
Soo Keok Ong 50,000 50,000 *
Cheah Meng Fui 927,000(2) 77,000 8.0%
Tan Sew Lan 425,000 20,000 3.8%
Zhang Hui Quan 1,500 1,500 *
Sothebay International Ltd. 323,000 20,000 2.8%
Neutron Enterprises Inc. 1,700,000 200,000 14.1%
Ambang Dinamik Sdn Bhd 850,000 85,000 7.2%
Jap Siu Fie 3,000 3,000 *
Wee Yong Seng 2,000 2,000 *
Henny Kartika 2,000 2,000 *
</TABLE>
53
<PAGE>
<TABLE>
<CAPTION>
AMOUNT OF NUMBER OF PERCENTAGE OF
COMMON STOCK SHARES COMMON STOCK
OWNED PRIOR TO THE REGISTERED IN OWNED AFTER THE
SELLING SHAREHOLDER OFFERING THIS OFFERING OFFERING(1)
------------------- -------- ------------- -----------
<S> <C> <C> <C>
Chew Li Lian 5,000 5,000 *
Lim Hock San 17,500 17,500 *
Shih Chien Ho 20,000 20,000 *
Masslink Technology Co Ltd 50,000 50,000 *
Xu Hui 38,000 38,000 *
Seah Chin Yew 300,000 270,000 *
</TABLE>
- --------------
(1) Assumes all of the shares offered hereby are sold.
(2) Of such shares, 77,000 are owned of record by Mr. Fui and 850,000 are owned
of record by Jerisle Ltd., of which Mr. Fui owns 100% of the outstanding
stock.
* Less than 1%.
54
<PAGE>
PLAN OF DISTRIBUTION
We are registering 1,210,750 shares of common stock covered by this
prospectus on behalf of the selling shareholders. We will pay the costs and fees
of registering the common stock, but the selling shareholders will pay any
brokerage commissions, discounts or other expenses relating to the sale of the
common stock.
The selling shareholders may, from time to time, sell all or portion of
the shares of common stock on any market upon which the common stock may be
quoted, in privately negotiated transactions or otherwise, at fixed prices that
may be changed, at market prices prevailing at the time of sale, at prices
related to the prevailing market prices, or at negotiated prices. The shares of
common stock may be sold by the selling shareholders by one or more of the
following methods, without limitation:
- block trades in which the broker or dealer so engaged will
attempt to sell the shares of the common stock as agent, but
may position and resell a portion of the block as principal,
in order to facilitate the transaction;
- purchases by a broker or dealer as principal and the resale
by the broker or dealer for its account pursuant to this
prospectus;
- ordinary brokerage transactions and transactions in which
the broker solicits purchasers;
- privately negotiated transactions;
- market sales (both long and short to the extent permitted
under the federal securities laws); and
- a combination of any of these methods of sale.
When selling the common stock, the selling shareholders may enter into
hedging or other types of transactions with third parties. For example, the
selling shareholders may:
- enter into transactions involving short sales of the common
stock by broker-dealers;
- sell common stock short themselves and redeliver such shares
to close out their short positions;
- enter into options or other types of transactions that
require the selling shareholder to deliver common stock to a
broker-dealer, who will then resell or transfer the common
stock under this prospectus; or
- loan or pledge the common stock to a broker-dealer, who may
sell the loaned shares or, in the event of default, sell the
pledged shares.
In effecting sales, brokers and dealers engaged by the selling
shareholders may arrange for other brokers or dealers to participate.
Broker-dealers may receive commissions, discounts or concessions for their
services from the selling shareholders or, if any such broker-dealer acts as
agent for the purchaser of such shares, from such purchaser, in amounts to be
negotiated. These commissions or discounts are not expected to exceed those
customary in the types of transactions involved. Broker-dealers may agree with
the selling shareholders to sell a specified number of shares of common stock at
a stipulated price per share, and, to the extent such broker-dealer is unable to
do so acting as agent for the selling shareholder, to purchase as principal any
unsold shares of common stock at the price required to fulfill the broker-dealer
commitment to the selling shareholders. Broker-dealers who acquire shares of
common stock as principal may thereafter resell such shares of common stock from
time to time (which may involve block transactions and sales to and through
other broker-dealers, including transactions of the nature described above) at
55
<PAGE>
price and on terms then prevailing at the time of sale, at prices then related
to then-current market price or in negotiated transactions. In connection with
such resales, broker-dealers may pay to or receive from the purchasers of shares
of common stock commissions as described above.
The selling shareholders and any broker-dealer or agent involved in the
sale or resale of the common stock may qualify as "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act of 1933 and a portion of any
proceeds of sale and the broker-dealers' or agents' commissions, discounts, or
concessions may be deemed to be underwriters' compensation under the Securities
Act of 1933. If the selling shareholders qualify as "underwriters," they will be
subject to the prospectus delivery requirements of Section 5(b)(2) of the
Securities Act of 1933.
In addition to selling their common stock under this prospectus, the
selling shareholders may:
- agree to indemnify any broker-dealer or agent against
certain liabilities related to the selling of the common
stock, including liabilities arising under the Securities
Act of 1933;
- transfer their common stock in other ways not involving
market makers or established trading markets, including
directly by gift, distribution, or other transfer; or
- sell their common stock under Rule 144 of the Securities Act
of 1933 rather than under this prospectus, if the
transaction meets the requirements of Rule 144.
DESCRIPTION OF CAPITAL STOCK
The authorized capital stock of MyWeb consists of 100,000,000 shares of
common stock, $0.01 par value per share, of which 10,671,628 shares were issued
and outstanding as of October 19, 1999. The outstanding common stock, including
the common stock offered hereby, is fully-paid and nonassessable.
The following is a summary of certain terms and rights of the common
stock.
- Dividends may be paid on the common stock, as and when
declared by the Board of Directors out of funds legally
available for distribution as a dividend.
- The holders of common stock are entitled to one vote per
share in the election of directors and in respect of other
matters submitted to shareholders for a vote.
- Upon liquidation, the holders of the common stock are
entitled to receive all assets of MyWeb available for
distribution to shareholders. Distributions upon liquidation
are required to be made pro rata to shareholders in
accordance with their holdings.
- The common stock has no preemptive or conversion rights,
redemption provisions or sinking fund provisions.
- Special meetings of shareholders, unless otherwise
prescribed by statute, may be called by the President, any
three members of the Board of Directors, or by the holder of
not less than a majority in amount of all shares of the
company entitled to vote at the meeting.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth information regarding beneficial
ownership of our common stock by all shareholders who own 5% or more of our
common stock. The ownership reflected in the table is accurate as of the date of
this prospectus. Beneficial ownership has been determined for purposes of
completing the table in
56
<PAGE>
accordance with Rule 13d-3 of the Securities Exchange Act of 1934, as amended.
Under Rule 13d-3 a person is deemed to be the beneficial owner of securities if
the person has or shares voting power or investment power in respect of such
securities or has the right to acquire beneficial ownership of the securities
within 60 days.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF PERCENT OF
NAME AND ADDRESS BENEFICIAL OWNERSHIP CLASS
---------------- -------------------- -----
<S> <C> <C>
Dr. Ahmad Mustaffa Babjee 850,000 8.0%
Incubator 2, Unit G3, Technology Park Indirect(1)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
Cheah Meng Fui 927,000 8.7%
Suite 10-01, Heritage House 33 Direct and Indirect(2)
Jin Yap Ah Shak
50300 Kuala Lumpur, Malaysia
The Estate of Doris Poh Heem Huang 789,950 7.4%
612 Telok Blangah Road Direct(3)
#01-03 Fairways Condominium
Singapore 102096
Chew Gaik Sim 850,000 8.0%
Incubator 2, Unit G3, Technology Park Indirect(4)
Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit Jalil
57000 Kuala Lumpur
T.S. Wong 2,137,730 19.8%
Block G, Unit G606, Phileo Damansara 1 Direct and Indirect(5)
No. 9, Jalan 16/11
Off Jalan Damansara, 46350 Petaling Jaya
Malaysia
</TABLE>
- ---------------
(1) Owned of record by Ambang Dinamik Sdn Bhd, of which Dr. Babjee owns 100% of
the outstanding stock.
(2) Of such shares, 77,000 are owned of record by Mr. Fui and 850,000 are owned
of record by Jerisle Ltd., of which Mr. Fui owns 100% of the outstanding
stock.
(3) Mrs. Huang was the wife of Mr. Ng. Under the will of Mrs. Huang, the only
beneficiary of these shares is Ng E-Ming Joyce, the daughter of Mr. Ng and
Mrs. Huang. Mr. Ng disclaims beneficial ownership of these shares.
(4) Owned of record by Neutron Enterprises Inc., of which Mr. Sim owns 50.1% of
the outstanding stock.
(5) Of such shares, 2,037,730 are owned of record by Star Channel Systems Sdn
Bhd, of which Mr. Wong owns 82.3% of the outstanding stock. Includes
100,000 shares which are subject to options which are exercisable within
the next 60 days.
The following table lists, as of the date hereof, the number and
percentage of our outstanding shares of common stock beneficially owned,
directly or indirectly, by each executive officer and director, and by all of
our directors and officers as a group:
57
<PAGE>
<TABLE>
<CAPTION>
NATURE AND AMOUNT OF
BENEFICIAL OWNER BENEFICIAL OWNERSHIP PERCENT OF CLASS
---------------- -------------------- ----------------
<S> <C> <C>
Victor Ng 889,950 8.3%
Direct and
Indirect(1)
T.S. Wong 2,137,730 19.8%
Direct and
Indirect(2)
Danny Toe Teow Teck 150,000(3) 1.4%
Direct
All executive officers 3,177,680(4) 28.8%
and directors as a group
</TABLE>
- --------------
(1) Of such shares, 789,950 are owned of record in the name of "The Estate of
the Late Doris Poh Heem Huang." Mrs. Huang was the wife of Mr. Ng. Under
the will of Mrs. Huang, the only beneficiary of these shares is Ng E-Ming
Joyce, the daughter of Mr. Ng and Mrs. Huang. Mr. Ng disclaims beneficial
ownership of these shares. Includes 100,000 shares which are subject to
options which are exercisable within the next 60 days.
(2) Of such shares, 2,037,730 are owned of record by Star Channel Systems Sdn
Bhd, a corporation of which Mr. Wong owns 82.3% of the outstanding capital
stock. Includes 100,000 shares which are subject to options which are
exercisable within the next 60 days.
(3) Includes 150,000 shares which are subject to options which are exercisable
within the next 60 days.
(4) Includes an aggregate of 350,000 shares which are subject to options which
are exercisable within the next 60 days.
The company does not know of any arrangements, the operation of which
may, at a subsequent date, result in a change in control of the company.
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Albright, Persing & Associates, Ltd. are the independent accountants
that audited our financial statements for the year ended December 31, 1995 and
the 11 month period ended December 31, 1994. The report of Albright, Persing &
Associates, Ltd. on our financial statements for each of such periods did not
contain an adverse opinion or a disclaimer of opinion, nor was it qualified or
modified as to uncertainty, audit scope, or accounting principles, except that
it expressed an uncertainty as to our ability to continue as a going concern.
We dismissed Albright, Persing & Associates, Ltd. as our independent
accountants on December 23, 1998. The dismissal of Albright, Persing &
Associates, Ltd. was approved by our Board of Directors.
During the year ended December 31, 1995 and the 11 month period ended
December 31, 1994 and during the interim period preceding the dismissal of
Albright, Persing & Associates, Ltd., there were no disagreements with Albright,
Persing & Associates, Ltd. on any matter of accounting principles or practice,
financial statement disclosure, or auditing scope or procedure. No "reportable
event" within the meaning of Item 304(a)(1)(v) of Regulation S-K promulgated
under the Securities Exchange Act of 1934 occurred during either the year ended
December 31, 1995 or the 11 month period ended December 31, 1994 or during the
interim period preceding the dismissal of Albright, Persing & Associates, Ltd.
58
<PAGE>
On December 24, 1998, we engaged Wlosek & Braverman, L.L.C. as the
principal accountant to audit our financial statements for its fiscal year ended
December 31, 1996.
LAWYERS
Baker & McKenzie, New York, New York, represented MyWeb in connection
with the offering.
EXPERTS
Wlosek & Braverman, L.L.C., independent auditors, audited our
consolidated financial statements as of December 31, 1998 and for the years
ended December 31, 1998 and 1997. We include those financial statements in this
prospectus with the permission of Wlosek & Braverman, L.L.C. and rely on Wlosek
& Braverman, L.L.C.'s report given upon their authority as experts in accounting
and auditing.
Arthur Andersen, independent auditors, audited the financial statements
of TecnoChannel Technologies Sdn Bhd as of December 31, 1998 and for the year
ended December 31, 1998 and the period from April 5, 1997 (inception) to
December 31, 1997. We include those financial statements in this prospectus with
the permission of Arthur Andersen and rely on Arthur Andersen's report given
upon their authority as experts in accounting and auditing.
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES
The company is organized under the laws of the State of Nevada. Holders
of shares of common stock will be able to effect service of process in the
United States upon the company and may be able to effect service on one or more
directors, officers or selling shareholders. However, all or a substantial
portion of the assets of the company and such persons are located outside the
United States. As a result, it may not be possible to enforce against the
company or its directors, officers or selling shareholders any judgments of a
United States court that are predicated upon the civil liability provisions of
United States laws.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the United States Securities and Exchange Commission
a Registration Statement on Form SB-2 under the Securities Act of 1933 covering
the shares of MyWeb common stock. As allowed by the Securities and Exchange
Commission rules, this prospectus does not contain all of the information set
forth in the registration statement. Our descriptions in this prospectus
concerning the contents of any contract, agreement or documents are not
necessarily complete. For those contracts, agreements or documents that we filed
as exhibits to the registration statement, you should read the exhibit for a
more complete understanding of the document or subject matter involved.
Because we are subject to the informational requirements of the
Securities Exchange Act of 1934, we file reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
the registration statement, including the attached exhibits and schedules, and
any reports, proxy statements or other information that we file at the
Securities and Exchange Commission's public reference room in Washington, D.C.
at 450 Fifth Street, N.W., 20549. You can request copies of these documents by
writing to the Securities and Exchange Commission and paying a duplicating
charge. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for
further information on the operation of its public reference rooms in other
cities. The Securities and Exchange Commission makes our filings available to
the public on its internet site (http://www.sec.gov).
59
<PAGE>
INDEX TO FINANCIAL STATEMENTS
FINANCIAL STATEMENTS OF MYWEB INC.COM
Independent Auditors' Report.................................................F-2
Balance Sheet as of December 31, 1998........................................F-3
Statements of Operations for the years ended December 31, 1997 and 1998......F-4
Statements of Deficit in Stockholders' Equity for the years ended
December 31, 1997 and 1998.................................................F-5
Statements of Cash Flows for the years ended December 31, 1997 and 1998......F-6
Notes to Financial Statements................................................F-7
FINANCIAL STATEMENTS OF TECNOCHANNEL TECHNOLOGIES, SDN. BHD.
Report of Independent Public Accountants....................................F-13
Balance Sheet as of 31 December, 1998.......................................F-14
Statements of Operations for the Year/9 Month Period ended 31
December, 1998 and 1997...................................................F-15
Statements of Shareholders' Equity for the Year/9 Month Period ended 31
December, 1998 and 1997...................................................F-16
Cash Flow Statements for the Year/9 Month Period ended 31 December, 1998
and 1997..................................................................F-17
Notes to the Accounts.......................................................F-18
INTERIM CONSOLIDATED FINANCIAL INFORMATION
Consolidated Balance Sheet as of June 30, 1999 (unaudited)..................F-21
Consolidated Statements of Operations (unaudited) for the six month
periods ended June 30, 1999 (historical) and June 30, 1998 (pro forma) ...F-22
Consolidated Statements of Cash Flows (unaudited) for the six month
periods ended June 30, 1999 (historical) and June 30, 1998 (pro forma)....F-23
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
My Web, Inc.com (formerly Asia Media Communications, Ltd.)
New York, New York
We have audited the accompanying balance sheet of My Web, Inc.com, formerly Asia
Media Communications, Ltd. (a corporation), as of December 31, 1998 and the
related statements of operations, stockholders' equity and cash flows for the
years ended December 31, 1998 and 1997. These financial statements are the
responsibility of management. Our responsibility is to express an opinion of
these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit and the report of other auditors provide a reasonable
basis for our opinion.
In our opinion, based on our audit, the financial statements referred to above
present fairly, in all material respects, the financial position of My Web,
Inc.com, as of December 31, 1998 and the results of its operations and its cash
flows for the years ended December 31, 1998 and 1997 in conformity with
generally accepted accounting principles.
The accompanying financial statements have been prepared assuming the Company
will continue as a going concern. As discussed in Note 6, the Company has no
substantial assets and it is uncertain, as of December 31, 1998, whether the
Company will be able to pay its liabilities in the normal course of the
business. The accompanying financial statements do not include any adjustments
to reflect the possible future effects on the recoverability and classification
of assets or the amounts and classification of liabilities that may result from
the possible inability of the Company to continue as a going concern.
Wlosek & Braverman, L.L.C.
Certified Public Accountants
March 29, 1999
Clifton, New Jersey
F-2
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
BALANCE SHEET
DECEMBER 31, 1998
ASSETS
Current Assets:
Cash $10,848
Total Assets $10,848
=======
LIABILITIES AND STOCKHOLDER'S EQUITY
Current Liabilities:
Accounts payable $10,848
-------
Commitments and Contingencies (Notes 8 & 9)
Deficit in Stockholders' Equity:
Common stock, $.01 par value, 100,000,000 55,356
shares authorized; 5,535,586 shares issued
and outstanding
Additional paid-in capital 798,825
Deficit in retained earnings (120,460)
--------
733,721
Less: Treasury stock (Note 4) (733,721)
--------
Total Deficit in Stockholders' Equity -
--------
Total Assets $10,848
=======
The accompanying notes are an integral part of these financial statements.
F-3
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE YEARS ENDED
DECEMBER 31,
1998 1997
--------- ---------
<S> <C> <C>
Revenues $ - $ -
--------- ---------
Costs and Expenses - -
Cost of Sales - -
Selling, general and administrative expenses
Legal and other fees 27,954 -
Other expenses 7,598 -
--------- ---------
Total Costs and Expenses 35,552 -
Loss before Income Tax Benefit (35,552) -
Income Tax (Benefit)
Current (5,333) -
Deferred 5,333 -
--------- ---------
Total Income Tax (Benefit) - -
--------- ---------
Net Loss $ (35,552) $ -
========= =========
Income (Loss) Per Common Share $ (0.01) $ 0.00
========= =========
Average weighted number of common
shares outstanding 5,535,586 5,465,919
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
STATEMENTS OF DEFICIT IN STOCKHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1998 AND 1997
<TABLE>
<CAPTION>
RETAINED
ADDITIONAL EARNINGS TOTAL
NUMBER PAID-IN (ACCUMULATED TREASURY STOCKHOLDERS'
OF SHARES COMMON STOCK CAPITAL DEFICIT) STOCK EQUITY
--------- ------------ --------- ----------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1997 5,535,586 $ 55,356 $ 748,825 $ (84,908) $ (733,721) $ (14,448)
Sales of common stock purchase - - 50,000 - - 50,000
warrant
Net Income - - - - - -
--------- ------------ --------- ----------- ----------- ----------
Balances, December 31, 1997 5,535,586 $ 55,356 $ 798,825 $ (84,908) $ (733,721) $ 35,552
Net Loss, year ended - - - (35,552) - (35,552)
December 31, 1998 --------- ------------ --------- ----------- ----------- ----------
Balances, December 31, 1998 5,535,586 $ 55,356 $ 798,825 $ (120,460) $ (733,721) $ -
========= ============ ========= =========== =========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
F-5
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31,
1998 1997
----------- ---------
Net Loss $ (35,552) $ -
----------- ---------
Adjustments to reconcile net loss to net
cash provided by operating activities
Shareholder debt forgiveness (14,448) -
Changes in assets and liabilities:
Increase in accounts payable 10,848 -
Decrease in advances from stockholder - -
---------- ---------
Total Adjustments (3,600) -
----------- ---------
Net Cash used in Operating Activities (39,152) -
----------- ---------
Cash Flows from Financing Activities:
Sale of common stock purchase warrant - 50,000
---------- ---------
Net (decrease) increase in cash and (39,152) 50,000
cash equivalents
Cash and cash equivalents, beginning 50,000 -
---------- ---------
Cash and cash equivalents, end $ 10,848 $ 50,000
========== =========
DISCLOSURE OF ACCOUNTING POLICY
For purposes of the statement of cash flows, the Company considers all
short-term investments with an original maturity of three months or less to be
cash equivalents.
The accompanying notes are an integral part of these financial statements.
F-6
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
The accompanying balance sheet includes the accounts of Asia Media
Communications, Ltd., a corporation purchased by Sperzel-NV, Inc. on
January 31, 1994. On the same date, Sperzel NV, Inc. changed its name to
Asia Media Communications, Ltd. As Asia Media Communications, Ltd., the
Company had attempted to acquire the licensing rights for distribution
of videos in the Far East. However, the acquisition was never completed
and the Company is seeking opportunities in other business ventures. The
Company also had acquisition and merger agreements relating to the
distribution of vodka and other products, primarily in Russia as well as
an Australian company which distributes computer equipment in the Far
East. All acquisition and merger agreements were effectively rescinded
as of their respective effective dates, and accordingly, no transactions
related thereto are included in the accompanying financial data.
Income taxes:
The Company has adopted the Statement of Financial Accounting Standard
No. 109 (FAS 109), Accounting for Income Taxes, from its inception. FAS
109 requires an asset and liability approach that recognizes deferred
tax assets and liabilities for the expected future tax consequences of
events that have been recognized in the Company's financial statements
or tax returns. In estimating future tax consequences, FAS 109 generally
considers all expected future events other than enactments of changes in
the tax law or rates.
