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U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-KSB
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
Commission file number 1-15745
MYWEB INC.COM
(Name of Small Business Issuer in Its Charter)
NEVADA 88-0207089
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
BLOCK G, UNIT G606, PHILEO DAMANSARA 1
NO. 9, JALAN 16/11
OFF JALAN DAMANSARA, 46350 PETALING JAYA
SELANGOR, MALAYSIA
(Address of principal executive offices)
(603) 460-9282
Issuer's telephone number (including area code)
Securities registered under Section 12(b) of the Exchange Act:
<TABLE>
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Title of Each Class Name of Each Exchange on Which Registered
<S> <C>
COMMON STOCK AMERICAN STOCK EXCHANGE
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Securities registered under Section 12(g) of the Exchange Act:
- --------------------------------------------------------------------------------
(Title of Class)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes [X]
No [ ]
Check if disclosure of delinquent filers in response to Item 405 of
Regulation S-B is not contained in this form, and no disclosure will be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [ ]
State issuer's revenues for its most recent fiscal year: $3,512,000
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The aggregate market value of the voting equity (common stock) held by
non-affiliates of the Registrant on March 31, 2000 was approximately $48,974,880
based on the closing price of $12.87 of such stock on such date, as reported by
the American Stock Exchange ("AMEX"). Shares of common stock held by each of our
officers and directors, the directors of our subsidiary, TecnoChannel
Technologies Sdn Bhd and by each person who owns 10% or more of the outstanding
common stock have been excluded as such persons may be deemed to be affiliates.
This determination is not conclusive and does not constitute an admission of
affiliate status.
ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST FIVE YEARS
Check whether the issuer has filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes /X/ No / /
APPLICABLE ONLY TO CORPORATE REGISTRANTS
State the number of shares outstanding of each of the issuer's classes
of common equity as of March 31, 2000: 11,121,357 shares of common stock, par
value $0.01 per share
Transitional Small Business Disclosure Format (check one):
Yes / / No /X/
Certain statements under item "Management's Discussion and Analysis of
Operations" and elsewhere in this Form 10-KSB constitute "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. These statements are typically identified by their inclusion of phrases
such as "we anticipate," "we believe" and other phrases of similar meaning. Such
forward-looking statements involve known and unknown risks, uncertainties and
other factors that may cause our actual results, performance or achievements to
be materially different from any future results, performance or achievements
expressed or implied by such forward-looking statements. Such factors include,
among others: general economic and business conditions; competition; political
changes in international markets; operating costs; costs of capital equipment;
changes in foreign currency exchange rates; changes in business strategy or
expansion plans; quality of management; availability, terms and development of
capital; fluctuating interest rates and other factors referenced in this Form
10-KSB.
PART I
ITEM 1. DESCRIPTION OF BUSINESS
HISTORY
We were incorporated under the laws of the State of Nevada, The United
States of America, on February 20, 1985 as a limited liability company 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 ("Asia Media"). 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.
Beginning in 1995, our principal activity consisted of exploring
opportunities in other business ventures, including:
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(i) In March 1996, a merger with Kremlyovskaya Group, Inc, a
privately held Delaware corporation with a subsidiary company
involved in the distribution of vodka and other products in
foreign markets; and
(ii) In December 1996, the acquisition of IPC Corporation
(Australia) Pty, Ltd ("IPC Australia"), an Australian company
by our wholly-owned subsidiary, AMC International Holdings
Ltd, a British Virgin Islands Corporation ("AMC Holdings").
By mutual consent, the merger with Kremlyovskaya Group, Inc. was
rescinded in August 1996. AMC Holdings was sold in September 1997 to an
unrelated party, effective as of December 31, 1996, the date of the acquisition
of the capital stock of IPC Australia.
ACQUISITION OF TECNOCHANNEL
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 acquired all of the issued and outstanding
stock of TecnoChannel Technologies Sdn Bhd, a privately-held Malaysian
corporation ("TecnoChannel"), in exchange for 8,500,000 shares of our common
stock which we issued to the shareholders of TecnoChannel. We also issued
440,000 shares of our common stock to GEM Ventures Ltd for its services as our
financial adviser in connection with this transaction. As a result of the
reverse split of our outstanding common stock on February 23, 1999 and
subsequent issues of our common stock on February 24, 1999, the aggregate
shareholdings of those persons who were our shareholders before these
transactions were reduced to less than 1% of our issued and outstanding common
stock immediately after these transactions. Our acquisition of TecnoChannel
allowed us to adopt and focus on the business of TecnoChannel. In April 1999, we
changed our name from Asia Media Communications, Ltd. to MyWeb Inc.com.
Business Overview
We are a major Asian Internet online service and portal company that
uses alternative access devices as an additional means of distributing our
portal services. Our main portals are currently in the People's Republic of
China (the "PRC" or "China"), Singapore and Malaysia, each of which are focused
on delivering locally-targeted, local content and electronic commerce. Our
portals are principally accessed through co-branded television set-top boxes and
through personal computers.
THE BUSINESS OF ONLINE SERVICES ("PORTALS")
Portals are gateways or entrances to the Internet. They have the
potential to be central hubs for content, communication, community, and commerce
on the Internet. Portals have come to typically describe a starting point page
with a hierarchical, topical directory, a search window, and added features like
news headlines and stock quotes. In this respect, all default pages that get
loaded upon connection and which provide features like search engines could
generally be termed Portals. Typical examples include Yahoo, Netscape and
America Online ("AOL").
Portals generally provide a comprehensive, intuitive and user-friendly
online guide to web navigation and aggregated information content. It would
usually include a hierarchical, subject-based directory of websites, which
enables Web users to locate and access desired information and services through
hypertext links included in the directory. Portals also normally incorporate a
rich set of current and reference information from leading content providers,
including real-time news, stock quotes, business profiles, stock investing
commentary, sports scores, television listing, weather information, maps with
driving directions, searchable yellow pages, People Search white pages and
e-mail listing.
Generally, the main revenue generators for portals are advertising on
the Internet and electronic commerce ("e-commerce") revenues.
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a. Advertising on the Internet
The Internet offers web-based advertising, which has significant
advantages over traditional advertising mediums in a number of ways. In
addition to allowing an advertiser to target a specific audience, the
Internet also enables users to interact with the advertising messages
presented on the websites. The Internet also allows the advertiser to
track the number of impressions or times that an advertising message
appears in page views downloaded by users, which is verifiable by an
independent third-party auditor. Advertisers can also measure the
effectiveness of advertising in generating "click-through" or user
requests for additional information made by clicking on the
advertiser's banner linking the user to the advertiser's websites.
b. E-commerce
The Internet enables features and functions that are unavailable in
traditional media which include permitting online retailers to interact
effectively with customers and advertisers to target specific
demographic groups by capturing valuable data on customer tastes,
preference and shopping patterns.
We seek to become an internationally-recognized brand for providing
high-quality, localized content, services and e-commerce. This entails offering
an international one-stop information and lifestyle content in traditional
Chinese and English, providing access to entertainment, news, e-commerce,
business, finance, health education and a myriad of other services to serve the
needs of a diverse group of people and cultures within the Asian region. Through
strategic alliances with hardware manufacturers, we provide set-top boxes as a
means of capturing users onto our Internet portal.
Our current focus markets are China, Malaysia and Singapore. We plan to
further expand our operations into Thailand, Indonesia and Latin America within
the next 12 months.
OUR BUSINESS MODEL
In developing our business strategy, we have sought to integrate our
business lines by becoming involved in what we believe are the four fundamental
layers of technology within the Internet field. In the context of set-top boxes
for Internet television access, the four fundamental layers of technology are:
- - Software Layer: this involves providing interfacing software to enable
set-top boxes to access the Internet and perform interactive functions
and a software that enables Internet service providers ("ISPs") to
serve set-top box users. This means that the software used within the
set-top box must be compatible with the software used by the ISPs to
host and deliver Internet content to the end-user.
- - Device Layer: this involves cooperating with hardware manufacturers in
the design, production and distribution of the set-top box, the
hardware that connects the user to the Internet through the television
via a modem. We participate in the device layer through our co-branded
set-top boxes, which are manufactured by our strategic alliances with
our partners.
- - Communications Layer: this involves collaborating with
telecommunication companies ("Telcos") and ISPs, who offer a delivery
channel to the Internet.
- - Content Layer: this involves providing information, applications, links
and material, both in static and interactive formats, whether free or
for a price. Content can also be in the form of advertising and
electronic commerce.
We are primarily involved in the software and content layers. However
we also work with ISPs and Telcos (the communications layer) and hardware
manufacturers (the device layer) to drive the deployment of MyWeb services to
the end customers. Our primary involvement in the software layer is through our
Thunder software
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which allows set-top boxes to function and our ThunderServ software which allows
ISPs and Telcos to offer television Internet access to their subscribers. Our
primary involvement in the content layer is through our portals.
In taking part in the four layers, we have actively sought to build
strategic alliances with third parties, including manufacturers, ISPs and
content and application providers. This has enabled us to focus our research and
development expenditure and exploit the marketing potential of each alliance's
existing distribution channels and customer base.
The products and services that we offer, in terms of these four layers
of technology, are set forth below.
a. The Software Layer
Software for set-top boxes: Thunder
We design and develop the software solution that enables set-top boxes
to function. This software, called Thunder, can be adopted by any
set-top box manufacturer. All of the manufacturers involved in the
production and distribution of our set-top boxes to date have used our
Thunder technology. For a description of our strategic alliances with
these manufacturers, see "The Device Layer", below.
We are currently developing an alternative version of the Thunder
software based on the Linux platform. A prototype version has been
developed. However, commercial production of co-branded set-top boxes
based on the Linux platform has yet to commence.
Software for ISPs: ThunderServ
We also designed and developed a software solution that provides an
interface between the set-top box and the ISP. We license this
software, called ThunderServ, to ISPs with whom we have developed
strategic relationships.
ThunderServ software currently incorporates the following features:
- Integrated electronic billing module for completely automated
and paper-free billing;
- Personalization module to allow personalization of MyWeb
Online Services for subscribers;
- User access control based on a password for restricting
unauthorized usage;
- Remote upgrade module to allow remote online upgrading of
client software; and
- Parental control for blocking access to specified sites.
We have strategic alliances with ISPs in China and Malaysia that
license our ThunderServ software to provide television Internet access
to their subscribers. In each market we seek to identify and establish
relationships with leading ISPs in order to gain access to the broadest
subscriber base. We have relationships with MIMOS Berhad in Malaysia,
HKNet in Hong Kong and Beijing Telecom in China. We recently
established a relationship with Turnaround Technology Ltd. in Indonesia
("Turnaround") and Asia Infonet Co. Ltd. ("Asia Infonet") in Thailand.
These relationships are discussed more fully under "-- The
Communications Layer."
b. The Device Layer
The set-top box is an Internet access device that is designed to sit on
top of the television. A built-in modem connects the television to the
Internet via an ordinary telephone line. To install the set-top box,
the user simply connects the television and telephone to the set-top
box. Once connected through an ISP, the user can surf the Internet with
an infrared remote control, aimed at the television screen, which
functions
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like a mouse, and allows the user to "point and click." Alternatively,
the user can use a cordless infrared keyboard to enter text and
navigate within the portal.
Set-top boxes are generally low-cost and easy to use products that
deliver one or more interactive benefits. Consumers use set-top boxes
to supplement personal computers and, to a certain extent, replace
personal computers. Set-top boxes can also offer consumers a range of
services, from the provision of basic functions such as teletext (a
one-way content), to complete interactive services such as
video-on-demand, web browsing and e-mail.
Rather than manufacture the set-top boxes ourselves or source through a
single supplier, we have chosen to enter into strategic relationships
with different manufacturers. We have done so in order to ensure that
MyWeb set-top boxes will be available in the market to a greater number
of users who wish to access the Internet using televisions. Under these
arrangements, the manufacturers principally drive the marketing and
sales process through the co-branding of MyWeb set-top boxes. We
believe that these arrangements are advantageous for us because the
manufacturers are responsible for carrying any inventory of the set-top
boxes and we therefore are not affected by any holding costs associated
with this activity. Having a variety of manufacturers is also
beneficial for us because it helps us to penetrate the marketplace with
the MyWeb brand-name and portal, to facilitate greater acceptance of
and compatibility for our Thunder software, and also to better realise
our vision of broadening the use of the television as an alternative
means of access to the Internet.
Generally, we seek to establish non-exclusive relationships with
well-known manufacturers in each market in which we operate. We
currently have business arrangements, as further described below, with
Philips Consumer Electronics ("Philips"), Qingdao Haier Computer Co.,
Ltd. ("Haier") and Soyea Technology Company Ltd. ("Soyea") to jointly
develop non-PC access devices and/or manufacture set-top boxes that
carry the MyWeb brand. In order to further expand our distribution
network, we are currently exploring opportunities with other
manufacturers in our markets.
Philips: We established our first strategic alliance for the
manufacture of set-top boxes with Philips in December 1997. Under the
first arrangement, Philips produced, manufactured and distributed the
Philips MyWeb TM brand of set-top box. The arrangement was terminated
upon the expiry of the agreement in 1999. We continue to work with
Philips to develop an embedded Internet television functionality card,
which is a printed circuit board or PCB card that can be installed
inside television sets and which would allow users to access the
Internet through the television.
Soyea: Soyea, a company listed on the Shenzen Stock Exchange and a
subsidiary of the West Lake Electronics Group, is one of China's major
television manufacturers. We entered into an agreement dated May 18,
1999 with Soyea, pursuant to which we agreed to provide the Thunder
Software and manufacturing specifications and details for the set-top
boxes. Soyea, in return, agreed to provide the manufacturing
infrastructure, marketing and transportation of the end product
throughout China. We have also agreed to undertake joint research and
development with Soyea, as well as to share the technology of our
future projects developed with Soyea.
Haier: Haier is one of China's major consumer electronics and
whitegoods manufacturers, based in Shandong, China. We entered into a
joint venture agreement in July 1999 with Haier to cooperate in product
development, marketing and promotion, the provision of content and
e-commerce and the joint development of the television Internet market.
Under this agreement, Haier has agreed to manufacture MyWeb set-top
boxes, and we have agreed to provide software and technical support,
product licensing, recommendations on marketing as well as subsidies
for the set-top boxes. We believe we will benefit from this strategic
relationship because of Haier's strong brand recognition and wide
distribution network in China.
In January 2000, TecnoChannel entered into a license agreement with
MyWeb Network Systems (Beijing) Co. Ltd. ("MyWeb Beijing") to license
our Thunder software and other intellectual property related to the
production of our set-top boxes to MyWeb Beijing. Due to regulations in
China relating to the importation and licensing of foreign technology,
such licensing agreements between a Chinese company and a foreign
company are required to be approved by
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relevant regulatory authorities. We have applied for and are waiting
for such approval to be granted. MyWeb Beijing subsequently entered
into a sub-licensing agreements with Soyea and Haier in February 2000.
The Thunder software provided to Soyea and Haier is programmed to have
our MyWeb websites as the default home page once the Internet is
accessed through these set-top boxes. Through this arrangement we
secure visitors who use the co-branded MyWeb set-top boxes, to the
MyWeb websites.
c. The Communications Layer
Telecommunication companies and ISPs act as the delivery channel
through which owners of MyWeb set-top boxes access the Internet. We
offer ISPs and Telcos an attractive low-cost solution for increasing
subscribers to their networks. All set-top boxes users require an ISP
account to access the Internet. ISPs receive a direct benefit from
their partnership with us.
From our perspective, linking up with these companies will help
distribute MyWeb set-top boxes to a captive fixed-line subscriber
market and to the market of potential Internet users who may be unable
to afford or unwilling to pay for a personal computer. From the
viewpoint of a purchaser of a MyWeb set-top box, the box will come
already hooked up with an ISP. All the purchaser needs to do is to
simply "plug and play."
We have established strategic alliances with ISPs in several countries
to provide maintenance and updating of software, joint promotions, and
increasing consumer awareness. Depending on the arrangements with each
ISP, we may receive certain fees which are further described below. In
return for providing the ThunderServ software, we receive marketing
benefits, such as advertising space on the ISP's websites.
Details of our arrangements with these ISPs are set forth below.
Jaring (Malaysia): Jaring, the ISP arm of MIMOS Berhad, is a large ISP
in Malaysia. My Web has an informal arrangement with MIMOS Berhad for
Jaring to be the default ISP provider for the set-top box users to
access the Internet. For the Jaring subscribers we service, we charge
an initial registration fee and a 10% fee based on the access fees paid
through us.
ChinaNet (China): ChinaNet, a major ISP in China, is the ISP arm of
Beijing Telecom, the Chinese national telecommunications company. Under
the terms of our agreement with Beijing Telecom, which we entered into
in April 1999, we have agreed to jointly promote the Chinese portal of
MyWeb Online Services with Beijing Telecom. Beijing Telecom has placed
a MyWeb banner advertisement on its ChinaNet home page since we
commenced co-marketing activities.
Turnaround (Indonesia) On December 3, 1999, we entered into a license
agreement with Turnaround licensing the use of our Thunderserv software
to Turnaround. Under the agreement, we will jointly manage and market
the Indonesian version of our MyWeb Online Service and share
advertising and transaction revenues. We will also jointly market MyWeb
set-top boxes in Indonesia. The term of the license is from January 1
to December 31, 2000, and Turnaround is to pay to us $2 million in
license fees for the period of the license.
Asia Infonet (Thailand): Asia Infonet is an ISP in Thailand. On
February 22, 2000, we entered into an agreement with Asia Infonet to
jointly distribute and market a co-branded portal in Thailand,
localized in Thai language. Under the terms of the agreement, Asia
Infonet has agreed to provide consumers with local access to MyWeb's
portal and allow MyWeb access to its distribution channels at no cost
to distribute and market the product and MyWeb has agreed to provide
logos and icon links to Asia Infonet's websites on its portal.
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d. The Content Layer
We established the MyWeb Online Service in October 1997. The MyWeb
Online Service is an internet lifestyle and business content provider
of information and interactive applications, such as e-commerce,
financial services, educational services, games and chat rooms. Portals
for the MyWeb Online Service are available in each country in which we
operate, and are customized to provide services and information in the
local language, for local users.
The current internet properties in the MyWeb Online Service family are:
- www.mywebinc.com
- www.myweb.com.sg (Singapore)
- www.myweb.com.my (Malaysia)
- www.myweb.com.cn (China)
- www.myweb.com.hk (Hong Kong)
We are in the process of launching several new internet properties that
will join our existing family of MyWeb Online Service properties.
Our internet strategy involves partnering with third-party content
providers, to allow their content to be accessible from within our
portal. We believe that this will assist us in making our portals
attractive and self-contained, so that users will find all of their
internet interests within our portal, leading to longer time within our
portal and more repeat visits. The provision of interesting and
appealing content, offering e-commerce possibilities and ensuring a
high visit rate to MyWeb's portals will help generate e-commerce and
advertising revenues. To this end, we have formed business
relationships with providers in several fields, including Unilever
(Malaysia) Holdings Sdn Bhd ("Unilever"), MPH Bookstores, Tanjung
Golden Village, United Artists Cinemas, The China People's University,
Xinhua News Agency, China Sci-Technologies International Trust and
Investment Co. Ltd. Such relationships are not pursuant to any formal
documentation.
The MyWeb Online Service family has local content targeted at local
internet users and is generally organised into six channels. A summary
of the main content in each channel is described below:
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CHANNEL CONTENT
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BUSINESS AND FINANCE - Financial information from major financial centres
- Stock market and economic commentary in the regional markets
- Bulletin board to host financial discussions and forums
- Access to online stockbroking through partnership with Hwang DBS
Securities (in Malaysia only)
- Access to online banking for set-top box users through partnership
with RHB Bank (in Malaysia only)
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EDUCATION AND CAREER - Educational content through partnership with Beijing Cybton Technology
Development Co. Ltd. ("Cybton") (China only)
- Directory of educational learning institutes and online tutorials for
students (Malaysia only)
- Company directory and articles on professional industries
- Career advice and job listings
- Resume bank facility
- Career fair, resume administration programme, and job search through a
recruitment and career development website (Jobpolitan), developed by MyWeb
in Malaysia
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FOOD AND - Food recipes
ENTERTAINMENT - Listing of entertainment events
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- Movie synopses, cinema movie listings and screening schedules of
certain local movie theatres
- Celebrity news
- Music reviews
- Tips on computer games
- Book reviews
- Special interest chat rooms
- Online quizzes (China only)
- Horoscopes, comics, jokes and opinion polls
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E-SHOPPING - Movie ticketing
(CURRENTLY IN - Music CDs
MALAYSIA ONLY) - Bakery and cakes
- Household consumer products
- Books through partnership with MPH Bookstore
- Stationery and office supplies
- Online promotional coupons and discount vouchers
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HEALTH AND BEAUTY - Discussions with health and beauty industry professionals
- Medical information
- General education for baby care (China only)
- Health advice
- Beauty tips
- Special women's section dedicated to covering career, relationships,
money and parenting (Malaysia only)
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NEWS - News through links with local and international news providers
- Sports news through partnership with Sharkwave Information Technologies
Company Limited, an internet-based provider of sports content (China only)
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OTHER FACILITIES - Travel articles and general advice
- Bargains and special offers for travel and tours
- Travel ticket reservations
- Auction site (www.easy2bid.com)
- Electronic planning calendars and greeting cards (Scheduler)
- Classifieds
- E-mail
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</TABLE>
Our Key Strategies
We envisage advertising and e-commerce to be the two main sources of
our revenue going forward. Consequently, our key strategy is to increase
advertising and e-commerce activities by continuing to develop our portal
content and to expand its distribution by enlarging our set-top box distribution
network. This entails continuing the development of our set-top box software and
server applications technologies to serve consumers.
a. Advertising
The Internet has become a new means of communication, marketing and
distribution for the advertising industry. The volume of traffic
generated by our portal network by our products and services allows our
portal network to be an attractive vehicle to host advertising for
targeted audiences. We are able to generate significant revenue by
hosting advertisements on, and soliciting sponsorship for, our
myweb.com portals in China, Malaysia and Singapore.