Business activity:
The Company, a Nevada corporation, with its administrative office now
located in New York, was incorporated on February 20, 1985. At December
31, 1998, the Company had no operations, and was actively attempting to
acquire a business operation, or obtain one through merger with a
privately-held company seeking public status, (see Note 10).
Income (Loss) per Share:
The computation of income (loss) per share of common stock is based on
the weighted average number of shares outstanding during the periods
presented.
Use of Estimates:
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company to make estimates
and assumptions that affect (1) the reported amounts of assets and
liabilities, (2) disclosure of contingent assets and liabilities at the
date of the financial statements, and (3) reported amounts of revenues
and expenses during the reporting period. Actual results could differ
from those estimates.
NOTE 2 REORGANIZATION
On January 31, 1994, the company's reorganization plan was confirmed by
the United States Bankruptcy Court, District of Nevada. Pursuant
thereto, the Company acquired Asia Media Communications, Ltd. and
changed its name accordingly. The Company accounted for its
F-7
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
reorganization using "fresh start" reporting, thereby restating assets
and liabilities at reorganizing values, which approximates fair market
at the reorganization date. The Asia Media Communications, Ltd. balance
sheet as of January 31, 1994, (date of reorganization) follows:
ASSETS
Current Assets $ 6,445
Cash
Property and equipment: 501
Assets held for disposal
Other Assets 5,900
---------
Deposits
$ 12,846
=========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
Accounts payable $ 6,443
Accrued liabilities 25,500
Advances from Stockholders 17,943
---------
Total Current Liabilities 49,886
---------
Stockholders' (Deficit):
Common stock 160,132
Additional paid-in capital 536,549
Retained earnings -
---------
696,681
Less: Treasury stock 733,721
---------
Total Stockholders' (Deficit) (37,040)
---------
$ 12,846
=========
NOTE 3: ADVANCES FROM STOCKHOLDERS
During 1996, a new shareholder paid accounts payable aggregating $14,448
on behalf of the Company. The payments were substantially for
professional fees rendered. The indebtedness was non-interest bearing
and had no specific repayment terms. In 1998, the shareholder forgave
the indebtedness, (see Note 7), and the balance was credited to
professional fee cost.
NOTE 4: TREASURY STOCK
Treasury stock is shown at cost and consists of 771,290 shares of common
stock. The shares held in the treasury were adjusted for the effects of
a reverse 1 to 10 stock split.
F-8
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
NOTE 5: INCOME TAXES
Since the Company has not generated any taxable income since its
emergence from bankruptcy, no provision for income tax has been made.
Temporary differences giving rise to the deferred tax asset consist of
potential net operating loss carryforwards for both financial and tax
reporting purposes. However, Statement of Financial Accounting Standard
No. 109, Accounting for Income Taxes, allows the establishment of a
valuation allowance to offset any deferred tax asset that may result
from the recording of potential future net operating loss carryforwards.
Since it is unclear at this time whether any income tax benefit will be
realized in the future for the recognition of the Company's net
operating loss carryforward, an allowance was establish to reduce the
deferred tax asset as follows:
1998 1997
-------- ---------
Deferred tax asset for future benefits $(34,053) $ 28,720
of net operating loss carryforward
Less: valuation allowance to recognize
possible non-realization of net
operating loss carryforward (34,053) (28,720)
-------- ---------
$ - $ -
======== =========
The following temporary differences gave rise to the deferred tax assets
at December 31:
FOR THE YEAR ENDED
DECEMBER 31,
1998 1997
--------- ---------
Tax benefit of net operating loss $ (34,053) $ 28,720
carryforward
Valuation allowance for judgement of
realizability of net operating loss
carryforward in future years (34,053) (28,720)
--------- ---------
$ - $ -
========= =========
F-9
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
NOTE 5: INCOME TAXES - (CONTINUED)
A reconciliation of income tax expenses at the statutory rate to the
Company's effective rate is as follows:
FOR THE YEAR ENDED
DECEMBER 31,
1998 1997
--------- ---------
Computed at the expected statutory rate - -
Less: Tax benefit, current - -
--------- ---------
Income tax expense computed $ - $ -
At effective rate ========= =========
The Company can carry forward its $189,689 net operating loss as
follows:
YEAR OF EXPIRATION
2007 $ 106,561
2008 71,048
2009 12,080
---------
Total $ 189,689
=========
NOTE 6: GOING CONCERN CONTINGENCY
The Company reported losses from January 31, 1994, (date of
reorganization), through 1996. There was no operating activity in 1997.
In 1997, the Company sold a warrant for $50,000,(see Note 9), in order
to generate cash for operations; however, the Company reported a loss of
$35,552 in 1998 and the Company's ability to continue as a going concern
will depend upon management's acquiring profitable operations and the
ability to develop a sufficient cash flow to meet its obligations as
they become due.
NOTE 7: RELATED PARTY TRANSACTIONS
The Company presently operates from offices on a rent-free basis
utilized by the chairman and director. Actual space utilization is de
minimus in nature and is non-reimbursable. There are no pending lease
F-10
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
arrangements at the present time. In addition, the Company received a
debt forgiveness on prior working capital advances of $14,448. The debt
reduction was credited to operating expenses in the current period.
NOTE 8: CERTAIN TRANSACTIONS
Acquisition of K.G.I.:
In March 1996, the Company acquired Kremlyovskaya Group, Inc., (K.G.I.),
a privately-held Delaware corporation. K.G.I., through a wholly owned
subsidiary in Belgium, distributes vodka and other product in foreign
markets, primarily Russia. Subsequent thereto, the Company and K.G. I.,
by mutual consent, rescinded the merger acquisition as of the
acquisition date in 1996. Accordingly, the accompanying financial
statements report no transaction relative thereto, except the
cancellation of the shareholder indebtedness, (see Note 3).
Acquisition I.P.C. Australia:
On December 31, 1996, (the "Effective Date"), the Company, through its
newly formed, wholly owned subsidiary, AMC International Holdings Ltd.,
a British Virgin Islands corporation, ("AMC Holdings"), purchased from
I.P.C. Corporation, Ltd., a Singaporean corporation (the "Vendor"),
effective as of January 1, 1996, all of the issued and outstanding
capital stock of I.P.C. Corporation (Australia) Pty Ltd., an Australian
corporation ("IPC Australia"). The consideration paid was $1.00 in cash
plus the issuance to I.P.C. of 25 preference shares of AMC Holdings (the
"Preference Shares"), each having a stated value of $1,000,000, (the
"Stated Value"). The Preference Shares are exchangeable at any time and
from time to time at the option of the holder into shares of the
Company's common stock, par value $.01 per share, (the "Common Stock"),
on the basis of one share of Common Stock for each $2.00 of the Stated
Value of each share or part thereof of a Preference Share so exchanged
(subject to adjustment under certain circumstances including stock
splits and recapitalizations). The Preference Shares are also redeemable
at any time and from time to time at the option of the Company upon
payment of the Stated Value of each Preference Share or part thereof so
redeemed. In addition, I.P.C. assigned to AMC Holdings all of the
indebtedness of I.P.C. Australia to I.P.C. which on the Effective Date
was approximately $25,000,000.
The Company granted an option to AMC Holdings in order to effect the
exchange of Preference Shares for common shares as described above. In
1997, the Company and I.P.C. Corporation, Ltd. executed an agreement
that, subject to certain terms and conditions, I.P.C. agreed never to
exercise the option to exchange the Preference Shares pursuant to the
option agreement. Management is presently uncertain as to the legal
binding effect of the forbearance agreement upon an innocent purchaser
for value and, accordingly, reports the contingent commitment to honor
this option agreement, (See Note 9).
On September 1, 1997, the Company sold, for nominal cash, the capital
stock of AMC Holdings effective December 31, 1996, (date of
acquisition). The effect of this sale transaction, (which carried the
same terms and conditions as the purchase agreement of the same date),
was to completely negate the acquisition of I.P.C. Australia effectively
creating a rescinded purchase. The Company was thereby restored to its
same condition prior to the I.P.C. Australia purchase, with the
exception of the contingent obligations.
F-11
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
NOTES TO FINANCIAL STATEMENTS
NOTE 9: COMMITMENTS AND CONTINGENCIES
Option Agreement:
Pursuant to the I.P.C. Australia acquisition described in Note 8, the
Company granted its newly formed subsidiary, AMC Holdings, an option to
acquire 12,500,000 shares of the Company's common stock, (subject to
adjustment in the event of stock splits, recapitalizations, etc.), in
order to effect the exchange provision related to the preference
shares. Further, as described in Note 8, the agreement of forbearance
with respect to the option may not be binding upon a purchaser for
value. Accordingly, the Company may be forced to issue 12,500,000
shares of its common stock to such a purchaser and are thereby
reserved. The reverse split of the Company's outstanding stock effected
on February 23, 1999, reduced this contingency to 125,000 shares of
common stock.
Sale of Warrant:
In August 1997, the Company sold a warrant to purchase 1,000,000 shares
of its common stock to Ocean Strategic Holdings, Limited, (holder), at
an exercise price of $.01 per share. The Company received $50,000 as
consideration for the warrant. Under the terms of the warrant, the
holder's share rights may be adjusted to reflect certain capital
transactions that the Company may establish; however, in the event of a
stock split, the exercise price and number of shares shall not be
adjusted. The warrant is exercisable as of August 1, 1998 and expires
August 1, 2001. As of December 31, 1998, no shares had been issued
pursuant to the warrant and the Company had reserved 1,000,000 shares
of its common stock. In February, 1999, the holder exercised a purchase
of 500,000 shares under the warrant, at the exercise price of $.01 or
an aggregate of $5,000. Accordingly, the Company currently has 500,000
common shares reserved.
NOTE 10: SUBSEQUENT EVENTS
On February 23, 1999, the Company effected a one for 100 reverse split
of its outstanding common stock. No adjustment has been made in the
accompanying financial statements and the notes thereto to reflect such
reverse split.
On February 24, 1999, the Company acquired 100% of the issued and
outstanding capital stock of TecnoChannel Sdn BHd, a Malaysian
Corporation, ("TSB"), in exchange for an aggregate of 8,500,000 shares
of common stock. In connection with such acquisition, the Company
issued an aggregate of 440,000 shares of its common stock to GEM Ltd.
for its services as financial advisor to the Company.
TecnoChannel, which was formed in April, 1997 and operates under the
trade name "My Web", has developed with Philips Consumer Electronics
set-top boxes that enable Internet access via the television set. The
boxes are marketed and sold by Philips and include software developed
by TecnoChannel and Sun Microsystems. Approximately 15,000 of the boxes
are installed in Malaysia and Singapore. In addition, TecnoChannel has
developed and provides enabling technologies to manufacturers and
Internet service providers serving non-personal computer devices, (such
as the set-top boxes), to enhance the functionalities of such devices.
TecnoChannel also operates the My Web Online Service which is an
Internet portal providing interactive applications, such as e-commerce,
to both personal computer users and set-top box users.
F-12
<PAGE>
Arthur Andersen & Co.
Public Accountants
Level 1 - Block C (South)
Pusat Bandar Damansara, 50490 Kuala Lumpur
P.O. Box 11040, 50734 Kuala Lumpur, Malaysia
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Board of Directors of
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
We have audited the accompanying balance sheet of TECNOCHANNEL TECHNOLOGIES SDN.
BHD. (a Malaysian Incorporated Company) as of 31 December, 1998, and the related
statements of operations, shareholders' equity and cash flows for the year/9
month period ended 31 December, 1998 and 1997, respectively. 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 audit.
We conducted our audit in accordance with generally accepted auditing standards
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by the directors, as well as evaluating the overall
financial statements' presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the state of affairs of the Company as of 31 December,
1998 and of the results of operations, shareholders' equity and cash flows for
the year/9 month period ended 31 December, 1998 and 1997, respectively, in
conformity with generally accepted accounting principles in the United States of
America.
Arthur Andersen & Co.
Dated: 6 May, 1999
Kuala Lumpur, Malaysia
F-13
<PAGE>
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
(INCORPORATED IN MALAYSIA)
BALANCE SHEETS AS OF 31 DECEMBER, 1998
NOTE USD*
----
CURRENT ASSETS
Cash and bank balances 270
Accounts receivable 1,100,492
Other debtors, deposits and prepayments 6,176
----------
1,106,938
FIXED ASSETS 3 53,941
----------
TOTAL ASSETS 1,160,879
==========
CURRENT LIABILITIES
Trade accounts payable 408,306
Other accounts payable 355,287
Amount due to directors 4 37,271
----------
800,864
----------
SHAREHOLDERS' EQUITY
Ordinary shares of RM1.00 par value;
5,000,000 ordinary shares authorized; 900,000
ordinary shares issued and fully paid 236,842
Retained earnings 123,173
----------
360,015
----------
1,160,879
==========
* Refer to Note 2(e)
The accompanying notes are an integral part of these balance sheets.
F-14
<PAGE>
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
(INCORPORATED IN MALAYSIA)
STATEMENTS OF OPERATIONS
FOR THE YEAR/9 MONTH PERIOD ENDED 31 DECEMBER, 1998 AND 1997
<TABLE>
<CAPTION>
9 MONTHS ENDED YEAR ENDED
NOTE 31DEC 1997 31 DEC 1998
---- ---------- -----------
USD* USD*
<S> <C> <C> <C>
Revenue 5 102,367 1,310,843
Selling, general and administrative
expenses (354,700) (935,337)
------------------ ------------------
(Loss)/profit before taxation (252,333) 375,506
Taxation 6 - -
------------------ ------------------
(Loss)/profit after taxation (252,333) 375,506
Retained deficit - (252,333)
------------------ ------------------
Retained (deficit) earnings (252,333) 123,173
================== ==================
</TABLE>
* Refer to Note 2(e)
The accompanying notes are an integral part of these statements.
F-15
<PAGE>
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
(INCORPORATED IN MALAYSIA)
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEAR/9 MONTH PERIOD ENDED 31 DECEMBER, 1998 AND 1997
<TABLE>
<CAPTION>
ORDINARY SHARES RETAINED (DEFICIT)/
--------------------------
SHARES AMOUNT EARNINGS SHAREHOLDERS' EQUITY
------ ------ ------------------ ---------------------------
USD* USD* USD*
<S> <C> <C> <C> <C>
Issuance of ordinary shares upon
incorporation 2 1 - 1
Issuance of ordinary shares to
Ambang Dinamik Sdn. Bhd. 99,998 26,315 - 26,315
Net loss - - (252,333) (252,333)
-------------------------- --------------- -----------------
BALANCE, 31 December, 1997 100,000 26,316 (252,333) (226,017)
Issuance of ordinary shares to
Ambang Dinamik Sdn. Bhd. 260,000 68,421 - 68,421
Issuance of ordinary shares to Star
Channel Systems Sdn. Bhd. 540,000 142,105 - 142,105
Net profit - - 375,506 375,506
========================== =============== =================
BALANCE, 31 December, 1998 900,000 236,842 123,173 360,015
========================== =============== =================
</TABLE>
* Refer to Note 2(e)
The accompanying notes are an integral part of these statements.
F-16
<PAGE>
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
(INCORPORATED IN MALAYSIA)
CASH FLOW STATEMENTS
FOR THE YEAR/9 MONTHS PERIOD ENDED 31 DECEMBER, 1998 AND 1997
<TABLE>
<CAPTION>
9 MONTHS YEAR
ENDED ENDED
31 DEC 1997 31 DEC 1998
USD* USD*
------------ --------------
<S> <C> <C>
CASH FLOW FROM OPERATING ACTIVITIES
(Loss)/profit before taxation (252,332) 375,506
Adjustments for:
Depreciation 8,677 11,934
Unrealised loss on foreign exchange - 12,977
------------ --------------
Operating/(loss) profit before working capital (243,655) 400,417
changes
Increase in accounts receivable (106,176) (1,013,468)
Increase in accounts payable 212,330 551,264
------------ --------------
Net cash used in operating activities (137,501) (61,787)
------------ --------------
CASH FLOW FROM INVESTING ACTIVITY
Purchase of fixed assets (54,583) (19,972)
------------ --------------
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from issuance of shares 26,316 210,526
Proceeds from directors' loan 171,424 -
Repayment of amount due to directors - (134,153)
------------ --------------
Net cash generated from financing activities 197,740 76,373
------------ --------------
NET INCREASE/(DECREASE) IN CASH 5,656 (5,386)
CASH AT BEGINNING OF THE YEAR - 5,656
------------ --------------
CASH AT END OF THE YEAR 5,656 270
============ ==============
</TABLE>
* Refer to Note 2(e)
The accompanying notes are an integral part of these statements.
F-17
<PAGE>
TECNOCHANNEL TECHNOLOGIES SDN. BHD.
(INCORPORATED IN MALAYSIA)
NOTES TO THE ACCOUNTS - 31 DECEMBER, 1998 AND 1997
1. PRINCIPAL ACTIVITY
The Company is principally engaged in the development, production and
marketing of internet related products and services. There has been no
significant change in the principal activity during the financial year/9
month period ended 31 December, 1998 and 1997, respectively.
2. SIGNIFICANT ACCOUNTING POLICIES
(A) BASIS OF ACCOUNTING
The financial statements are prepared under the historical cost
convention and comply with generally accepted accounting principles in
the United States of America.
(B) FIXED ASSETS AND DEPRECIATION
Fixed assets are stated at cost less accumulated depreciation.
Depreciation is provided on a straight line basis calculated to write
off the cost of each asset over its estimated useful life. The
principal annual rates of depreciation are:
Communication equipment 12%
Office equipment 20%
Furniture and fittings 10%
Motor vehicles 16%
(C) DEFERRED TAXATION
Deferred taxation is provided under the liability method for all
material temporary differences. Where it is more likely than not that
some portion of a deferred tax amount will not be realised, a valuation
allowance is provided.
(D) CURRENCY CONVERSION AND TRANSLATION
Transactions in foreign currencies during the year are converted into
Ringgit Malaysia at rates of exchange approximating those ruling at the
transaction dates. Foreign currency monetary assets and liabilities at
the balance sheet date are translated into Ringgit Malaysia at rates of
exchange approximating those ruling at that date. All exchange gains or
losses are dealt with in the statement of operations.
(E) CONVENIENCE TRANSLATION
The financial statements were initially prepared in Ringgit Malaysia
("RM"). The translations of RM into U.S. Dollars ("USD") are included
solely for the convenience of the reader, using the fixed currency
conversion ratio of RM3.80 to USD1.00. The convenience translations
should not be construed as representations that the RM amounts have
been, could have been, or could in the future be converted into USD at
this or any other rate of exchange.
F-18
<PAGE>
(F) USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles in the United States of America requires
management to make estimates and assumptions that affect the reported
amounts of assets and liabilities and disclosure of contingent assets
and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
3. FIXED ASSETS
<TABLE>
<CAPTION>
FURNITURE
COMMUNICATION OFFICE AND MOTOR
TOTAL EQUIPMENT EQUIPMENT FITTINGS VEHICLE
----- --------- --------- -------- -------
USD USD USD USD USD
<S> <C> <C> <C> <C> <C>
COST
At 1 January, 1998 54,582 3,293 31,530 19,759 -
Additions 19,970 - 1,549 - 18,421
------------------------------------------------------------------
At 31 December, 1998
74,552 3,293 33,079 19,759 18,421
------------------------------------------------------------------
Accumulated Depreciation
At 1 January, 1998 8,677 395 6,306 1,976 -
Additions 11,934 395 6,615 1,977 2,947
------------------------------------------------------------------
At 31 December, 1998
20,611 790 12,921 3,953 2,947
==================================================================
Net Book Value 53,941 2,503 20,158 15,806 15,474
==================================================================
</TABLE>
4. AMOUNT DUE TO DIRECTORS
The amounts relate to advances to the Company for working capital purposes
and are unsecured, interest free and have no fixed term of repayment.
5. REVENUE RECOGNITION
Revenue represents the invoiced value of licensing and advertising services
rendered and subscribers' fees.
6. TAXATION
There is no tax charge for the year/9 month period ended December 31, 1998
and 1997, respectively, as the Company was granted Multimedia Super
Corridor ("MSC") status on 19 August, 1997 under the Promotion of
Investments Act, 1986 which entitled the Company to claim for pioneer
status on its business income.
7. SIGNIFICANT RELATED PARTY TRANSACTIONS
31 Dec 1997 31 Dec 1998
USD USD
Purchase of motor vehicle from a company in
which a director has an interest - 18,421
========== =============
F-19
<PAGE>
8. RELIANCE ON ONE SINGLE CUSTOMER
During the financial year ended 31 December, 1998, the Company relied on
one single major customer which represented approximately 77% of total
revenue.
During the financial period ended 31 December, 1997, the year of
incorporation, the Company had two customers.
9. SUBSEQUENT EVENT
On 24 February, 1999, the Company became a wholly owned subsidiary company
of Asia Media Communications Ltd., a company incorporated in the State of
Nevada, United States of America.
10. 1997 FIGURES
The figures are for the 9 month period from 5 April, 1999 (date of the
Company's inception) to 31 December, 1997.
F-20
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
JUNE 30, 1999
-------------
(HISTORICAL)
ASSETS:
- -------
Current Assets:
Cash and cash equivalents $ 3,815,517
Accounts receivable, net 430,541
Inventories 43,338
Prepaid expenses and other current assets 359,163
-----------
Total Current Assets 4,648,559
-----------
Property and equipment, net 188,248
-----------
$ 4,836,807
===========
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable, trade $ 585,905
Other accounts payable 288,129
Due to directors 75,162
-----------
Total Current Liabilities 949,196
-----------
Shareholders' Equity:
Common stock, par value $.01; authorized
100,000,000 shares; issued, 10,679,319 shares;
outstanding 10,671,606 shares 106,717
Additional paid-in capital 5,558,247
Retained earnings (deficit) (1,043,576)
Currency translation adjustment (56)
-----------
4,621,332
Less: Treasury stock, at cost 733,721
-----------
Total Shareholders' Equity 3,887,611
-----------
$ 4,836,807
===========
F-21
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998
---------------- -----------------
(HISTORICAL) (PRO FORMA)*
Revenues:
Net Sales and licensing $ 2,884,634 $ 254,996
Interest 40,423 -
Other 1,278 -
---------- ----------
Total Revenues 2,926,335 254,996
---------- ----------
Costs and Expenses:
Cost of sales 950,823 57,173
Sales and marketing 2,467,256 86,250
Product development 55,735 27,705
General administration 619,271 86,180
---------- ----------
Total Costs and 4,093,085 257,308
---------- ----------
Expenses
Net Income (Loss) $(1,166,750) $ (2,312)
---------- ----------
Income (Loss) per share $ (.12) $ (.00)
========== ==========
Average number of common shares 9,730,773 8,555,355
outstanding (post split) ========== ==========
* Gives effect to MyWeb's acquisition of TecnoChannel Technologies as if it had
occurred on TecnoChannel Technologies' date of inception (April 5, 1997).
F-22
<PAGE>
MY WEB, INC.COM
(FORMERLY ASIA MEDIA COMMUNICATIONS, LTD.)
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998
---------------- -----------------
(HISTORICAL) (PRO FORMA)*
Cash Flows from Operating Activities:
Net income (loss) $(1,166,750) $ (2,312)
Adjustments:
Depreciation 8,684 5,967
Currency exchange - unrealized 1,450 -
Common stock issuance for 4,400 -
consulting services
Disposition of equipment 3,251 -
Shareholder debt forgiveness - -
Working Capital Adjustments:
(Increase) Decrease in inventories (43,338) -
(Increase) Decrease in accounts 670,258 (90,503)
receivable, trade
(Increase) Decrease in prepaids (352,702) -
and other
Increase in accounts payable 112,954 61,219
---------- ----------
Cash Flows from Operating Activities (761,793) (25,629)
----------- -----------
Cash Flows from Investing Activities:
Acquisition of property and equipment (146,232) (19,444)
----------- -----------
Cash Flows from Financing Activities:
Proceeds on issuance of common stock 4,690,000 210,526
Repayments on due to directors 22,424 (157,835)
---------- -----------
Cash Flows from Financing Activities 4,712,424 52,691
---------- ----------
Increase in cash and cash equivalents 3,804,399 7,618
Cash balance, beginning 11,118 55,656
---------- ----------
Cash balance, end $ 3,815,517 $ 63,274
========== ==========
Supplementary Data:
Interest income received in operations $ 40,423 $ -
========== ==========
* Gives effect to MyWeb's acquisition of TecnoChannel Technologies as if it had
occurred on TecnoChannel Technologies' date of inception (April 5, 1997).
F-23
<PAGE>
MYWEB INC.COM HAS NOT AUTHORIZED ANY PERSON TO GIVE YOU INFORMATION THAT DIFFERS
FROM THE INFORMATION IN THIS PROSPECTUS. YOU SHOULD RELY SOLELY ON THE
INFORMATION CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO
SELL THESE SECURITIES, AND WE ARE NOT SOLICITING OFFERS TO BUY THESE SECURITIES
IN ANY STATE WHERE THE OFFER OR SALE OF THESE SECURITIES IS NOT PERMITTED. THE
INFORMATION IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE OF THIS
PROSPECTUS, EVEN IF THE PROSPECTUS IS DELIVERED TO YOU AFTER THE PROSPECTUS
DATE, OR YOU BUY MYWEB INC.COM COMMON STOCK AFTER THE PROSPECTUS DATE.
TABLE OF CONTENTS
PROSPECTUS SUMMARY.........................................................2
RISK FACTORS...............................................................5
USE OF PROCEEDS...........................................................26
PRICE RANGE FOR OUR COMMON STOCK..........................................26
OUR DIVIDEND POLICY.......................................................26
CAPITALIZATION............................................................27
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS.................28
SELECTED CONSOLIDATED FINANCIAL INFORMATION...............................29
PRO FORMA CONSOLIDATED FINANCIAL INFORMATION..............................30
MANAGEMENT'S DISCUSSION AND ANALYSIS......................................33
INFORMATION ABOUT MYWEB...................................................37
EXECUTIVE OFFICERS AND DIRECTORS..........................................49
EXECUTIVE COMPENSATION....................................................50
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS............................51
SELLING SHAREHOLDERS......................................................52
PLAN OF DISTRIBUTION......................................................55
DESCRIPTION OF CAPITAL STOCK..............................................56
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT............56
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE............................................58
LAWYERS...................................................................59
EXPERTS...................................................................59
ENFORCEABILITY OF CERTAIN CIVIL LIABILITIES...............................59
WHERE YOU CAN FIND MORE INFORMATION.......................................59
INDEX TO FINANCIAL STATEMENTS............................................F-1
1,210,750 SHARES
[GRAPHIC OMITTED]
MYWEB INC.COM
COMMON STOCK
PROSPECTUS
October ___, 1999
<PAGE>
PART II
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by Section 78.751 of the Nevada General Corporation Law,
our Bylaws provide for the indemnification by MyWeb, including suits brought by
or on our behalf, of each director, officer, employee or agent thereof to the
fullest extent permitted by Nevada law.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses, other than
underwriting discounts and commissions, payable by MyWeb in connection with the
sale of common stock being registered (all amounts are estimated except the SEC
registration fee ). The selling shareholders will only pay the brokerage
commissions, discounts or other expenses relating to the sale of the common
stock.
SEC registration fee $ 6,510
-------------
Blue sky fees and expenses (including legal fees) $ *
-------------
Printing expenses $ *
-------------
Legal fees and expenses (other than blue sky) $ *
-------------
Accountants' fees and expenses $ *
-------------
Miscellaneous expenses $ *
-------------
Total estimated expenses $ *
-------------
* To be filed by amendment.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES.
Within the past three years, we have sold securities pursuant to the
following transactions, all of which were exempt from the registration
requirements of the Securities Act of 1933, as amended (the "Act").
- On March 18, 1996, we issued an aggregate of 89,125,000
shares of our common stock to 14 parties in connection
with the merger of Kremlyovskaya Group, Inc. with and into
a wholly-owned subsidiary of MyWeb. All of such parties
were sophisticated investors and the shares were offered
and sold in reliance upon the exemption from registration
provided by Section 4(2) of the Act. On August 15, 1996,
the merger was rescinded and all of the shares were
returned to us.
- On December 26, 1996, we granted an option for no
consideration to our wholly-owned subsidiary, AMC
International Holdings Ltd., a British Virgin Islands
corporation ("AMC Holdings"), to acquire, for no
consideration, such number of shares of our common stock
as may be required to effect the exchange of preference
shares to be issued to AMC Holdings. On December 31, 1996,
AMC Holdings issued 25 preference shares to IPC
Corporation, a publicly traded company in Singapore, in
connection with the acquisition of a wholly-owned
subsidiary of IPC Corporation. The option was granted in
reliance upon the exemption from registration provided in
Section 4(2) of the Act.
- On August 1, 1997, we sold a warrant to purchase 1,000,000
shares of our common stock to Ocean Strategic Holdings,
Limited, a Guernsey corporation, for $50,000 in cash. The
warrant's exercise price is $.01 per share, provided that
both the exercise price per share and the number of shares
issuable upon exercise of the warrant are subject to
adjustment
II-1
<PAGE>
upon the happening of certain events, except for a reverse
stock split in which case no adjustment is to be made. The
warrant is exercisable between August 1, 1998 and August
1, 2001. On February 25, 1999 Ocean Strategic Holdings
exercised its rights under the warrant to purchase 500,000
shares of our common stock; on April 1, 1999 Ocean
Strategic Holdings exercised its rights under the warrant
to purchase an additional 400,000 shares of our common
stock; and on August 4, 1999 Ocean Strategic Holdings
exercised its rights under the warrant to purchase an
additional 100,000 shares of our common stock. The warrant
and the shares issued upon the exercise thereof were
issued in reliance upon Regulation S under the Act.
- On February 24, 1999, we issued:
- 8,500,000 shares of our common stock to 20 parties
in connection with the acquisition of all of the
capital stock of TecnoChannel Technologies Sdn Bhd,
a Malaysian corporation, and
- 440,000 shares of common stock to GEM Ventures
Ltd., an investment banking firm, in consideration
of their services as financial advisor to the
company with regard to the acquisition of
Tecnochannel Technologies. All of the former
shareholders of TecnoChannel Technologies and GEM
Ventures are accredited investors and the shares
were issued in reliance upon the exemption from
registration provided in Section 4(2) of the Act
and Regulation D promulgated thereunder.
- In May 1999 we issued 526,250 shares of our common stock
to 13 accredited investors in a private placement for an
aggregate of $3,780,000. The shares were issued in
reliance upon the exemption from registration provided in
Section 4(2) of the Act and Regulation D thereunder.
ITEM 27. EXHIBITS.
See the Exhibit Index filed herewith.
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes as follows:
(1) To file, during any period in which offers or sales of securities
are being made, a post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) reflect in the prospectus any facts or events which,
individually or together, represent a fundamental change
in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total dollar value of
securities offered would not exceed that which was
registered) and any deviation from the low or high end of
the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant
to Rule 424(b) if, in the aggregate, the changes in volume
and price represent no more than a 20 percent change in
the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective
registration statement;
(iii) include any additional or changed material information on
the plan of distribution.
II-2
<PAGE>
(2) For determining liability under the Securities Act of 1933 (the
"Act"), each post-effective amendment shall be treated as a new registration
statement of the securities offered, and the offering of the securities at that
time shall be treated as the initial bona fide offering.
(3) To file a post-effective amendment to remove from registration any
of the securities that remain unsold at the end of the offering.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers or persons controlling MyWeb, MyWeb has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements of filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in Kuala Lumpur,
Malaysia on this 22nd day of October, 1999.
MyWeb Inc.com
By: /s/ T.S. Wong
---------------------------------
T.S. Wong
President and Chief Executive Officer
In accordance with the requirements of the Securities Act of 1933, this
Registration Statement was signed by the following persons in the capacities and
on the dates stated.
/s/ T.S. Wong Director, President and Chief October 22, 1999
- --------------------- Executive Officer
T. S. Wong
/s/ Victor Ng Director and Chief Financial Officer October 22, 1999
- ---------------------
Victor Ng
POWER OF ATTORNEY
Each person whose signature appears above severally hereby constitutes
and appoints T.S. Wong and Victor Ng, and each of them singly, our true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, to sign for him or her and in his or her name, place and stead
in any and all capacities indicated below, the Registration Statement on Form
SB-2 filed herewith and any and all pre-effective and post-effective amendments
to said Registration Statement, and to file the same, with all exhibits thereto
and other documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary fully to all intents and purposes as he might or could
do in person thereby ratifying and confirming all that said attorneys-in-fact
and agents or any of them, or their or his substitute, may lawfully do or cause
to be done by virtue hereof.
II-4
<PAGE>
EXHIBIT LIST
2.1 Plan of Reorganization (incorporated by reference to the Report on Form
10-SB of Asia Media Communications, Ltd., filed with the Commission on
February 23, 1994)
2.2 Acquisition Agreement dated February 24, 1999, by and among Asia Media
Communications, Ltd. and the stockholders of TecnoChannel Technologies
Sdn Bhd (incorporated by reference to the Current Report on Form 8-K of
Asia Media Communications, Ltd. (Commission File No. 0-23462), filed
with the Commission on March 11, 1999)
3.1(a) Articles of Incorporation of Sperzel-NV, Inc. (incorporated by reference
to the Report on Form 10-SB of Asia Media Communications, Ltd., filed
with the Commission on February 23, 1994)
3.1(b) Certificate Amending Articles of Incorporation of Sperzel-NV, Inc.
(incorporated by reference to the Report on Form 10-SB of Asia Media
Communications, Ltd., filed with the Commission on February 23, 1994)
3.1(c) Certificate of Amendment of Articles of Incorporation of Sperzel-NV,
Inc. (incorporated by reference to the Report on Form 10-SB of Asia
Media Communications, Ltd., filed with the Commission on February 23,
1994)
3.1(d) Certificate of Amendment of Articles of Incorporation of Asia Media
Communications, Ltd. (incorporated by reference to the Registration
Statement on Form S-8 of MyWeb Inc.com (Registration No. 333-81823),
filed with the Commission on June 29, 1999)
3.1(e) Certificate of Amendment of Articles of Incorporation of Asia Media
Communications, Ltd.
3.1(f) Restated Articles of Incorporation of MyWeb Inc.com
3.2 Registrant's By-laws (incorporated by reference to the Report on Form
10-SB of Asia Media Communications, Ltd., filed with the Commission on
February 23, 1994)
*5.1 Opinion of Baker & McKenzie
10.1 Agreement and Plan of Merger, dated March 18, 1996, by and among Asia
Media Communications, Ltd., AMC Merger Co., Inc., Kremlyovskaya Group,
Inc., Riccardo Franchini and Richard Gaspar (incorporated by reference
to the Current Report on Form 8-K of Asia Media Communications
(Commission File No. 0-23462), filed with the Commission on April 2,
1996)
10.2 Rescission Agreement, dated as of August 15, 1996, by and among Asia
Media Communications, Ltd., Kremlyovskaya Group, Inc., Kremlyovskaya
Group NV, Riccardo Franchini, Richard Gaspar, Yakov Tillman, Tadeus
Tonley, Valentin Kassatkine, Guerman Liberman, Youri Bykhovski, Wengen
Investments Ltd., Redwatch Investments Inc. SA, Safine A.G., Wallflower
Investments Inc., SA, Able Investments Ltd., Whitehall Investments
Company Inc. and Merton Trustees Limited (incorporated by reference to
the Current Report on Form 8-K of Asia Media Communications, Ltd.
(Commission File No. 0-23462), filed with the Commission on October 15,
1996)
10.3 Consulting Agreement, dated as of October 30, 1996, between Asia Media
Communications, Ltd. and Ian Rice (incorporated by reference to the
Current Report on Form 8-K of Asia Media Communications, Ltd.
(Commission File No. 0-23462), filed with the Commission on November 7,
1996)
10.4 Option Agreement, dated as of December 26, 1996, between Asia Media
Communications, Ltd. and AMC International Holdings, Ltd. (incorporated
by reference to the Report on Form 10-KSB of Asia Media Communications,
Ltd. (Commission File No. 0-23462) for the fiscal year ended December
31, 1996, filed with the Commission on December 30, 1998)
II-5
<PAGE>
10.5 Written Consent of the Sole Director of AMC International Holdings,
Ltd., dated as of December 27, 1996 (incorporated by reference to the
Report on Form 10-KSB of Asia Media Communications, Ltd. (Commission
File No. 0-23462) for the fiscal year ended December 31, 1996, filed
with the Commission on December 30, 1998)
10.6 Share Acquisition Agreement, dated December 1996, among IPC Corporation,
Asia Media Communications, Ltd. and AMC International Holdings, Ltd.
(incorporated by reference to the Report on Form 10-KSB of Asia Media
Communications, Ltd. (Commission File No. 0-23462) for the fiscal year
ended December 31, 1996, filed with the Commission on December 30, 1998)
10.7 Letter Agreement, dated April 1, 1997, between AMC International
Holdings, Ltd. and IPC Corporation (incorporated by reference to the
Report on Form 10-KSB of Asia Media Communications, Ltd. (Commission
File No. 0-23462) for the fiscal year ended December 31, 1996, filed
with the Commission on December 30, 1998)
10.8 Warrant, dated August 1, 1997, to purchase 1,000,000 shares of the
common stock of Asia Media Communications, Ltd. issued to Ocean
Strategic Holdings Limited (incorporated by reference to the Report on
Form 10-KSB of Asia Media Communications, Ltd. (Commission File No.
0-23462) for the fiscal year ended December 31, 1996, filed with the
Commission on December 30, 1998)
10.9 Share Purchase Agreement, dated September 1, 1997, by and between
Parthanon Investment Corporation and Asia Media Communications, Ltd.
(incorporated by reference to the Report on Form 10-KSB of Asia Media
Communications, Ltd. (Commission File No. 0-23462) for the fiscal year
ended December 31, 1996, filed with the Commission on December 30, 1998)
10.10 Acquisition Agreement, dated February 24, 1999, by and among Asia Media
Communications, Ltd., TecnoChannel Technologies Sdn Bhd, all
stockholders of TecnoChannel Technologies Sdn Bhd and GEM Ventures Ltd.
(incorporated by reference to the Current Report on Form 8-K of Asia
Media Communications, Ltd. (Commission File No. 0-23462), filed with the
Commission on March 11, 1999)
10.11 1999 Non-Qualified Stock Option Plan of MyWeb Inc.com (incorporated by
reference to the Registration Statement on Form S-8 of MyWeb Inc.com
(Registration No. 333-81823), filed with the Commission on June 29,
1999)
10.12 Asia Media Communications, Inc. 1999 Incentive Program (incorporated by
reference to the Registration Statement on Form S-8 of Asia Media
Communications, Ltd. (Registration No. 333-76289), filed with the
Commission on April 14, 1999)
10.13 Employment Agreement, dated April 2, 1997, between T.S. Wong and
TecnoChannel Sdn Bhd
10.14 Tenancy Agreement, dated April 28, 1999, by and between Selekta Bakti
Sdn Bhd and TecnoChannel Technologies Sdn Bhd
10.15 Tenancy Agreement, dated April 28, 1999, by and between Woi Seen Chin
Enterprises Sdn Bhd and TecnoChannel Technologies Sdn Bhd
10.16 Rental of Storage Space Agreement, dated March 16, 1999, by and between
Woo Ah Lek and TecnoChannel Technologies Sdn Bhd
10.17 Office Service Agreement, dated June 3, 1999, by and between
Alliance/Interoffice San Francisco, LLC and MyWeb Inc.com
10.18 Lease Agreement, dated April 29, 1999, by and between MyWeb Asia
Pte.Ltd. and Lee Wing Han
II-6
<PAGE>
*10.19 Binary License and Redistribution Agreement, dated March 25, 1999, by
and between Sun Microsystems, Inc. and Tecnochannel Sdn Bhd
*10.20 License Agreement dated January 4, 1999 by and between TecnoChannel
Technologies Sdn Bhd and NetChina
*10.21 Memorandum of Understanding dated March 15, 1999 by and between MyWeb
Inc.com and Masslink
*10.22 Agreement dated June 16, 1999 by and between MyWeb Inc.com and Xin Hua
Organization
*10.23 Memorandum of Understanding on Joint Venture dated April 7, 1999 by and
between MyWeb Inc.com and Xihu Electronics Group Ltd, SOYEA Ltd
*10.24 Joint Venture Agreement dated July 12, 1999 by and between MyWeb Inc.com
and Qingdao Haier Computer Co., Ltd.
*10.25 Memorandum of Understanding dated April 8, 1999 by and between MyWeb
Inc.com and Lang Chao Computer Co
*10.26 Service Agreement dated January 2, 1999 by and between TecnoChannel
Technologies Sdn Bhd and Unilever (Malaysia) Holdings Sdn Bhd
*10.27 Agreement dated December 8, 1997 by and between TecnoChannel Sdn Bhd and
Philips Consumer Electronics B.V.
*10.28 Joint Venture Agreement dated April 12, 1999 by and between Asia Media
Communications, Ltd. and Beijing Telecom Communication Ltd
*10.29 License Agreement dated May 4, 1999 by and between TecnoChannel
Technologies Sdn Bhd and HKNet Co Ltd
*10.30 Agreement dated April 5, 1999 by and between TecnoChannel Technologies
Sdn Bhd and Euro-American Business Group/Associated Medical Devices (for
Germany/Turkey)
*10.31 Agreement dated June 4, 1999 by and between TecnoChannel Technologies
Sdn Bhd and Euro-American Business Group/Associated Medical Devices (for
Brazil/Argentina)
*10.32 Memorandum of Understanding dated May 19, 1999 by and between MyWeb
Inc.com and China Sci-Technologies International Trust & Investment Co.
Ltd
*10.33 Lease Agreement dated June 2, 1999 by and between MyWeb Inc.com and
Beijing Chongwen-New World Properties Development Co. Ltd.
*10.34 Letter of Agreement dated June 22, 1999 by and between MyWeb Inc.com and
Ogilvy Public Relations Worldwide
*10.35 Manufacturing Agreement dated April 7, 1999 between SOYEA Ltd and MyWeb
Inc.com
*10.36 Manufacturing Contract dated May 18 1999 between Westlake and MyWeb
Inc.com.com
*10.37 License Agreement dated April 12, 1999 between Beijing Telecom and MyWeb
Inc.com
II-7
<PAGE>
*10.38 Licensing Agreement between Chong Wang Sin Xi and MyWeb Inc.com
*10.39 Licensing Agreement between Masslink and MyWeb Inc.com
*10.40 Joint Venture Agreement dated April 12, 1999 between ChinaNet and MyWeb
Inc.com
16 Letter, dated December 28, 1998 from Albright, Persing & Associates,
Ltd., our former principal accountants, to the Securities and Exchange
Commission pursuant to Item 304(a)(3) of Regulation S-B (incorporated by
reference to the Report on Form 10-KSB of Asia Media Communications,
Ltd. (Commission File No. 0-23462) for the fiscal year ended December
31, 1996, filed with the Commission on December 30, 1998)
21 Subsidiaries of the Registrant
23.1 Consent of Wlosek & Braverman, L.L.C.
23.2 Consent of Arthur Andersen & Co.
23.3 Consent of Baker & McKenzie (included in Exhibit 5.1)
- ---------------
* To be filed by amendment
II-8
<PAGE>
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(AFTER ISSUANCE OF STOCK)
ASIA MEDIA COMMUNICATIONS, LTD.