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The principal forms of advertising that we offer are:
- banner ads (small, rectangular graphics that appear on most
consumer websites, with either static or moving graphics);
- button ads (small, squarish ads that are usually at the bottom
of a webpage and contain only a corporate name or brand, and
which link the webpage directly to the corporate homepage of
the advertiser); and
- sponsorship or co-branded channels (advertising that links
companies' brands and products with the editorial content on
targeted websites).
We use a range of pricing and products to sell advertising content on
our portals. Our advertising rates, which are often negotiated on a
case-by-case basis, vary according to several factors, including the
duration of the advertising contract, the cost per million of page
views, commission negotiated and channel sponsorship.
In the past, our main advertising customers have been:
In China: Compaq, Kodak, JiDa, Yingdong Studio.
In Malaysia: Universal Music, Jaring, MPH Bookstores, KL Mutual
Fund, Noel Gifts, Star Online, Mines Wonderland,
I-Bhd.
b. E-commerce
We believe that e-commerce is a natural extension of our portal
network. Currently, e-commerce is not developed within Asia nearly to
the extent it is in the United States and we have only begun to
generate revenues from e-commerce in 1999 in Malaysia. We believe this
is due to several factors, including purchase fulfilment and payment
processing. Our transaction driven e-commerce business generates
revenue by selling products or services on the Internet. Our e-commerce
business is currently operated by our subsidiary companies, Unioffice
Sdn Bhd ("Unioffice") and MyWeb E-Commerce Sdn Bhd ("MyWeb
E-Commerce").
Unioffice is engaged in the online sales of office stationery supplies
while MyWeb E-Commerce is an online shop for fast moving consumer
goods. MyWeb E-Commerce mainly distributes Unilever, Kao and Indocafe
branded products.
To expand our e-commerce business, in January 2000, we acquired a 95.0%
interest in Easy2Bid Pte Ltd ("Easy2Bid"), an internet auction company
incorporated in Singapore, in exchange for 6,200 shares of our common
stock at the agreed value of S$32.26 per share. Easy2Bid operates the
online auction site, www.easy2bid.com. We plan to expand Easy2Bid's
business in Singapore and use it as a base to start online auction
sites in Malaysia and China.
We entered into a sales and purchase agreement, dated January 2, 2000,
to acquire a 66.67% interest in Pacific Office Supplies Sdn Bhd
("Pacific Office"), a Malaysian corporation, for cash consideration of
Malaysian Ringgit ("RM") 4,666,667. The amount of the consideration is
subject to renegotiation if, upon the completion of satisfactory due
diligence, the revenue and net tangible assets of Pacific Office varies
by more than 3% as compared to its revenues and net tangible assets as
at the date of the agreement. Pacific Office is engaged in the
stationery and office supplies trading business. We plan to develop an
online sales operations for Pacific Office and integrate such online
operations into our portals to expand our e-commerce operations.
As part of our efforts to enhance our image and increase our public
awareness, we engaged Merger Communications, Inc. ("Merger
Communications") for a one year period, beginning September 28, 1999,
to provide media relation services in the United States. In
consideration for such services, we issued Merger Communications 15,000
shares of our common stock.
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CUSTOMERS
Our major customers (that account for more than 5% of our total revenue) for our
two main business lines are the following.
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Major Customers % Contribution to total 1999 revenue
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Advertising Cyber Village Pte Ltd 9.5%
Alam Teknokrat Sdn Bhd 0.9%
Compaq (China Investment Co. Ltd.) 0.2%
TA Decor Sdn Bhd 0.2%
Wonder Snow Sdn Bhd 0.2%
E-commerce Hangzhou Westlake Electronics 26.5%
Import and Export Co. Ltd.
Pemasaran Jaya Mas Sdn Bhd 5.4%
Saw Beng Swee Sdn Bhd 8.5%
Visan Holdings Sdn Bhd 8.5%
Elemkay Resources Sdn Bhd 5.5%
</TABLE>
E-commerce revenue from Hangzhou Westlake Electronics Import and Export
Co., Ltd., which contributed 26.5% of our total revenue for the year 1999,
represented non recurring sales of set-top boxes manufactured by Philips, which
were ordered through our portal in China. We are not dependent upon any single
customer or supplier in our business.
LICENSESX
We currently license the use of the QNX operating system with no
termination date for our Thunder software installed in each of our set-top
boxes, at a price based on the number of set-top boxes produced. There are
alternative operating systems available, for example, Linux; hence, subject to
the redevelopment of the Thunder software on alternative operating systems, we
are not dependent on any particular licensing agreement or contract.
COMPETITION
Our co-branded set-top boxes, which are manufactured and distributed by
set-top box manufacturers with whom we have entered into strategic partnerships
may compete with set-top boxes manufactured by other companies. However, as we
are essentially a portal business, we consider other set-top box manufacturers
in Asia as our potential partners rather than competitors of our operations.
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. We believe the
principal competitive factors in the consumer online services industry include:
- - product features
- - brand recognition
- - ease of use
- - ease of access through distribution channels such as Internet search
engines and links on other Internet properties
- - types and manner of advertising
- - quality of content
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. Most significantly, the main differentiation that sets us apart from
our competitors is the localization of the language and content of the MyWeb
Online Service. This brings us much
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closer to the user in that the user's local needs and requirements could be met
much more easily. This is of particular significance in our biggest priority
market, China, where the majority of the population speaks Mandarin while the
majority of the web content on the Internet is in English and is catered to the
US and European market.
Our most significant existing competition in our target markets comes
from existing Chinese language Internet portal sites, including:
- - Sina.com (Chinese);
- - Netease (Chinese);
- - 263.net (Chinese);
- - Sohu (Chinese);
- - GB Yahoo! (Chinese);
Other potential competitors are:
- - Eastnet (English);
- - 21cn (Chinese);
- - Shanghai Online (Chinese);
- - ChinaByte (Chinese);
- - Hong Kong Telecom's Navigator (Chinese);
- - Catcha.com (English);
- - Lycos Asia (English);
- - The Star Online (English);
- - e-Media (English).
There has been a proliferation recently in the number of internet entities
that provide free services and rely on advertising for their revenue, each of
which also competes with us for advertising revenue. We may also encounter
competition from ISPs, Web site operators and providers of Web browser software
(such as Netscape or Microsoft) that incorporate search and retrieval features
into their offerings. Our internet properties compete for user traffic
principally on the basis of ease of use and functionality. We compete for
advertising revenues with other internet properties and advertising outlets
principally on the basis of cost and results. In addition to our internet based
competition, we also compete with traditional offline media such as television,
radio, billboards, magazines, and newspapers for a share of advertiser's total
advertising budgets.
Our Thunder and ThunderServ software applications compete with similar
software applications developed by other companies, such as Microsoft's Venus
(which is already available on the Chinese market) and NUWA, which is developed
by the People's Republic of China's Science and Research Institute. We compete
with such software on the basis of cost, functionality, support, and
reliability.
Our co-branded set-top boxes, which are manufactured and distributed by
set-top box manufacturers with whom we have entered into strategic partnerships
may compete with set-top boxes manufactured by other companies in sales, and
consequently, Internet user traffic that is directed to our portal network
through our set-top boxes. Microsoft's WebTV was the first company to target the
market for set-top boxes through a combination of software applications for use
in set-top boxes, co-branding of set-top boxes with manufacturers of set-top
boxes, and branded internet properties targeted towards users of set-top boxes.
We do not consider WebTV as our competitor, as it currently does not operate in
the Asian market that we are in. However, competition may arise from Asian
set-top box manufacturers such as TCL International Holdings Limited and Legend
Holdings Limited. Although we are not a set-top box manufacturer, we may compete
with these companies in directing internet user traffic to our portal through
our set-top boxes.
Competition may also arise from companies which provide alternative access
systems and devices to the Internet, including high speed broadband satellite
service, WAP (wireless application protocol) devices and local multi-point
distribution systems in the Asian market.
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RECENT DEVELOPMENTS
On February 15, 2000, we entered into a license and service agreement
with MyWeb Americas, Inc. ("MyWeb Americas"). The agreement allows MyWeb
Americas to develop, offer and promote television Internet access and Spanish
and Portuguese versions of our MyWeb Online Services to markets in Latin
America. Under the agreement, MyWeb Americas may use our Thunder and Thunderserv
software, and our intellectual property rights relating to our MyWeb Online
Service, and may also sub-license and promote our technology within the Latin
American markets. The agreement and license is valid for a term of five years,
after which the agreement and license will automatically be extended for
successive three-year terms. Either party may terminate the agreement and
license by providing at least 90 days' notice before the end of a term. In
accordance with the agreement, MyWeb Americas is to issue to us 3,405,405 shares
of its common stock. MyWeb Online Services for the Latin American market are
still being developed, and we anticipate that they will be ready by the end of
2000.
We have entered into a Shareholders' Agreement, dated February 15,
2000, among all of the shareholders of MyWeb Americas (the "Shareholders'
Agreement"). Subject to certain exceptions, the Shareholders' Agreement provides
shareholders with a right of first refusal to purchase any shares of MyWeb
Americas that any shareholder wishes to sell and tag-along rights to include a
pro-rata portion of their shares in any proposed sale of shares by any
shareholder. Shareholders who wish to transfer their shares are required to
obtain an opinion of counsel that such transfer may be effected without
registration under the U.S. Securities Act of 1933, as amended, or that such
shares have been registered with the Securities Exchange Commission under an
effective registration statement. Subject to certain terms and conditions, the
shareholder of MyWeb Americas' Series A preferred shares has an option to
purchase additional Series A preferred shares and a right of first offer to
subscribe for additional shares that MyWeb Americas proposes to issue. In
addition, certain actions cannot be taken, including, but not limited to,
altering the rights or privileges of MyWeb Americas' Series A preferred shares,
entering into any transaction with an affiliate and the incurrence or guaranty
of indebtedness in excess of $500,000, without the vote of the directors elected
by such shareholder owning the Series A preferred shares.
On March 22, 2000, we entered into an agreement to acquire a strategic
equity stake of 25% - 36% in Jingqi.com, one of the largest retail bookstore
chains in China. Jingqi.com has launched its online bookstore and has signed on
as a merchant on MyWeb's E-Commerce shopping mall, which is to be launched in
2000. Pursuant to this agreement, MyWeb will manage the online payment and
direct Internet traffic to the Jingqi.com website.
GOVERNMENTAL REGULATION
The Internet largely operates outside the scope of U.S. government
regulation. Standards are set by an inter-related group of independent,
non-profit bodies, but no U.S. agency or organization exerts formal regulatory
control over the market.
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.
REGULATION OF THE PRC INTERNET INDUSTRY
OVERVIEW. The PRC is currently our largest and most important market.
At present, there is no legislation in the PRC directly addressing the Internet
businesses we are engaged in. However, certain areas related to the Internet,
such as telecommunications, international connections for computer information
networks, information security and censorship, as well as foreign investment in
those areas, are covered in detail by a number of existing laws and regulations.
Some of these existing laws and regulations, which may impact foreign investment
in various Internet businesses in China, are promulgated by various governmental
authorities, such as the Ministry of Information Industry ("MII") (formerly the
Ministry of Posts and Telecommunications, or MPT), the State Administration for
Industry and Commerce ("SAIC"), or the Ministry of Public Security.
The PRC legislature and regulatory authorities are currently in the
process of preparing new legislation that will govern or affect the PRC Internet
sector. For example, the SAIC is currently considering adopting new
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<PAGE> 14
regulations governing online advertising. We cannot predict the timing and
effects of such new regulations and may be adversely affected by one or more of
the following:
- new laws or regulations, or different interpretation of
existing laws and regulations;
- pre-emption of provincial or local laws by national laws;
- our ability to timely obtain the necessary administrative
approvals and licences;
- our ability to comply with applicable administrative
requirements;
- content restrictions on our Internet properties;
- confiscatory taxation;
- restrictions on imports;
- restrictions on foreign investments;
- 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.
There are substantial uncertainties regarding the proper interpretation
of existing PRC laws and regulations relating to the Internet Industry and there
are likely to be new PRC laws and regulations relating to the Internet sector
adopted in the future. In particular, the PRC does not have a well-developed
body of laws governing foreign enterprises, such as those relating to the
permissible percentage of foreign investments. Official Chinese statements
regarding these evolving policies have been conflicting and are subject to broad
interpretation and modification.
The legal issues, risks and uncertainties relating to the PRC
government laws and regulations generally relate to the legality of MyWeb
Beijing's ownership structure, whether the PRC government will restrict or
prohibit the distribution of content over the Internet, whether the imposition
of additional regulatory requirements may result in our non-compliance with
applicable law, whether we will be able to acquire future licenses or permits
necessary to conduct our operations in the PRC. Some of these issues, risks and
uncertainties include the following:
- Various officials of the MII have, during 1999, stated
publicly that foreign investment is prohibited in the PRC
Internet sector, including in Internet service providers and
Internet content providers.
- Foreign investment is prohibited in businesses providing
"value-added telecommunication services", including "computer
information services" or "electronic mail box services".
However, the relevant regulation is silent as to whether the
Internet business is included in these businesses in which
foreign investment is prohibited.
- The MII has stated recently that it intends to adopt new laws
or regulations governing foreign investment in the PRC
Internet sector in the near future. At this time, we do not
know the timing or terms of these new laws or regulations or
whether or how they will apply to us.
- According to press reports, under the agreement reached in
November 1999 between China and the United States concerning
the United States' support of China's entry into the World
Trade Organization ("WTO"), foreign investment in PRC Internet
services will be liberalized at the same rate as other key
telecommunications services. In addition, according to press
reports, key telecommunication services in the PRC will be
subject to a foreign ownership limit of 49% for the first two
years after China's entry into the WTO and 50% thereafter. We
do not know if this agreement will in fact be implemented, the
timing thereof, the terms of any new laws or regulations
resulting from such implementation, or whether our Internet
business in China will be subject to these foreign ownership
limits.
- The MII has stated recently that the activities of Internet
content providers are also subject to regulation by various
PRC government authorities, depending on the specific
activities conducted by the Internet content provider.
According to press reports, various government authorities are
in the process of preparing new laws and regulations that will
govern these activities. The areas of regulation may include
online advertising and online news reporting.
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<PAGE> 15
- A PRC wholly foreign-owned enterprise is prohibited from
engaging in the business of providing or distributing
advertisements as defined under the 1994 PRC Advertising Law.
The relevant law is silent as to whether online advertising is
covered by the law.
OWNERSHIP STRUCTURE AND RESTRICTIONS ON FOREIGN INVESTMENT. The MII has
promulgated regulations restricting foreign investment in the telecommunications
sector in China, including:
- Provisional Administrative Measures Regarding the Examination
and Approval of Deregulated Telecommunications Operations
(1993);
- Provisional Regulations for the Administration of the
Deregulated Telecommunications Operations Market (1995); and
- Definitions of Various Deregulated Telecommunications
Operations (1995).
These regulations prohibit a foreign person or entity, including any
foreign investment enterprise established in the PRC, such as MyWeb Beijing,
from investing in, or operating or participating in the operation of, any
business that provides "value-added telecommunications services", which is
defined to include, among other services, "computer information services" and
"electronic mail box services". However, these regulations were promulgated and
the definitions were adopted, prior to the general emergence of the Internet in
China, and the relevant regulation is silent as to whether our Internet business
is included in these businesses in which foreign investment is prohibited.
Foreign investment in advertising companies is also restricted, and
proposed investment projects in these areas must be approved on a project by
project basis. Under the relevant restrictions, non-PRC investors are restricted
from holding a majority of voting shares in an advertising company. No
regulations have yet been adopted specifically governing online advertising in
the PRC and the PRC laws and regulations are silent as to whether they cover
online advertising. The SAIC, the PRC government agency regulating advertising
activities, has not expressly issued regulations or rules stating that the
Internet is considered an advertising media. However, if the SAIC were to do so,
MyWeb Beijing, as a wholly foreign-owned enterprise in the PRC, could be
required to apply to the SAIC for authorization to conduct advertising business
in accordance with its rules. We cannot guarantee that such application, if
required, would be approved by the relevant authorities. If we were unable to
obtain required approvals, our ability to generate advertising revenues could be
seriously restricted. If the relevant regulatory authorities were to take the
position that our operations are in violation of existing regulations, we could
be subjected to penalties, including being prohibited from engaging in online
advertising and having our earnings from such activities confiscated. In
addition, if we are deemed to be an "advertisement publisher", we will be held
responsible for ensuring the content of an advertisement complies with the
regulations of PRC laws.
The interpretation and application of existing PRC laws and
regulations, the stated positions of the MII relating to the prohibition of
foreign investments in PRC Internet companies, and the likely possibility of the
introduction of new laws or regulations, have created substantial uncertainties
regarding the legality of existing and future foreign investments in, and the
businesses and activities of, PRC Internet businesses, including our business.
We cannot be sure that our current ownership structure and activities
relating to MyWeb Beijing will be viewed by PRC regulatory authorities as in
compliance with applicable PRC laws or regulations. Our businesses in the PRC
will be adversely affected if our business license is revoked as a result of
non-compliance with the relevant regulations. It is possible that the relevant
PRC authorities could, at any time, assert that any portion or all of our
existing or future ownership structure and business in China violate existing or
future PRC laws and regulations. In addition, new laws and regulations may be
retroactively applied to us. For example, China's potential entry into the WTO
will likely affect the terms of any new laws and regulations, and may result in
the PRC government adopting a 49% or 50% limit on foreign investment in Internet
businesses, including limits on foreign investments in PRC Internet content
providers, as well as affect the interpretation of existing regulations relating
to the PRC Internet sector.
INFORMATION SECURITY AND CENSORSHIP. The principal PRC regulations
concerning information security and censorship are:
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<PAGE> 16
- The Law of the People's Republic of China on the Preservation
of State Secrets (1988) and its implementing rules (1990);
- The Law of the People's Republic of China on State Security
(1993) and its implementing rules (1994);
- Rules of the People's Republic of China for Protecting the
Security of Computer Information Systems (1994);
- Notice Concerning Work Relating to the Filing of Computer
Information Systems with International Connections (1996);
- Administrative Measures for Protecting the Security of
Computer Information Network with International Connections
(1997); and
- Regulations for the Protection of State Secrets for Computer
Information Systems on the Internet (2000).
These regulations specifically prohibit the use of Internet
infrastructure which results in a breach of public security or the provision of
socially destabilizing content or transmission of state secrets.
- "A breach of public security" includes breach of national
security or disclosure of state secrets, infringement on
state, social or collective interests or the legal rights and
interests of citizens, and illegal or criminal activities.
- "Socially destabilizing content" includes any action that
incites defiance or violation of Chinese laws and regulations,
incites subversion of state power and the overturning of the
socialist system, fabricates or distorts the truth, spreads
rumours or disrupts social order, spreads feudal superstition,
involves obscenities, pornography, gambling, violence, murder
or horrific acts, or instigates criminal acts.
- "State secrets" are defined as "matters that affect the
security and interest of the state". The term covers such
broad areas as national defense, diplomatic affairs, policy
decisions on state affairs, national economic and social
development, political parties and "other state secrets that
the State Secrets Bureau has determined should be
safeguarded".
China has enacted regulations governing Internet access and the
distribution of news and other information. In the past, the PRC government has
stopped the distribution of information over the Internet that it believes
violated PRC laws or regulations, including content that is obscene, incites
violence, endangers national security, is contrary to the national interest or
is defamatory. The Ministry of Public Security also has the authority to cause
any local Internet service provider to block any website maintained outside
China at its sole discretion. In addition, the Propaganda Department of the
Chinese Communist Party has been given the responsibility to censor news
published in China to ensure, supervise and control proper political ideology.
The State Secrecy Bureau, which is directly responsible for the
protection of state secrets of all PRC government and Chinese Communist Party
organizations, is also authorized to block any website it deems to be leaking
state secrets or failing to meet the relevant regulations relating to the
protection of state secrets in the distribution of online information.
Specifically, Internet companies in China with bulletin board systems, chat
rooms or new services must apply for the approval of the State Secrets Bureau.
As the implementing rules for the regulations have not been issued, however,
details concerning how Internet companies should comply with these regulations
remain to be clarified.
The MII has also published implementing regulations that subject online
information providers such as us to potential liability for content included on
their portals and the actions of subscribers and others using their systems,
including liability for violation of Chinese laws prohibiting the distribution
of content deemed to be socially destabilizing. Furthermore, we are required to
delete content that clearly violates the laws, regulations or policies of the
PRC and report content that we suspect may violate such laws, regulations or
policies.
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Because many Chinese laws, regulations and legal requirements with
regard to the Internet are relatively new and untested, their interpretation and
enforcement may involve significant uncertainty. In addition, the Chinese legal
system is a civil law system in which decided legal cases have limited binding
force as legal precedents. As a result, in many cases it is difficult for us to
determine the type of content that may result in liability for a website
operator.
According to applicable regulations, Internet companies in China are
required to complete security filing procedures with the local public security
bureau and to regularly update the local public security bureau regarding
information security and censorship systems for their websites. MyWeb has
adopted security maintenance measures, including employing personnel to be
responsible for its security systems, and exchanging information with the local
public security bureau with regard to sensitive or censored information and
websites on a regular basis.
INTERNATIONAL CONNECTIONS FOR COMPUTER INFORMATION NETWORKS. The State
Council and the MII have promulgated regulations governing international
connections for PRC computer networks, including:
- Provisional Regulations of the People's Republic of China for
the Administration of International Connections to Computer
Information Networks (1997) and their Implementing Measures
(1998);
- Measures for the Administration of International Connections
to China's Public Computer Interconnected Networks (1996); and
- Reply Concerning the Verification and Issuance of Operating
Permits for Business Relating to International Connections for
Computer Information Networks and for Public Multimedia
Telecommunications Business (1998).