We the undersigned, Edward J. Tobin, President and Steven A. Saide,
Secretary of Asia Media Communications, Ltd. do hereby certify:
That the Board of Directors of said corporation by Unanimous Written
Consent of the Board of Directors dated January 11, 1999, adopted a resolution
to amend the original articles as follows:
Article FOURTH is hereby amended to read as follows:
"FOURTH: That the total number of shares of voting common stock
authorized that may be issued by the Corporation is ONE HUNDRED
MILLION (100,000,000) shares of stock with a par value of One Cent
($0.01) per share and no other class of stock shall be authorized.
Said shares of stock with a par value of ONE CENT ($0.01) per share
may be issued by the Corporation from time to time for such
consideration as may be fixed from time to time by the Board of
Directors. Each 100 shares of common stock outstanding, at 9:00 a.m.
February 23, 1999 shall be deemed to be one share of common stock of
the Corporation, par value ONE CENT ($0.01) per share."
The number of shares of the corporation outstanding and entitled to vote on
an amendment to the Articles of Incorporation is 5,535,586 shares of Common
Stock; that the said change and amendment has been consented to and approved by
a majority vote of the stockholders holding at least a majority of each class of
stock outstanding and entitled to vote thereon.
/s/ Edward J. Tobin
------------------------------------
Edward J. Tobin, President
/s/ Steven A. Saide
------------------------------------
Steven A. Saide, Secretary
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On February 19, 1999, personally appeared before me, a Notary Public,
Steven A. Saide who acknowledged that they executed the above instrument.
/s/ Karen Johnson
--------------------------------
Signature of Notary
<PAGE>
STATE OF NEW YORK )
) ss.
COUNTY OF NEW YORK )
On February 19, 1999, personally appeared before me, a Notary Public,
Edward J. Tobin, who acknowledged that he executed the above instrument.
/s/ Steven A. Saide
--------------------------------
Signature of Notary
2
<PAGE>
RESTATED ARTICLES OF INCORPORATION
OF
MYWEB INC. COM
Pursuant to the provisions of Nevada Revised Statutes, Title 7, Chapter 78,
it is hereby certified that:
1. The name of the corporation (the "Corporation") is:
My Web Inc.com
2. Annexed hereto and made a part hereof is the entire text of the Articles
of Incorporation of the Corporation as heretofore amended and as hereby
restated.
FIRST: The name of the corporation is My Web Inc.com (hereinafter
called the "Corporation").
SECOND: Its Principal office in the State of Nevada is located in 2527
North Carson Street, Suite 205, Carson City, Nevada 89701, that the Corporation
may maintain an office, or offices, in such other place within or without the
State of Nevada as may be from time to time designated by the Board of
Directors, or by the By-Laws of said Corporation, and that this Corporation may
conduct all Corporation business of every kind and nature, including the holding
as of all meetings of Directors and Stockholders, outside the State of Nevada as
well as within the State of Nevada.
THIRD: The objects for which this Corporation is formed are:
To engage in any lawful activity, including, but not limited to the following:
(A) Shall have such rights, privileges and powers as may be conferred upon
corporations by any exiting law.
(B) May at any time exercises such rights, privileges and powers, when not
inconsistent with the purposes and objects for which this Corporation is
organized.
(C) Shall have power to have succession by its corporate name for the
period limited in its certificate or articles of incorporation, and when no
period is limited, perpetually, or until dissolved and its affairs wound up
according to law,
(D) Shall have power to sue and be sued in any court of law or equity.
(E) Shall have power to make contracts.
(F) Shall have power to hold, purchase and convey real and personal estate
and to mortgage or lease any such real and personal estate with its franchises.
The power to hold real and personal estate shall include the power to take the
same by devise or bequest in the State of Nevada, or in any other state,
territory or country.
<PAGE>
(G) Shall have power to appoint such officers and agents as the affairs of
the Corporation shall require, and to allow them suitable compensation.
(H) Shall have power to make bylaws not inconsistent with the constitution
or laws of the United States, or of the State of Nevada, for the management,
regulation and government of its affairs and property, the transfer of its
stock, the transaction of its business, and the calling and holding of meeting
of its stockholders.
(I) Shall have the power to wind up and dissolve itself, or be wound up or
dissolved.
(J) Shall have power to adopt and use a common seal or stamp, and alter the
same at pleasure. The sue of a seal or stamp by the Corporation on any corporate
documents is not necessary. The Corporation may use a seal or stamp, if its
desires, but such use or nonuse shall not in any way affect the legality of the
document.
(K) Shall have the power to borrow money and contract debts when necessary
for the transaction of its business, or for the exercise of its corporate
rights, privileges or franchises, or for any other lawful purposes of its
incorporation; to issues bonds, promissory notes, bills of exchange, debentures,
and other obligations and evidences of indebtedness, payable at a specified time
or times, or payable upon the happening of a specified event or events, whether
secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or
in payment for property purchased, or acquired, or for any other lawful object.
(L) Shall have power to guarantee, purchase, hold, sell, assign, transfer,
mortgage, pledge or otherwise dispose of the shares of the capital stock of, or
any bonds, securities or evidences of the indebtedness created by, and other
corporation, or corporations of the State of Nevada, or any other state or
government, and, while owners of such stock, bonds, securities or evidence of
indebtedness, to exercise all the rights, powers and privileges of ownership,
including the right to vote, if any.
(M) Shall have power to purchase, hold, sell and transfer shares of its own
capital stock, and use therefor it capital, capital surplus, surplus, or other
property or fund.
(N) Shall have power to conduct business, have one or more offices, and
hold, purchase, mortgage and convey real and personal property in the State of
Nevada, and in any of the several states, territories, possessions an
dependencies of the United States, the District of Columbia, and any foreign
countries.
(O) Shall have power to do all and everything necessary and proper for the
accomplishment of the objects enumerated in its certificate or articles of
incorporation, or any amendment thereof, or necessary or incidental to the
protection and benefit of the Corporation, and, in general, to carry on any
lawful business necessary or incidental to the attainment of the objects of the
Corporation, whether or not such business is similar in nature to the objects
set forth, in the certificate or articles of incorporation of the Corporation,
or any amendment thereof.
(P) Shall have power to make donations for the public welfare or the
charitable, scientific or educational purposes.
2
<PAGE>
(Q) Shall have the power to enter into partnerships, general or limited, or
joint ventures, in connection with any lawful activities.
FOURTH: That the total number of voting common stock authorized that
may be issued by the Corporation is ONE HUNDRED MILLION (100,000) shares of
stock with a par value of One cent ($0.01) per share and no other class of stock
shall be authorized. Said shares of stock with a par value of ONE CENT ($0.01)
per share may be issued by the Corporation form time to time for such
consideration as may be fixed from time to time by the Board of Directors. Each
100 shares of common stock outstanding at 9:00 a.m. February 23, 1999 shall be
deemed to be one share common stock of the Corporation, par value ONE CENT
($0.01) per share.
FIFTH: The governing board of this Corporation shall be known as
directors, and the number of directors nay from time to time be increased or
decreased in such manner as shall be provided by the By-Laws of this
Corporation, providing that the number of directors shall not be reduced to less
than three (3), except that in cases where all the shares of the Corporation are
unissued or owned beneficially and of record by either one or two shareholders,
the number of directors may be less than three (3) but not less then the number
of stockholders.
The name and post office address of the first Board of Directors shall
be one (1) in number and listed as follows:
NAME POST OFFICE ADDRESS
Dorothy J. Laughlin 2527 N. Carson Street, Suite 205,
Carson City, NV 89701
SIXTH: The capital stock, after the amount of the subscription price,
or par value, has been paid in, shall not be subject to assessment to pay the
debts of the Corporation.
SEVENTH: The name and post office address of the Incorporator signing
the Articles of Incorporation is as follows:
NAME POST OFFICE ADDRESS
Dorothy J. Laughlin 2527 N. Carson Street, Suite 205,
Carson City, NV 89701
EIGHTH: The resident agent for this corporation shall be:
LAUGHLIN ASSOCIATES, INC.
The address of said agent, and, the principal or statutory address of this
corporation in the state of Nevada, shall be:
2527 N. Carson Street, Suite 205,
Carson City, NV 89701
3
<PAGE>
NINTH: The Corporation is to have perpetual existence.
TENTH: In furtherance and not in limitation of the powers conferred by
statute, the Board of Directors is expressly authorized;
Subject to the By-Laws, if any, adopted by the Stockholders, to make,
alter or amend the By-Laws of the Corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in; to authorize and cause to be executed, mortgages and
liens upon the real and personal property of this Corporation.
By resolution passed by a majority of the whole Board, to designate one
(1) or more committees, each committee to consist of one or more of the
Directors of the Corporation, which, to the extent provided in the resolution,
or in the By-Laws of the Corporation, shall have and may exercise the powers of
the Board of Directors in the management of the business and affairs of the
Corporation. Such committee, or committees, shall have such name, or names, as
may be state in the By-Laws of the Corporation, or as may be determined from
time to time by resolution adopted by the Board of Directors.
When and as authorized by the affirmation vote of the Stockholders
holding stock entitling them to exercise at lease a majority of the voting power
given at a Stockholders meeting called for that purpose, or when authorized by
the written consent of the holders of at lease a majority of the voting stock
issued and outstanding, the Board of Directors shall have power and authority at
any meeting to sell, lease or exchange all of the property an assets of the
Corporation, including its good will and its corporate franchises, upon such
terms and conditions as its Board of Directors deems expedient and for the best
interests of the Corporation.
ELEVENTH: No shareholder shall be entitled as a matter or right to
subscribe for or receive additional share of any class of stock of the
Corporation, whether now or hereafter authorized, or any bonds, debentures or
securities convertible into stock, but such additional shares of stock or other
securities convertible into stock may be issued or disposed of by the Board of
Directors to such persons and on such terms as in its discretion it shall deem
advisable.
TWELFTH: This Corporation reserved the right to amend, alter, change or
repeal any provision contained in the Articles of Incorporation, in the manner
now or hereafter prescribed by statute, or by the Articles of Incorporation, and
all rights conferred upon Stockholders herein are granted subject to this
reservation.
3. The undersigned officers have been authorized to execute this
certificate by resolution of the Board of Directors of the Corporation adopted
on May 26, 1999.
4
<PAGE>
The certificate correctly sets forth the text of the Articles of
Incorporation as amended to the date of this certificate.
Executed on July 19, 1999.
By:
/s/ T.S. Wong
----------------------------------------
T.S. Wong, President
----------------------------------------
/s/ Steven A. Saide
----------------------------------------
Steven A. Saide, Assistant Secretary
----------------------------------------
5
<PAGE>
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 19th day of July, 1999, before me, the undersigned, a Notary
Public in and for the County of New York, State of New York personally appeared:
T.S. Wong
Known to me to be the person whose name is subscribed to the foregoing
Restated Articles of Incorporation and acknowledged to me that be executed the
same.
/s/ Steven A. Saide
-----------------------------
Notary Public
Commission expires:
(SEAL)
6
<PAGE>
STATE OF NEW YORK )
) SS:
COUNTY OF NEW YORK )
On this 19th day of July, 1999, before me, the undersigned, a Notary
Public in and for the County of New York, State of New York personally appeared:
Steven A. Saide
Known to me to be the person whose name is subscribed to the foregoing
Restated Articles of Incorporation and acknowledged to me that be executed the
same.
/s/ illegible
-----------------------------
Notary Public
Commission expires:
(SEAL)
7
<PAGE>
2 April 1997
Wong Thean
Dear Mr. Wong,
OFFER OF APPOINTMENT AS CHIEF EXECUTIVE OFFICER
We have pleasure in offering you employment as CHIEF EXECUTIVE OFFICER with a
basic salary of RM8000 per month. Salary increments in the future shall be in
line with our policy of advancement on an individual merit basis.
1. Confirmation & Notice of Termination
This appointment is terminable by one month's notice in writing, or pay in
lieu thereof, by either the company or yourself without any reason being
assigned for such termination.
2. Terms & Conditions
You will be required to observe and adhere to the following terms and
conditions:
2.1 at all times faithfully and diligently perform such duties and accept
such responsibilities as may from time to time be assigned to you by
the company to advance the interests of the company.
2.2 to obey and comply with all orders and directions given to you by the
company and faithfully observe all the rules, regulations, procedures,
practices and arrangements of the company for the time being in force
for the management of the company's property, works and business or
for the control and good conduct of the company's employees and
servants.
2.3 not at any time during the continuance of your employment to engage
directly or indirectly, in any other business or occupation whatever,
either as principal, agent, servant, broker or otherwise, or to engage
in any activity to the detriment, whether direct or indirect, of the
company's associate or subsidiary companies. Provided that you may
acquire or hold shares in any public company with limited liability.
<PAGE>
2.4 not at any time to be guilty of any act or conduct causing or
calculate to cause damage to the company, its property, reputation or
general interest and in all respects and at all times to conduct
yourself with propriety and decorum.
2.5 not at any time during the continuance or after termination of your
employment with the company except by the direction and with the
express approval of the company, to divulge either directly or
indirectly to any person or company knowledge or information which may
be acquired during the course of or incidental to your employment with
the company concerning the affairs or property of the company or its
associate or subsidiary companies or any business or property or
transactions or policies in which the company or its associate or
subsidiary companies may be or may have been concerned or interested.
We invite you to sign and return the duplicate copy of this letter within three
(3) days of the date and thereof indicating on the space provided below your
acceptance or otherwise of this offer of employment.
Yours sincerely
TECHNOCHANNEL SDN BHD
/s/ Tan Sri Dato Dr. Ahmad Mustaffa Babjee
Tan Sri Dato Dr Ahmad Mustaffa Babjee
EXECUTIVE CHAIRMAN
I, Wong Thean Soon, hereby confirm that I fully understand the terms and
conditions of the offer of employment on probation as set out above, and
accept/reject (delete whichever is applicable) the offer.
Signature: /s/ Wong Thean Soon Date 02-04-97
---------------------------- ------------------
Wong Thean Soon
I shall report for duty on 02-04-97
WITNESS
Name :
-------------------------------
Signature : Date:
-------------------------------
Occupation :
-------------------------------
Address :
--------------------------------
2
<PAGE>
DATED THIS 28TH DAY OF APRIL 1999
BETWEEN
SELEKTA BAKTI SDN BHD
AND
TECNOCHANNEL TECHNOLOGIES SDN BHD
***************************************
T E N A N C Y A G R E E M E N T
***************************************
<PAGE>
TENANCY AGREEMENT
THIS AGREEMENT is made the day and year stated in Section 1 of the First
Schedule hereto between the party whose name and description are stated in
Section 2 of the First Schedule hereto (hereinafter called the "Landlord") of
the one part and the party whose name and description are stated in Section 3 of
the First Schedule hereto (hereinafter called the "Tenant") of the other part.
WHEREAS :
(1) The Landlord is the owner of the office premises described in Section 4 of
the First Schedule hereto (hereinafter referred to as the "Demised
Premises").
(2) At the Tenant's request, the Landlord is agreeable to letting out the
Demised Premises to the Tenant upon the terms and conditions hereinafter
contained.
NOW IT IS HEREBY AGREED as follows :
1. The Landlord hereby grants and the Tenant hereby accepts, on the terms and
subject to the conditions of this Agreement, a tenancy of the Demised
Premises for the term set forth in Section 1 of the Second Schedule hereto
commencing on the date set forth in Section 2 of the Second Schedule hereto
(hereinafter referred to as the "Commencement Date") and expiring on the
date set forth in Section 3 of the Second Schedule hereto (hereinafter
referred to as the "Expiry Date") at the rent set out in Section 2 of Part
One of the Third Schedule hereto (hereinafter referred to as the "Rent)
payable in advance without any deductions in the manner set forth in Part
Two of the Third Schedule hereto.
2. DEPOSITS
2.1 Security Deposit
2.1.1 The Tenant shall on or before the Commencement Date pay to the
Landlord a sum in the amount specified in Section 1 of Part One
of the Third Schedule hereto (hereinafter referred to as the
"Security Deposits") to be held by the Landlord during the term
of the tenancy as a deposit and
<PAGE>
security for the due performance and observance by the Tenant of
all and singular its covenants and obligations herein contained.
2.1.2 The Tenant shall at all times during the tenancy maintain the
Security Deposit in the amount which is equal to three (3)
installments of the Rent and shall upon demand by the Landlord
pay such sum as may from time to time and at any time be required
to maintain the Security Deposit in such amount.
2.1.3 The Security Deposit shall not be deemed to be or treated as
payment of the Rent (or any part thereof), and the Tenant shall
not be entitled to set-off against the Security Deposit any
installment or installments of the Rent or any other sum due or
payable by the Tenant to the Landlord under or in relation to
this Agreement.
2.1.4 The Landlord may however from time to time in the event of any
breach or non-performance or non-observance by the Tenant of any
of its covenants or obligations herein contained, appropriate
from the Security Deposit any sum or sums as may be necessary in
or towards satisfaction of the sums due from the Tenant under or
in relation to this Agreement In addition, the Landlord may upon
the expiration or sooner determination of the tenancy, deduct
from the Security Deposit :-
(a) such sum that may then be due to the Landlord under or relation
to this Agreement (whether by way of Rent or any part thereof) or
otherwise whatsoever or howsoever) but remaining unpaid;
(b) any outgoings or other sum whatsoever payable by the Tenant to
any appropriate authority or other person or the Landlord under
the terms of this Agreement; and
(c) such costs of any repairs or replacement of any damage to the
Demised Premises or any of the fixtures and fittings therein
belonging to the Landlord and any other loss or damage suffered
by the Landlord as a result of or arising from or in connection
with the Tenant's breach of any of its covenants and obligations
under or in relation to this Agreement.
2.1.5 The appropriation by the Landlord from the Security Deposit of
any sums by reason of the breach or the non-performance or
non-observance by the Tenant of any of its covenants or
obligations herein contained shall be without prejudice to other
rights, if any, of the Landlord in respect of such breach or
non-performance or non - observance and shall not prejudice the
<PAGE>
rights of the Landlord in respect of any further breach, non -
performance or non - observance by the Tenant of the same
covenant or obligation or of any breach by the Tenant of the
Tenant's other covenants or obligations herein contained.
2.1.6 Subject to the foregoing provisions, the Security Deposit (or as
the case may be, the balance thereof) shall be refunded by the
Landlord to the Tenant, free of interest, after the expiration or
sooner determination of the tenancy.
2.2. UTILITIES DEPOSIT
2.2.1. The Tenant shall on or before the Commencement Date, pay to the
Landlord a sum in the amount specified in Section 3 Part One of
the Third Schedule hereto hereinafter referred to as the
"Utilities Deposit") as a deposit for the Tenant's covenant
herein to pay all charges for electricity and water supplied to
the Demised Premises. All utility services and the downpayment
deposits for utility services payable to the appropriate
authorities for the connection of electricity, water supply and
other utilities to the Demised Premises shall be applied for by
the Tenant and paid for directly by the Tenant to the appropriate
authorities.
2.2.2. Upon the expiration or sooner determination of the tenancy :-
(a) if any charges for utility services including electricity and/or
water supplied to the Demised Premises shall not have been paid
by the Tenant, the Landlord may deduct from the Utilities Deposit
such sum as shall be due to the appropriate authority or
person(s) for such utility services, electricity and/or water
supply and remaining unpaid by the Tenant; and
(b) subject to the foregoing provisions, the Utilities Deposit (or as
the case may be, the balance thereof) shall be refunded by the
Landlord to the Tenant, free of interest.
3. TENANT'S COVENANTS
The Tenant hereby covenants with the Landlord as follows :-
3.1. Covenant to pay the Rent
The Tenant shall pay the Rent reserved herein without any
deduction, at the times and the manner herein set forth and
without any demand therefor
<PAGE>
by the Landlord in the manner set forth in Part Two of the Third
Schedule hereto.
3.2 Covenant to pay and maintain the Deposits
The Tenant shall pay and maintain the Security Deposit and the
Utilities Deposit as provided above.
3.3 Covenant to pay additional rent In the event that the aggregate
amount paid or payable by the Landlord by way of quit rent,
municipal and other rates, taxes, assessment, service charges,
property taxes or other imposition of a like nature by whatever
name called levied in respect of the Demised Premises shall be
increased beyond the aggregate amount so paid by the Landlord as
at the Commencement Date (whether the increase shall result from
an increase in the amounts paid and payable by the Landlord as
the Commencement Date or the levy subsequent to the Commencement
Date of impositions as aforesaid or otherwise howsoever), the
Tenant shall by way of and as additional rent, pay such aforesaid
increase to the Landlord at such times and in such manner as the
Landlord shall specify PROVIDED ALWAYS THAT the Tenant shall not
be entitled to any reduction of the Rent in the event that the
aggregate amount paid or payable by the Landlord by way of quit
rent, municipal and other rates, taxes, assessment, service
charges, property taxes or other imposition of a like nature by
whatever name called levied in respect of the Demised Premises as
at the Commencement Date shall thereafter be decreased or not
imposed or levied by the appropriate authorities.
3.4. Covenant to pay water, sewerage (IWK charges), electricity, and
telephone charges etc.
The Tenant shall duly pay all charges for electricity, water,
sewerage (IWK charges) and telephone facilities supplied to the
Demised Premises during the term of the tenancy and forthwith
forward to the Landlord the receipts for all such payments as
aforesaid.
3.5. Covenant to repair
The Tenant shall keep and maintain the Demised Premises in good and
tenantable repair and clean condition, and shall repair and keep the
interior of the Demised Premises (other than the main structure thereof)
including the floors, ceilings, drains, pipes, cables, wires, sewers, the
plaster or other surface material or rendering on the floors, walls and
ceilings and all glass in the windows, doors and partitions thereof and all
shutters, locks, fastenings, metal parts and other fixtures and fittings
therein in a clean condition and in good and tenantable repair (fair
<PAGE>
wear and tear and damage by fire, storm, tempest, riot and any other cause
beyond the Tenant's control excepted, save in the case of fire where the
insurance monies are rendered irrecoverable in consequence of the act or
default of the Tenant).