Under these regulations, any entity seeking access to international
connections for computer information networks in China, such as MyWeb, must
comply with the following requirements:
- be a PRC legal person;
- have the appropriate equipment, facilities and technical and
administrative personnel;
- have implemented and registered a system of information
security and censorship; and
- effect all international connections with an authorized
Internet service provider in China.
We believe that MyWeb Beijing is in proper compliance with all of these
requirements.
ENCRYPTION SOFTWARE. In October 1999, the State Encryption
Administration Commission promulgated the Regulations for the Administration of
Commercial Encryption, which was followed in November 1999 by the Notice of the
General Office of the State Encryption Administration Commission. Both of these
regulations address the use in China of software with encryption functions.
According to these regulations, encryption products purchased for use without
the permission of the state encryption administration departments and foreign
encryption products purchased for use must be reported. Violation of the
encryption regulations may result in the issuance of a warning, levying of a
penalty, confiscation of the encryption products and even criminal liabilities.
Because these regulations do not specify what constitutes encryption products,
and there are currently no official interpretations of, or detailed implementing
rules for, these regulations, we are unsure as to whether or how they may apply
to us.
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BUSINESS LICENSE AND APPROVAL FOR FOREIGN INVESTMENT. Under current PRC
law, the legal establishment of a technology company such as MyWeb Beijing must
be approved by the relevant local Commission for Foreign Economic Relations and
Trade. MyWeb Beijing has obtained such approval. MyWeb Beijing is also required
to have a business license issued by the SAIC. MyWeb Beijing's business license
has lapsed and renewal of the business license is dependent on MyWeb Beijing
passing the annual inspection by the SAIC
If we are found to be in violation of any existing or future PRC laws,
regulations or policies, the relevant PRC authorities would have broad
discretion in dealing with such a violation, including, without limitation, the
following:
- levying fines;
- revoking our business license;
- requiring us to restructure our ownership structure or
operations; and/or
- requiring us to discontinue any portion or all of our Internet
business or our investment in MyWeb Beijing.
In addition, governmental agencies in China may:
- require us to obtain licenses in order to commence or continue
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 a material adverse effect on our
business, results of operations and financial condition.
Research and Development
The amount we spent on research and development in 1998 and 1999 was
approximately $313,000 and $418,000, respectively. Research and development is a
critical element in our business. We are currently working on several research
and development projects, both in-house and in collaboration with our partners
to improve our service delivery, including the following:
- designing a set-up box which is lower in cost than the
currently available set-up boxes. We believe this will
increase the cost competitiveness of the set-top boxes we
co-brand with our partners. We are also working to design a
set-top box that allows for broadband cable and ADSL access,
which may allow these set-top boxes to process digital media,
in addition to its current media. We are also working on a
design board that has the functions of a set-top box which can
be integrated into a television set.
- developing a financial services software package that enables
financial transactions to be conducted through our co-branded
set-up boxes in a secure environment at a commercially
acceptable speed. We are also developing a web storage
software which can allow subscribers to store certain
electronic data from the Internet, effectively allowing our
users to have a virtual "hard disk" on the Internet.
- developing with our partner, a Chinese version of a popular
instant messaging software which can allow our subscribers to
interact with other existing users through this instant
messaging platform on their set-top boxes.
- developing an application suite for our subscribers containing
an organizer, a document creation software, spreadsheet and
web storage facility which will allow users to access their
information regardless of their physical location as long as
they have access to the Internet. In addition, we intend that
subscribers will be able to have access to a "unified mailbox"
which can receive short messaging system ("SMS"), pager,
e-mail, voice and fax messages.
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- developing a customized e-commerce engine for vertical portals
to be hosted on our existing portals.
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
are currently in the process of registering our trademark of MyWeb in Malaysia,
China, Hong Kong, Singapore, Thailand, Indonesia, Philippines and India.
We have entered into agreements with some of our employees, business
partners, licensees and others which provide for certain protections of our
intellectual property. Despite these precautions, it may be possible for a third
party to copy or otherwise obtain and use our licensed services or technology
without authorization, or to develop similar technology independently. Policing
unauthorized use of our intellectual property is difficult and we have no
assurance 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, and the global nature of the Internet
makes it currently virtually impossible to control the
ultimate destination of our products;
- 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.
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 have no assurance 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.
The "www.myweb.com" and "www.myweb.net" URLs in the United States,
among other URLs which contain "myweb" in their URL names, are currently owned
by unrelated third parties. There is no assurance that these third parties will
not make a claim against us in the future. The current law regarding Internet
user names remains unclear. We may be required to defend the use of our name
within the United States in a future litigation suit. This could result in
significant legal costs and expenses, which may have a material adverse effect
on our business, results of operation and financial condition.
We entered into a two-year Binary License and Redistribution Agreement
with Sun Microsystems, Inc ("Sun") in March 1999 (the "Sun Agreement"). The Sun
Agreement permits us to reproduce and redistribute Sun's "JavaOS for Consumers"
and its "Personal Applications Browser". We have not incorporated the licensed
Java technology of Sun into any of our co-branded set-top boxes, due primarily
to technical issues, and we have no intention to do so in the future. For the
"JavaOS for Consumers", the royalties payable under the Sun Agreement in the
first and second year are $234,000 and $360,000, respectively. For the "Personal
Applications Browser", the royalties payable in the first and second years are
$22,750 and $35,000, respectively. As of December 31, 1999, we accrued costs
related to the Sun Agreement in the amount of $256,750 under Cost of Revenues
for the 1999 Period. However, we have not made any payment under the Sun
Agreement and are disputing our obligation to pay any amounts under the
agreement. We are in discussions with Sun to resolve this matter.
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Our Thunder software is based on the QNX operating system. We have a
licensing arrangement with QNX which allows us to use its QNX software for
installation in our co-branded set-top boxes. The cost of licensing this
software is $15.15 per set-top box. There is no termination date for this
agreement.
EMPLOYEES
At December 31, 1999, we employed a total of 109 full-time employees,
including approximately 40 in sales and marketing, 48 in design and technical
positions, and 21 in finance and administration. Of these full-time employees,
47 are based in China (covering Hong Kong as well), 58 are based in Malaysia
(covering Singapore as well), 3 are based in Singapore and 1 is based in USA.
As of the end of December 1998, we employed 14 full-time employees
based in Malaysia, of which 3 are in sales and marketing, 5 are in design and
technical positions and 6 are in general administration. As of the end of 1997,
we employed 16 full-time employees based in Malaysia, including 4 in sales and
marketing, 7 in design and technical position and 5 in general administration.
We presently plan to expand our personnel base in such areas as
management, marketing, research and development, and multimedia designs. We do
not foresee any serious difficulties in hiring these additional employees. From
time to time, we also employ independent contractors to support our research and
development. None of our employees are covered by a collective bargaining
agreement, and we believe our employee relations are good.
ITEM 2. DESCRIPTION OF PROPERTY
We currently do not own any property. We lease our office 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 a director
of MyWeb Inc.com, Danny Teow Teck Toe.
Our significant asset investment is in our computer servers and
computer systems. In the year 1999, the cumulative expenditures on computer
servers and computer systems amounted to $117,000. Capital expenditure on
computer servers and systems in 2000 is expected to be incurred for the expected
launch of the portal in Thailand and the planned expansion in China. We own all
of our servers and computer systems. We currently have more than 25 servers in
aggregate in Malaysia, Singapore and China.
ITEM 3. LEGAL PROCEEDINGS
From time to time we expect to be subject to legal proceedings and
claims in the ordinary course of our business. Such legal proceedings or claims,
even if not meritorious, could result in the expenditure of significant
financial and managerial resources. See Note 7 to the Consolidated Financial
Statements on page F-12.
In 1999, MyWeb Beijing set up a music channel on its website, which
contained links to websites on the internet with MP3 music, enabling users to
listen to or download MP3 songs through its search engine. Four member companies
of the International Federation of the Panographic Industry ("IFPI"), namely,
Sony Music Entertainment (Hong Kong) Records Ltd., Warner Records Ltd.,
Universal Records Ltd. and China Records Guangzhou Ltd., each sued MyWeb's
hyperlink service in the Beijing Second Intermediate People's Court for
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<PAGE> 21
copyright infringement from the end of November to early December 1999. MyWeb
and IFPI, as well as its four member companies, have reached a settlement
agreement. Under the terms of the agreement, we have paid an agreed settlement
figure as compensation which included the legal costs, notarization cost and
attorney's fees of the four member companies.
In February 1999, we engaged Merger Communications to provide us with
media relation services. A dispute subsequently arose regarding the compensation
that Merger Communications was to receive under the agreement. We have entered
into a settlement agreement pursuant to which we paid $30,000 and issued 30,000
shares of our common stock to Merger Communications.
Except as otherwise disclosed herein, neither MyWeb Inc.com nor any of
its subsidiaries is engaged in any legal or arbitration proceedings either as a
plaintiff or defendant in respect of any amounts or claims which could have a
material adverse effect on our business, financial condition or results of
operations. Except as otherwise disclosed herein, we are not aware of any legal
or arbitration proceedings pending or threatened against us or any of our
subsidiaries or any facts likely to give rise to any such proceedings which
might materially affect our business, financial condition or results of
operations.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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<PAGE> 22
PART II
ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
MARKET INFORMATION
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)." From March 24, 1999 until March 12, 2000, our common
stock traded on the OTC Bulletin Board under the symbol "MYWB." Since March 13,
2000, our common stock has traded on the AMEX under the symbol "MWB". The
following table sets forth the high and low closing bid prices for transactions
on common stock 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.
<TABLE>
<CAPTION>
PERIOD HIGH BID PRICE LOW BID PRICE
------ -------------- -------------
<S> <C> <C> <C>
1998................................. (1/1 - 12/31) 2.00 0.03
1Q (1/1 - 3/31) 2.00 0.03
2Q (4/1 - 6/30) 2.00 0.03
3Q (7/1 - 9/30) 0.06 0.06
4Q (10/1 - 12/31) 0.06 0.06
1999................................. (1/1 - 12/31) 30.13 0.06
1Q (1/1 - 3/31) 24.75 0.06
2Q (4/1 - 6/30) 21.50 8.25
3Q (7/1 - 9/30) 13.38 8.25
4Q (10/1 - 12/31) 30.13 10.88
2000................................. 1Q (1/1 - 3/31) 27.00 12.88
January 27.00 12.88
February 21.00 14.75
March 18.06 12.88
</TABLE>
Over the first quarter of 1999, our stock price rose dramatically. This
increase was due to the acquisition of TecnoChannel. Trading of our shares
commenced thereafter in the first quarter of 1999.
HOLDERS
As of March 31, 2000, there were approximately 1,400 holders of record
of our common stock each holding 100 shares or more.
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<PAGE> 23
DIVIDENDS
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 the common stock but to retain earnings, if any, to fund growth and
expansion. Any payment of cash dividends on the common stock in the future will
be dependant on our financial condition, results of operations, current and
anticipated cash requirements, plans for expansion, as well as other factors
that the Board of Directors deems relevant.
RECENT SALES OF UNREGISTERED SECURITIES
There were no sales of unregistered shares in the fourth quarter of
1999. Sales of unregistered shares in the first three quarters of 1999 have
already been reported in our quarterly filings.
We entered into a subscription agreement, dated March 23, 2000, with
Asia Internet Assets, Inc. ("Asia Internet") pursuant to which Asia Internet
agreed to subscribe for 250,000 shares of our common stock at a price of $10 per
share, in an unregistered offering pursuant to section 4(2) or 3(b) of the 1933
Securities Act. Asia Internet paid $1,000,000 of the total purchase price on
April 4, 2000, and is to pay the remaining sum of $1,500,000 million within 30
days thereafter. Asia Internet is an accredited investor as such term is defined
in Rule 501 of Regulation D, and the shares are being purchased for their own
account and not for distribution or resale to others.
In addition, on March 23, 2000, Samsung Asia Pte Ltd, a Singapore
corporation, confirmed their acceptance to subscribe to 100,000 shares of our
common stock at a price of $8 per share for a total consideration of $800,000 in
a private placement pursuant to section 4(2) or 3(b) of the 1933 Securities Act.
The completion of this private placement is pending the preparation and
execution of a formal subscription agreement.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS AND
RESULTS OF OPERATIONS
We were essentially inactive in 1997 and 1998. In February 1999, we
acquired all of the capital stock of TecnoChannel. Following our acquisition of
TecnoChannel, we revised our business plan. Our current business plan is to
devote all of our resources to the development and expansion of our 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 fiscal year 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 we
anticipate will lead to increasing advertising revenues from our Internet
properties. We also have implemented a brand development and promotion strategy
that we expect will 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 fiscal year
1999. Our expenditures during fiscal year
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<PAGE> 24
1999 exceeded our revenues resulting in a net operating loss during that period.
We expect to continue to incur operating losses during the continued expansion
of our products and services in China and other emerging markets.
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.
CONSOLIDATED RESULTS OF OPERATIONS
REVENUES
The following table and discussion highlights our revenues for the
years ended December 31, 1999, 1998 and 1997.
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
Revenues: (in thousands of dollars)
<S> <C> <C> <C>
Advertising and design work $ 498 $ 303 -
Electronic commerce 2,940 - -
Subscription services, Licensing and others 98 1,008 102
------ ------ ----
Total Net Revenue $3,512 $1,311 $102
====== ====== ====
</TABLE>
Our business is principally in Asia. We currently generate three main
types of revenues: advertising and design work, e-commerce,
licensing/subscription services and others. Advertising, electronic commerce and
other revenues are generated mainly from businesses marketing to the Internet
users of our online properties. Advertising, electronic commerce and other
revenues mainly consist of advertising and related revenues, fees associated
with electronic commerce and the sale of merchandise. Subscription services
revenues are generated from our set-top Internet terminal customers. There are
no significant seasonality factors in advertising and e-commerce, our primary
businesses.
COSTS AND EXPENSES
The following table and discussion highlights our costs and expenses
for the years ended December 31, 1999, 1998 and 1997.
24
<PAGE> 25
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
(in thousands of dollars)
<S> <C> <C> <C>
Costs and expenses:
Costs of revenues $ 3,530 $109 $ 0
Sales and marketing 6,326 224 37
Product Development 4,396 313 204
General administration 2,659 289 114
------- ---- ----
Total costs and expenses $16,911 $935 $355
======= ==== ====
</TABLE>
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1999 TO THE YEAR ENDED
DECEMBER 31, 1998
Total Revenues
An important component of our business strategy in our Interactive
Online Services business is an increasing reliance on advertising, commerce and
other revenues. These revenues include advertising and electronic commerce
revenues, the sale of merchandise and development revenues. The growth of
advertising, electronic-commerce and other revenues is important to our business
objectives, as these revenues provide an important contribution to our operating
results. Advertising revenues are expected to grow in importance as we continue
to leverage its large, active and growing user base in the emerging market.
Revenues increased from $1.31 million in the year ended December 31,
1998 (the "1998 Period") to $3.51 million in the year ended December 31, 1999
(the "1999 Period"), an increase of 168%. This increase was attributable to
revenue generated from e-commerce transactions in the amount of $2.94 million.
No one customer accounted for more than 10% of total revenues during the year
ended 1999, except for Hangzhou Westlake Electronics Import and Export Co. Ltd.
which accounted for approximately 26% of our total revenue during 1999.
Cost of Revenues
Cost of revenues includes the costs of merchandise sold and royalties
paid for licensed technologies. Cost of revenues increased 3,138% from $109,000
in the 1998 Period to $3.53 million in the 1999 Period. This increase was due to
the increase in e-commerce transactions and sales of set-top boxes. We have also
recognized expenses related to the royalties for licensed technologies from Sun
for a total amount of $256,750 for the 1999 Period. However, we have not made
any payment under the agreement and are disputing our obligation to pay any
amounts under the agreement.
Total Operating Expenses
Total operating expense increased 1,520% from $826,000 in the 1998
Period to $13.38 million in the 1999 Period. The increase was primarily
attributable to an increase in:
i) Sales and marketing expense from $224,000 in the 1998 Period to
$6.33 million in the 1999 Period;
ii) Product development expenses from $313,000 in the 1998 Period to
$4.40 million in the 1999 Period; and
iii) General administration expenses from $289,000 in the 1998 Period
to $2.66 million in the 1999 Period.
Sales and marketing expenses include the non-monetary stock
compensation expense, employee compensation, the costs to acquire and retain
subscribers, and advertising and other promotion and marketing related expenses.
The sales and marketing expenses increased 2,724% from $224,000 in the 1998
Period to $6.33 million in the 1999 Period, and increased as a percentage of
total revenues from 17% in the 1998 Period to 180% in the 1999 Period. The
increase was primarily attributable to the stock compensation expense of $4.6
million for the 1999 Period in connection with certain of our sales and
marketing employees allowed to exercise their options without paying the
exercise price (cashless exercise) as well as the excess of the fair value over
the exercise prices of options
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<PAGE> 26
granted to certain of the sales and marketing employees which became immediately
exercisable on the date of the grant. The increase was also attributable to the
increase in the number of personnel, the costs associated with our aggressive
brand building strategy in China and an increase in advertising and
promotion/marketing related expenses in China and other emerging market
countries in 1999.
Product development costs consist primarily of the non-monetary stock
compensation expense, employee compensation relating to developing and enhancing
features of the MyWeb online service properties and our products and the
outsourcing of certain research and development work.
Product development costs increased 1,304% from $313,000 in the 1998
Period to $4.40 million in the 1999 Period, and increased as a percentage of
total revenues from 24% in the 1998 Period to 125% in the 1999 Period. The
increase in product development costs was primarily due to the stock
compensation expense of $3.9 million for the 1999 Period in connection with
certain of our product development employees allowed to exercise their options
without paying the exercise price (cashless exercise) as well as the excess of
the fair value over the exercise prices of options granted to certain of the
product development employees which became immediately exercisable on the date
of the grant. The increase was also attributable to the increase in the number
of technical employees that develop and enhance MyWeb online media properties.
We have expensed all internal product development costs as incurred and expect
to incur increased product development costs in future periods in order to
remain competitive. The decrease in product development costs as a percentage of
total revenues was primarily a result of the substantial growth in revenues.
General and administration expenses increased 820% from $289,000 in the
1998 Period to $2.66 million in the 1999 Period, and increased as a percentage
of total revenues from 22% in the 1998 Period to 76% in the 1999 Period. General
administration expenses consist primarily of fees for professional services and
employee compensation. The increase in general and administrative costs for the
1999 Period, was primarily attributable to higher fees due to the increase in
professional services required in 1999, an increase in personnel costs due to
the increase in the number of employees, charges incurred for settlement of a
claim, stock compensation expenses of $0.4 million arising from excess of the
fair value over the exercise prices of options granted to certain of the general
and administrative employees which became immediately exercisable on the date of
the grant and a general increase in operational expenses of newly incorporated
subsidiaries in Beijing, San Francisco and Singapore.
Stock-based Compensation Expense
We have recorded total stock based compensation expense of $9.0 million
for the 1999 Period in connection with certain of our employees who were allowed
to exercise their options without paying the exercise price and the excess of
the fair value over the exercise price of options granted to other employees.
The cashless exercise is treated similarly to a stock appreciation right and the
difference between the fair value of the stock and the exercise price of the
option is recognized as compensation expense. We do not expect this to be a
recurring expense item in the future, as all options will be required to be
exercised by payment of the exercise price. The stock compensation expense has
been allocated to the various categories of expenditure based on the job
function of the employees.
Net Income (Loss)
We recorded a net loss of $13.40 million or $1.31 per share, for the
1999 Period (based on the weighted average outstanding shares of 10,241,352 for
the year ended December 31, 1999) compared to net income of $376,000, or $0.04
per share for the 1998 Period (based on the total outstanding shares of
8,500,000 during December 31, 1998). This was primarily attributable to an
increase in the sales and marketing expenses and general administrative expenses
in the 1999 Period that was greater than the increase in revenue.
26
<PAGE> 27
COMPARISON OF THE YEAR ENDED DECEMBER 31, 1998 TO THE NINE MONTH PERIOD
ENDED DECEMBER 31, 1997
Total Revenues
Revenues increased from $102,000 in the nine month period beginning on
TecnoChannel's date of inception (April 5, 1997) and ended on December 31, 1997
(the "1997 Period") to $1.31 million in the 1998 Period, an increase of 1,185%.
This increase was attributable to the increasing acceptance in the marketplace
of the products and services of TecnoChannel, which were introduced in the
fourth quarter of 1997. One customer, Wizoffice Pte Ltd., accounted for
approximately 90% of revenues during the 1997 Period, while one customer,
Philips (and subsidiaries thereof), accounted for approximately 77% of revenue
during the 1998 Period.
COST OF REVENUES
Cost of revenue increased from $0 in the 1997 Period to $109,000 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 133% from $355,000 in the 1997
Period to $826,000 in the 1998 Period. The increase was primarily attributable
to an increase in sales and marketing expenses from $37,000 in the 1997 Period
to $224,000 in the 1998 Period, and to an increase in product development
expenses from $204,000 in the 1997 Period to $313,000 in the 1998 Period.
Furthermore, the 1998 Period consists of twelve months of operations as compared
to the nine months of operation in the 1997 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. We have 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.
Product development costs increased 53% from $204,000 in the 1997
Period to $313,000 in the 1998 Period. However, product development costs
decreased as a percentage of total revenues from 200% in the 1997 Period to 24%
in the 1998 Period. The increase in product development costs was primarily due
to an increase in the number of technical employees as well as an increase in
research and development expenses incurred in the 1998 Period. The decrease in
product development costs as a percentage of total revenues was primarily a
result of the substantial growth in revenues.
General and administration expenses increased 154% from $114,000 in the
1997 Period to $289,000 in the 1998 Period due primarily to higher fees due to
the increase in professional services required in 1998 and an increase in
personnel costs. However, general and administration expense decreased as a
percentage of total revenues from 111% in the 1997 Period to 22% in the 1998
Period due to a substantial growth in revenues.
Net Income (Loss)
We recorded net income of $376,000 or $0.04 per share, for the 1998
Period (based on the total of 8,500,000 outstanding shares of TecnoChannel as at
December 31, 1998) compared to a net loss of $253,000, or $0.03 per share, for
the 1997 Period (based on the total of 8,500,000 outstanding shares of
TecnoChannel Technologies as at December 31, 1997) . This was primarily
attributable to an increase in sales revenue that was greater than the increase
in our cost of sales and operating expenses.
27
<PAGE> 28
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1999, we had cash and cash equivalents totaling $2.36
million compared to $270 at December 31, 1998. For the 1999 Period, cash used in
operating activities of $2.77 million was primarily due to the net loss of
$13.40 million in such period.
Cash used in investing activities was $336,000 for the 1999 Period
compared to $20,000 for the 1998 Period. The capital expenditure of $347,000 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 $5.46
million was derived primarily from the private placement of shares of common
stock, from which we received gross proceeds of $3.78 million, and the issuance
of 200,000 shares of our common stock upon the exercise of a stock option, for
which we received $1.50 million. As we experienced negative cash flow from
operations in the 1999 period and we anticipate that we will continue to incur
negative cash flow during the continued expansion of our products and services
in China and the other emerging markets, we 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 us, if available at all.
The Company completed a private placement of 250,000 shares of our
common stock on March 23, 2000 for aggregate proceeds of $2.50 million. Under
the terms of the agreement, we have received $1.0 million on April 4, 2000 and
will receive a further $1.50 million in aggregate proceeds within the next 30
days. The Company has also secured another private placement of 100,000 shares
of our common stock where we will receive $800,000 upon the signing of the
agreement. However, the Company is continuing to pursue leads for additional
possible investors. The Company believes that with the additional funds of $3.30
million, it will be able to meet its current expenditure requirements and
achieve its business goals for the next 12 months. Any additional funds raised
will determine the speed with which promotion and enhancements are pursued.
Our principal capital expenditures currently in progress relate to the
planned expansion of our business in Latin America, Indonesia and Thailand. We
plan to fund this expansion through our existing internal sources of funds. We
are also currently actively looking for opportunistic acquisitions and/or joint
ventures which could complement our existing businesses. Any such acquisitions
or joint venture would be funded through our existing funds or new capital
raised where appropriate. In the past three years, the amount of principal
capital expenditures (used for communication equipment, office equipment,
furniture and leasehold improvements) was $54,000, $21,000 and $348,000 in 1997,
1998 and 1999, respectively.
At December 31, 1999, we had working capital of $1.20 million, compared
to working capital of $306,000 at December 31, 1998 and net deficit of $273,000
at December 31,1997. Current assets increased by $3.58 million, from $1.11
million at December 31, 1998 to $4.69 million at December 31, 1999, while
current liabilities increased by $2.65 million, from $800,000 to $3.45 million,
over this same period. The increase in current assets was primarily attributable
to an increase in cash generated from the private placement of shares of common
stock. The change in current liabilities was due to increases in other accrued
expenses and liabilities, primarily related to our new subsidiaries in China and
Singapore.
PLAN OF OPERATION
The Company's operations in 1999 incurred an operating expenditure of
$4.40 million and a non-operating expenditure of $9.0 million arising from the
stock compensation expense as compared to Net Revenues of $3.51 million. While
the Company does not expect to incur similar non-operating expenditure for the
stock compensation expense in 2000, it expects to incur operating expenditure of
$3.0 to $4.0 million in 2000 for its operations in the emerging markets.
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<PAGE> 29
As a result, the Company believes that its significant cash outlay over
the next twelve months will be for the advertising and marketing expenses. It
also expects to incur significant cash outlay for general and administration
expenses as a result of the operational expenditure for its offices in the
emerging markets.
YEAR 2000
Our comprehensive program to address Year 2000 issues was successful in
that our business activities continued without disruption through the days
before and after January 1, 2000 and February 29, 2000. In terms of supply chain
readiness, on the basis of the information available to us, we do not expect
disruptions caused by the failures of third parties to remediate their Year 2000
issues. We will continue to monitor its computer applications throughout the
Year 2000 to ensure that any latent Year 2000 matters that may arise are
addressed promptly.
INFLATION
We believe that inflation has not had, and will not have in the future,
a material effect on our results of operations.
ITEM 7. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The consolidated financial statements of MyWeb Inc.com and the Report
of Independent Auditors thereon are included as part of this report beginning on
page F-1 attached hereto.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On March 22, 2000, MyWeb Inc.com ("MyWeb") dismissed Wlosek &
Braverman, L.L.C. ("Wlosek & Braverman"), the independent accountants that had
audited the financial statements of Asia Media Communications, Ltd. ("Asia
Media"), MyWeb's predecessor, for the fiscal years ended December 31, 1997 and
December 31, 1998. The reports of Wlosek & Braverman on Asia Media's financial
statements for 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 each such expressed an uncertainty as to the
ability of Asia Media to continue as a going concern and the financial
statements did not include any adjustments to reflect the effects on the
recoverability and classification of assets or the amounts and classification of
liabilities that may result from the possible inability of Asia Media to
continue as a going concern. The dismissal of Wlosek & Braverman was
approved by MyWeb's Board of Directors. There were no disagreements between Asia
Media or MyWeb and Wlosek & Braverman on any matter of accounting principles or
practice, financial statement disclosure, or auditing scope or procedure. Wlosek
& Braverman did not advise Asia Media or MyWeb with respect to any of the
matters set forth in item 304(a)(1)(iv)(B) of Regulation S-B promulgated by the
Securities and Exchange Commission.
On March 22, 2000, MyWeb engaged Arthur Andersen as the principal
accountant to audit MyWeb's financial statements for the fiscal year ended
December 31, 1999.
Subsequent to its appointment in March 1999 as auditors of TecnoChannel
Technologies Sdn Bhd ("TecnoChannel"), a wholly-owned subsidiary of MyWeb,
Arthur Andersen consulted with management of TecnoChannel, in the normal course
of its audit, on various accounting and reporting issues, including
TecnoChannel's arrangement with third parties pursuant to which it provides
access to TecnoChannel's Web-TV technology to third parties in exchange for
directing users to TecnoChannel's web-site ("barter transactions"). Arthur
Andersen advised TecnoChannel that barter transactions should be accounted for
in accordance with Accounting Principles Board (APB) Opinion No. 29, Accounting
for Non Monetary Transactions, which states in part that, in general, accounting
for nonmonetary transactions should be based on the fair values of the assets
(or services) involved which is the same basis as that used in monetary
transactions. Thus, the cost of a nonmonetary asset acquired in exchange for
another nonmonetary asset is the fair value of the asset surrendered to obtain
it, and a gain or loss should be recognized on the exchange. The fair value of
the asset received should be used to measure
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<PAGE> 30
the cost if it is more clearly evident than the fair value of the asset
surrendered. Similarly, a nonmonetary asset received in a nonreciprocal transfer
should be recorded at the fair value of the asset received. If the fair values
of the assets/services surrendered or received in the transaction are not
readily determinable, the book value of the asset surrendered should be used to
record the transaction.
In its financial statements for the first three fiscal quarters of
1999, MyWeb had recorded gross revenues from barter transactions at the value of
the transactions stated in the contracts between MyWeb and the third parties
with whom it entered into the barter transactions. As a result of TecnoChannel's
consultations with Arthur Andersen, MyWeb has determined that the fair value of
the assets/services surrendered or received in the barter transactions were not
readily determinable and the book value of the asset surrendered by MyWeb in the
barter transactions was zero. MyWeb has decided to restate its previously filed
financial statements for the first three fiscal quarters of 1999 to show that
its revenues from barter transactions were zero. The effect of the restatement
will be a reduction in revenues from barter transactions with a corresponding
reduction in advertising expense and a net effect of zero to net income.
Wlosek & Braverman was not consulted with respect to the accounting
treatment of the barter transaction.
30
<PAGE> 31
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(a) OF THE EXCHANGE ACT
The following table sets forth, the names, ages and positions of our
directors and executive officers as at March 31, 2000. Their respective
backgrounds are described below.
<TABLE>
<CAPTION>
NAME AGE POSITION
- ---- --- --------
<S> <C> <C>
Nin Contreras 45 President and Chief Executive Officer
Wong Thean Soon 29 Chairman and Director
Danny Teow Teck Toe 30 Executive Director
Victor Fook Ai Ng 52 Executive Director, Chief Financial Officer, Treasurer and Secretary
Alvin Roy Granoff 52 Independent Director
George S. Bayoud 45 Independent Director
K. Shanmugam* 40 Independent Director
Alex Jorge 28 Vice President
Pan Dong 41 Vice President
</TABLE>
- -----------
*Nominated but not appointed
<TABLE>
<CAPTION>
<S> <C>
Nin Contreras Mr. Contreras was appointed President and Chief Executive Officer in March 2000.
Mr. Contreras is an accomplished technology executive with over twenty years of
professional international business experience throughout Asia Pacific, the U.S.,
and Europe. Mr. Contreras was formerly the general manager of Sunbeam, Latin
America, where he had bottom-line responsibility for the full product portfolio of
Sunbeam products in this region. Prior to that, he worked 13 years with the Dutch
consumer electronics company, Philips, where his last position was Director of
Marketing and Sales of Internet television products worldwide. Mr. Contreras holds
a degree in B.Sc. from the University of York (UK) and an MBA from IMI (Geneva,
Switzerland).
Thean Soon Wong Mr. Wong was appointed as Chairman of our Board of Directors in February 1999. Mr.
Wong is a co-founder of TecnoChannel Technologies Sdn Bhd. From 1997 to March 2000,
Mr. Wong was 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 1995, Mr. Wong graduated from the
National University of Singapore with a Bachelor of Electrical Engineering degree.
Danny Teow Teck Toe Prior to becoming MyWeb's Chief Operating Officer in April 1999, Mr. Toe was the
co-founder and Chief Operating Officer of TecnoChannel since April 1997. From 1996
until 1997, Mr. Toe was a Senior Officer at the Economic Development Board of
Singapore, where he worked at the Enterprise Development Division. He has also held
marketing positions with 3M Inc. in Singapore. Mr. Toe holds a first class degree in
Electronics Engineering from the National University of Singapore.
Victor Fook Ai Ng Mr. Ng was appointed as a director in February 1999. Mr. 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.
</TABLE>
31
<PAGE> 32
<TABLE>
<CAPTION>
<S> <C>
Alvin Roy Granoff Mr. Granoff was appointed as an independent director in November 1999. Mr. Granoff
is an attorney by profession. From 1983-1995, Mr. Granoff served as an elected
member of the Texas House of Representatives. Mr. Granoff also serves as an
executive officer in Granoff Law Offices PC, Granoff Company, Stoneleigh Hotel and
River City Hotel LP. Mr. Granoff holds a Juris Doctor from SMU School of Law and a
Bachelor of Arts degree from Beloit College.
George S. Bayoud, Jr. Mr. Bayoud was elected as an independent director in November 1999. Mr. Bayoud is the
managing partner of Texas Ltd., an investment company. Mr. Bayoud founded and is
the President of Raven Interests of Texas Inc., a real estate company. Mr. Bayoud is
also part of the Board of Directors of the Beck Group, a construction and real estate
company and of Great Lodge.Com. He was previously appointed to the board of the Texas
National Research Laboratory Commission (Superconducting Super Collider). In 1996,
Mr. Bayoud served as President of First Southwest Holdings, Inc., a leading
investment bank in the Southwest. Mr. Bayoud is a graduate of St. Mark's School of
Texas and The University of Texas at Austin.
K. Shanmugam Mr. Shanmugam has been nominated as a director. Mr. Shanmugam is a Partner and Deputy
Head of Litigation at the Singapore law firm of Allen & Gledhill. Since January 1993,
Mr. Shanmugam has served as a director of Eastern Development Pte. Ltd. Mr.
Shanmugam has served as a director of SembCorp Industries Ltd since July 1998 . He
has also served as Director of Asia Food & Properties Ltd and Golden Agri-Resources
Ltd since July 1997 and May 1999, respectively. He is a mediator with the panel of
mediators of the Singapore Mediation Centre, a Fellow of the Singapore Institute of
Arbitrators and Chartered Institute of Arbitrators, as well as a Member of the Pabek
of Accredited Arbitrators of the Singapore International Arbitration Centre. He was
appointed a Senior Counsel of the Singapore Bar on January 19, 1998. Mr. Shanmugam
graduated with a first class Honors degree from the National University of Singapore
in 1984. It is intended that Mr. Shanmugam's appointment will be formalized in April
2000.
Alex Jorge Mr. Jorge was appointed Vice President in September 1999. Mr. Jorge was formerly a
Test Center Performance Analyst for PC World Magazine, analysing hardware component
testing, benchmark development, objective analysis and vendor product development.
He was also a contributing Editor for Hardware and Software systems review for both
print and online divisions. Mr. Jorge has an Associates Degree from Diablo Valley
College and is currently pursuing another degree from California State University,
San Francisco.
Pan Dong Mr. Doug was appointed Vice President in March 2000. Mr. Dong was previously
employed by General Electric Company offices in Shanghai and Beijing for a total of
4 years prior to joining MyWeb. His other previous employment history included a
joint venture in a PVC Window Company, China Project Department, China Machinery
Import and Export Corporation, National Institute of Building Materials, Accuride
Canada Inc. He was primarily involved in the implementation and monitoring of
operations and productivity issues, business developments, investment projects,
joint ventures and partnerships, among others. Mr. Dong has an MBA from the
University of Western Ontario, Canada and a Master of Science in Industrial
Engineering from Wuhan Technology University, China.
</TABLE>
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
To our knowledge, based on a review of the copies of reports which have
been furnished to us, the following persons are directors, officers, or
beneficial owners of 10% or more of our common stock subject to Section 16(a) of
the Exchange Act that failed to file on a timely basis Forms 3, 4 and/or 5,
with respect to our 1999 fiscal year.
Thean Soon Wong had a reportable event in 1999 and has not filed a
Form 4 or a Form 5. Victor Ng had reportable events in 1999 and has not filed
Forms 4s or a Form 5. Danny Teow Teck Toe had reportable events in 1999 and has
not filed Forms 4s or a Form 5. Alex Jorge has not filed a Form 3, and a Form 4
or Form 5 for a reportable event in 1999. Alvin Roy Granoff had a reportable
event in 1999 and has not filed a Form 4 or Form 5. George S. Bayoud, Jr. had a
reportable event in 1999 and has not filed a Form 4 or Form 5. Neutron
Enterprises Inc. had a reportable event in 1999 and has not filed a Form 4 or
Form 5. Chew Gaik Sim, who owns 50.1% of Neutron Enterprises Inc., if required
to do so, has not filed a Form 3, or a Form 4 or Form 5 for the above-mentioned
event that is reportable by Neutron Enterprises Inc.
32
<PAGE> 33
ITEM 10. EXECUTIVE COMPENSATION
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth the total compensation paid for the last
three completed fiscal years to Mr. Thean Soon Wong, our Chief Executive Officer
during the last completed fiscal year. No one serving as an executive officer
during the last completed fiscal year received total annual salary and bonus of
$100,000 or more during any of the last three completed fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
------------------- ----------------------
AWARDS PAYOUT
----------- ------------
NAME AND PRINCIPAL SECURITIES
POSITION OTHER ANNUAL UNDER-LYING ALL OTHER
YEAR SALARY BONUS COMPENSATION OPTIONS/SARs COMPENSATION
($) ($) ($) (#) ($)
(a) (b) (c) (d) (e) (g) (i)
--- --- --- --- --- --- ---
<S> <C> <C> <C> <C> <C> <C>
Thean Soon Wong - 1999 53,684 5,263 105,263(1) 100,000 7,074(2)
Chairman of MyWeb
Inc.com and CEO of 1998 25,263 2,105 31,579(1) 0 3,284(2)
TecnoChannel 1997 18,947 2,105 0 0 2,274(2)
</TABLE>
Note:
(1) Represents Mr. Wong's fees for services as a director of TecnoChannel
Technologies.
(2) Represents the Company's contribution to Mr. Wong's Employee Provident
Fund which is required under Malaysian law.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
(INDIVIDUAL GRANTS)
<TABLE>
<CAPTION>
NUMBER OF PERCENT OF TOTAL
SECURITIES OPTIONS / SARs GRANTED MARKET PRICE ON
UNDERLYING TO EMPLOYEES IN FISCAL EXERCISE OR DATE OF GRANT
NAME OPTIONS / SARs YEAR BASE PRICE ($/Sh) EXPIRATION
(a) GRANTED (#) (c) ($/Sh) (e) DATE
(b) (d) (f)
<S> <C> <C> <C> <C> <C>
Thean Soon Wong 100,000 6.89% 6.00 16.81(1) 11/06/2004
</TABLE>
- ----------
Note:
(1) Grant date present value $2,380,000
33
<PAGE> 34
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END
OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
SHARES ACQUIRED OPTIONS / SARs AT FY-END (#) OPTIONS/SARs AT FY-END
NAME ON EXERCISE VALUE REALIZED EXERCISABLE / UNEXERCISABLE ($) EXERCISABLE /
(#) ($) UNEXERCISABLE
(a) (b) (c) (d) (e)
<S> <C> <C> <C> <C>
Thean Soon Wong 0 0 Exercisable: 100,000 Exercisable: 2,100,000
</TABLE>
COMPENSATION OF DIRECTORS
STANDARD ARRANGEMENTS. The aggregate remuneration and emoluments
(including fees, salaries, bonuses and commissions) paid to Directors for
services rendered for the financial year ended December 31, 1999 was $241,284.
For the current financial year ending December 31, 2000, the estimated amount
payable to the Directors is approximately $500,000.
Stock options were also granted to George Bayoud and Alvin Granoff for
50,000 shares at an exercise price of $12 per share. These were granted on
November 6, 1999 and will expire on November 6, 2009.
OTHER ARRANGEMENTS. We reimburse each member of our board of directors
for out of pocket expenses incurred in connection with attending board meetings.
No member of our board of directors currently receive any additional cash
compensation.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, AND
CHANGE-IN-CONTROL ARRANGEMENTS
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 can
terminate this agreement by providing the other party with one month's written
notice.
In May 1999, we entered into an employment agreement with Danny Teow
Teck Toe to serve as our Chief Operating Officer. The agreement does not specify
Mr. Toe's term of employment. Mr. Toe's annual compensation is $84,000. Mr. Toe
resigned as Chief Operating Officer in March 2000. The Board of Directors
appointed Mr. Toe to serve as a director in November 1999.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
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 March 31,
2000.
34
<PAGE> 35
<TABLE>
<CAPTION>
DIRECT INTEREST INDIRECT INTEREST TOTAL INTEREST
SHAREHOLDERS NO. OF SHARES NO. OF SHARES NO. OF SHARES (%)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOLDERS OF 5% OR MORE
Neutron Enterprises Inc (1) 1,450,000 - 1,450,000 13.1
Incubator 2, Unit G3
Technology Park Malaysia
57000 Kuala Lumpur, Malaysia
Meng Fui Cheah 97,000 850,000(2) 947,000(3) 8.5
Incubator 2, Unit G3,
Technology Park Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit
Jalil
Dr Ahmad Mustaffa Babjee 20,000 850,000(4) 870,000(5) 7.8
Incubator 2, Unit G3,
Technology Park Malaysia
Lebuhraya Puchong-Sungei Besi, Bukit
Jalil
Free Earth Investments Ltd. (6) 789,550 - 789,550 7.1
612, Telok Blangah Road
#01-03, Fairways Condominium
Singapore
</TABLE>
- -------
Note:
(1) Neutron Enterprises Inc. is a company which is 50.1% owned by Mr. Sim
Chew Gaik.
(2) Owned of record by Jerisle Ltd., of which Mr. Cheah owns 100% of the
outstanding stock.
(3) Inclusive of 20,000 shares Mr Cheah has the right to acquire beneficial
ownership within 60 days.
(4) Owned of record by Ambang Dinamik Sdn Bhd, of which Dr. Babjee owns
100% of the outstanding stock.
(5) Inclusive of 20,000 shares Dr. Babjee has the right to acquire
beneficial ownership within 60 days.
(6) Doris Poh Heem Huang (now deceased) was the owner of Free Earth
Investments Ltd. Mrs. Poh was the wife of Victor Ng, one of our
directors and officers. Mr. Ng disclaims beneficial ownership of these
shares. Under the will of Mrs. Poh, the only beneficiary of these
shares is Ng E-Ming Joyce, the daughter of Mr. Ng and Mrs. Poh. Does
not include shares which are subject to options held by Mr. Ng.
35
<PAGE> 36
SECURITY OWNERSHIP OF MANAGEMENT
The following table lists the number and percentage of our outstanding
shares of common stock beneficially owned, directly or indirectly, by each
director and named executive officers, and by all of our directors and officers
as a group as at March 31, 2000:
<TABLE>
<CAPTION>
DIRECT INTEREST INDIRECT INTEREST TOTAL INTEREST
SHAREHOLDERS NO. OF SHARES NO. OF SHARES NO. OF SHARES (%)
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DIRECTORS
Thean Soon Wong (1) 100,000 2,675,950 2,775,950 24.8
Block G, Unit G606
Phileo Damansara 1
46350 Petaling Jaya
Malaysia
Victor Ng (2) 78,032 789,550 867,582 7.8
Block G, Unit G606
Phileo Damansara 1
46350 Petaling Jaya
Malaysia
Danny Teow Teck Toe 103,473 425,000(3) 528,473 4.8
Block G, Unit G606
Phileo Damansara 1
46350 Petaling Jaya
Malaysia
Alvin Roy Granoff 50,000 17,000 67,000(4) 0.6
3013 Fairmount
Dallas, Texas
United States of America
George S. Bayoud 50,000 - 50,000(5) 0.4
3909 Miramar Ave.
Dallas, Texas 75205
United States of America
All executive officers and directors as 381,505 3,907,500 4,289,005
a group
</TABLE>
- -----
Note:
(1) Of such shares, 2,675,950 are owned of record by Star Channel Systems
Sdn Bhd, of which Mr. Wong owns 76.5% of the outstanding stock.