3.6 Covenant to allow inspection and repair
The Tenant shall permit the Landlord by its duly authorised agent
and/or servants, with or without workmen and appliances, at all
reasonable times, and upon giving prior notice to the Tenant, to
enter upon and view the condition of the Demised Premises.
Upon such inspection, the Landlord shall be entitled to serve
upon the Tenant notice in writing specifying any repairs (other
than structural repairs) to be carried out by the Tenant at the
Tenant's cost and expenses and if the Tenant shall not, within
fourteen (14) days after the service of such notice, proceed
diligently with the execution of such repairs then, the Landlord
shall be entitled at all reasonable times and upon giving prior
written notice to the Tenant, to enter upon the Demised Premises
by its duly authorised agents and/or servants, with or without
workmen and appliances, to execute such repairs. The costs so
incurred by the Landlord shall be payable by the Tenant upon
demand by the Landlord together with interest thereon calculated
at 12% per annum from day to day from the date of the Landlord
incurs such costs until the date of full payment thereof by the
Tenant to the Landlord, and shall be a debt forthwith due from
the Tenant to the Landlord recoverable by action.
3.7 Covenant in respect of alterations
3.7.1 The Tenant shall not make or carry out any alterations,
renovations, additions or demolitions in, on, to or
about the Demised Premises without the prior written
consent of the Landlord, such consent to be withheld or
granted by the Landlord at its absolute discretion and
if withheld without assigning any reason therefor. Such
consent if granted, may be granted by the Landlord
subject to such conditions as the Landlord may at its
absolute discretion deem fit to impose.
3.7.2 Any alterations, renovations, additions or demolitions
as may be carried out by the Tenant pursuant hereto
shall be carried out at the Tenant's own cost and
expense and in confirmity in every respect with the
plans and specifications therefore approved by the
Landlord and the appropriate authorities and in
compliance with all relevant laws, by-laws, directives,
instruments, orders and requirements of the appropriate
authorities. If such alterations, renovations,
additions or demolition's (or the works to be carried
out in respect thereof or in connection therewith)
shall involve any change the mechanical and electrical
services to and/or the main structure of the Demised
Premises and/or the pipes, wires, cables or other
apparatus
<PAGE>
constructed, installed or laid in or under the Demised
Premises the Tenant shall appoint such qualified and
competent, mechanical and electrical engineers or, as
the case may be such civil and structural engineers to
properly, design, and supervise the completion of, such
alteration, renovations and additions as shall involve
the aforesaid changes. The Tenant shall appoint such
qualified and competent contractors to carry out such
alterations, renovations and additions.
3.7.3 The Tenant shall indemnify and keep the Landlord
indemnified against all actions, proceedings, claims,
penalties, fines, demands, costs, expenses, damages,
losses and liabilities whatsoever which may be brought
or made against the Landlord or which the Landlord may
pay, sustain or incur by reason of or arising from or
in connection with such alterations, renovations and
additions and/or the works carried out in respect
thereof or in connection therewith.
3.7.4 The Tenant covenants that unless otherwise agreed by
the Landlord in writing, it shall immediately before
the expiration or sooner determination of the tenancy,
remove at its own cost and expense all alterations,
renovations, and additions to the Demised Premises
effected or executed by the Tenant and shall make good
all damage caused by such removal to the satisfaction
of the Landlord and shall restore and reinstate the
Demised Premises in all respects to the state and
conditions thereof prior to the effecting or executing
of all such aforesaid alterations, renovations,
additions and demolition by the Tenant or at the
Landlord's election, to a condition which is good and
tenantable and to the satisfaction of the Landlord and
in the event of the Tenant refusing failing or
neglecting for any reason whatsoever to restore and
reinstate the Demised Premises as aforesaid, then and
in such event notwithstanding any provisions herein
this Agreement and the Landlord's absolute discretion
be forfeited to the Landlord. In the event that the
Landlord agrees that the Tenant shall not required to
remove, the said alterations, renovations or additions
(or any part thereof) pursuant to the foregoing
provisions of this Clause 3.7.4, the Tenant shall
nevertheless, on the expiration or sooner determination
of the tenancy, yield up the Demised Premises in good
and tenantable condition, but shall not be entitled to
any monies or compensation or reimbursement by or from
the Landlord for the said alterations, renovations or
additions not removed by the Tenant as aforesaid.
3.8 Covenant in respect of insurance
The Tenant shall not do or permit to be done on the Demised
Premises anything whereby the policy or policies of insurance
taken out by the Landlord on the Demised Premises against any
loss or damage by fire or any other risks may be rendered void or
voidable whereby the rate or rates of premium thereon may be
<PAGE>
increased and shall pay to the Landlord, on demand, any such
increase and any expenses incurred by the Landlord in or about
the renewal of such policy or policies rendered necessary by a
breach or non-observance of this covenant without prejudice to
the other rights of the Landlord in respect of such breach or
non-observance.
3.9 Covenant not to assign, underlet, etc.
The Tenant shall use the Demised Premises only for the purposes
of an office for carrying on thereat the Tenant's lawful business
and at the Tenant's own cost and expenses, to obtain and maintain
all licenses, permits, approvals, registration, consents and the
like for the carrying on by the Tenant of its lawful business the
user of the Demised Premises as aforesaid.
3.10 Covenant restrictive of user
The Tenant shall not :-
3.11.1 use the Demised Premises or any part thereof for
residential purposes;
3.11.2 use or permit or suffer the use of Demised Premises for
storing goods or merchandise(other than good and
merchandise belonging to or held by the Tenant for and
in connection with the Tenant's business);
3.11.3 hold or permit or suffer to be held any sale by auction
on the Demised Premises or any part thereof.
3.11.4 use the Demised Premises or any part thereof in such
manner whereby dirt, rubbish or debris accumulates in
or outside the Demised Premises or whereby an excessive
amount of noise is caused;
3.11.5 keep or permit to be kept on the Demised Premises or
any part thereof, any materials the keeping of which
may contravene any local ordinance, statute, regulation
or by-law or in respect of which an increased rate of
insurance may be required and in particular not to
store arms, ammunition, unlawful goods, gun powder,
saltpetre, kerosene or any explosive, combustible or
radioactive substance;
3.11.6 use the Demised Premises or any part thereof or permit
or suffer the name to be used for any illegal or
immoral purposes; and
3.11.7 do or permit to be done upon the Demised Premises
anything which may constitute a nuisance to, or give
reasonable cause for complaint by, the occupiers of
adjoining and neighbouring premises.
<PAGE>
3.12 Covenant to observe laws and House Rules etc.
The Tenant shall observe and comply with all laws,
by-laws, rules and regulations relating to and/or
affecting the Demised Premises or the use thereof which
are now in force or may hereafter be enacted or imposed
by the appropriate authorities including the House
Rules applicable on the Demised Premises, which said
House Rules are attached in the Appendix annexed hereto
this Agreement.
3.13 Covenant in respect of notices for reletting etc.
The Tenant shall permit the Landlord or its servants or
agents at any time during the three (3) months
immediately preceding the expiration of the tenancy to
affix and retain on any part of the Demised Premises, a
notice for reletting thereof and to permit intending
tenants and others with written authority from the
Landlord or its agents, upon giving reasonable notice
and at reasonable times of the day, to enter and view
the Demised Premises.
3.14 Covenant to yield up.
On the expiration or sooner determination of the
tenancy, to peacefully yield up the Demised Premises in
accordance of the provisions of Clause 3.7.4 and in
good tenantable repair and condition, fair wear and
tear accepted.
4. LANDLORD COVENANTS.
4.1. Covenant to pay quit rent, etc.
Except insofar as the same are payable by the Tenant
pursuant to this Agreement, the Landlord shall pay and
discharge all existing and future quit rent, service
charges, municipal and other rates, taxes, assessment
charges, property taxes or other imposition of a like
nature by whatever name called levied in respect of the
Demised Premises.
4.2 To repair main structure.
The Landlord shall repair and keep the main structure
of the Demised Premises (but not including the plaster
or other surface material applied to the faces thereof
or any part of the Demised Premises to be repaired by
the Tenant pursuant to this Agreement) in good and
tenantable repair and conditions.
4.3 Covenant to insure.
<PAGE>
The Landlord shall insure and keep insured the Demised
Premises (but excluding the Tenant's goods properties,
effects, fittings, fixtures and any alterations,
renovations or additions to the Demised Premises
effected or executed by the Tenant pursuant to this
Agreement) against loss or damage by fire and such
other risks as the Landlord at its absolute discretion
deem it and shall pay all premium necessary for that
purpose.
4.4 Covenant for quiet enjoyment.
The Landlord shall, so long as the Tenant shall duly
punctually pay the rent hereby reserved at the times
and in the manner herein provided and duly perform and
observe all the Tenant's covenant and obligations under
in relation to this Agreement, the Tenant shall
peaceably hold and enjoy the Demised Premises during
the term of the tenancy without any interruption by the
Landlord or any person lawfully claiming through, under
or in trust for the Landlord.
5. RE-ENTRY AND TERMINATION BY THE LANDLORD.
If any installment of the Rent herein reserved shall
remain unpaid for seven (7) days after the due date
thereof (whether formally demanded or not) or if any of
the covenants and obligations herein contained and on
the Tenant's part to be performed and observed shall
not be duly performed or observed or the Tenant is
otherwise in breach of any of the covenants or
obligations herein contained and on the part of the
Tenant to be performed and observed or, an order is
made or an effective resolution passed for the
dissolution / winding up of the Tenant or if the Tenant
enters into any arrangement or composition with its
creditors or allows or suffers any judgment entered
against the Tenant to remain unsatisfied for a period
of twenty-one (21) days or suffers any distress or
execution to be levied on its good, then and in any
such events, it shall be lawful for the Landlord,
immediately or at anytime thereafter, to terminate the
tenancy by giving to the Tenant written notice to such
effect and/or to re-enter upon the Demised Premises or
any part thereof in the name of the whole, whereupon
the tenancy shall be forthwith terminated and the
Tenant shall peacefully yield up the Demised Premises
in accordance to the Clause 3.14. Upon such
termination, the Security Deposit shall be forfeited to
the Landlord absolutely but without prejudice the
Landlord's right, power and remedies (whether conferred
by law or this Agreement) in respect of any breach of
the Tenant's covenants and obligations herein contained
or otherwise resulting or arising from or in connection
with such termination.
6. SUSPENSION OF THE RENT.
<PAGE>
If at any time during the term of the tenancy, the
Demised Premises or substantial part thereof shall be
destroyed or damaged by fire, water, storm, tempest,
earthquake, insects, explosion, riots, civil commotion,
enemy action or other inevitable cause so as to become
unfit for use and provided that such destruction or
damage shall not have been caused by any act, default
or omission of the Tenant or whereby the monies under
any policy of the insurance effected by the Landlord
shall be irrecoverable, the Rent hereby reserved or a
fair and just proportion thereof according to the
nature and extent of the destruction or damage
sustained shall be suspended and cease to be payable
from the date on which the Demised Premises or any part
thereof shall be destroyed or damaged as aforesaid and
become unfit for use and until the Demised Premises ora
substantial part thereof shall have been rendered fit
for occupation and use. Any dispute concerning this
Clause shall be determined in accordance with the
Arbitration Act 1952 (Revised 1972).
6.2 The Landlord shall not be bound or compelled to rebuild
or reinstate the Demised Premises or any part thereof
unless the Landlord in its absolute discretion thinks
fit. If the Landlord shall decide not to rebuild and
reinstate the Demised Premises or any part thereof,
then the Landlord shall serve notice in writing to the
Tenant to such effect and if such destruction or damage
shall not have been caused by any act, default or
omission of the Tenant, the Rent herein reserved for
the remaining term of the tenancy shall cease to be
payable from the date of such destruction or damage as
aforesaid rendering the Demised Premises (or a
substantial part thereof) unfit for use, the Tenant
shall be deemed to have been determined on the date on
which the Demised Premises or substantial part thereof
shall have become or damaged as aforesaid and become
unfit for use, but without prejudice to the right and
remedies of either party hereto in respect of any
antecedent breach by the other party hereto of its
covenants and obligations herein contained.
7. LIMITATION OF LANDLORD'S LIABILITY.
The Landlord shall incur no liability to and shall not
be liable in damages or otherwise to the Tenant for any
damage, injury or loss which may, at any time during
the term of the Tenancy, be caused or suffered by the
Tenant, its servants, agents, licensees and invitees or
any of them or to any property of goods of the Tenant
or of such persons as aforesaid in or about the Demised
Premises occasioned by or arising from fire, storm,
tempest earthquake, insects, theft, burglary,
explosion, riots, civil commotion or enemy action or by
reason of the defective working, stoppage, or breakage
of any appliances, pipes, wires, cables, apparatus,
air-conditioning or other machinery in or under passing
through or connected with or used for the purpose of
the Demised Premises or any part thereof or failure of
air-conditioning services, electricity or other
supplies or owing to the act , default or omission of
the Tenant, its servants, agents, licensees and
invitees or occupiers of the Demised Premises or any of
them.
<PAGE>
8. OPTION FOR RENEWAL.
If the Tenant shall be desirous of taking a tenancy of
the Demised Premises for a further term equivalent to
the period set forth in Section 5 of the Second
Schedule from (and including) the day immediately
following the Expiry Date at the rent (to be mutually
agreed upon) and on the terms and conditions
hereinafter mentioned and shall, not less than three
(3) months before the Expiry Date, give to the Landlord
notice in writing of such its desire, then AND PROVIDED
ALWAYS that the Tenant shall have, throughout the term
of the tenancy punctually paid the Rent herein reserved
in the manner herein stipulated and duly performed and
observed all the Tenant's obligations under and in
relation to the tenancy and this Agreement up to the
Expiry Date, the Landlord shall let the Demised
Premises to the Tenant for the aforesaid further term
commencing on the day immediately following the Expiry
Date at a rent to be mutually agreed upon between the
Landlord and the Tenant in writing at least one (1)
month prior to the Expiry Date and subject to in all
other respects to the same terms and conditions of this
Agreement mutatis mutandis save and except for this
Clause 8.
9. MISCELLANEOUS PROVISIONS.
9.1 Fitting Out Period.
For the period specified in Section 4 of the Second
Schedule hereto (hereinafter referred to as "the
Fitting Out Period") and subject always to the
provisions of Clause 3.6, the Tenant shall have license
and authority to enter upon the Demised Premises for
the purpose of executing its renovation works on the
Demised Premises.
9.2 No Waiver.
The acceptance of the Rent or any part thereof by the
Landlord shall not be deemed to operate as a waiver by
the Landlord of any right of action against the Tenant
in respect of any breach by the Tenant of any of its
covenants or obligations herein contained. No failure
or delay on the part of the Landlord in exercising any
right under this Agreement shall operate as a waiver of
such right nor shall the knowledge or acquiescence by
the Landlord of or in a breach or non-observance or
non- performance by the Tenant of any terms and
conditions of this Agreement constitute a waiver of
such and/or any other terms and conditions.
9.3 Cost.
All costs and expenses for the preparation of this
Agreement including the stamp duty and the Landlord's
solicitor fees and disbursements shall be borne and
paid by the Tenant. The Tenant shall further, upon
demand therefor made by the
<PAGE>
Landlord pay all fees, costs, charges and expenses
(including the Landlord's solicitor fees on a full
indemnity basis) incurred by the Landlord in enforcing
this Agreement, whether such fees, costs, charges and
expenses shall be incurred in the giving of any notice
to the Tenant, the recovery of monies payable by the
Tenant under this Agreement or recovery of vacant
possession of the Demised Premises, by legal
proceedings or otherwise howsoever.
9.4 Notices.
9.4.1 Any notice, consent, request or other communication
given or to be given hereunder by a party hereto to the
other party hereto shall be in writing and shall be
sufficiently served :-
(a) on the Tenant if addressed to the Tenant and left
at or sent by post to the Demised Premises or at
the Tenant's place of business last known to the
Landlord or its registered office for the time
being or at such address as the Tenant may notify
to the Landlord in writing; and
(b) on the Landlord if addressed to the Landlord and
left at or sent by post to the address above given
of the Landlord or its registered office for the
time being or such address as the Landlord may
notify to the Tenant in writing.
9.4.2 A notice, request, consent or other communication
given, addressed and sent in accordance with Clause
9.4.1 shall if sent by post, be deemed to be received
by the party which it is sent on the third (3rd)
working day after it is put in the post, postage
prepaid and addressed as aforesaid.
9.5 Time.
Time whenever and wherever mentioned is of the essence
of this Agreement.
9.6 Cumulative rights.
The rights and remedies provided in this Agreement are
cumulative and not exclusive of any rights, power or
remedies provided by law.
9.7 Caveat.
The Tenant shall not lodge, or apply for the lodgment
of, any caveat against the Demised Premises or any
interest therein.
9.8 Successors.
This Agreement shall be binding upon the respective
successors in title of the Landlord and the Tenant.
<PAGE>
9.9 Severability.
Each of the provisions of this Agreement is severable
distinct from the others and if at any time one or more
or such provisions is or becomes invalid illegal or
unenforceable, the validity legality and enforceability
of the remaining provisions hereof shall not in any way
be affected or impaired thereby.
9.10 Interpretation.
9.10.1 In this Agreement, unless the context otherwise
requires:-
"law" includes common or customary law and any
constitution, decree, judgment, legislation, order,
ordinance, regulation, statute, treaty or other
legislative measure, in each case of any jurisdiction
whatsoever and "lawful" and unlawful" shall be
construed accordingly;
"obligations" of any party under this Agreement shall
construed as a reference to an obligation of that party
(whether by way of an agreement, covenant, proviso,
term, condition, undertaking, stipulation or otherwise)
expressed to be made or assumed by or imposed on that
party under this Agreement;
IN WITNESS WHERE of the Landlord and Tenant hereto have hereunto set their hands
the day and year first above written.
SIGNED by )
for and on behalf of )
)
the LANDLORD aforesaid ) /s/ illegible
----------------------------
in the presence of : ) /s/ illegible
----------------------------
SIGNED by )
for and on behalf of )
)
the TENANT aforesaid ) /s/ T.S. Wong
----------------------------
T. S. Wong
in the presence of : ) /s/ illegible
----------------------------
<PAGE>
THE FIRST SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 The day and the year of this The 28th day of April, 1999.
Agreement.
- --------------------------------------------------------------------------------
2 Name and description of the SELEKTA BAKTI SDN. BHD. (CO. NO.
Landlord. 40541-U) OF NO. 21-B, JALAN
SS2/75, 47300 PETALING JAYA.
- --------------------------------------------------------------------------------
3 Name and description of the TECNOCHANNEL TECHNOLOGIES SDN.
Tenant. BHD. (CO. NO. 426318-M) having
its registered address at SUITE
NO. 10.01, LEVEL 10, HERITAGE
HOUSE, NO. 33, JALAN YAP AH SHAK,
50300 KUALA LUMPUR.
- --------------------------------------------------------------------------------
4 Particular of the Demised All that part of the office unit
Premises. known as Unit Nos. 605 AND 505,
BLOCK G, PHILEO DAMANSARA I, JALAN
DAMANSARA, measuring in area
5,054 S.F.
- --------------------------------------------------------------------------------
THE SECOND SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 Term of the tenancy (Clause 1) 2 (two) years.
- --------------------------------------------------------------------------------
2 Commencement Date of the tenancy 15/6/1999.
(Clause 1)
- --------------------------------------------------------------------------------
3 Expiry Date of the tenancy (Clause 1) 14/6/2001.
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
4 Fitting out period (Clause 9.1) From vacant possession
to 14/6/1999.
- --------------------------------------------------------------------------------
5 Terms of the new tenancy pursuant 2 (two) years.
to option to renewal (Clause 8)
- --------------------------------------------------------------------------------
THE THIRD SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 Amount of the Security Deposit Ringgit Malaysia Sixteen
(Clause 2.1) Thousand Six Hundred Seventy
Eight And Cents Twenty Only
(RM 16,678.20)
- --------------------------------------------------------------------------------
2 Amount of the Rent for the term Ringgit Malaysia One Hundred
of two (2) years of the tenancy Thirty Three Thousand Four
(Clause 1) Hundred Twenty Five and Cents
Sixty Only (RM 133,425.60)
- --------------------------------------------------------------------------------
3 Amount of the Utilities Deposit Ringgit Malaysia Two Thousand
(Clause 2.2) Seven Hundred Seventy Nine and
Cents Seventy Only (RM 2,779.70)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE THIRD SCHEDULE
(PART TWO)
- --------------------------------------------------------------------------------
The Tenant shall pay the Rent by TWENTY FOUR (24) equal monthly installments,
each installments to be in a sum of RINGGIT Five Thousand Five Hundred Fifty
Nine and Cents Forty Only (RM 5,559.40) the first of the installments to be paid
on or before execution of Tenancy Agreement and each subsequent installment to
be paid on or before the 7TH. DAY of every succeeding month during the term of
the tenancy.
<PAGE>
DATED THIS 28TH DAY OF APRIL 1999
BETWEEN
WOI SEEN CHIN ENTERPRISES SDN BHD
AND
TECNOCHANNEL TECHNOLOGIES SDN BHD
***************************************
T E N A N C Y A G R E E M E N T
***************************************
<PAGE>
TENANCY AGREEMENT
THIS AGREEMENT is made the day and year stated in Section 1 of the First
Schedule hereto between the party whose name and description are stated in
Section 2 of the First Schedule hereto (hereinafter called the "Landlord") of
the one part and the party whose name and description are stated in Section 3 of
the First Schedule hereto (hereinafter called the "Tenant") of the other part.
WHEREAS :
(1) The Landlord is the owner of the office premises described in Section 4 of
the First Schedule hereto (hereinafter referred to as the "Demised
Premises").
(2) At the Tenant's request, the Landlord is agreeable to letting out the
Demised Premises to the Tenant upon the terms and conditions hereinafter
contained.
NOW IT IS HEREBY AGREED as follows :
1. The Landlord hereby grants and the Tenant hereby accepts, on the terms and
subject to the conditions of this Agreement, a tenancy of the Demised
Premises for the term set forth in Section 1 of the Second Schedule hereto
commencing on the date set forth in Section 2 of the Second Schedule hereto
(hereinafter referred to as the "Commencement Date") and expiring on the
date set forth in Section 3 of the Second Schedule hereto (hereinafter
referred to as the "Expiry Date") at the rent set out in Section 2 of Part
One of the Third Schedule hereto (hereinafter referred to as the "Rent)
payable in advance without any deductions in the manner set forth in Part
Two of the Third Schedule hereto.
2. DEPOSITS
2.1 Security Deposit
2.1.1 The Tenant shall on or before the Commencement Date pay to the
Landlord a sum in the amount specified in Section 1of Part One of
the Third Schedule hereto (hereinafter referred to as the
"Security Deposits") to be held by the Landlord during the term
of the tenancy as a deposit and
<PAGE>
security for the due performance and observance by the Tenant of
all and singular its covenants and obligations herein contained.
2.1.2 The Tenant shall at all times during the tenancy maintain the
Security Deposit in the amount which is equal to three (3)
installments of the Rent and shall upon demand by the Landlord
pay such sum as may from time to time and at any time be required
to maintain the Security Deposit in such amount.
2.1.3 The Security Deposit shall not be deemed to be or treated as
payment of the Rent (or any part thereof), and the Tenant shall
not be entitled to set-off against the Security Deposit any
installment or installments of the Rent or any other sum due or
payable by the Tenant to the Landlord under or in relation to
this Agreement.
2.1.4 The Landlord may however from time to time in the event of any
breach or non-performance or non-observance by the Tenant of any
of its covenants or obligations herein contained, appropriate
from the Security Deposit any sum or sums as may be necessary in
or towards satisfaction of the sums due from the Tenant under or
in relation to this Agreement In addition, the Landlord may upon
the expiration or sooner determination of the tenancy, deduct
from the Security Deposit :-
(a) such sum that may then be due to the Landlord under or relation
to this Agreement (whether by way of Rent or any part thereof) or
otherwise whatsoever or howsoever) but remaining unpaid;
(b) any outgoings or other sum whatsoever payable by the Tenant to
any appropriate authority or other person or the Landlord under
the terms of this Agreement; and
(c) such costs of any repairs or replacement of any damage to the
Demised Premises or any of the fixtures and fittings therein
belonging to the Landlord and any other loss or damage suffered
by the Landlord as a result of or arising from or in connection
with the Tenant's breach of any of its covenants and obligations
under or in relation to this Agreement.
2.1.5 The appropriation by the Landlord from the Security Deposit of
any sums by reason of the breach or the non-performance or
non-observance by the Tenant of any of its covenants or
obligations herein contained shall be without prejudice to other
rights, if any, of the Landlord in respect of such breach or
non-performance or non - observance and shall not prejudice the
<PAGE>
rights of the Landlord in respect of any further breach, non -
performance or non - observance by the Tenant of the same
covenant or obligation or of any breach by the Tenant of the
Tenant's other covenants or obligations herein contained.
2.1.6 Subject to the foregoing provisions, the Security Deposit (or as
the case may be, the balance thereof) shall be refunded by the
Landlord to the Tenant, free of interest, after the expiration or
sooner determination of the tenancy.
2.2. UTILITIES DEPOSIT
2.2.1. The Tenant shall on or before the Commencement Date, pay to the
Landlord a sum in the amount specified in Section 3 Part One of
the Third Schedule hereto hereinafter referred to as the
"Utilities Deposit") as a deposit for the Tenant's covenant
herein to pay all charges for electricity and water supplied to
the Demised Premises. All utility services and the downpayment
deposits for utility services payable to the appropriate
authorities for the connection of electricity, water supply and
other utilities to the Demised Premises shall be applied for by
the Tenant and paid for directly by the Tenant to the appropriate
authorities.
2.2.2. Upon the expiration or sooner determination of the tenancy :-
(a) if any charges for utility services including electricity and/or
water supplied to the Demised Premises shall not have been paid
by the Tenant, the Landlord may deduct from the Utilities Deposit
such sum as shall be due to the appropriate authority or
person(s) for such utility services, electricity and/or water
supply and remaining unpaid by the Tenant; and
(b) subject to the foregoing provisions, the Utilities Deposit (or as
the case may be, the balance thereof) shall be refunded by the
Landlord to the Tenant, free of interest.
3. TENANT'S COVENANTS
The Tenant hereby covenants with the Landlord as follows :-
3.1. Covenant to pay the Rent
The Tenant shall pay the Rent reserved herein without any
deduction, at the times and the manner herein set forth and
without any demand therefor
<PAGE>
by the Landlord in the manner set forth in Part Two of the Third
Schedule hereto.
3.2 Covenant to pay and maintain the Deposits
The Tenant shall pay and maintain the Security Deposit and the
Utilities Deposit as provided above.
3.3 Covenant to pay additional rent In the event that the aggregate
amount paid or payable by the Landlord by way of quit rent,
municipal and other rates, taxes, assessment, service charges,
property taxes or other imposition of a like nature by whatever
name called levied in respect of the Demised Premises shall be
increased beyond the aggregate amount so paid by the Landlord as
at the Commencement Date (whether the increase shall result from
an increase in the amounts paid and payable by the Landlord as
the Commencement Date or the levy subsequent to the Commencement
Date of impositions as aforesaid or otherwise howsoever), the
Tenant shall by way of and as additional rent, pay such aforesaid
increase to the Landlord at such times and in such manner as the
Landlord shall specify PROVIDED ALWAYS THAT the Tenant shall not
be entitled to any reduction of the Rent in the event that the
aggregate amount paid or payable by the Landlord by way of quit
rent, municipal and other rates, taxes, assessment, service
charges, property taxes or other imposition of a like nature by
whatever name called levied in respect of the Demised Premises as
at the Commencement Date shall thereafter be decreased or not
imposed or levied by the appropriate authorities.
3.4. Covenant to pay water, sewerage (IWK charges), electricity, and
telephone charges etc.
The Tenant shall duly pay all charges for electricity, water,
sewerage (IWK charges) and telephone facilities supplied to the
Demised Premises during the term of the tenancy and forthwith
forward to the Landlord the receipts for all such payments as
aforesaid.
3.5. Covenant to repair
The Tenant shall keep and maintain the Demised Premises in good and
tenantable repair and clean condition, and shall repair and keep the
interior of the Demised Premises (other than the main structure thereof)
including the floors, ceilings, drains, pipes, cables, wires, sewers, the
plaster or other surface material or rendering on the floors, walls and
ceilings and all glass in the windows, doors and partitions thereof and all
shutters, locks, fastenings, metal parts and other fixtures and fittings
therein in a clean condition and in good and tenantable repair (fair
<PAGE>
wear and tear and damage by fire, storm, tempest, riot and any other cause
beyond the Tenant's control excepted, save in the case of fire where the
insurance monies are rendered irrecoverable in consequence of the act or
default of the Tenant).
3.6 Covenant to allow inspection and repair
The Tenant shall permit the Landlord by its duly authorised agent and/or
servants, with or without workmen and appliances, at all reasonable times,
and upon giving prior notice to the Tenant, to enter upon and view the
condition of the Demised Premises.
Upon such inspection, the Landlord shall be entitled to serve upon the
Tenant notice in writing specifying any repairs (other than structural
repairs) to be carried out by the Tenant at the Tenant's cost and expenses
and if the Tenant shall not, within fourteen (14) days after the service of
such notice, proceed diligently with the execution of such repairs then,
the Landlord shall be entitled at all reasonable times and upon giving
prior written notice to the Tenant, to enter upon the Demised Premises by
its duly authorised agents and/or servants, with or without workmen and
appliances, to execute such repairs. The costs so incurred by the Landlord
shall be payable by the Tenant upon demand by the Landlord together with
interest thereon calculated at 12% per annum from day to day from the date
of the Landlord incurs such costs until the date of full payment thereof by
the Tenant to the Landlord, and shall be a debt forthwith due from the
Tenant to the Landlord recoverable by action.
3.7 Covenant in respect of alterations
3.7.1 The Tenant shall not make or carry out any alterations,
renovations, additions or demolitions in, on, to or about the
Demised Premises without the prior written consent of the
Landlord, such consent to be withheld or granted by the Landlord
at its absolute discretion and if withheld without assigning any
reason therefor. Such consent if granted, may be granted by the
Landlord subject to such conditions as the Landlord may at its
absolute discretion deem fit to impose.
3.7.2 Any alterations, renovations, additions or demolitions as may be
carried out by the Tenant pursuant hereto shall be carried out at
the Tenant's own cost and expense and in confirmity in every
respect with the plans and specifications therefore approved by
the Landlord and the appropriate authorities and in compliance
with all relevant laws, by-laws, directives, instruments, orders
and requirements of the appropriate authorities. If such
alterations, renovations, additions or demolition's (or the works
to be carried out in respect thereof or in connection therewith)
shall involve any change the mechanical and electrical services
to and/or the main structure of the Demised Premises and/or the
pipes, wires, cables or other apparatus
<PAGE>
constructed, installed or laid in or under the Demised Premises
the Tenant shall appoint such qualified and competent, mechanical
and electrical engineers or, as the case may be such civil and
structural engineers to properly, design, and supervise the
completion of, such alteration, renovations and additions as
shall involve the aforesaid changes. The Tenant shall appoint
such qualified and competent contractors to carry out such
alterations, renovations and additions.
3.7.3 The Tenant shall indemnify and keep the Landlord indemnified
against all actions, proceedings, claims, penalties, fines,
demands, costs, expenses, damages, losses and liabilities
whatsoever which may be brought or made against the Landlord or
which the Landlord may pay, sustain or incur by reason of or
arising from or in connection with such alterations, renovations
and additions and/or the works carried out in respect thereof or
in connection therewith.
3.7.4 The Tenant covenants that unless otherwise agreed by the Landlord
in writing, it shall immediately before the expiration or sooner
determination of the tenancy, remove at its own cost and expense
all alterations, renovations, and additions to the Demised
Premises effected or executed by the Tenant and shall make good
all damage caused by such removal to the satisfaction of the
Landlord and shall restore and reinstate the Demised Premises in
all respects to the state and conditions thereof prior to the
effecting or executing of all such aforesaid alterations,
renovations, additions and demolition by the Tenant or at the
Landlord's election, to a condition which is good and tenantable
and to the satisfaction of the Landlord and in the event of the
Tenant refusing failing or neglecting for any reason whatsoever
to restore and reinstate the Demised Premises as aforesaid, then
and in such event notwithstanding any provisions herein this
Agreement and the Landlord's absolute discretion be forfeited to
the Landlord. In the event that the Landlord agrees that the
Tenant shall not required to remove, the said alterations,
renovations or additions (or any part thereof) pursuant to the
foregoing provisions of this Clause 3.7.4, the Tenant shall
nevertheless, on the expiration or sooner determination of the
tenancy, yield up the Demised Premises in good and tenantable
condition, but shall not be entitled to any monies or
compensation or reimbursement by or from the Landlord for the
said alterations, renovations or additions not removed by the
Tenant as aforesaid.
3.8 Covenant in respect of insurance
The Tenant shall not do or permit to be done on the Demised Premises
anything whereby the policy or policies of insurance taken out by the
Landlord on the Demised Premises against any loss or damage by fire or any
other risks may be rendered void or voidable whereby the rate or rates of
premium thereon may be
<PAGE>
increased and shall pay to the Landlord, on demand, any such increase and
any expenses incurred by the Landlord in or about the renewal of such
policy or policies rendered necessary by a breach or non-observance of this
covenant without prejudice to the other rights of the Landlord in respect
of such breach or non-observance.
3.9 Covenant not to assign, underlet, etc.
The Tenant shall use the Demised Premises only for the purposes of an
office for carrying on thereat the Tenant's lawful business and at the
Tenant's own cost and expenses, to obtain and maintain all licenses,
permits, approvals, registration, consents and the like for the carrying on
by the Tenant of its lawful business the user of the Demised Premises as
aforesaid.
3.10 Covenant restrictive of user
The Tenant shall not :
3.11.1 use the Demised Premises or any part thereof for residential
purposes;
3.11.2 use or permit or suffer the use of Demised Premises for storing
goods or merchandise(other than good and merchandise belonging to
or held by the Tenant for and in connection with the Tenant's
business);
3.11.3 hold or permit or suffer to be held any sale by auction on the
Demised Premises or any part thereof.
3.11.4 use the Demised Premises or any part thereof in such manner
whereby dirt, rubbish or debris accumulates in or outside the
Demised Premises or whereby an excessive amount of noise is
caused;
3.11.5 keep or permit to be kept on the Demised Premises or any part
thereof, any materials the keeping of which may contravene any
local ordinance, statute, regulation or by-law or in respect of
which an increased rate of insurance may be required and in
particular not to store arms, ammunition, unlawful goods, gun
powder, saltpetre, kerosene or any explosive, combustible or
radioactive substance;
3.11.6 use the Demised Premises or any part thereof or permit or suffer
the name to be used for any illegal or immoral purposes; and
3.11.7 do or permit to be done upon the Demised Premises anything which
may constitute a nuisance to, or give reasonable cause for
complaint by, the occupiers of adjoining and neighbouring
premises.
<PAGE>
3.12 Covenant to observe laws and House Rules etc.
The Tenant shall observe and comply with all laws, by-laws, rules
and regulations relating to and/or affecting the Demised Premises
or the use thereof which are now in force or may hereafter be
enacted or imposed by the appropriate authorities including the
House Rules applicable on the Demised Premises, which said House
Rules are attached in the Appendix annexed hereto this Agreement.
3.13 Covenant in respect of notices for reletting etc.
The Tenant shall permit the Landlord or its servants or agents at
any time during the three (3) months immediately preceding the
expiration of the tenancy to affix and retain on any part of the
Demised Premises, a notice for reletting thereof and to permit
intending tenants and others with written authority from the
Landlord or its agents, upon giving reasonable notice and at
reasonable times of the day, to enter and view the Demised
Premises.
3.14 Covenant to yield up.
On the expiration or sooner determination of the tenancy, to
peacefully yield up the Demised Premises in accordance of the
provisions of Clause 3.7.4 and in good tenantable repair and
condition, fair wear and tear accepted.
4. LANDLORD COVENANTS.
4.1. Covenant to pay quit rent, etc.
Except insofar as the same are payable by the Tenant pursuant to
this Agreement, the Landlord shall pay and discharge all existing
and future quit rent, service charges, municipal and other rates,
taxes, assessment charges, property taxes or other imposition of
a like nature by whatever name called levied in respect of the
Demised Premises.
4.2 To repair main structure.
The Landlord shall repair and keep the main structure of the
Demised Premises (but not including the plaster or other surface
material applied to the faces thereof or any part of the Demised
Premises to be repaired by the Tenant pursuant to this Agreement)
in good and tenantable repair and conditions.
4.3 Covenant to insure.
<PAGE>
The Landlord shall insure and keep insured the Demised Premises
(but excluding the Tenant's goods properties, effects, fittings,
fixtures and any alterations, renovations or additions to the
Demised Premises effected or executed by the Tenant pursuant to
this Agreement) against loss or damage by fire and such other
risks as the Landlord at its absolute discretion deem it and
shall pay all premium necessary for that purpose.
4.4 Covenant for quiet enjoyment.
The Landlord shall, so long as the Tenant shall duly punctually
pay the rent hereby reserved at the times and in the manner
herein provided and duly perform and observe all the Tenant's
covenant and obligations under in relation to this Agreement, the
Tenant shall peaceably hold and enjoy the Demised Premises during
the term of the tenancy without any interruption by the Landlord
or any person lawfully claiming through, under or in trust for
the Landlord.
5. RE-ENTRY AND TERMINATION BY THE LANDLORD.
If any installment of the Rent herein reserved shall remain
unpaid for seven (7) days after the due date thereof (whether
formally demanded or not) or if any of the covenants and
obligations herein contained and on the Tenant's part to be
performed and observed shall not be duly performed or observed or
the Tenant is otherwise in breach of any of the covenants or
obligations herein contained and on the part of the Tenant to be
performed and observed or, an order is made or an effective
resolution passed for the dissolution / winding up of the Tenant
or if the Tenant enters into any arrangement or composition with
its creditors or allows or suffers any judgment entered against
the Tenant to remain unsatisfied for a period of twenty-one (21)
days or suffers any distress or execution to be levied on its
good, then and in any such events, it shall be lawful for the
Landlord, immediately or at anytime thereafter, to terminate the
tenancy by giving to the Tenant written notice to such effect
and/or to re-enter upon the Demised Premises or any part thereof
in the name of the whole, whereupon the tenancy shall be
forthwith terminated and the Tenant shall peacefully yield up the
Demised Premises in accordance to the Clause 3.14. Upon such
termination, the Security Deposit shall be forfeited to the
Landlord absolutely but without prejudice the Landlord's right,
power and remedies (whether conferred by law or this Agreement)
in respect of any breach of the Tenant's covenants and
obligations herein contained or otherwise resulting or arising
from or in connection with such termination.
6. SUSPENSION OF THE RENT.
<PAGE>
If at any time during the term of the tenancy, the Demised
Premises or substantial part thereof shall be destroyed or
damaged by fire, water, storm, tempest, earthquake, insects,
explosion, riots, civil commotion, enemy action or other
inevitable cause so as to become unfit for use and provided that
such destruction or damage shall not have been caused by any act,
default or omission of the Tenant or whereby the monies under any
policy of the insurance effected by the Landlord shall be
irrecoverable, the Rent hereby reserved or a fair and just
proportion thereof according to the nature and extent of the
destruction or damage sustained shall be suspended and cease to
be payable from the date on which the Demised Premises or any
part thereof shall be destroyed or damaged as aforesaid and
become unfit for use and until the Demised Premises ora
substantial part thereof shall have been rendered fit for
occupation and use. Any dispute concerning this Clause shall be
determined in accordance with the Arbitration Act 1952 (Revised
1972).
6.2 The Landlord shall not be bound or compelled to rebuild or
reinstate the Demised Premises or any part thereof unless the
Landlord in its absolute discretion thinks fit. If the Landlord
shall decide not to rebuild and reinstate the Demised Premises or
any part thereof, then the Landlord shall serve notice in writing
to the Tenant to such effect and if such destruction or damage
shall not have been caused by any act, default or omission of the
Tenant, the Rent herein reserved for the remaining term of the
tenancy shall cease to be payable from the date of such
destruction or damage as aforesaid rendering the Demised Premises
(or a substantial part thereof) unfit for use, the Tenant shall
be deemed to have been determined on the date on which the
Demised Premises or substantial part thereof shall have become or
damaged as aforesaid and become unfit for use, but without
prejudice to the right and remedies of either party hereto in
respect of any antecedent breach by the other party hereto of its
covenants and obligations herein contained.
7. LIMITATION OF LANDLORD'S LIABILITY.
The Landlord shall incur no liability to and shall not be liable
in damages or otherwise to the Tenant for any damage, injury or
loss which may, at any time during the term of the Tenancy, be
caused or suffered by the Tenant, its servants, agents, licensees
and invitees or any of them or to any property of goods of the
Tenant or of such persons as aforesaid in or about the Demised
Premises occasioned by or arising from fire, storm, tempest
earthquake, insects, theft, burglary, explosion, riots, civil
commotion or enemy action or by reason of the defective working,
stoppage, or breakage of any appliances, pipes, wires, cables,
apparatus, air-conditioning or other machinery in or under
passing through or connected with or used for the purpose of the
Demised Premises or any part thereof or failure of
air-conditioning services, electricity or other supplies or owing
to the act , default or omission of the Tenant, its servants,
agents, licensees and invitees or occupiers of the Demised
Premises or any of them.
<PAGE>
8. OPTION FOR RENEWAL.
If the Tenant shall be desirous of taking a tenancy of the
Demised Premises for a further term equivalent to the period set
forth in Section 5 of the Second Schedule from (and including)
the day immediately following the Expiry Date at the rent (to be
mutually agreed upon) and on the terms and conditions hereinafter
mentioned and shall, not less than three (3) months before the
Expiry Date, give to the Landlord notice in writing of such its
desire, then AND PROVIDED ALWAYS that the Tenant shall have,
throughout the term of the tenancy punctually paid the Rent
herein reserved in the manner herein stipulated and duly
performed and observed all the Tenant's obligations under and in
relation to the tenancy and this Agreement up to the Expiry Date,
the Landlord shall let the Demised Premises to the Tenant for the
aforesaid further term commencing on the day immediately
following the Expiry Date at a rent to be mutually agreed upon
between the Landlord and the Tenant in writing at least one (1)
month prior to the Expiry Date and subject to in all other
respects to the same terms and conditions of this Agreement
mutatis mutandis save and except for this Clause 8.
9. MISCELLANEOUS PROVISIONS.
9.1 Fitting Out Period.
For the period specified in Section 4 of the Second Schedule
hereto (hereinafter referred to as "the Fitting Out Period") and
subject always to the provisions of Clause 3.6, the Tenant shall
have license and authority to enter upon the Demised Premises for
the purpose of executing its renovation works on the Demised
Premises.
9.2 No Waiver.
The acceptance of the Rent or any part thereof by the Landlord
shall not be deemed to operate as a waiver by the Landlord of any
right of action against the Tenant in respect of any breach by
the Tenant of any of its covenants or obligations herein
contained. No failure or delay on the part of the Landlord in
exercising any right under this Agreement shall operate as a
waiver of such right nor shall the knowledge or acquiescence by
the Landlord of or in a breach or non-observance or non-
performance by the Tenant of any terms and conditions of this
Agreement constitute a waiver of such and/or any other terms and
conditions.