(2) Of such shares, 789,550 are owned of record in the name of Free Earth
Investments Ltd. Doris Poh Heem Huang (now deceased) was the owner of
Free Earth Investments Ltd. Mrs. Poh was the wife of Mr. Ng. Under the
will of Mrs. Poh, the only beneficiary of these shares is Ng E-Ming
Joyce, the daughter of Mr. Ng and Mrs. Poh. Mr. Ng disclaims beneficial
ownership of these shares.
(3) Owned of record by Mdm. Tan Sew Lan as trustee for her son, Mr. Toe
(4) Inclusive of 50,000 shares that Mr. Granoff has the right to acquire
beneficial ownership of within 60 days.
(5) Inclusive of 50,000 shares that Mr. Bayoud has the right to acquire
beneficial ownership of within 60 days.
We only have one class of shares which is the common stock, par value of $0.01
each.
36
<PAGE> 37
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In 1997, 1998 and 1999, some of our directors and shareholders made
loans to us for working capital purposes. As of December 31, 1999, we owed
$151,037 to Thean Soon Wong (our chairman), $24,573 to Danny Teow Teck Toe (our
director), $911 to Dr. Ahmad Mustaffa Babjee (a shareholder), and $20,990 to
Meng Fui Cheah (a shareholder). These loans were made to us on an interest-free
basis, and have no specified repayment terms.
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 Danny
Teow Teck Toe, one of our directors. 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.
37
<PAGE> 38
ITEM 13. EXHIBITS, LIST AND REPORTS ON FORM 8-K
EXHIBITS
Number Description
- ------ -----------
2. * Plan of Reorganization incorporated by reference to the Report
on Form 10-SB of Asia Media Communications, Ltd. as filed with
the Commission on February 16, 1994.
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. as 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. as 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. as 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., incorporated by reference to the
Registration Statement on Form SB-2 of MyWeb Inc.com, filed on
October 28, 1999.
3.1(f) * Restated Articles of Incorporation of MyWeb Inc.com,
incorporated by reference to the Registration Statement on
Form SB-2 of MyWeb Inc.com, filed on October 28, 1999.
3.1(g) Certificate of Correction to Restated Articles of
Incorporation.
3.2 * MyWeb Inc.com's By-laws incorporated by reference to its
Report on Form 10-SB as filed with the Commission on February
16, 1994.
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, Ltd. to the Current Report
on Form 8-K of Asia Media Communications, Ltd. (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., Kremlysovskaya Group
Inc., Kremlyovskaya Group NV, Riccardo Franchini, Richard
Gaspar, Yakov Tillman, Tadeus Tonley, Valentin Kassatkine,
Guerman Liberman, Youri Bychovski, 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.
38
<PAGE> 39
10.4 * Option Agreement, dated as of December 26, 1996, between Asia
Media Communication, Ltd. and AMC International Holdings,
Ltd., incorporated by reference to the Annual 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.
10.5 * Written Consent of the Sole Director of AMC International
Holdings, Ltd. dated as of December 27, 1996, incorporated by
reference to the Annual 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
Annual 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 Annual 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 Annual 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 Annual
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 shareholders 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, incorporated by reference to the
Registration Statement on Form SB-2 of MyWeb Inc.com, filed on
October 28, 1999.
10.14 * Tenancy Agreement, dated April 28, 1999, by and between
Selekta Bakti Sdn Bhd and TecnoChannel Technologies Sdn Bhd.,
incorporated by reference to the Registration Statement on
Form SB-2 of MyWeb Inc.com, filed on October 28, 1999.
10.15 * Tenancy Agreement, dated April 28, 1999, by and between Woi
Seen Chin Enterprises Sdn Bhd and TecnoChannel Technologies
Sdn Bhd., incorporated by reference to the Registration
Statement on Form SB-2 of MyWeb Inc.com, filed on October 28,
1999.
39
<PAGE> 40
10.16 * Rental of Storage Space Agreement, dated March 16, 1999, by
and between Woo Ah Lek and TecnoChannel Technologies Sdn Bhd.,
incorporated by reference to the Registration Statement on
Form SB-2 of MyWeb Inc.com, filed on October 28, 1999.
10.17 * Office Service Agreement, dated June 3, 1999, by and between
Alliance/Interoffice San Francisco, LLC and MyWeb Inc.com. ,
incorporated by reference to the Registration Statement on
Form SB-2 of MyWeb Inc.com, filed on October 28, 1999.
10.18 * Lease Agreement, dated April 29, 1999, by and between MyWeb
Asia Pte. Ltd. and Lee Wing Han, incorporated by reference to
the Registration Statement on Form SB-2 of MyWeb Inc.com,
filed on October 28, 1999.
10.19 *+ Binary License and Redistribution Agreement, dated March 28,
1999, by and between Sun Microsystems, Inc. and TecnoChannel
Sdn Bhd., incorporated by reference to the Registration
Statement on Form SB-2A of MyWeb Inc.com, filed on November
12, 1999.
10.20 *+ License Agreement, dated January 4, 1999, by and between
TecnoChannel Technologies Sdn Bhd and NetChina. , incorporated
by reference to the Registration Statement on Form SB-2 of
MyWeb Inc.com, filed on October 28, 1999.
10.21 *+ Memorandum of Understanding, dated March 15, 1999, by and
between MyWeb Inc.com and Masslink. , incorporated by
reference to the Registration Statement on Form SB-2 of MyWeb
Inc.com, filed on October 28, 1999.
10.22 ** Agreement, dated June 16, 1999, by and between MyWeb Inc.com
and Xin Hua Organization.
10.23 *+ Joint Venture Agreement, dated July 12, 1999, by and between
MyWeb Inc.com and Qingdao Haier Computer Co., Ltd.,
incorporated by reference to the Registration Statement on
Form SB-2A of MyWeb Inc.com, filed on November 12, 1999.
10.24 *+ Memorandum of Understanding, dated April 8, 1999, by and
between MyWeb Inc.com and Lang Chao Computer Co., incorporated
by reference to the Registration Statement on Form SB-2A of
MyWeb Inc.com, filed on November 12, 1999.
10.25 *+ Service Agreement, dated January 2, 1999, by and between
TecnoChannel Technologies Sdn Bhd and Unilever (Malaysia)
Holdings Sdn Bhd., incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
10.26 *+ Agreement, dated December 8, 1997, by and between
TecnoChannel Technologies Sdn Bhd and Philips Consumer
Electronics B.V. , incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
10.27 *+ Joint Venture Agreement, dated April 12, 1999, by and
between Asia Media Communications, Ltd and Beijing Telecom
Communication Ltd., incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
10.28 *+ License Agreement, dated May 4, 1999, by and between
TecnoChannel Technologies Sdn Bhd and HKNet Co Ltd. ,
incorporated by reference to the Registration Statement on
Form SB-2A of MyWeb Inc.com, filed on November 12, 1999.
10.29 *+ Memorandum of Understanding, dated May 19, 1999, by and
between MyWeb Inc.com and China Sci-Technologies International
Trust & Investment Co. Ltd., incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
40
<PAGE> 41
10.30 + Lease Agreement, dated June 2, 1999, by and between MyWeb
Inc.com and Beijing Chongwen-New World Properties Development
Co. Ltd.
10.31 *+ Letter of Agreement, dated June 22, 1999, by and between
MyWeb Inc.com and Ogilvy Public Relations Worldwide.,
incorporated by reference to the Registration Statement on
Form SB-2A of MyWeb Inc.com, filed on November 12, 1999.
10.32 ** Cooperation Agreement, dated May 18, 1999, between SOYEA Ltd
and MyWeb Inc.com
10.33 * Agreement, dated June 28, 1999, between Ncore Technology and
TecnoChannel Technologies Sdn Bhd., incorporated by reference
to the Registration Statement on Form SB-2A of MyWeb Inc.com,
filed on November 12, 1999.
10.34 + Letter of Intent, dated October 25, 1999, between Infosto
Information Technology (Beijing) Co, Ltd. and MyWeb Internet
System (Beijing) Co., Ltd.
10.35 *+ Agreement, dated October 23, 1999, between TVSN China
(Holdings) Ltd. and MyWeb Inc.com., incorporated by reference
to the Registration Statement on Form SB-2A of MyWeb Inc.com,
filed on November 12, 1999.
10.36 ** Agreement between Beijing Yin Jian and MyWeb Inc.com.
10.37 + Agreement between Beijing Goyoyo Technology Development. Ltd.
and MyWeb Inc.com.
10.38 ** Agreement between Shenzhen Prosperity Systems Co. Ltd. and
MyWeb Inc.com.
10.39 + Agreement between www.158.com.ch (Beijing Hairong Information
System Ltd.) and MyWeb Inc.com
10.40 * Employment Agreement, dated May 1, 1999, between Danny Toe
Teow Teck and MyWeb Inc.com., incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
10.41 *+ Media Relations Cooperation Agreement, dated February 23,
1999, between Merger Communications, Inc. and Asia Media
Communications Ltd., incorporated by reference to the
Registration Statement on Form SB-2A of MyWeb Inc.com, filed
on November 12, 1999.
10.42 Settlement Agreement between Merger Communications, Inc. and
MyWeb Inc.com.
10.43 ** Media Relations Cooperation Contract, dated September 28,
1999, between Merger Communications, Inc. and MyWeb Inc.com.
10.44 + Sale and Purchase Agreement dated January 3, 2000 between
MyWeb Inc.com and Deepa Nilkanth Mahajan for purchase of 95%
of outstanding and issued shares in Easy2Bid Pte. Ltd.
10.45 + Sale and Purchase Agreement dated January 2, 2000 between
MyWeb Inc.com and Tan Tian Sin and Chew Siau Fong for purchase
of 13,334 shares representing 66.67% of the issued and paid-up
capital of Pacific Office Supplies Sdn Bhd.
10.46 ** Co-marketing Agreement dated February 22, 2000 between MyWeb
Inc.com and Asia Infonet Co., Ltd.
10.47 + License Agreement dated February 15, 2000 between MyWeb
Inc.com and MyWeb Americas, Inc.
41
<PAGE> 42
10.48 [Not Used]
10.49 [Not Used]
10.50 Agreement for Bank Loan between MyWeb (Beijing) and China
Construction Bank
10.51 Mortgage Agreement between MyWeb (Beijing) and China
Construction Bank.
10.52 [Not Used]
10.53 [Not Used]
10.54 [Not Used]
10.55 ** Component Sale and Purchase Agreement, dated July 9, 1999,
between Philips Singapore Pte,. Ltd. and TecnoChannel
Technologies Sdn Bhd.
10.56 + Service Agreement, dated May 24, 1999, between CorpCom
Services Sdn Bhd and TecnoChannel Technologies Sdn Bhd.
10.57 ** Service Agreement, dated October 1, 1999, between De Flower
Shop and TecnoChannel Technologies Sdn Bhd.
10.58 ** Service Agreement, dated November 1, 1999, between MPH
Bookstores Sdn Bhd and TecnoChannel Technologies Sdn Bhd.
10.59 + Distribution Agreement, dated July 15, 1999, between KL Mutual
Fund Bhd and TecnoChannel Technologies Sdn Bhd.
10.60 ** Advertising Contract, dated November 1, 1999, between GWCom
Information Technology (Shanghai) Co. and MyWeb (Beijing)
10.61 ** Cooperation Agreement, dated September 8, 1999, between GWCom
Information Technology (Shanghai) Co. and MyWeb (Beijing)
10.62 + QNX OEM Licensing Agreement dated April 5, 2000 between QNX
Software Systems Ltd and TecnoChannel Technologies Sdn Bhd.
10.63 Subscription Agreement, dated March 23, 2000, for Asia
Internet Assets, Inc. to subscribe for MyWeb Inc.com's common
stock.
10.64 Letter, dated March 23, 2000, confirming Samsung Asia Pte.
Ltd.'s acceptance of MyWeb Inc.com's offer to subscribe for
MyWeb Inc.com common stock.
16. * Letter, from Wlosek & Braverman, LLC, the Registrant's former
principal accountants, to the Securities and Exchange
Commission pursuant to Item 304(a)(3) of Regulation S-B,
incorporated by reference to the Current Report on Form 8-K of
MyWeb Inc.com, filed on March 24, 2000 .
21. Subsidiaries of the Company.
23. Consent of Experts.
24. Power of attorney (included on signature page hereto).
27. Financial Data Schedule for the year ending December 31, 1999,
and restated for the years ending December 31, 1998 and 1997.
42
<PAGE> 43
- ----------
* Previously filed with the Commission and incorporated by reference.
** To be filed by amendment.
+ Portions of these exhibits have been omitted pursuant to a request for
confidential treatment.
REPORTS ON FORM 8-K FILED DURING THE LAST QUARTER OF 1999
As previously disclosed in the Registrant's Form 8-K, dated March 22,
2000, the Registrant dismissed Wlosek & Bravemen, L.L.C. as its independent
accountants and engaged Arthur Andersen as its new independent accountants,
effective March 22, 2000. The Registrant's Form 8-K, dated March 22, 2000, is
incorporated herein by reference.
43
<PAGE> 44
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the
registrant caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
MyWeb Inc.com
By: /s/ T. S. Wong
-------------------------
T.S. Wong
Director and Chairman
Date: April 13, 2000
In accordance with the Exchange Act, this report has been signed below
by the following persons on behalf of the registrant and in the capacities and
on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ T. S. Wong Director and Chairman April 13, 2000
- ---------------------------
T.S. Wong
/s/ Danny Teow Teck Toe Director April 13, 2000
- ------------------------
Danny Teow Teck Toe
/s/ Victor Fook Ai Ng Director, Chief Financial Officer, April 13, 2000
- ---------------------- Treasurer and Secretary
Victor Fook Ai Ng
/s/ Nin Contreras Chief Executive Officer and April 13, 2000
- ---------------------------- President
Nin Contreras
</TABLE>
POWER OF ATTORNEY
Each person whose signature appears above severally hereby constitute
and appoint Thean Soon Wong and Victor Fook Ai Ng, and each of them, their true
and lawful attorneys-in-fact and agents, with full powers of substitution and
resubstitution, for them and in their names, places and steads, in any and all
capacities indicated above, to sign the Annual Report on Form 10-KSB of MyWeb
Inc.com for the fiscal year ending December 31, 1999 and all amendments to such
Annual Report on Form 10-KSB, 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, each acting alone,
full power and authority to do and perform to all intents and purposes as they
might or could do in person, hereby ratifying all that said attorneys-in-fact
and agents, each acting alone, or their substitutes, may lawfully do or cause to
be done by virtue hereof.
<PAGE> 45
MYWEB INC.COM
CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<S> <C>
Report of Independent Public Accountants.................................................................. F-2
Consolidated Balance Sheets as of December 31, 1999 and 1998.............................................. F-3
Consolidated Statements of Operations for the years ended
December 31, 1999 and 1998, and the nine months ended December 31, 1997............................. F-4
Consolidated Statements of Changes in Stockholders' Equity for the years ended
December 31, 1999 and 1998, and the nine months ended December 31, 1997.............................. F-5
Consolidated Statements of Cash Flows for the years ended
December 31, 1999 and 1998, and the nine months ended December 31, 1997.............................. F-6
Notes to Consolidated Financial Statements................................................................ F-7
</TABLE>
F-1
<PAGE> 46
[Arthur Andersen Letterhead]
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TO THE BOARD OF DIRECTORS AND SHAREHOLDERS
OF MYWEB INC.COM:
We have audited the accompanying consolidated balance sheets of MYWEB
INC.COM (a Nevada corporation) and subsidiaries as of December 31, 1999, 1998
and 1997 and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for the years ended December 31, 1999 and
1998 and the nine-month period ended December 31, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with the auditing standards
generally accepted in the United States. 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 management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of MYWEB INC.COM and
subsidiaries as of December 31, 1999, 1998 and 1997 and the results of their
operations and their cash flows for the years ended December 31, 1999 and 1998
and the nine-month period ended December 31, 1997 in conformity with the
accounting principles generally accepted in the United States.
ARTHUR ANDERSEN
Kuala Lumpur
April 13, 2000
F-2
<PAGE> 47
MYWEB INC.COM
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31
(IN THOUSANDS OF DOLLARS, EXCEPT PAR VALUE)
<TABLE>
<CAPTION>
---- ---- ----
1999 1998 1997
---- ---- ----
ASSETS:
Current Assets:
<S> <C> <C> <C>
Cash and cash equivalents 2,362 -- 6
Accounts receivable 1,818 1,100 100
Inventories 43 -- --
Prepared expenses and other current assets 466 6 6
------- ------- -------
Total Current Assets 4,689 1,106 112
------- ------- -------
Property and equipment 352 54 46
------- ------- -------
1,160 158
5,041
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable, trade 408 187
1,861
Other accounts payable 1,369 355 27
Due to directors 198 37 171
Deferred Revenue 26 -- --
------- ------- -------
Total Current Liabilities 3,454 800 385
------- ------- -------
Commitments and contingencies (Note 7) -- -- --
Minority Interests 7 -- --
Shareholders' Equity:
Common stock, par value $0.01; authorized
100,000,000 shares;
Issued and outstanding 11,070,135 shares in 1999 and
and 8,500,000 in 1998 and 1997 111 85 85
Additional paid-in capital 14,749 152 (59)
Retained earnings (deficit) (13,272) 123 (253)
Other comprehensive loss (8) -- --
------- ------- -------
Total Shareholders' Equity 1,580 360 (227)
------- ------- -------
5,041 1,160 158
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated balance sheets
F-3
<PAGE> 48
MYWEB INC.COM
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
AND THE NINE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
1999 1998 1997
----------- ----------- -----------
<S> <C> <C> <C>
Net Revenues 3,512 1,311 102
Cost of revenues 3,530 109 --
----------- ----------- -----------
Gross profit (loss) (18) 1,202 102
----------- ----------- -----------
Operating Expenses:
Sales and marketing 6,326 224 37
Product development 4,396 313 204
General administration 2,659 289 114
----------- ----------- -----------
Total operating expenses 13,381 826 355
----------- ----------- -----------
Minority Interest (4) -- --
Net Income (Loss) (13,395) 376 (253)
=========== =========== ===========
Income (Loss) per share, Basic and Diluted (1.31) 0.04 (0.03)
=========== =========== ===========
Average number of common shares
outstanding 10,241,352 8,500,000 8,500,000
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated statements
F-4
<PAGE> 49
MYWEB INC.COM
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998,
AND THE NINE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
ACCUMULATED
COMMON ADDITIONAL OTHER TOTAL
STOCK PAID IN RETAINED COMPREHENSIVE STOCKHOLDERS'
SHARES AMOUNT CAPITAL EARNINGS INCOME (LOSS) EQUITY
<S> <C> <C> <C> <C> <C> <C>
Capitalization of 8,500,000 85 (59) - - 26
TecnoChannel
Comprehensive loss
Net Loss for 1997 (253) (253)
Total Comprehensive income (253)
--------- ------- --------- ------- --------- ----------
Balance as at December 31, 1997 8,500,000 85 (59) (253) - (227)
Capital contribution 211 211
Comprehensive income
Net Income for 1998 376 376
Total Comprehensive income 376
--------- ------- --------- ------- --------- ----------
Balance as at December 31, 1998 8,500,000 85 152 123 360
Acquisition of MyWeb Inc.com 55,356 1 (1) -
Issuance of common stock 440,000 4 (4) -
Issuance of common stock in 1,000,000 10 10
connection with exercise of
warrants
Issuance of common stock in 526,250 5 3,775 3,780
connection with private
placement
Issuance of common stock in 200,000 2 1,498 1,500
connection with exercise of
options
Shares issued for litigation - - 330 330
Issuance of common stock in 348,529 4 6,343 6,347
connection with options
exercised for compensation
</TABLE>
F-5
<PAGE> 50
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
Compensation for stock option - - 2,656 2,656
grants
Comprehensive Loss:
Net Loss for 1999 (13,395) (13,395)
Foreign currency translation (8)
(8)
Total comprehensive loss (13,403)
--------- ------- --------- ------- --------- ----------
Balance as at December 31, 1999 11,070,135 111 14,749 (13,272) (8) 1,580
========== === ====== ======= == =====
</TABLE>
The accompanying notes are an integral part of these consolidated statements
F-6
<PAGE> 51
MYWEB INC.COM
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1999, 1998
AND THE NINE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
1999 1998 1997
---- ---- ----
Operating Activities
<S> <C> <C> <C>
Net income (loss) (13,395) 376 (253)
Reconciliation to net cash used in
operating activities
Depreciation 45 12 9
Non cash expenses 9,333 -- --
Minority interest in net income(loss) (4) -- --
Unrealized loss on foreign exchange -- 13 --
Loss on sale of equipment 3 -- --
Changes in Operating Working Capital
Accounts receivable, trade (705) (1,014) (100)
Inventories (43) -- --
Prepaids and other current assets (460) -- (6)
Accounts payable 2,434 550 214
Deferred revenue 26 --
------- ------- -------
Net cash used in operating (2,766) (63) (136)
activities
------- ------- -------
Investing Activities
Acquisition of property and equipment (347) (20) (55)
Acquired cash in Asia Media 11 -- --
------- ------- -------
Net cash used in Investing (336) (20) (55)
Activities
------- ------- -------
Financing Activities:
Proceeds on issuance of common stock 5,290 211 26
Proceeds from minority shareholders 11 -- --
Borrowings from (repayments to) directors 163 (134) 171
------- ------- -------
Net cash provided by Financing 5,464 77 197
Activities
------- ------- -------
Increase (decrease) in cash and cash equivalents 2,362 (6) 6
Cash, beginning of year -- 6 --
------- ------- -------
Cash, end of year 2,362 -- 6
======= ======= =======
</TABLE>
The accompanying notes are an integral part of these consolidated statements
F-7
<PAGE> 52
MYWEB INC.COM
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999, 1998 AND 1997
NOTE 1 THE COMPANY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY. MyWeb Inc. com (the "Company") was incorporated in the
state of Nevada in February 20, 1985 under the name Sperzel.-NV.Inc.