9.3 Cost.
All costs and expenses for the preparation of this Agreement
including the stamp duty and the Landlord's solicitor fees and
disbursements shall be borne and paid by the Tenant. The Tenant
shall further, upon demand therefor made by the
<PAGE>
Landlord pay all fees, costs, charges and expenses (including the
Landlord's solicitor fees on a full indemnity basis) incurred by
the Landlord in enforcing this Agreement, whether such fees,
costs, charges and expenses shall be incurred in the giving of
any notice to the Tenant, the recovery of monies payable by the
Tenant under this Agreement or recovery of vacant possession of
the Demised Premises, by legal proceedings or otherwise
howsoever.
9.4 Notices.
9.4.1 Any notice, consent, request or other communication given or to
be given hereunder by a party hereto to the other party hereto
shall be in writing and shall be sufficiently served :-
(a) on the Tenant if addressed to the Tenant and left at or sent
by post to the Demised Premises or at the Tenant's place of
business last known to the Landlord or its registered office
for the time being or at such address as the Tenant may
notify to the Landlord in writing; and
(b) on the Landlord if addressed to the Landlord and left at or
sent by post to the address above given of the Landlord or
its registered office for the time being or such address as
the Landlord may notify to the Tenant in writing.
9.4.2 A notice, request, consent or other communication given,
addressed and sent in accordance with Clause 9.4.1 shall if sent
by post, be deemed to be received by the party which it is sent
on the third (3rd) working day after it is put in the post,
postage prepaid and addressed as aforesaid.
9.5 Time.
Time whenever and wherever mentioned is of the essence of this
Agreement.
9.6 Cumulative rights.
The rights and remedies provided in this Agreement are cumulative
and not exclusive of any rights, power or remedies provided by
law.
9.7 Caveat.
The Tenant shall not lodge, or apply for the lodgment of, any
caveat against the Demised Premises or any interest therein.
9.8 Successors.
This Agreement shall be binding upon the respective successors in
title of the Landlord and the Tenant.
<PAGE>
9.9 Severability.
Each of the provisions of this Agreement is severable distinct
from the others and if at any time one or more or such provisions
is or becomes invalid illegal or unenforceable, the validity
legality and enforceability of the remaining provisions hereof
shall not in any way be affected or impaired thereby.
9.10 Interpretation.
9.10.1 In this Agreement, unless the context otherwise requires:-
"law" includes common or customary law and any constitution,
decree, judgment, legislation, order, ordinance, regulation,
statute, treaty or other legislative measure, in each case of any
jurisdiction whatsoever and "lawful" and unlawful" shall be
construed accordingly;
"obligations" of any party under this Agreement shall construed
as a reference to an obligation of that party (whether by way of
an agreement, covenant, proviso, term, condition, undertaking,
stipulation or otherwise) expressed to be made or assumed by or
imposed on that party under this Agreement;
<PAGE>
IN WITNESS WHERE of the Landlord and Tenant hereto have hereunto set their hands
the day and year first above written.
SIGNED by )
for and on behalf of )
)
the LANDLORD aforesaid ) /s/ illegible
-------------------------------
in the presence of : ) /s/ illegible
-------------------------------
SIGNED by )
for and on behalf of )
)
the TENANT aforesaid ) /s/ T.S. Wong
-------------------------------
T.S. Wong
in the presence of : ) /s/ Roger Koh
-------------------------------
Roger Koh
<PAGE>
THE FIRST SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 The day and the year of this The 28th day of April, 1999.
Agreement.
- --------------------------------------------------------------------------------
2 Name and description of the WOI SEEN CHIN ENTERPRISES SDN.
Landlord. BHD. (CO. NO. 40541-U) of NO.
21-B, JALAN SS2/75, 47300
PETALING JAYA.
- --------------------------------------------------------------------------------
3 Name and description of the TECNOCHANNEL TECHNOLOGIES SDN.
Tenant. BHD. (CO. NO. 426318-M) having its
registered address at SUITE NO.
10.01, LEVEL 10, HERITAGE HOUSE,
NO. 33, JALAN YAP AH SHAK, 50300
KUALA LUMPUR.
- --------------------------------------------------------------------------------
4 Particular of the Demised All that part of the office unit
Premises. known as Unit Nos. 606 AND 506,
BLOCK G, PHILEO DAMANSARA I,
JALAN DAMANSARA, measuring in
area 5,054 S.F.
- --------------------------------------------------------------------------------
<PAGE>
THE SECOND SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 Term of the tenancy (Clause 1) 2 (two) years.
- --------------------------------------------------------------------------------
2 Commencement Date of the 15/6/1999.
tenancy (Clause 1)
- --------------------------------------------------------------------------------
3 Expiry Date of the tenancy 14/6/2001.
(Clause 1)
- --------------------------------------------------------------------------------
4 Fitting out period From vacant possession to
(Clause 9.1) 14/6/1999.
- --------------------------------------------------------------------------------
5 Terms of the new tenancy pursuant 2 (two) years.
to option to renewal (Clause 8)
- --------------------------------------------------------------------------------
<PAGE>
THE THIRD SCHEDULE
- --------------------------------------------------------------------------------
SECTION NO. ITEM PARTICULARS
- --------------------------------------------------------------------------------
1 Amount of the Security Deposit Ringgit Malaysia Sixteen
(Clause 2.1) Thousand Six Hundred Seventy
Eight and Cents Twenty Only
(RM 16,678.20)
- --------------------------------------------------------------------------------
2 Amount of the Rent for the term Ringgit Malaysia One Hundred
of two (2) years of the tenancy Thirty Three Thousand Four
(Clause 1) Hundred Twenty Five and Cents
Sixty Only (RM 133,425.60)
- --------------------------------------------------------------------------------
3 Amount of the Utilities Deposit Ringgit Malaysia Two Thousand
(Clause 2.2) Seven Hundred Seventy Nine and
Cents Seventy Only (RM 2,779.70)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
THE THIRD SCHEDULE
(PART TWO)
- --------------------------------------------------------------------------------
The Tenant shall pay the Rent by TWENTY FOUR (24) equal monthly installments,
each installments to be in a sum of RINGGIT Malaysia Five Thousand Five Hundred
Fifty Nine and Cents Forty Only (RM 5,559.40) the first of the installments to
be paid on or before execution of Tenancy Agreement and each subsequent
installment to be paid on or before the 7TH. DAY of every succeeding month
during the term of the tenancy.
- --------------------------------------------------------------------------------
<PAGE>
16th March 1999
Woo Ah Lek
27 Jalan SR8/6
Taman Putra Indah
43300 Serdang Raya
Selangor Darul Ehsan
TecnoChannel Technologies Sdn Bhd
Incubator2, Lot G3
Technology Park Malaysia
Lebuhraya Puchong-Sungei Besi
Bukit Jalil
57000 Kuala Lumpur
Dear Sir / Madam,
RENTAL OF STORAGE PLACE
Following the recent meeting with your Mr. Wong on 15th March 1999, this is to
confirm the minutes of meeting that Mr. Wong on behalf of TecnoChannel
Technologies Sdn Bhd (referred as "TecnoChannel") has agreed to rent the storage
place bearing the address of No. 7C-G, Lot 7, Jalan PCR2, Off Jalan Balakong,
Batu 11 Cheras, 43200 Kajang, Selangor Darul Ehsan (refererd as "storage
place"), for the period from 19th March 1999 to 19th June 1999 for the amount of
RM 12,000.00 (Malaysia Ringgit only) and subject to the terms and conditions
hereinafter contained.
It is hereby agreed as follows :-
1) TecnoChannel shall be liable and shall have an insurance coverage on their
goods or assets stored in the storage place against loss or damage or
against such other risks and shall indemnifies the landlord against any
claims.
2) TecnoChannel shall bear the maintenance charges of the storage place
including the water and electricity charges during the period.
3) TecnoChannel shall notify the landlord in writing of any alteration or
renovation to the storage place and shall bear all expenses incurred.
4) The schedule of the rental payment shall be at RM 4000.00 per month payable
in advance on
or before 19th of the month with a grace period of 14 days.
5) In the event that TecnoChannel defaults or fail to continue to rent the
storage place for the said period, the rental for the remaining period
shall be settle in full.
6) TecnoChannel covenants that the storage place is utilised only for legal
purposes and free from activities that against the law, by-law and state
council.
Any defaults on the above conditions, the landlord reserve the right to
discontinue the rental of the storage place and Clause no.5 shall be in effect.
Please acknowledge your acceptance of the minutes by signing and returning the
duplicate copy.
Yours faithfully
/s/ Woo Ah Lek
- ----------------------
Woo Ah Lek
- --------------------------------------------------------------------------------
I hereby acknowledge and agree to the terms and conditions as stipulated.
/s/ T.S. Wong
- ----------------------
T.S. Wong
Date : March 26, 1999
- ---------------------------------
<PAGE>
ALLIANCE/INTEROFFICE
- --------------------------------------------------------------------------------
OFFICE SERVICE AGREEMENT
- --------------------------------------------------------------------------------
This Agreement is dated June 3,1999 and is entered into in San Francisco,
California by and between ALLIANCE/INTEROFFICE, SAN FRANCISCO, LLC, dba
ALLIANCE/INTEROFFICE (hereinafter "ALLIANCE") and Mywebinc.Com, Inc.
(hereinafter "CLIENT").
ALLIANCE and CLIENT agree that ALLIANCE will provide to CLIENT for and in
consideration of the agreements and fee(s) set forth herein, an exclusive
License to use the Office(s) as from time to time designated by ALLIANCE and, in
common with ALLIANCE's other clients, the non-exclusive License to use
ALLIANCE's Business Center facilities and services,
1. BASIC TERMS: This Section 1 contains the basic terms of this Agreement
and all provisions of this Agreement are to be read in accord
therewith:
A. Base Services: ALLIANCE's Full Time Office Program, including the use
of executive offices complete with professional administrative staff,
reception services and such other inclusive services which are defined
as Base Services in Exhibit A.
B. Additional Services: Access to additional business services for
purchase as needed by CLIENT, including secretarial, administrative,
telecommunications support and such other services as defined in
Exhibit A.
C. ALLIANCE Business Center and Address: Alliance Business Center 595
Market Street, 75th Floor, San Francisco, CA 94105
- ------------------------------------------------------
E. Maximum Occupancy Capacity: Two (2)
G. Commencement Date: June 4, 1999
I. Total Refundable Retainer: $3,650.00
D. Office Number(s): #29
F. Initial Term: Twelve (12) Months
H. End of Term: May 31, 2000
J. Credit Limit: $2,500.00
2. OFFICE. The CLIENT shall, as part of the Base Services, be provided with the
exclusive use of the Office and shall have access to the Office twenty-four (24)
hours day, seven (7) days a week. The location of Office is indicated on Exhibit
A. ALLIANCE agrees to provide office cleaning, maintenance services,
electricity, heating and air conditioning to the Office for normal office use in
reasonable quantities during generally recognized business days subject to the
rules and regulations of the building. In addition, CLIENT will have reasonable
use of ALLIANCE common area facilities. CLIENT shall use the Office and
auxiliary areas of the ALLIANCE Business Center solely for general office use in
the conduct of the CLIENT's business.
If, for any reason whatsoever, ALLIANCE is unable to deliver possession of
the Office or a mutually agreed upon alternative office at the time herein
agreed, CLIENT may either extend the Commencement Date until the Office becomes
available or, as its sale remedy for such failure, cancel and terminate this
Agreement if the Office is not delivered to CLIENT within five (5) business days
after written notice to ALLIANCE by CLIENT, in which case any prior payments
shall be
<PAGE>
fully refunded. No such failure to deliver possession shall subject ALLIANCE to
any liability for loss or damage, nor affect the validity of this Agreement or
the obligations of the CLIENT hereunder.
In order to accommodate the needs of potential multiple office clients,
ALLIANCE will have the right, upon ten (10) days written notice, to relocate the
CLIENT to another office in the ALLIANCE Business Center, and to substitute such
other office for the Office contracted herein, provided such other office is
substantially similar in area and configuration to CLIENT's contracted Office
and provided the CLIENT shall incur no increase in the Total Monthly Fee or any
relocation cost or expense.
3. SERVICES. ALLIANCE agrees, in consideration for a Monthly Fee, to
provide Base Services to CLIENT as itemized in Exhibit A. Allowances not
utilized in one month may not be carried over to subsequent months and shall not
decrease the charge for the allowances in that month. Rates fair services
provided in excess of allowances may be changed by ALLIANCE with 30 days advance
written notice.
CLIENT will not offer to any party in the ALLIANCE Business Center or the
Building, any of the services which ALLIANCE provides to its clients including,
but not limited to, services described in Exhibit A.
ALLIANCE will answer all incoming phone calls, unless otherwise mutually
agreed, during normal business hours, as determined by ALLIANCE. CLIENT will use
only telecommunications systems and services as provided by ALLIANCE. CLIENT
will pay ALLIANCE a monthly fee for equipment rental and, where applicable, for
voice lines.
CLIENT acknowledges that due to the imperfect nature of verbal, written
and electronic communications, ALLIANCE shall not be responsible for damages,
direct or consequential, which may result from the failure of ALLIANCE to
furnish any service, including but not limited to the service of conveying
messages, communications and other utility or services required under this
Agreement or agreed to by ALLIANCE. CLIENT's sole remedy and ALLIANCE's sole
obligation for any failure to render any service, any error or omission, or any
delay or interruption with respect thereto, is limited to an adjustment to the
CLIENT's billing in an amount equal to the charge for such service for the
period during which the failure, delay or interruption continues.
The CLIENT expressly agrees to waive, and agrees not to make any claim for
damages, direct or consequential, arising out of any failure to furnish any
utility, service or facility, any error or omission with respect thereto, or any
delay or interruption of the same.
4. DURATION OF AGREEMENT. Unless one party hereto gives notice to the
other party in writing sixty (60) days prior to the end of the term to terminate
this Agreement, upon the end of the Initial Term, or any extension thereof, the
term of this Agreement and the License herein granted shall be automatically
extended for the same period of time as the Initial Term, upon the same terms
and conditions as contained herein, except that the Monthly Base Fee shall be
increased by 0.4% per month of the Initial Term. Such sixty (60) day notice
period shall be tended to ninety (90) days if CLIENT occupies three or more
offices.
Upon any termination of this Agreement, by proper written notice by either
Party, CLIENT shall surrender possession and vacate the Office and the ALLIANCE
Business Center immediately. For each and every month or portion thereof that
CLIENT retains possession of the Office after the termination of this Agreement,
without the express written consent of ALLIANCE, CLIENT shall pay ALLIANCE, as
liquidated damages, an amount equal to double the Total Monthly Base Fee
computed on a per-month basis for each month or portion thereof that the CLIENT
remains in possession.
5. PAYMENTS AND ESCALATIONS. CLIENT agrees to pay to ALLIANCE the Total
Monthly Fixed Fee including applicable sales or use Taxes as detailed in Exhibit
C hereto, in advance, on the first day of each calendar month during the initial
term and all extensions thereof, without any deduction, offset, notice or
demand. If the term shall not commence on the first day of a month or end on the
last day of a month, fees for any such month shall be prorated, any amounts due
for services in excess of the Total Monthly Fixed Fee shall be due on the first
day of the following month. All amounts payable hereunder shall be payable at
the office of ALLIANCE or to such other location or to any agent designated in
writing by ALLIANCE. CLIENT shall, in addition to any other sums due, pay a late
charge equal to five percent (5%) of the
2
<PAGE>
total outstanding balance that is due or $5.00, whichever is greater, when
amounts due have not been paid to ALLIANCE within five (5) days of the date such
amount is due. The parties agree that such late charges are fair and reasonable
compensation for costs incurred by ALLIANCE where there is default in any
payment clue under this Agreement.
Upon the execution of this Agreement, CLIENT shall pay ALLIANCE or its
agent the Refundable Retainer. The Refundable Retainer need not be kept separate
and apart and no interest shall be paid to[?] ALLIANCE. In addition to the
Refundable Retainer, CLIENT will, upon execution hereof, pay to ALLIANCE the
Total Monthly Fixed Fee for the first full month of the Initial Term.
CLIENT agrees that the Refundable Retainer shall not be used by CLIENT as
payment for the Total Monthly Fixed Fee for the last month of the term. In the
event CLIENT defaults in the performance of any of the terms hereof, ALLIANCE
may terminate this Agreement and the License herein granted and may also use,
apply or retain the whole, or any part of the Refundable Retainer for the
payment (if any service fee or any other payment due hereunder, or for payment
of any other sum which ALLIANCE may spend by reason of CLIENT's default. If
CLIENT shall, at the end of the term of this Agreement, have fully and
faithfully complied with all of the terms and provisions of this Agreement, and
surrendered all keys, access cards and building passes, the Refundable Retainer,
or any balance thereof, shall be returned to CLIENT within forty-five (45) days
after the end of term.
The Refundable Retainer in conjunction with Clients credit rating provide
the basis for establishing the Client's Credit Limit. Payment in accordance with
the terms herein will assure no interruption to your service. In the event
amounts owed exceed the established Credit Limit services provided under the
terms of this Agreement shall be suspended.
6. DAMAGES AND INSURANCE. CLIENT will not damage or deface the
furnishings, walls, floors or ceilings, although reasonable hardware may be used
for the hanging of pictures. CLIENT will not cause damage to any part of the
Building or the property of ALLIANCE or disturb the quiet enjoyment of any other
Licensee or occupant of the Building nor suffer to be made any waste,
obstruction or unlawful, improper or offensive use of the Office or the common
area facilities. At the termination of this Agreement, CLIENT will return Office
in as good condition as when CLIENT took possession, normal wear and tear
excepted. A move out fee of $100.00 will be charged for cleaning, painting and
general maintenance for each office occupied less than three years. Within sixty
(60) days prior to termination of this Agreement, ALLIANCE shall have the right
to show the Office to prospective clients, provided ALLIANCE will use reasonable
efforts not to disrupt CLIENT's business.
ALLIANCE and its respective directors, licensors, officers, agents,
servants and employees shall not, to the extent permitted by law, except upon
the affirmative showing of ALLIANCE's gross negligence or willful misconduct, be
liable for, and the CLIENT waives all right of recovery against such entities
and individuals for any damage or claim with respect to any injury to person or
damage to, or loss or destruction of any property of the CLIENT, its employees,
authorized persons and invitees due to any act, Omission or occurrence in or
about the ALLIANCE Business Center or the Building. Without limitation of any
other provision hereof, CLIENT agrees to indemnify, defend, protect and save
ALLIANCE and its respective directors, licensors, officers, agents, servants and
employees harmless from and against all liability to third parties arising out
of CLIENT's use and occupancy of the Office or actions of omissions of CLIENT
and its agents, employees, contractors, and invitees. CLIENT further agrees that
all personal property of CLIENT, its agents, employees, contractors, and
invitees, within or about the ALLIANCE Business Center or the Building shall be
at the sole risk of CLIENT.
Client shall at Client's sole expense, obtain and keep in force during the
term of this Agreement a policy of comprehensive general liability insurance
with bodily injury and property damage aggregate limits in an amount not less
than three hundred thousand dollars ($300,000) insuring Client and naming
ALLIANCE/INTEROFFICE SAN FRANCISCO, LLC as an additional insured against any
liability arising out of the use, occupancy or maintenance of the Office and
ALLIANCE Business Center. The limit of said insurance shall not however limit
the liability of Client hereunder. Client shall provide to ALLIANCE, within 15
days of the commencement of this lease term, a Certificate of Insurance
verifying such coverage. Client agrees that failure by Client to provide such
3
<PAGE>
coverage increases ALLIANCE's risk of loss and may increase ALLIANCE's cost of
insurance. Should Client fail to provide the Certificate of Insurance, ALLIANCE
may charge, and Client shall pay, a monthly fee of forty dollars ($40.00) for
the first office and twenty dollars ($20.00) for each additional office occupied
under this Agreement as compensation for the additional risk and/or costs
incurred by ALLIANCE. Any insurance carried by ALLIANCE shall be excess and
non-contributing to the maximum extent permitted by insurance policies which may
be owned by ALLIANCE or Client. ALLIANCE and Client, for the benefit of each
other, waive any and all rights of subrogation which might exist against each
other.
ALLIANCE and CLIENT each hereby waive any and all rights of recovery
against the other, or against the officers, employees, agents or representatives
of the other, for loss of or damage to its property or the property of others
under its control, to the extent such loss or damage is covered by any insurance
policy.
If the ALLIANCE Business Center is made unusable, in whole or in part, by
fire or other casualty not due to negligence of CLIENT, ALLIANCE may, at its
option, terminate the Agreement upon notice to CLIENT, effective upon such
casualty, or may elect to repair, restore, or rehabilitate, or cause to be
repaired, restored or rehabilitated, the ALLIANCE Business Center, without
expense to CLIENT, within ninety (90) days or within such longer period of time
as may be required because of events beyond ALLIANCE's control. The Monthly Base
Fee shall be abated on a per diem basis for the portions of the Office that are
unusable. 7. DEFAULT. The CLIENT shall be deemed to be in default under this
Agreement: (a) if CLIENT defaults in the payment of the Monthly Base Fee or
other sums due hereunder, or (b) if the CLIENT defaults in the prompt and full
performance of any other provision of this Agreement and any such default
continues in excess of five (5) business days after written notice by ALLIANCE
or (c) if CLIENT fails to comply with the laws or permit licensing rules and
other requirements regulating the conduct of Client's business.
Should the CLIENT be in default hereunder, ALLIANCE shall have the option
to pursue any one or more of the following remedies without any additional
notice or demand whatsoever and without limitation to ALLIANCE in the exercise
of any remedy:
(1) ALLIANCE may, if ALLIANCE so elects, without any additional notice of
such election or demand to CLIENT, either forthwith terminate this Agreement and
the License to use any portion of the ALLIANCE Business Center, and may enter
into the Office and take and hold possession of the Office and contents thereof,
without releasing the CLIENT, in whole or in part, from the CLIENT's obligation
hereunder. In the event of such termination, ALLIANCE may, at its option,
declare the entire amount of the Monthly Base Fee which would become due and
payable during the remainder of the term, to be due and payable immediately, in
which event, CLIENT agrees to pay the same upon demand.
(2) Pursue any other remedy now or hereafter available to ALLIANCE.
ALLIANCE's exercise of any right or remedy shall not prevent it from exercising
any other right or remedy.
8. RESTRICTION ON HIRING. CLIENT, including its principals and any
affiliated companies, agrees that during the term of this Agreement and within
one (1) year of the termination of this Agreement, neither CLIENT nor any of its
employees will hire, directly or as an independent contractor, any person who is
employed by ALLIANCE at any time during the six (6) month period prior to the
new hire date of said person by CLIENT. In the event that CLIENT shall breach
any obligation of CLIENT contained in this paragraph, CLIENT shall be liable to
ALLIANCE for, and shall pay to ALLIANCE, on demand, liquidated damages in the
sum of $10,000.00 for each employee with respect to whom such breach shall
occur, it being mutually agreed by ALLIANCE as the result of any such breach
would be, from the nature of the case, extremely difficult to fix and that the
aforesaid liquidated damage amount is fair and reasonable ALLIANCE agrees that
this restriction applies only to ALLIANCE employees employed at the ALLIANCE
Business Center during the term of this agreement.
9. MISCELLANEOUS.
A. This is the only Agreement between the parties. No other agreements are
effective. All amendments to this Agreement shall be in writing and signed by
all parties. Any other attempted amendment shall be void. The invalidity or
unenforceability of any provision hereof shall not affect the remainder hereof.
4
<PAGE>
B. All waivers must be in writing and signed by the waiving party.
ALLIANCE's failure to enforce any provision of this Agreement or its acceptance
of fees shall not be a waiver and shall not prevent ALLIANCE from enforcing any
provision of this Agreement in the future. No receipt of money by ALLIANCE shall
be deemed to waive any default of CLIENT or to extend, reinstate or continue the
term hereof.
C. All Exhibits and Addenda attached hereto are hereby incorporated
herein. The laws of the State of California shall govern this Agreement.
D. All parties signing this Agreement as a partnership or cosigning
individuals shall be jointly and severally liable for all obligations of the
CLIENT.
E. CLIENT represents and warrants to ALLIANCE that there are no agents,
brokers, finders or other parties except none, with whom CLIENT has dealt who
are or may be entitled to any commission or fee with respect to this Agreement.
F. Neither CLIENT nor anyone claiming by, through or under CLIENT shall
assign this Agreement or permit the use of any portion of the ALLIANCE Business
Center by any person other than the CLIENT.
G. The Rules and Regulations of the Building and of ALLIANCE as defined on
Exhibit B hereto are expressly made a part of this Agreement and CLIENT
expressly covenants and agrees to abide by all of said Rules and Regulations, as
well as such reasonable modifications as may be hereafter adopted by ALLIANCE.
H. All notices hereunder shall be in writing. Notices to CLIENT shall be
deemed to be duly given if mailed by registered or certified mail, Postage
Prepaid, addressed to Client at: 712 5th Avenue, 7th Floor, New York, NY 10019.
Notice to ALLIANCE shall be deemed to be duly given if mailed by registered or
certified mail, postage prepaid, to ALLIANCE at 595 Market Street, 25th Floor,
San Francisco, CA 94105.
I. THIS AGREEMENT IS NOT INTENDED TO CREATE ANY INTEREST IN REAL PROPERTY
IN FAVOR OF THE CLIENT, BUT INSTEAD CREATES A REVOCABLE LICENSE IN ACCORDANCE
WITH THE TERMS HEREOF. This Agreement grants the CLIENT the License to use the
ALLIANCE Business Center and the Office for the specific purpose herein set
forth without diminution of the legal possession or control thereof by ALLIANCE
and shall be revocable at the option of ALLIANCE upon the destruction of the
ALLIANCE Business Center, the abandonment or non-use by CLIENT, or the breach by
the CLIENT of any term or condition herein set forth. This Agreement is subject
and subordinate to any underlying Lease or Contract of the premises as it may be
amended from time to time (said underlying Lease or Contract together with any
amendments, hereinafter referred to as the Master Lease). This Agreement shall
terminate simultaneously with the termination of the ALLIANCE Business Center
operation for any reason. The CLIENT is not a party to nor shall have any rights
under the Master Lease.
J. The CLIENT acknowledges that ALLIANCE Business Centers will comply with
U.S. postal Service regulations regarding client mail and, upon termination of
this Agreement it will be the CLIENT's responsibility to notify all parties of
termination of the use of the above-described address, assigned telephone number
and facsimile numbers. For thirty (30) days after the termination of the
Agreement has taken effect, ALLIANCE will, at the CLIENT's written request and
cost, provide the CLIENT's new telephone number and address to all incoming
callers and will hold or forward once a week all mail, packages and facsimiles.
K. ALLIANCE may assign this Agreement and/or any fees hereunder and the
CLIENT agrees to attorn to any such assignee.
L. ALLIANCE's Monthly Base Service Fees have been established based on
expected Client electrical usage for one computer and one printer per office.
Client's use of office equipment in excess of this standard shall result in an
additional charge for electrical consumption at a rate reflecting typical
consumption for such additional equipment.
M. Client acknowledges that any phone numbers assigned to Client under
this agreement may not be taken by Client at the termination of this Agreement.
Client further acknowledges that no Yellow Pages advertising utilizing the
assigned phone number shall be placed without advance written approval by
ALLIANCE in the form of a contract for the duration of the telephone directory.
5
<PAGE>
- --------------------------------------------------------------------------------
The following exhibits are attached hereto and made a part hereof.
Exhibit A Services, Furniture and Equipment Agreement
Exhibit B Building Rules and Regulations
Exhibit C Floorplan
ADDENDUM
1) Client will have a one time option to terminate this agreement at the end of
the first six (6) months, with sixty (60) days written notice to Alliance, to be
received no later than October 31, 1999. The fee for this option, if exercised,
shall be equivalent to one month's fixed charges.
2) Client will be allowed to move into office earlier than the June 4, 1999,
start date, and rent will be prorated back to cover those days. Phones will be
installed at least five (5) working days from when Alliance receives a signed
agreement from client.
- --------------------------------------------------------------------------------
"CLIENT" - Mywebin.com, Inc.
a Nevada Corporation
Address: 712 5th Avenue, 7th Floor
New York, NY 10019
By: /s/ illegible
---------------------------
Title: Vice President
---------------------------
Date: 6/3/99
---------------------------
ALLIANCE ALLIANCE/INTEROFFICE SAN FRANCISCO, LLC
a Nevada corporation
dba ALLIANCE/INTEROFFICE
Address: 595 Market Street, 25th Floor
San Francisco, CA 94105
By:
By: /s/ Derrick Lanier
---------------------------
Derrick Lanier
Title: General Manager
---------------------------
Date: 6/3/99
---------------------------
PERSONAL GUARANTEE:
For value received, the undersigned does hereby unconditionally and irrevocably
guarantee the prompt payment and full performance of all terms, covenants,
conditions and agreements as contained herein.
By:
-----------------------------------
6
<PAGE>
OFFICE AND SERVICES AGREEMENT AMENDMENT
DATED JULY 27,1999
This agreement between ALLIANCE SAN FRANCISCO, LLC DBA ALLIANCE BUSINESS CENTERS
and MyWebInc.com (Client) constitutes an amendment to the existing Office and
Services Agreement dated June 4,1999.
Effective, JULY 27, 1999, both parties agree to change the terms of occupancy
for office #29 by making Victor Ng the contact and representative of
MyWeblnc.com in place of Walter Ling. Signing below, in effect, makes Victor Ng
responsible for the terms of any and all contracts and/or agreements previously
signed by Walter Ling and removes Walter Ling as the responsible party.
This amendment leaves all other terms and conditions of the Office and Services
Agreement between the parties in full force and effect.
Client: MyWebInc:Com
712 5th Ave., 7th Floor
New York, NY 94105
By: /s/ Victor Ng
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Victor Ng
Title: Director
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Date: 8/16/99
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By: /s/ Walter Ling
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Walter Ling
Title: Vice President
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Date: 7/27/99
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ALLIANCE BUSINESS CENTER
595 Market St., Suite 2500
San Francisco, CA 94105
By: /s/ Derrick Lanier
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Derrick Lanier
Title: General Manager
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Date: 7/27/99
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LEASE AGREEMENT
The LANDLORD and the TENANT agree to lease the Apartment (referred to as
"Apartment") for the Term and at the Rent stated on the terms below:
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LANDLORD TENANT
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Name: Lee Wing Han Name: My Web Asia Pte Limited
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B.R. No.:
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Address: 10/F, Pearl Oriental House Address: 629 Aljunied Road
60, Stanley Street #04-18
Central Cititech Ind Building
Hong Kong Singapore 389838
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Phone: 2136-0361 Phone:
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Fax: 2537-8296 Fax:
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Apartment at BEIJING NEW WORLD CENTRE SERVICE APARTMENTS (__________) UNIT 617
Landlord's Name: Lee Wing Han, Henrietta
Bank Name: Overseas Trust Bank Limited
Bank Account No.: 052-200-31015751
Bank Address: 12-16 Pak Tai Street, Hunghom, Hong Kong
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<S> <C> <C> <C>
Lease signing date: Apr. 29, 1999 Monthly Rent: US$ 758.90
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Monthly Management Fee: US$ 241.10
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Term: 12 months
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Beginning: Apr. 19, 1999
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Ending: Apr. 28, 2000 Overall Security Deposit: US$ 2,600.00
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First period payment (payable to the landlord): US$ 3,705.00
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Exchange Rate: (US$1.00:HK$7.75)
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Rider Additional terms (if any) on 6-8 page(s) initiated at the end by the
parties is attached and made a part of this Lease.
1. USE The Apartment must be used only as a private Apartment to live in as
the residence of the Tenant or the Tenant's employee and for no other
reason.
2. FAILURE TO GIVE POSSESSION Landlord shall be liable for failure to give
Tenant possession of the Apartment on the beginning date of the Term by
at Tenant's option, refunding the above referenced deposits to Tenant or
extending the beginning date of the Term. Rent
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payable as of the beginning of the Term or the new beginning of the Term
if possession of the Apartment is delayed caused by the Landlord.
3. RENT AND MANAGEMENT FEE The rent and management fee payment for each rental
month must be paid on the tenth day before the commencement of the rental
month of that month at Landlord's address or deposited into Landlord's
Bank Account after the payment notice is received by the tenant three
weeks before the commencement of the month, Tenant may be required to pay
other charges to Landlord under the terms of this Lease. They are called
"added rent". This added rent will be billed and is payable as rent,
together with the next month rent due.
Added rent may include water, electricity, gas, telephone bills and must
be paid by the tenant on time.
4. NOTICES Any bill, statement of notice must be in writing. To Tenant, it
must be delivered or mailed to the Tenant at its address. To Landlord, it
must be mailed to Landlord's address. It will be considered delivered on
the day mailed or if not mailed, when left at the proper address. A
notice must be sent by certified, mail. Each party must accept and claim
the notice given by the other. Landlord must notify Tenant if Landlord's
address is changed.
5. SECURITY AND UTILITIES DEPOSITS Tenant has given security deposit to
Landlord in the amounts stated above. The deposits have been deposited in
the Bank named above and delivery of this Lease is notice of the deposit.
If Tenant does not pay rent, management fee or added rent on time.
Landlord can use the security deposits to pay for rent /management fee
and added rent then due. If Tenant fails to timely perform any other term
in this Lease. Landlord may use the security deposit for payment of money
Landlord may spend. If the Landlord uses the security, Tenant, shall,
upon notice from Landlord, send to Landlord an amount equal to the sum
used by Landlord. At all times Landlord is to have the amount of security
stated above.
If Tenant fully performs all terms of this Lease, pays rent, management
fee and leaves the Apartment in good condition on the last day of the
Term, then Landlord will return the deposits within 15 days without
interest after the days when all rents and utilities have been paid.
6. TENANT'S RIGHTS Tenant may enforce its rights under the warranty of
habitability and quite enjoyment. Damage to the equipment or appliances
supplied by Landlord, caused by Tenant's act or neglect, may be repaired
by Landlord at Tenant's expense. The repair cost will be added rent.
7. ALTERATIONS Tenant must obtain Landlord's prior written consent to install
any paneling, flooring, "built in" decorations, partitions, railings, or
make alterations or to paint or wallpaper the Apartment. Tenant must not
change the plumbing, ventilating, air conditioning electric or heating
systems. If consent is given, the alterations and installations shall
become the property of Landlord when completed and paid for. They shall
remain with and as part of the Apartment at the end of the Term.
8. REPAIRS Tenant must take well care of the Apartment and all equipment and
fixtures in it. Landlord and the assigned management company will repair
the plumbing, heating and
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electrical systems. Tenant must, at Tenant's cost, make all repairs and
replacements, whenever the need results from Tenant's act or neglect. If
Tenant fails to make a needed repair or replacement after being notified
of such need by the Landlord, Landlord may do it. Landlord's reasonable
expense will be added rent. If the equipment and fixtures in the
Apartment are covered by warranty, Landlord must provide repair and
maintenance services free of charge. All repairs must be done by Landlord
within the shortest time possible.
9. FIRE, ACCIDENT, DEFECT, DAMAGE Tenant must give Landlord prompt notice of
fire, accident, damage or dangerous or defective conditions. If the
Apartment cannot be used because of fire or other casualty, Tenant is not
required to pay rent for the time the Apartment is unusable.
10. LIABILITY Landlord shall be liable for loss, expense, or damage to any
person property, due to Landlord's negligence.
Tenant must pay for damages suffered and reasonable expenses of Landlord
relating to any claim arising from any act or neglect of Tenant.
11. ENTRY BY LANDLORD Landlord may enter the Apartment upon prior notice at
reasonable hours to: repair, inspect, exterminate, install or work on
master antennas or other systems or equipment and perform other work that
Landlord decides is necessary or desirable. Upon prior written notice to
Tenant, Landlord may show the Apartment to possible buyers and lenders.
At reasonable hours Landlord may show the Apartment to possible new
tenants during the last 2 months of the Term.
12. CONDEMNATION If the whole or any part of the Apartment is taken or
condemned by a legal authority, the Term, and Tenant's rights and
obligations shall end as of the date the authority takes title to the
Apartment. If any Part of the Apartment is taken, Landlord may cancel
this Lease on notice to Tenant. The notice shall set a cancellation date
not less than 60 days from the date of the notice. If the Lease is
canceled, Tenant must deliver the Apartment to Landlord on the
cancellation date together with all rent due to that date.
13. TEARNING DOWN THE APARTMENT If the Landlord wants to tear down the
Apartment, Landlord shall have the right to end this Lease by giving six
(6) months notice to Tenant and then the Lease will end and Tenant must
leave the Apartment at the end of the 6 months period in the notice.
14. PLAYGROUND, POOL, PARKING AND RECREATION AREAS If there is a playground,
pool, parking or recreation area, Landlord's Beijing Management Office
shall keep such areas in clean and safe conditions and Landlord shall
give Tenant permission to use them. Tenant must pay all fees Landlord
charges if the rent does not include such fees.
15. CORRECTING, TENANT'S DEFAULTS If Tenant fails to timely correct a default
after notice from Landlord, Landlord may correct it at Tenant's expense.
16. TENANT'S DUTY TO OBEY LAWS AND REGULATIONS Tenant must, at Tenant's
expense, promptly comply with all laws, orders, rules, requests, and
directions, of all governmental authorities with regard to the occupancy
of the Apartment, except, however, that Landlord shall assure compliance
at its own expense with zoning, building code, fire prevention and
security regulations.
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17. TENANT'S DEFAULT Landlord must give Tenant written notice of
default stating the type of default. The following are defaults and must
be cured by Tenant within the time stated:
(1) Failure to pay rent or added rent on time, 15 days.
(2) Failure to move into the Apartment within 15 days after the beginning
date of the Term, 30 days.
(3) Improper conduct by Tenant annoying other tenants, 10 days.
(4) Failure to comply with any other term of the Lease, 10 days.
18. REPRESENTATIONS, CHANGES IN LEASE Tenant and Landlord have read this Lease
and understand its meaning. All promises made by the Landlord and Tenant
are in this Lease- There are no others. This Lease may be changed only by
an agreement in writing signed by and delivered to each party.
19. LANDLORD UNABLE TO PERFORM If due to any cause within Landlord's reasonable
control. Landlord is delayed or unable to
(a) Carry out any of Landlord's promises or agreements.
(b) Supply any equipment to be supplied.
(c) Make any required repair or change in the Apartment or
(d) Supply any equipment or appliances Landlord is required to supply
This Lease may be terminated at Tenant's option and the deposits shall be
promptly refunded.
20. END OF TERM At the end of the Term, Tenant must leave the Apartment clean
and in good condition, subject to ordinary wear and tear; remove all of
Tenant's property and all Tenant's installations and decorations that are
not "built in".
21. LANDLORD'S WARRANTY OF HABITABILITY Landlord states that the Apartment is a
first class residential unit and fit for human living and there is no
condition dangerous to the health, life or safety of the Tenant of
affecting Tenant's quiet enjoyment of the Apartment.
22. LEASE BINDING ON This Lease is binding on Landlord and Tenant and their
heirs, executors, administrators, successors and lawful assigns.
23. PARAGRAPH HEADINGS The paragraph headings are for convenience only.
24. FURNITURE AND FURNISHINGS A list of the furniture and furnishings in the
Apartment and supplied by the Landlord is attached to this Lease and made a part
hereof. The rent already covers Tenant's use of the furniture and furnishings
and there are no separate charges of fees thereon. At the end of the Term Tenant
shall return the furniture and other furnishings clean and in good order and
repair. Tenant is not responsible for ordinary wear and damage by the elements
such as corrosion, cracking and termites.
SIGNATURES Landlord and Tenant have signed this Lease in Beijing as of the above
date.
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SIGNATURES Landlord and Tenant have signed this Lease in Beijing as of the above
date.
LANDLORD: TENANT:
By: /s/ illegible By: /s/ illegible
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APPENDIX I
1. PARTICULARS OF PARTIES
Landlord: Lee Wing Han
Tenant: My Web Asia Pte Limited
2. PARTICULARS OF TERM
Length: 12-month
Date of Commencement: Apr 29, 1999
Date of Expiry: Apr 28, 2000
3. PARTICULARS OF RENT
The Rent for the period from the Commencement Date to the Expiration of
the said term shall be US$758.90 per rental month.
4. PARTICULARS OF MONTHLY MANAGEMENT FEE
The management fee payable to the Landlord US$241.10 per month.
5. ADVANCE PAYMENT
The Tenant shall pay the first period advance payment in the amount of
US$1,105.00 to the Landlord before taking possession of the Premises.
The details of the advance payment are as follows:
Payable to the Landlord:
[X] First period (1-month) rent US$ 758.90
[X] First period (1-month) management fee US$ 241.10
[X] 12-month telephone maintenance fee: US$ 105 00
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Sub-total: US$ 1,105.00
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6. PARTICULARS OF THE OVERALL SECURITY DEPOSIT.
Payable to the Landlord:
2-month rent: US$1,517.80
2-month management fee: US$ 482.20
Telephone extension line: US$ 600.00
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Sub-total: US$2,600.00
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7. FIXTURES & FURNITURES
The Landlord will provide the Tenant with the list of fixtures,
furniture and appliances within the Premises upon the delivery of the
possession of the Premises.
8. TELEPHONE LINE
A telephone extension line (with IDD) has been installed and the
12-month maintenance fee US$105.00 is paid by the tenant.
9. EXTRA-APPLICANCES & FURNITURE
(I) Microwave Oven
(II) 21" TV
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(III) Shower Curtain
(IV) Iron and Ironing Board
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SUBSIDIARIES OF MYWEB INC.COM
(as of September 30, 1999)
MyWeb Network Systems (Beijing) Co., Ltd. (China)
TecnoChannel Technologies Sdn Bhd (Malaysia)
MyWeb Asia Pte Ltd (Singapore)
MyWeb America Inc.com (Delaware)
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CONSENT OF WLOSEK & BRAVERMAN, L.L.C.,
INDEPENDENT AUDITORS
To the Board of Directors
MyWeb Inc.com (formerly Asia Media Communications, Ltd.)
We hereby consent to the inclusion of our report dated March 29, 1999, with
respect to the consolidated financial statements of MyWeb Inc.com, formerly Asia
Media Communications, Ltd. (the "Company") as of December 31, 1998 and for the
years ended December 31, 1998 and 1997, respectively, and the notes thereto, in
the Registration Statement on Form SB-2 and the related Prospectus of the
Company relating to the registration of its shares of common stock. We also
consent to the reference to our firm under the caption "Experts" in the
Prospectus included in such Registration Statement.
We have not audited any financial statements of the Company subsequent to
December 31, 1998 or performed any audit procedures subsequent to the date of
our report.
/s/ Wlosek & Braverman, LLC
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Wlosek & Braverman, L.L.C.
Certified Public Accountants
October 5, 1999
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26 October, 1999
The Board of Directors
MyWeb Inc.
Dear Sirs
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the inclusion of our
report dated 6 May, 1999 on the financial statements of TecnoChannel
Technologies Sdn. Bhd. as of 31 December, 1998 and for the year/nine month
period ended 31 December, 1998 and 1997, respectively, and the notes thereto in
the Registration Statement on Form SB-2 and the related Prospectus of MyWeb
Inc.com relating to the registration of its shares of common stock.
We have not audited any financial statements of the Company subsequent to 31
December, 1998 or performed any audit procedures subsequent to the date of our
report.
/s/ Arthur Andersen & Co.
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Arthur Andersen & Co.
Yours faithfully,
Kuala Lumpur, Malaysia
wkh/kck