On February 24, 1999, we completed a reverse merger with TecnoChannel
Technologies Sdn Bhd ("TSB"), 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 of
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 Inc.com.
In February 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 TSB. The
Company currently operates the MyWeb Online Service Internet Properties which
provides localized comprehensive information, communication, and shopping
services to Internet users in the emerging markets in Asia.
PRINCIPLES OF CONSOLIDATION. The consolidated financial statements
include the accounts of MyWeb Inc. com and its majority-owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated. The
equity and net loss attributable to the minority shareholder interests that are
related to the Company's subsidiaries, are shown separately in the consolidated
balance sheets and consolidated statements of operations, respectively. Losses
in excess of the minority interest equity would be charged against the Company.
REVENUE RECOGNITION. The Company's revenues are derived principally
from the sale of banner advertising and electronic commerce including sales of
set-top boxes. To date, our banner advertising commitments have ranged from one
month to one year. Advertising revenues are recognized as services are
performed.
We also earn revenue on design and development work relating to the
design, and integration of customers' content and links into the MyWeb Online
Service media properties. These development fees are recognized as revenue once
the related activities have been performed. Electronic commerce revenues are
recognized when the goods are delivered. Barter transactions are recorded at the
fair value of the goods or services provided or received, whichever is more
readily determinable in the circumstances. To date, revenues from barter
transactions for design and development and electronic commerce have each been
less than 10% of net revenues, accounting for approximately 1% of total revenues
during the year.
No one customer accounted for 10% or more of net revenues during 1999,
except for Hangzhou Westlake Electronics Import and Export Co. Ltd which
accounted for approximately 26% of total revenues during the year.
DEFERRED REVENUE. Deferred revenue is primarily comprised of billings
in excess of recognized revenue relating to sales of set-top boxes and
advertising contracts.
PROPERTY AND EQUIPMENT. Property and equipment are depreciated or
amortized using the straight-line method over the following estimated useful
lives:
F-8
<PAGE> 53
<TABLE>
<S> <C>
Communication equipment 8 years
Office equipment, furniture and fittings 5 to 10 years
Motor vehicles 6 years
Electrical fittings and equipment 4 years
Leasehold improvements 4 years
</TABLE>
Effective July 1, 1998, the Company adopted Statement of Position (SOP) 98-1,
"Accounting for the Cost of Computer Software Developed or Obtained for Internal
Use", which requires that certain cost for the development of internal use
software should be capitalized, including the cost of coding, software
configuration, upgrades and enhancements. The adoption of this pronouncement did
not have a material effect on our financial results.
PRODUCT DEVELOPMENT. Costs incurred in the development and organization
of information within MyWeb Online Services Properties and the development of
new products and enhancements to existing products are charged to expense as
incurred. Material software development costs subsequent to the establishment of
technological feasibility are capitalized. Based upon our product development
process, technological feasibility is established upon completion of a working
model.
ADVERTISING COSTS. Advertising costs are expensed as incurred. We do
not incur any direct-response advertising costs. Advertising expense totaled
approximately $951,000, $137,000 and $7,000 for 1999 ,1998 and 1997
respectively.
CASH AND CASH EQUIVALENTS. We consider all highly liquid investments
with an original maturity of three months or less when purchased to be cash
equivalent. We did not use cash to pay for interest or income taxes during any
of the periods in the financial statements.
CONCENTRATION OF CREDIT RISK. Financial instruments that potentially
subject the Company to significant concentration of credit risk consist
primarily of cash, cash equivalents, and accounts receivable. The carrying
amount of our cash and cash equivalents, other receivables, other assets
approximate fair value. Accounts receivable are typically unsecured and are
derived from revenues earned from customers primarily located in Asia. We
perform ongoing credit evaluations of our customers and maintain reserves for
potential credit losses; historically, such losses have been within management's
expectations. At December 31, 1999 and 1998, no one customer accounted for 10%
or more of the accounts receivable balance except Cyber-Village Pte Ltd and
Hangzhou Westlake Electronics Import and Export Co. Ltd. which accounted for
approximately 18% and 51% of total accounts receivable respectively.
INCOME TAXES. Income taxes are computed using the asset and liability
method. Under the asset and liability method, deferred income tax assets and
liabilities are determined based on the differences between the financial
reporting and tax bases of assets and liabilities and are measured using the
currently enacted tax rates and laws. A valuation allowance is provided for the
amount of deferred tax assets that, based on available evidence, are less likely
to be realized.
STOCK-BASED COMPENSATION. The Company accounts for stock-based employee
compensation arrangements in accordance with the provisions of Accounting
Principles Board Opinion ("APB") No. 25, "Accounting for Stock Issued to
Employees", and complies with the disclosure provisions of Statement of
Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based
Compensation". Under APB 25, compensation cost is recognized over the vesting
period based on the excess, if any, on the date of grant of the fair value of
our stock and the amount an employee must pay to acquire the stock.
F-9
<PAGE> 54
FOREIGN CURRENCY TRANSLATION AND INTERNATIONAL OPERATIONS. The local
currency of each of our subsidiaries is its reporting currency. Accordingly,
assets and liabilities of our wholly-owned foreign subsidiaries are translated
into U.S. dollars at year-end exchange rates, and revenues and expenses are
translated at average rates prevailing during the year. Translation adjustments
are included as a component of stockholders' equity. Foreign currency
transaction gains and losses, which have been immaterial, are included in result
of operations.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE. Basic net income (loss)
per share is computed using the weighted average number of common shares
outstanding during the period. Diluted net income (loss) per share is computed
using the weighted average number of common and common equivalent shares
outstanding during the period. Common equivalent shares consist of the
incremental common shares issuable upon the exercise of stock options and
warrants (using the treasury stock method). For 1999, common stock equivalents
were excluded as their effects would be anti-dilutive. For 1998, there were no
common stock equivalents outstanding.
BARTER TRANSACTIONS. The Company barters advertising for products and
services. Such transactions are recorded at the estimated fair value of the
products or services received or given. Revenue from barter transactions is
recognized when advertising is provided, and services are charged to expense
when used. Barter transactions are immaterial to our statement of operations for
all periods presented. In 1999, the Company entered into certain software
license agreements in exchange for fair value advertising and marketing
arrangements in kind. The duration of the agreements were for a period of twelve
months commencing in January 1999 and May 1999. The Company has determined that
the fair value of the assets/services surrendered or received in the barter
transactions were not readily determinable and the book value of the asset
surrendered by the Company in the barter transactions was zero. The Company has
decided to show that its revenues from these barter transactions were zero.
USE OF ESTIMATES. The preparation of financial statements in conformity
with generally accepted accounting principles requires the management to make
estimates and assumptions that affect the amounts reported in the financial
statements and disclosure of contingent assets and liabilities in accompanying
notes. Actual results could differ from those estimates.
ACQUISITION. On February 24, 1999, the Company acquired 100% of the
issued and outstanding capital stock of TSB in exchange for an aggregate of
8,500,000 shares of common stock. In connection with such acquisition, we issued
an aggregate of 440,000 shares of its common stock to GEM Ltd. for its services
as financial advisor to us.
TSB, which was formed in April 1997 and operates under the trade name, "MyWeb",
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 other third parties and include software developed by TSB.
Approximately 25,000 of the boxes are installed in Malaysia and Singapore and
50,000 are installed in China. In addition, TSB 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. TSB also operates multiple Internet portals
providing localized interactive applications, such as e-commerce, to both
personal computer users and set-top box users.
The Company accounted for the acquisition as a recapitalization under a reverse
acquisition procedure whereby TSB's operations and retained earnings are
reported as continuous. The value of the shares issued to GEM Ltd has been
charged to additional paid-in capital.
F-10
<PAGE> 55
NOTE 2 BALANCE SHEET COMPONENTS (IN THOUSANDS OF DOLLARS)
<TABLE>
<CAPTION>
Property and equipment: December 31,
1999 1998 1997
------ ------ ------
<S> <C> <C> <C>
Communication equipment 28 4 3
Office equipment 137 33 32
Furniture & fittings 58 20 20
Motor vehicles 40 18
Electrical fittings & equipment 93 --
Leasehold improvements 62 --
------ ------ ------
418 75 55
Less: Accumulated depreciation (66) (21) (9)
====== ====== ======
352 54 46
====== ====== ======
Accrued expenses and other current liabilities:
Accrued compensation & related expenses 18 88 4
Accrued content, connect, other costs 646 162 23
Accrued sales & marketing related expenses 584 99 --
Accrued professional service expenses 121 6 --
====== ====== ======
1,369 355 27
====== ====== ======
</TABLE>
NOTE 3 RELATED PARTY TRANSACTIONS
The Company presently operates from offices on a rent-free basis utilized by a
director. Actual space utilization is minimal in nature and is non-reimbursable.
There are no pending lease arrangements at the present time.
NOTE 4 DUE TO DIRECTORS
Amounts due to directors represent short-term non interest bearing advances,
with no set repayment terms. These amounts will be repaid from operational cash
flows.
NOTE 5 SHAREHOLDERS' EQUITY
COMMON STOCK
During May 1999, the Company 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. During May 1999, the Company completed a private placement of
526,250 of shares of our common stock. We received $3,780,000 in aggregate
proceeds from the private placement. We used the proceeds to finance our
expansion in China. During December 1999, the Company received a further
$600,000 upon the exercise of an option entitling the holder thereof to purchase
50,000 of our shares for our common stock for $12.00 per share.
STOCK INCENTIVE PLAN
Under our Stock Incentive plans, we may grant stock options and incentive awards
to executives, directors and employees to provide motivation to enhance the
company's success and increase shareholder value. Incentive or non-qualified
stock options granted under our plans may be exercised up to 10 years from the
date the options were granted and vest over a period of up to two (2) years and
certain options granted in 1999 became exercisable immediately. Option holders
are required to tender cash or shares of our common stock that they already
owned equal
F-11
<PAGE> 56
to the aggregate exercise price of the options at the time of exercise. Options
outstanding under our plans may not exceed 15% of the total number of shares at
any time outstanding and the total number of options that may be granted under
the plans may not exceed 1,000,000 under each plan. At December 31, 1999, shares
available for future awards under our plans were 547,862.
We apply APB Opinion 25 in accounting for our stock-based compensation programs.
Stock-based compensation expense recognized in connection with the plan was $9.0
million for the year ended December 31, 1999 and was related to certain of our
employees that we allowed to exercise their options without paying the exercise
price (cashless exercise) as well as the excess of the fair value over the
exercise prices of options granted which became exercisable immediately. Under
APB 25, a cashless exercise is treated similar to a stock appreciation right and
the excess of the fair value of the stock and the exercise price of the option
is recognized as compensation expense.
Had we accounted for the options underlying our plans in accordance with SFAS
123, pro forma net loss and loss per share would have been $23.8 million and
$2.32 respectively, for the year ended December 31, 1999. These pro forma
amounts are based upon estimated values of the options using the Black-Scholes
model with the following assumptions at the date of grant:
<TABLE>
<S> <C>
Expected life 10 years
Interest rate 5.5%
Volatility 80%
Dividend yield N/A
</TABLE>
A summary of our stock option plan activity is as follows:
<TABLE>
<CAPTION>
Number of Shares Range of exercise prices
---------------- ------------------------
<S> <C> <C>
Balance at January 1, 1999........................... - $ -
Granted ............................................ 1,452,138 $6.00 to $12.00
Exercised............................................ (700,000) $6.00 to $12.00
Forfeited............................................ - $ -
===================
Balance at December 31, 1999......................... 752,138 $6.00 to $12.00
===================
</TABLE>
NOTE 6 INCOME TAXES
The Company has total net operating loss carryforward at December 31, 1999 of
approximately $13.4 million principally in international jurisdictions. A
deferred asset for these amounts has not been accrued since it is less likely to
be realized.
The Company's effective tax provision (benefit) differs from the amount that
would have been provided using the US Federal statutory tax rate of 34%.
The difference is related to the effects of valuation allowances, net
operating loss benefits and lower tax rates in international locations.
NOTE 7 COMMITMENTS AND CONTINGENCIES
OPERATING LEASES. During 1999, the Company entered into operating lease
arrangements for its offices in China and Malaysia. Future minimum lease
payments for these operating lease arrangements are approximately $80,000 for
2000. The lease arrangements expires in 2001 and certain of the agreements have
a two year renewal option from the date of expiration at lease payments to be
re-negotiated. Rent expense under operating leases totaled approximately
$128,000, $18,000 and $11,000 during 1999, 1998 and 1997, respectively.
LEGAL. From time to time the Company is subject to legal proceedings
and claims in the ordinary course of business, including claims of alleged
infringement of trademarks, copyrights and other intellectual property rights,
F-12
<PAGE> 57
and a variety of claims arising in connection with the Company's email, message
boards, and other communications and community features, such as claims alleging
defamation and invasion of privacy. The Company is not currently aware of any
legal proceedings or claims that the Company believes will have, individually or
in aggregate, a material adverse effect on the Company's financial position or
results of operation.
Option agreement: Pursuant to a proposed acquisition in 1996 which was never
completed, the Company had granted in the acquisition agreement its then
subsidiary, AMC Holdings, an option to convert certain preference shares in the
acquisition agreement to 125,000 shares of the Company's common stock. The
proposed acquired company executed an agreement of forbearance whereby it was
agreed to never exercise such option. As management is presently uncertain as to
the legal binding effect of such an agreement upon an innocent purchaser for
value, and although management believes that no shares will be required to be
issued, an aggregate of 125,000 shares are reserved in the event that the
Company may be forced to issue such shares in the future.
NOTE 8 SETTLEMENT CHARGES
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 at a later date 30,000 shares
of our common stock. The aggregate cost of the settlement of $360,000 has been
charged to expense. The shares were issued in the first quarter of 2000.
NOTE 9 SUBSEQUENT EVENTS
On January 6, 2000, the Company announced its acquisition of the majority
interest in one of Asia's pioneer online auction companies, Singapore-based
Easy2Bid Pte Ltd. Under the terms of the agreement, the Company will issue and
allot to Easy2Bid Pte Ltd 6,200 ordinary shares at an agreed value of Singapore
$32.26 which is equivalent to approximately $120,000 as the purchase
consideration for the acquisition. The acquisition will be accounted for using
the purchase method of accounting.
The Company completed a private placement of 250,000 shares of our common stock
on March 23, 2000 for aggregate proceeds of $2.50 million. Under the terms of
the agreement, we have received $1.00 million on April 4, 2000 and will receive
a further $1.50 million in aggregate proceeds within the next 30 days. The
Company has also secured another private placement of 100,000 shares of our
common stock where we will receive $800,000 upon the signing of the agreement.
We intend to use the proceeds to finance our operations.
NOTE 10 LOSS FOR THE YEAR 1999 AND PLAN OF OPERATION FOR YEAR 2000
During the 1999 Period, the Company recorded a net loss of $13.40 million as
compared to a net income of $376,000 for the 1998 Period. The main reason for
the high net loss in 1999 was due to a non-cash expense related to employee
stock compensation expense of $9.0 million. Other attributable factors was the
increase in sales and marketing expenses and general administrative expenses in
1999 that was greater than the increase in revenue.
However, the Company does not expect to incur any significant stock compensation
expenses in 2000. Over the next 12 months, the Company plans to increase revenue
from advertising and electronic commerce by increasing awareness of its web
sites. The Company expects substantial cash outlay for sales and marketing as
well as general administration expenses. However, the Company intends to
maintain the operating expenses at a range of $3 to $4 million (unaudited) in
2000.
The Company completed a private placement of 250,000 shares of our common stock
on March 23, 2000 for aggregate proceeds of $2,500,000. Under the terms of the
agreement, we have received $1.0 million on April 4, 2000 and will receive a
further $1.5 million 500,000 in aggregate proceeds within the next 30 days. The
Company has also secured another private placement of 100,000 shares of our
common stock where we will receive $800,000 upon the signing of the agreement.
However, the Company is continuing to pursue leads for additional possible
investors. The
F-13
<PAGE> 58
Company believes that with the additional funds of $3.3 million, it will be able
to meet its current expenditure requirements and achieve its business goals for
the next 12 months. Any additional funds raised will determine the speed with
which promotion and enhancements are pursued.
F-14
<PAGE> 59
QUARTERLY FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AMOUNT)
<TABLE>
<CAPTION>
Quarter Ended
March 31 June 30 September 30 December 31
-------- ------- ------------ -----------
<S> <C> <C> <C> <C>
Net Revenues $ 444 $ 482 $ 1,543 $ 1,043
------------ ------------ ------------ ------------
Gross profit (loss) $ 49 $ (74) $ (239) $ 246
Net Income (Loss) $ (256) $ (911) $ (2,022) $ (10,206)
------------ ------------ ------------ ------------
Income (Loss) per share $ (0.03) $ (0.09) $ (0.20) $ (0.99)
------------ ------------ ------------ ------------
Average number of shares
outstanding 9,375,743 10,126,576 10,178,243 10,241,352
========= ========== ========== ==========
</TABLE>
F-15
<PAGE> 1
EXHIBIT 3.1(g)
<PAGE> 2
<TABLE>
<S> <C> <C>
Dean Heller STATE OF NEVADA Telephone 702.687.5203
Secretary of State OFFICE OF THE SECRETARY OF STATE FAX 702.687.3471
101 N. CARSON ST. STE. 3 Web site hope//103.state.nv.us
Carson City, Nevada 89701-4786 Filing Fee: $75
</TABLE>
Certificate of Correction
(Pursuant to NRS 72.0295 and 80.007)
- Remit in Duplicate -
1. The name of the corporation for which correction is being made:
MyWeb Inc.com
- --------------------------------------------------------------------------------
2. Description of the original document for which correction is being made:
Restated Articles of Incorporation of MyWeb Inc.com (filed with the Office
- --------------------------------------------------------------------------------
of the Secretary of State on September 8, 1999 and dated July 19, 1999)
- --------------------------------------------------------------------------------
3. Filing date of the original document: 9/08/99.
--------
4. Description of the incorrect statement and the reason it is incorrect or the
manner in which the execution or other formal authentication was defective:
Above document incorrectly spelled the name of the company: the name is
"MyWeb Inc.com" (without space), not "My Web Inc.com".
5. Correction of the incorrect statements or defective execution or
authentication:
Article 1 should read as follows:
- --------------------------------------------------------------------------------
1. The name of the corporation (the "Corporation") is:
- --------------------------------------------------------------------------------
MyWeb Inc.com
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
6. Signature:
Alexander Jorge __________
/s/ Alexander Jorge Vice President November 10, 1999
- ------------------------------ ---------------- -----------------
Signature of Corporate Officer Title of Officer Date
IMPORTANT: Failure to include any of the above information and remit the proper
fees may cause this filing to be rejected.
<PAGE> 1
EXHIBIT 10.30
<PAGE> 2
Beijing Chongwen New World Property Development Pte Ltd
China New World Electronic Pte Ltd
And
Myweb Inc.com
regarding
Beijing New World Centre
No 34 Chongwen Main Street, Beijing
Office block
South Block, Unit 5
Office Rental Agreement
2 June 1999
<PAGE> 3
Landlord: Beijing Chongwen New World Property Development Pte Ltd (hereinafter
known as "Landlord")
Business Registration Number: 005663 (2-1)
Registered Address: No. 16, Cheong Cheng Garden, Chongwen District, Beijing
Authorised signatories: Chern Cherng Tong Occupation: Managing Director
China New World Electronic Ptd Ltd
Business Registration Number: 00386
Registered Address: No. 3, Chongwen Main Street, Chongwen District, Beijing
Authorised signatories: Cheng Jia Chuern Occupation: Managing Director
Tenant: Myweb Inc.com (hereinafter known as "Tenant")
Business Registration Number:
Registered Address:
Authorised signatories: Occupation:
Landlord is a co-operative enterprise which is the developer of the Beijing New
World Centre (hereinafter known as "Centre"). Landlord is willing to rent out
and Tenant is willing to rent a portion of the office block at the Centre and
thus, this agreement.
This agreement is signed between Landlord and Tenant on 2 June 1999. In order
to ascertain the responsibility and rights of both parties, the following
agreement has been reached whereby both parties shall adhere to the terms and
conditions of the agreement, as follows:
1. Scope of Rental
Tenant shall rent from Landlord the office space at the Centre as
indicated in Appendix 1 (hereinafter known as "office rented"). The
floor area of the office rented is also set out in Appendix 1. The
floor plan of the office rented is highlighted in pink (refer Appendix
2) for easy reference. At the time of hand over of the office rented,
Landlord has provided certain fittings in the office rented (refer
Appendix 3) for the use of Tenant.
2. Date of Commencement
(refer Appendix 3)
3. Duration/Length of Rent
(refer Appendix 3)
4. Rental
(i) Tenant needs to pay monthly rental (this rental does not
include expenses) to Landlord. Refer Appendix 3 for the amount
of rental payable.
(ii) Tenant must pay the monthly rental fee in advance. Once Tenant
has signed the tenancy agreement, Tenant must make initial
payment (equivalent to one month rental) to Landlord.
(iii) The rental payment for a particular month must be paid 3 days
before the commencement of the month, without any deduction
for expenses. If the due date falls on a Saturday, Sunday or
public holiday of RPC, the due date will be delayed to the
next immediate working day.
5. Management Fee
<PAGE> 4
(i) Tenant must pay the monthly central management fee charged
on the office space rented. Refer to Appendix 3 for the
amount of monthly central management fees.
Both parties agree that the management fee can be adjusted
based on the actual increase in the cost of management.
Landlord and/or the management company appointed by Landlord
(hereinafter known as the "management company") must inform
Tenant of any adjustment not less than one month from the
impending adjustment. Tenant must pay the adjusted central
management fees according to the amount informed by the
management company.
(ii) Once Tenant has signed the agreement, Tenant must make
initial payment (equivalent to one month management fee) to
the management company.
(iii) The management fee for a particular month must be paid 3 days
before the commencement of the month, without any deduction
for expenses. If the due date falls on a Saturday, Sunday or
public holiday or RPC, the due date will be delayed to the
next immediate working day.
6. Other infrastructure facilities
(i) With regard to telephone charges, both parties agree to
settle the charges in accordance with the provisions in
Appendix 4.
(ii) Tenant should pay the monthly electricity charges according
to the bill issued by the management company, based on
individual meter installed by the management company showing
the electricity consumption by Tenant. Tenant must pay the
bill within 7 days of the bill being issued. Landlord and the
management company reserve the rights to increase the
electricity charges in accordance with the adjustment to
electricity charges by the relevant government authorities.
7. Deposit
(i) Deposit includes two months rental fee, two month management
fee and electricity deposit. Once the agreement has been sign
by Tenant, the full deposit must be paid to Landlord.
(ii) After the expiry of the rental period, and 30 days after
Tenant has returned the empty office in its original condition
to Landlord, Tenant has paid all charges, rental due to
Landlord or the management company, Tenant has paid for any
compensations for losses suffered by Landlord due to the
non-performance by Tenant of any provisions of this agreement,
after deducting any other amount according to the provisions
of this agreement, Landlord shall refund the balance of
deposit and related interest to Tenant.
8. Adjustment of deposits
(i) If there is adjustment in the monthly rental fee and/or
monthly management fee or electricity deposit by the
management company and the adjustment results in the deposits
previously paid by Tenant being less than the total of two
months rental, two months management fees and electricity
deposits, Tenant must pay the additional deposits within 7
days of being informed of the adjustment. Otherwise, Tenant
is deemed to have breached this agreement.
<PAGE> 5
(ii) The management company has authority to make adjustment on
electricity's deposit according to the actual usage. Landlord
and / or the management company must inform Tenant of any
adjustment not less than one month from the impending
adjustment.
9. Payment method
Unless there are special request by Landlord, Tenant must pay rental
fee, management fee and deposit or other fees in RMB equivalent to the
USD amounts provided in this agreement (based on the spot rate of Bank
of China for the sale of USD). Landlord and / or management company
shall furnish written advice to Tenant as to the amount payable,
designated bank, location and designated bank account number. Tenant
shall provide a photocopy of bank-in-slip to Landlord or management
company for their safekeeping within the payment deadline.
10. Right and Responsibility of Landlord and management company
(i) Where Tenant pays the rental and other charges and
adheres to other provisions of the agreement, Landlord does
not have right to interfere with the manner in which Tenant
utilises the rented space.
(ii) Management is responsible for the following centralised
services:-
Facilities included: drainage, electricity, lighting,
air-conditioning, heating system, telephone, public wash room
and other necessary facilities. Tenant may not install
air-conditioners unless it is done according to instructions
given by Landlord and / or management company.
(iii) Management company's responsibilities
a) 24 hours security
b) fire extinguishing service according to the standards
set forth by the relevant legal regulations of the
City of Beijing.
c) Cleanliness and hygiene of the public area
(iv) Other than the situation as described in clause 13 of this
agreement, where notice has been received from Tenant,
Landlord shall repair the damages to the structure of the
space rented, central machinery or drainage system (damage not
caused by Tenant) in a timely manner and according to the
regulations as set out in the "usage, management and repair
and maintenance handbook".
(v) The management company may set, announce, alter or abolish
rules and regulation contained in "rules and regulations for
Tenant--, --renovation handbook" and other notices. Tenant
must observe all these regulations.
(vi) Landlord reserves the following rights:
a) Public facilities: such as drainage, electricity, air
conditioning, heating system, fire extinguisher,
telecommunications common for space rented; Landlord
or management company has right to send their
technician to Tenant's premises to carry out
inspection, repairs, restructuring if necessary.
Tenant shall be notified in advance unless in
emergency cases.
b) Landlord or management company has the right to
temporary disconnect the facilities/infrastructure of
the rented space for purpose of repair and
maintenance, after issuing reasonable notice, other
than in emergency cases.
<PAGE> 6
c) Landlord has authority to use the external walls and roof
top of the property.
d) Landlord has authority to maintain or change the name of
the building, and has the right to transfer this authority
to a third party. If there is any change in name, one month
notice will be given to Tenant.
(vii) Landlord has the right to terminate the agreement if the
following circumstances happen to Tenant:
a) violation of law and regulations of China (and if Tenant
carries out illegal or immoral activities)
b) usage of office block has been change by Tenant.
c) Tenant uses an identity other than the one defined under
this agreement to carry out all the ongoing activities
(other than with the prior written approval of Landlord).
d) Tenant did not pay all the relevant expenditure (include
deposit, rental fee or management fee or payment according
to clause 14iv of this agreement) after 14 days of the due
date.
e) Tenant has rented out a part or the whole office to 3rd
parties or shares the rented space with 3rd party without
the prior written consent of Landlord.
f) If there is any serious damage of the building, whereby,
Tenant cannot afford to compensate for the damages, or
Tenant has already declared bankruptcy.
(viii) Where Tenant breaches the agreement, and whilst the total
compensation has not been determined, Landlord has the right
to seek compensation and legal responsibilities from Tenant,
other than other rights of Landlord.
(ix) Four months before the expiry date of the contract and with
the prior appointment of Tenant, Landlord or its authorised
agent would be able to bring interested parties (to rent the
space) to the office lot for purpose of inspection. Where
Landlord has intention to sell the property, Landlord would be
able to bring interested parties (to purchase the property) to
the office lot for purpose of inspection.
(x) Landlord shall incur no liability to and shall not be liable
in damages or otherwise to Tenant for any damage, injury or
loss which may, at any time during the term of the tenancy, be
caused or suffered by Tenant, its servants, agents, licensees
and invites or any of them or to any property of goods of
Tenant or of such persons as or aforesaid in or about the
premises occasioned by or arising from taifoon, earthquake,
storm, fire, water leaks, electricity leaks, gas or other
force majeure, or theft of the illegal acts of others.
(xi) During the term of the tenancy, Landlord has right to sell or
transfer the property to third parties. Landlord must inform
Tenant after the sale or transfer. After the right to the
property has been transferred to the third party, this third
party shall resume the role of Landlord as defined under this
agreement, enjoying the rights and resuming the
responsibilities under this agreement. After the sale or
transfer, Landlord has the right to transfer the deposits
(after deducting such expenses as provided under this
agreement) to the buyer or transferee. Tenant agrees to enter
into a new agreement upon the request of Landlord whereby the
terms and conditions of the existing agreement would remain.
Tenant may request for
<PAGE> 7
refund of deposit from buyer or transferee upon expiry or
termination of the agreement.
(xii) Landlord guarantees that it has legal ownership of office
block/property and has legal rights to rent the property to
other parties. Tenant has the right to seek compensation from
Landlord for losses suffered as a result of Landlord not being
able to fullfill the above obligation.
(xiii) Landlord guarantees that in the event the property is sold or
transferred, Tenant would be able to continue to rent the
property at the terms as set out in this agreement. Otherwise,
Landlord will bear the losses or additional expenses incurred
by Tenant.
(xiv) The agreement is temporarily entered into by "My Web Inc.com"
for its subsidiary company to be incorporated in Beijing.
Tenant will transfer its rights and responsibilities under
this agreement to the subsidiary company in Beijing. Landlord
hereby acknowledges this transfer of rights and
responsibilities.
11. Right and Responsibility of Tenant.
(i) Tenant has the right to occupy the office block rented, so
long as Tenant has paid the rental and other applicable
charges according to the provisions of this agreement, as well
as fulfilled the responsibilities under this agreement.
(ii) Tenant has the right to utilise common area and all the
facilities provided by the management company, so long as
Tenant has paid the relevant charges. The management company
may set reasonable rules for the use of the above and Tenant
must abide with the rules. Tenant is also responsible to pay
all taxes and duties relating to occupying the rented office
space levied by the relevant legislation of the PRC and the
City of Beijing.
(iii) Tenant must pay monthly rental fee, electricity charges,
telephone, fax charges, etc. on time. The management company
may set reasonable rules for the use of the above and Tenant
must abide with the rules. Tenant is also responsible to pay
all taxes and duties relating to occupying the rented office
space levied by the relevant legislation of the PRC and the
City of Beijing.
(iv) Tenant is responsible for the cleanliness and maintenance of
the interior of the office space. Tenant shall carry out
regular repairing and upkeeping, cleaning, including floor,
wall, ceiling and the various fittings such as windows,
electrical wiring and electrical equipment, hygiene facilities
(if any), etc. Tenant must maintain the drainage/sewage
systems of common area and washrooms in good working
condition. If the pipes/drains are damaged or blocked due to
the negligence or misuse by Tenant, its employees, visitors or
customers, Tenant shall be responsible to pay for the repair
work.
(v) Tenant must report to Landlord and management company of any
damage or defect of the office space rented in a timely
manner. Tenant must take any necessary step to prevent any
damage to the property.
<PAGE> 8
(vi) If damage to the property is caused by Tenant, Tenant is
responsible to carry out the repair work, according to the
requirements of Landlord or management company, within 14 days
after receiving the written advice for repair from Landlord or
management company. If Tenant fails to carry out the necessary
repair work on time, Landlord or the management company has
the right to enter the rented area to carry out the repair
work, whereby Tenant would then be responsible to pay for
losses and expenses.
(vii) At the end of the contract term or when the contract is
terminated before the expiry date, Tenant must return the
office block to Landlord in its original condition (subject
to reasonable wear and tear) when Landlord first handed the
property over to Tenant. Tenant shall remove all of Tenant's
furniture, fitting and other types of installations and
decorations, and repair damages that occur in the course of
such removal and moving-out. If Tenant fail to do so,
Landlord has the right to deduct a certain amount from the
deposits and use the net deposits to carry out repair and
removal without giving notice to Tenant. Where the net
deposits are insufficient to cover the expenditure incurred
by the Landlord, Tenant shall bear the excess.
(viii) If the management company arranges for centralised pest
control works, Tenant shall bear part of the expenses
according to the floor space occupied. Tenant should take the
necessary procedures to ensure that the office space rented
if free of pest.
(ix) Tenant must ensure that the property rented is sufficiently
covered by insurance to ensure that in the event the interior
facilities are damaged or destroyed, insurance claims can be
obtained. If Tenant fails to purchase the insurance, Landlord
has right to purchase the insurance on behalf of Tenant and
subsequently recover the expenses from Tenant.
(x) Tenant shall strictly obey overall rules and regulations set
by the management company. The business activities carried
out at the rented property must be in accordance with the law
and regulation of PRC and the City of Beijing.
(xi) Tenant is not allowed to used the premises rented to store
weapon, ammo, satpetre, gunpowder, kerosene or other products
which are flammable, conbustible, illegal or dangerous.
(xii) Tenant is not allowed to produce or store goods or
merchandise in the premises rented, other that those limited
quantity used as samples or for display.
(xiii) Tenant is not allowed to rear animal or keep any pets in the
premises rented.
(xiv) Tenant must ensure that the rented premises is used only as
an office and not for other purpose.
(xv) Tenant shall not allow any person to occupy the rented
premises for residential purposes.
<PAGE> 9
(xvi) Tenant shall not carry out any activities that would cause
harm to Landlord or other Tenants or activities that are
despised by other within the premises rented. Tenant shall
not carry out illegal or immoral activities within the
premises rented.
(xvii) Tenant is not permitted to hold or allow any other person to
hold any sale by auction within the premises.
(xviii) Tenant must obey all rules and directives of fire prevention
set by the fire department and management company. Tenant
must bear the costs of equipping the premises with fire
prevention facilities according to the requirement of the fire
department and the management company.
(xix) Tenant shall not carry out or allow any other person to carry
out any activities that would result in the loss of the
rights to insurance claim (of the property) or cause the
increase in insurance premium. Where Tenant breaches this
provision, resulting in Landlord and/or the management company
having to purchase new insurance or to pay additional
premium, Tenant would have to compensate Landlord and/or
management company of all expenses.
(xx) Tenant is not allow to deposit any boxes, furniture, garbage
or any other object outside of the premises rented, including
the common hall, stairway, corridor and other public area.
However, the management company or Landlord has the right to
do as it wishes in respect of the objects deposited at public
area without having to compensate any party for losses
incurred.
(xxi) Tenant shall not block, destroy, damage, alter, disrupt any
public utilities such as water, electricity or gas, etc. or
any facilities such as drainage, pipe, electricity cables.
(xxii) Without the prior written permission of Landlord or management
company, Tenant are not allowed to alter, move or increase
the power of electricity, water or the centralised air
conditioning.
(xxiii) From the commencement of the rent, Tenant has right to
renovation period that is rent-free in accordance with the
provisions of Appendix 3. In order to avoid any confusion, the
renovation rent-free period would be considered as part of the
rental term but Tenant need not pay rental during this period.
However, Tenant would still need to pay management fees and
other expenditure.
(xxiv) After the agreement has come into force, Tenant agrees to
submit all renovations plans to management office for
approval; whereby Tenant agrees to hire the contractor
appointed by the management company. Tenant agrees to pay the
necessary management charges and other expenses and deposits
according to the provisions of the "Renovation Guide". Tenant
agrees to reimburse for any damages or alteration to the
common facilities in the course of the renovation. The
renovation works must in accordance with the plans approved by
the management company and the "Renovation Guide". Tenant
shall not alter the renovation plans approved by the
management company, unless with the prior written approval of
the management company.
<PAGE> 10
(xxv) Without the prior permission from Landlord or management
company, Tenant is not allowed to place any words, logo or
advertisement board outside of the premises rented. The
placement of Tenant's signboard should be in accordance with
the instruction given by the management company. Tenant may
not modify any part of the building, nor can it alter the
external appearance of the building or block any windows or
doors.
(xxvi) Without the prior permission of Landlord, Tenant may not
transfer, sub-rent part of the premises rented to third party
or share the rented space with third party.
(xxvii) Where the following circumstances arise, Tenant should seek
the prior approval of Landlord. Otherwise, Tenant is deemed to
have rented or transferred the property without the prior
permission of Landlord:
a) where Tenant's business is conducted as a
partnership, there is new partner or partners in
the partnership in the event that the original
partner dies or retire or other reasons.
b) Tenant's company or enterprise is being taken-over,
restructured, merged, acquired, voluntary liquidated
or when there is a change in the holding company,
controlling shareholders or any other party with
effective controls over the company.
c) Tenant issue authority letter that allow other party
to take over the premises
d) Tenant changes the name of the company.
(xxviii) During the tenancy period, Tenant is not allowed to request
for a decrease in any fees or charges payable by Tenant
(regardless of the reason).
(xxix) Tenant is not allowed to use the word "new world", "new world
centre" or "Beijing new world centre" as part of the name of
the company, unless with the written approval from the
developer.
(xxx) Tenant is fully responsible for the action, negligence or
irresponsibleness of its employees, visitors, customers,
workers, and shall bear the compensation and legal
responsibility for damages to Landlord and/or third party
caused by the aforesaid persons.
12. Termination of Agreement
(i) Where the circumstances of clause 10(vii) arise, Landlord may
terminate the agreement without the consent of any other party
and Landlord need not pay any compensation.
(ii) If Tenant breaches the terms and conditions of this agreement
and does not rectify the situation within 30 days from the
date of receiving written notice from Landlord or management
company, Landlord has authority to terminate this agreement
without informing Tenant. Tenant must move from the premises
rented immediately and Landlord has the right to demand for
damages for the losses, expenses and legal obligation.
(iii) Landlord may terminate the agreement (without the consent of
Tenant) due to the inability to execute this agreement as a
result of the force majeure as mentioned in clause 13 below.
Tenant would still need to pay rental and other charges up to
the termination date.
<PAGE> 11
13. Force Majeure
If at any time during the tenancy period, Landlord is unable to fulfill
its obligations under the agreement due to unavoidable and
unpreventable (in terms of the occurrence and the resulting effects)
earthquake, storm, fire and other unforeseen circumstances, Landlord
shall inform Tenant immediately via telegramme or facsimile. In
addition, Landlord shall furnish detail information of the force
majeure and documentary proof of its inability to fulfill in full or in
part its obligations under the agreement, or the necessity to delay the
fulfilment of the terms of agreement, within 21 days. Landlord need not
be responsible to compensate Tenant for any losses suffered.
Under such circumstances, subject to the agreement between both
parties, the execution of the agreement may be delayed or the agreement
terminated before its expiry, unless Landlord has not terminated the
agreement based on provision of 12.03 above.
14. Breach of responsibility
(i) If either party breaches the conditions in the agreement
causing losses (including legal fees), that party would need
to pay compensation. However, where both parties are at fault,
both parties will bear its own responsibility for breach of
agreement.
(ii) If Tenant breaches the agreement, Landlord has the right to
deduct from the deposits amount outstanding, losses and
expenses, in addition to having the right to terminate the
agreement without the consent of Tenant. If the amount of
outstanding charges, losses and expenses exceed the deposits,
Landlord has the right to demand the excess from Tenant. If
Tenant refuses to pay the excess, Landlord has the right to
forfeit the assets in the rented office and sell the assets by
auction. Nevertheless, this does not prevent Landlord to
further demand for reasonable compensation and legal
responsibility from Tenant.
(iii) Electricity Bills
If Tenant do not settle the electricity bill 7 days after the
due date, Landlord has the right to terminate the agreement
based on the provisions of clause 10(vii) above. In addition,
Landlord may request the management company to terminate
supply of electricity without further notice to Tenant. Supply
of electricity would be reconnected after Tenant has paid all
charges. All reconnection charges are to be boned by Tenant.
(iv) Late payments
Landlord may collect from Tenant a 2% (on rental and other
expenses outstanding) late payment penalty if the rent or
other expenses are not paid or have been paid late, regardless
of the reason for the delay or non payment.
(v) If at any time during the tenancy period, Tenant terminates
the rental arrangement without the consent of Landlord,
tenancy is deemed to have breached the agreement. Landlord may
demand for losses incurred as a result of this (including but
does not limit to loss in future rental).
(vi) Tenant shall remit the deductions made from the deposits
within 7 days from receiving the written request from
Landlord, provided that the deductions has been made in
accordance with the provisions of this agreement. If Tenant
fails to
<PAGE> 12
remit the amount on time, Tenant is deemed to have breached
the agreement whereby Landlord has the right to terminate the
agreement and forfeit the rental and deposit paid by Tenant.
15. Waiver of Rights
Where Tenant has breached any provisions of the agreement but
Landlord still received rent from Tenant, Landlord shall not
be deemed to have given up the rights to demand for
compensation for the breach in agreement. Where Tenant has
made insufficient payments for rental or other charges,
Landlord shall not be deemed to agree to a reduction in rental
or other charges if Landlord accept the reduced payments from
Tenant, and Landlord shall retains the rights to demand for
the balance of payments and the rights to take legal action on
Tenant according to the provisions of the agreement.
16. Arbitration
(i) The laws of the PRC govern this agreement, including
the effectiveness, explanation, execution and
arbitration.
(ii) Both parties shall settle any disputes through
friendly negotiations, failing which, any party may
make an application to the China International
Economic and Trade Development Authority, Beijing
for arbitration. The decisions of the arbitrator
shall be final and binding on both parties.
17. Legal Expenses
(i) All costs and expenses for the preparation of this
Agreement including the attestation, registration,
stamp duty and other charges imposed by the laws of
China and the City of Beijing (excluding but not
limiting to taxes) shall be borne and paid by Tenant,
unless the Government has specifically given
direction for both parties to bear their own
expenses.
(ii) In the process of getting this agreement done, all
processing fees shall be borne by respective parties.
18. Others
(i) Where any clause in the agreement is found to be
illegal, ineffective or not executable under any
law, the other clauses of the agreement shall remain
to be effective, valid and executable. Both parties
would need to fulfill the respective obligations of
the other clauses.
(ii) Where either party is required to issue written
notice to the other party under the obligations of
the agreement, where the name and business/registered
address of the other party have been indicated on
the notice and sufficient postage (for registered
post) has been purchased, such notice is deemed to
have been served and received by the other party.
(iii) Where Tenant's employees, visitors, customers,
workers, renovation workers, agent enter the rented
property with the approval of Tenants, the actions,
negligence shall be that of Tenant.
<PAGE> 13
(iv) There are 3 copies to this agreement: 2 copies for Landlord
and 1 copy for Tenant. All 3 copies are valid.
(v) The agreement shall come into effect after being signed by
both parties.
Landlord
Beijing Chongwen New World Property China New World Electronic
Pte Ltd
(stamp) (stamp)
---------------------------- -----------------------
Authorised signatory Authorised signatory
Tenant
Myweb Inc.Com
(stamp)
----------------------------
Authorised signatory
<PAGE> 14
APPENDIX 1
1. Office rented
Beijing New World Centre, Office Block, Block South, Level 9, Unit 5,
Chongwen Street 3A, Chongwen District, Beijing, China.
2. The total built up area of the office rented is 273.57 square ft.
<PAGE> 15
APPENDIX 2
Map
<PAGE> 16
APPENDIX 3
1. This agreement is effective from 5th June 1999 to 4th June 2001, for a
period of 2 years. (Tenant may, after the 18th month, elect to give
written notice to Landlord not less than 6 months from the end of the
rental period, with regard to the rental of the remaining 6 months.
Otherwise, it is deemed that both parties agree to terminate the
agreement on 4th June 2001).
2. Tenant shall pay the monthly rental and management fees of US$3,419.60,
including the following
(i) Monthly rental fees (excluding other charges): US$2,462.10
(ii) Monthly management fees (which include air conditioning on
working days, 8:00 am -- 6:00 pm, excluding public holidays):
US$959.50
3. Deposits
Deposits for rental and management fees US$6,839.20
Deposits for electricity US$ 395.50
-----------
Total US$7,234.70
-----------
4. In the period of 61 days (5th June 1999 to 4th August 1999), there is a
waiver of rental for renovation purposes. But Tenant shall bear other
charges (excluding rental) and expenses incurred.
5. At the time of hand over of the office rented, Landlord has provided
the following fittings in the office rented:
- ceiling lights (material only; Tenant shall fix the lights himself)
- central ventilation system (vent hose, exhaust fan, heating system
and speed control dial shall be provided by Landlord; to be fixed
by Tenant);
- fire alarm system and sprinkler;
- independent electricity metre;
- concrete flooring and wall;
- wooden main door
<PAGE> 17
APPENDIX 4
Telephone line & bills
1. Tenant should take/purchase 6 lines from Landlord with RMB1,260 each
line. (lump sum payment at the time of signing of the agreement),
totalling RMB7,560
3. Besides the expenditure above, Tenant shall pay his monthly bills.
3. Tenant shall bear the cost of laying telephone cables.
<PAGE> 18
APPENDIX 5
LANDLORD:
- - should collect his rental at Beijing New World Electronic Pte Ltd
- - at the bank account (name of the bank)
- - A/C no: [***]
MANAGEMENT OFFICE:
- - should be paid at Beijing office
- - account no: [***]
- - Bank:
- --------------
[***] Portions of this page have been omitted pursuant to a
request for Confidential Treatment and filed separately with the
Commission.
<PAGE> 1
EXHIBIT 10.34
<PAGE> 2
Adlink China Classifieds
www.adlink.com.cn 10/25/99 Infosto Group
Myweb.com.cn & Adlink.com.cn
The Letter of Intent for Cooperation in Co-branded Classifieds Service
Party A: Myweb Internet System (Beijing) Co., Ltd.
Party B: Infosto Information Technology (Beijing) Co., Ltd.
1. Party A & Party B intend to co-establish the co-branding classifieds
service on website of Party A - www.myweb.com.cn
2. The cooperative classifieds service as a brand new service on Party A's
website - www.myweb.com.cn, will be hyperlinked with logo and/or text
on the front page of www.myweb.com.cn (in above folder webpage). To
generate more pageviews for the common resources of banner sales, Party
A should hyperlink the relevant classifieds category onto its relevant
channels. (Note: need to further define, like all channels with agreed
layout)
3. The URL of our cooperate classifieds channel will be
http://adlink.myweb.com.cn
4. The webpage layout (including pattern, color, etc.) of the cooperative
classifieds service will be designed based on the principle of (1) to
marry up or match with Party A's webpage style; (2) to combine Party B
adlink's functionality and webpage style. The webpage designing work
will be carried out and done through two parties' involvement with
friendly negotiation and coordination.
5. Party B is responsible to provide the technical solution and to develop
related technical tools and approaches with Party A's assistance.
6. In consideration of the fame and market influence, as well as the
potential of marketshare of TV set-box access market of Party A's
website, [***]
7. Under the principle of friendship and making best use of both parties'
advantages to improve the quality of the cooperative service, [***]
8. Party B is responsible to manage and run the cooperative classifieds
service on Party A's website. There should be a Party B logo (with
hyperlink to www.adlink.com.cn) at left-top corner on each webpage of
the cooperative classified service. Also at the footer line,
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 3
there should be a text footnote "powered by Adlink" (with hyperlink to
www.adlink.com.cn), the co-branding classifieds service will be named
as MyLink (logo on top-left), or place Adlink's logo on top-right of
each webpage of co-branding classifieds service.
9. To insure our cooperative classifieds service serves the user with rich
content and comprehensive functionality at the very 1st day of the
cooperation, the classifieds server of party B will support the
cooperative service during the cooperation. Classifieds content of the
cooperative classifieds service will be derived from the database of
Party B (adlink.com.cn). The classifieds content input by users of the
cooperative classifieds service will be transmitted and stored into
database of Party B (adlink.com.cn).
10. Party B has the ownership of personal data of new registered-user from
the co-branding classifieds service. Per request of Party A, party B
will share new registered user data of co-branding classifieds with
Party A.
11. Party B owns the copyright of all classifieds content. Without Party
B's agreement, Party A cannot use the classifieds content on any other
media, except the cooperative classifieds service. The copyright
ownership will be displayed (with hyperlink to adlink.com.cn) on footer
of all webpages of cooperative classifieds service. Party B owns the
right of the software (the classified technology). Myweb owns the
copyright of the co-branding webpages (except Adlink's graphical
elements). Adlink owns the classifieds content, user database and
technology.
12. Two parties are both legitimate to sell banner ads on all webpages of
the cooperative classifieds service. The price and discount rate of
banner sales will be decided by two parties. The valid banner sales
contract must be signed by any of the two parties with the advertiser,
and get approval from the other party. Party A and Party B should share
banner sales income according to the following principle: the active
sales party deserves [***] of total banner sales income, the other
party deserves [***]. Once the banner impressions of cooperative
classifieds service have not been sold, two parties should share total
banner impression at the ratio of [***] Each party can [***] banner
inventory of the total in displaying their own banners, but their
clients'. Party A is responsible to provide banner log report solution
and services. Party B has the right to access banner log system any
time during cooperation.
13. Both technical and marketing personnel of the two parties should
actively coordinate together to launch the cooperative classifieds
service as early as possible. Party B will do its best to help this
cooperative service to be launched within 4 weeks after this LOI is
signed.
-2-
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 4
14. During the launching and development stages of the cooperation, two
parties should mutually, jointly and actively promote this cooperation
project via respective websites and media resources. Two parties can
hold the news release conference in advance of when the cooperation
starts.
15. The cooperation term is one and half years (since the date of co-
branding classifieds to be launched online). At the end of the
cooperation term, two parties will renegotiate the further cooperation
conditions and terms.
16. Based upon this cooperation, two parties will actively and seriously
look into our long-term cooperation opportunities, as well as the
possibility to establish the strategic cooperation partnership.
17. Any issue that has not been mentioned above in this agreement will be
further negotiated between two parties.
/s/ illegible /s/ illegible
- ------------------------------ ---------------------------------------
Party A: Myweb Internet System Party B: Infosto Information Technology
(Beijing Co. Ltd. (Beijing) Co., Ltd.
[stamp] [stamp]
1999 10/25
-3-
<PAGE> 1
EXHIBIT 10.37
<PAGE> 2
Agreement on Cooperation
Party A: MyWeb Network System (Beijing) Co. Ltd.
Party B: Beijing Goyoyo Technology Development Ltd.
To improve the business development of both parties, the following agreement in
respect of the building up of a Chinese search engine in the website of Party A
has been reached after negotiations and based on the principle of equality
and mutual benefits.
I. Party A places a search bar of a Chinese search engine and a
classification catalog at a prominent position on the main page of
its website(http://www.myweb.com.cn), and the search service and
classification catalog of the search engine is provided by Party B.
II. Party A will place the remark of "Technology Support Provided by
Goyoyo" on the main page of the search engine with logos of both
parties and a linkage to Goyoyo in the inner pages.
III. Party B authorizes the usage of the Chinese search engine and the
classification catalog function by Party B which can be shown in the
chinese website of Party A in its own name. However, Party A cannot
transfer this authorization to 3rd parties. This agreement does not
limit any other operation of searching within the website of Party A
itself.
IV. Party B sets a server to provide a service of Chinese search and
classification catalog to Party A, and provides a related maintenance
along with a unique domain name (http://myweb.goyoyo.com.cn or
http://goyoyo.myweb.com.cn). Its content is in accordance with that of
the website of Party B.
V. Party B is to accomplish all the technical operation of the search
engine of the website of Party A, within one week from the effective
date of this contract, to enable the opening of this catalogue, with a
linkage at the related space or page to the website of Party A.
VI. Both parties can sell advertising space of Chinese search engine and
the classification catalog. The party who sells the advertising space
shares [***] of the income, and the other party shares [***] If there
is no advertisement sold, both parties place its own advertisement
space based on a ratio of [***] and the advertisement sales price and
the agency commission is to be determined under a negotiation between
both parties. The advertising income is to be settled and brought to
account by both parties within [***] days after the launch of the
advertisement. The advertisement monitoring program is provided by
Party B and supervised by both parties.
VII. Party A cannot cooperate with any other search engine in a similar way
within the cooperation period. A notification is to be given 3 months
in advance if either side wants to terminate the contract within the
agreement period. The agreement can only be terminated with the
consent of both parties after negotiation between both parties,
otherwise it will be regarded as a breach of contract.
VIII. The agreement is valid for one year, and is to be continued
automatically after the time is up if neither side does not dissent.
IX. This agreement takes effect from the date of signing and stamping.
Matters that are not included here are to be resolved by negotiation
of both parties.
X. There are two copies of this agreement and each party is to keep one
copy. This agreement takes effect from the date of signing and
stamping.
<TABLE>
<CAPTION>
<S> <C>
Party A: Party B:
MyWeb Network System (Beijing) Co. Ltd. Beijing Goyoyo Technology Development Ltd.
Signature: Signature:
3rd November, 1999 3rd November, 1999
</TABLE>
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 1
EXHIBIT 10.39
<PAGE> 2
Hairong Information System Ltd.
The Agreement of Cooperation in Website Information Service
Party A: Beijing Hairong Information System Ltd.
Address: Zhuzong 4, Beichen Dong Lu, Yayuncun, Beijing
Tel.: 010-64948696-99
Fax : 010-64942698
Website: www.158.com.cn
Party B: MyWeb Network System (Beijing) Co Ltd
Address:
Tel.:
Fax.:
Website:
Both parties shall work together with [***], in developing strategies, shall
follow the terms stated below:-
I. Duties and Obligations
1. Both parties to cooperate on the exchange of information within the
authorized boundaries of information resources.
2. When using information provided by Party B, Party A should plan a
remark that the information provider is "_____", indicating its name on
important webpages and establishing hyperlink with Party B.
3. When using information provided by Party A, Party B should place a
remark that the information provider is Hairong Information System Ltd,
indicating its name on important webpages and establishing hyperlink
with Party A.
4. Both parties are responsible to guarantee the well-balanced renewal of
information and the functionality of its websites.
5. Both parties have the copyright to its own information and are
responsible for the accuracy and legality of its own information.
6. Both parties promise to provide an extensive proportional platform
including hyperlinks, advertisements etc, for the purpose of promoting
the other parties website. At the same time, both parties can develop
extensive cooperation in various aspects such as news broadcast,
channels collaboration and marketing activities so as to establish a
strategic partnership.
II Commercial Secrecy
1. Both parties are responsible to maintain secrecy/confidentiality in
respect of the other party's commercial secrets that are obtained
through work connected and other channels. No secrets can be revealed
to third party unless with the prior written approval from the other
party.
2. Other than the working needs as defined under this agreement, no use or
copy of trademarks, brands, commercial information, technology and
other materials of the other party can be presumed without the prior
approval of the other party.
- -----------------
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 3
III. Announcements
1. Both parties hereby confirm that this agreement shall not result in an
employment relationship but a cooperation partnership.
2. Both parties may make modifications related to format/layout and
necessary annotations and other workings to any part of the
information, according to the general style and channel needs of it's
own websites without charging the contents of the data.
3. Both parties shall not offer in any form, the information provided by
the other party, to a third party.
IV. Termination of the Agreement
This agreement may be terminated pursuant to any of the following reasons:
1. This agreement will be terminated upon expiration.
2. If one party violates the terms and conditions of this agreement, the
other party can terminate this agreement at any time with a written
document to inform the party which violated the terms, of the
termination.
3. If one party violates clause IV, the other party is entitled to
terminate the execution of this agreement and to claim all legal
responsibilities from the violating party.
4. This agreement may be terminated in the event of bilateral approval. If
any party wishes to end this agreement without any reason concerning
the other party, the first party should notify the other party one
month in advance.
V. Agreement Term
1. The cooperation term is 1 year with effect from the date of signing by
both parties.
2. At the end of the term of this agreement, both parties may renegotiate
further cooperation conditions and terms.
VI. Other Items
1. This agreement will be in used together with the channel cooperation
agreement.
2. The agreement has two copies. Each party has a copy of the same
agreement of which both are equally legal and valid.
Party A: Beijing Hairong Information. Party B: MyWeb Network Systems
System Ltd (Beijing) Co LTd
Signed/Co Stamp Signed/Co Stamp
Authorised Signatory Authorised Signatory
20 October 1999 20 October 1999
<PAGE> 1
EXHIBIT 10.42
<PAGE> 2
SETTLEMENT AGREEMENT
This settlement agreement and release is made by and between Merger
Communications ("Merger") and MyWeb Inc.com ("MyWeb"):
RECITALS
WHEREAS, on or about February 23, 1999, Merger and Asia Media
Communications, Ltd., now known as MyWeb Inc.com, entered into a Media
Cooperation Agreement (hereinafter referred to as the "Contract") in which
Merger agreed to perform various media relations activities for MyWeb.
WHEREAS, Merger performed various media relations activities for MyWeb
for which it did not receive any compensation from MyWeb. The agreed upon
compensation and terms of same are more particularly described in the Contract
signed by the parties on or about February 23, 1999.
WHEREAS, a dispute arose between the parties regarding the compensation
Merger was to receive under the Contract.
WHEREAS, the parties to this agreement concede that bona fide disputes
and controversies exist between them both as to liability and the amount of
damages, if any, that are due because of the disputes between them; and
WHEREAS, the parties desire to dispose of the entire controversy and
dispute between them, including all claims and causes of action of any kind that
currently exist or that may exist in the future that relate in any way to the
Contract as set forth above. The parties recognize that there may be claims or
injuries arising out of the occurrence described in this agreement that are
unknown to the parties at the time of execution of this agreement, or that may
arise in the future. However, the parties have negotiated this agreement in full
knowledge of the possibility of additional claims or injuries, and intend this
agreement to settle and finally dispose of all such claims or injuries arising
out of or relating to the described occurrence, whether known or unknown.
PAGE 1
<PAGE> 3
AGREEMENT
NOW THEREFORE, in consideration of the mutual promises and covenants
contained in this agreement, including the recitals set forth above, the
parties agree as follows:
1. MyWeb agrees to pay to Merger, for all claims asserted or that could
have been asserted, the sum of $30,000 which sum includes compensation
for all damages, attorney's fees, court costs and other expenses.
2. MyWeb further agrees to provide to Merger 30,000 shares of common stock
in MyWeb, Inc.com. MyWeb expressly agrees that the services performed
by Merger paid for the 30,000 shares of common stock as of March 3,
1999. MyWeb agrees that the 30,000 shares of common stock will be
unrestricted and freely tradeable as of March 3, 2000.
3. Merger and MyWeb further agree that as part of this settlement the
parties will enter into a new Contract regarding Merger's performance
of various media relations activities for MyWeb. The terms and
conditions are set forth in the new contract, a copy of which is
attached hereto.
4. Merger and MyWeb hereby mutually release and forever discharge one
another, including all officers, directors, employees, heirs,
shareholders, assigns, insurers, agents and attorneys, from any and all
claims, demands, or suits, known or unknown, now existing or
subsequently arising, fixed or contingent, liquidated or unliquidated,
whether arising in tort or contract, whether statutory or under common
law, whether or not asserted, arising from or related to the events and
transactions which are the subject matter of the referenced dispute
regarding the Contract.
SETTLEMENT AGREEMENT
PAGE 2
<PAGE> 4
5. MERGER AGREES TO INDEMNIFY, DEFEND AND HOLD HARMLESS ALLIED, AND ANY
OTHER PERSON, FIRM, OR CORPORATION BOUND TO DEFEND OR PAY JUDGMENTS
AGAINST IT, FROM AND AGAINST ANY AND ALL CLAIMS, DEMANDS, AND CAUSES OF
ACTION, INCLUDING CLAIMS FOR CONTRIBUTION OR INDEMNITY, AND THE
REASONABLE AND NECESSARY COSTS, INCLUDING ATTORNEY'S FEES, INCURRED IN
DEFENSE OF ANY SUCH CLAIM, THAT MERGER, ITS HEIRS, ASSIGNS OR LEGAL
REPRESENTATIVES, OR THOSE WHO MAY CLAIM BY, THROUGH, OR UNDER THE
FOREGOING, HAVE OR MAY HAVE ARISING OUT OF OR RESULTING FROM THE
INJURIES ALLEGEDLY SUSTAINED BY MERGER ARISING OUT OF OR RELATING TO
THE EVENTS AND TRANSACTIONS WHICH FORM THE BASIS OF THIS LAWSUIT. THIS
INDEMNITY OBLIGATION EXTENDS TO THE ACTUAL OR ALLEGED NEGLIGENCE OF ANY
PERSON OR ENTITY INDEMNIFIED HEREUNDER. THE PARTIES AGREE THAT THIS IS
A CONSPICUOUS LEGEND, AND THAT THIS INDEMNITY PROVISION COMPLIES IN ALL
RESPECTS WITH THE EXPRESS NEGLIGENCE TEST PERTAINING TO INDEMNITY
PROVISIONS.
6. It is understood and agreed that the cash and stock consideration paid
to Merger as set forth above shall satisfy and extinguish any and all
claims, demands, actions or causes of action by Merger of whatever
nature and character related to or arising out of the subject matter of
the above-referenced lawsuit, including without limitation all claims
for actual, special, consequential, exemplary, treble or punitive
damages, legal fees and expenses, court costs, and all other costs,
expenses or damages, and claims for breach of any common law,
contractual, quasi contractual, or statutory duty owed by MyWeb.
SETTLEMENT AGREEMENT
PAGE 3
<PAGE> 5
7. The parties to this agreement represent that each:
a. has been fully informed of the terms, and effect of this
agreement and has had the opportunity to consult counsel in
connection with its execution;
b. has neither made nor received (nor relied on) any promise or
representation of any kind by any other party or anyone acting
for them, except as expressly stated in this agreement; and
c. owns outright and without any encumbrance the claims, rights
and/or interests that each purports to release herein.
Each signatory hereto warrants and represents that he or she has
authority to bind the parties for whom that signatory acts.
7. This is a compromise of a doubtful and disputed claim and the
consideration herein shall not be construed as an admission of
liability or fault on the part of the parties hereto, by whom
liability and wrongdoing is expressly denied. The parties to this
agreement have entered into this agreement for the consideration
stated herein, and for the sole purpose of avoiding the expense of
litigation and to buy their peace. None of the papers or documents
pertaining to this settlement or the fact of this settlement shall be
admissible against the parties in any lawsuit now pending or which
might hereinafter be filed by any entity except as may be necessary to
enforce the terms and conditions of this agreement. Nothing contained
herein shall impede any party from enforcing this agreement.
SETTLEMENT AGREEMENT
PAGE 4
<PAGE> 6
9. Merger and MyWeb each expressly warrant and stipulate that they have no
cause of action or claims against one another arising out of or
relating to the facts and circumstances relating to the above
referenced Contract dispute, except those claims which are released
herein. Merger and MyWeb each further warrant and stipulate that there
are no facts now in existence which could form the basis of any new or
additional causes of action or claims by or against any party to this
agreement arising out of or relating to the facts and circumstances
which form the basis of the above captioned lawsuit.
10. The provisions of this settlement agreement shall be applied and
interpreted in a manner consistent with each other so as to carry out
the purpose and intent of the parties, but, if for any reason any
provision is unenforceable or invalid, such provision shall be deemed
severed from this agreement and the remaining provisions shall be
carried out with the same force and effect as if the severed portion
had not been a part of this agreement.
11. This settlement agreement embodies the entire agreement between the
parties, supersedes all prior agreements or understandings, if any,
relating to the subject matter hereof, and may be amended only by an
instrument in writing executed jointly by each of the parties.
12. This settlement agreement is being executed and delivered, and is
intended to be performed in Harris County, Texas, and the laws of the
State of Texas shall govern the rights and the duties of the parties
hereto and the validity, construction, enforcement and interpretation
of this agreement.
13. This settlement agreement may be executed in a number of identical
counterparts, each of which shall be deemed an original for all
purposes and all of which constitutes, collectively, one agreement;
but, in making proof of this agreement, it shall not be necessary to
produce or account for more than one such counterpart.
SETTLEMENT
AGREEMENT
5
<PAGE> 7
13. All parties agree to cooperate fully and execute any and all
supplementary documents and to take all additional actions which may be
necessary or appropriate to give full force and effect to the basic
terms and intent of this settlement agreement.
14. This settlement agreement shall become effective immediately following
execution by each of the parties.
IN WITNESS WHEREOF, the parties hereto executed this settlement
agreement in duplicate originals as of the date set forth below.
MERGER COMMUNICATION
/s/ JUKKA TOLONEN
-------------------------------
By: Jukka Tolonen
Date:
-----------------------------
MYWEB, INC.COM
/s/ TS WONG
-------------------------------
By: TS Wong, CEO
Its:
Date:
-----------------------------
<PAGE> 1
EXHIBIT 10.44
<PAGE> 2
DATED THIS 3RD DAY OF JANUARY 2000
BETWEEN
DEEPA NILKANTH MAHAJAN
(NRIC No.: S7082401I/PASSPORT NO.: Z1004741)
AND
MY WEB INC. COM
*****************************************************
SALE AND PURCHASE AGREEMENT
[relating to 95,000 ordinary shares of nominal amount SGD1.00 each
in Easy2Bid Pte Ltd (Company No. 199901508M)]
*****************************************************
MESSRS PEI ANIZA & PARTNERS
ADVOCATES & SOLICITORS
BLOCK G, UNIT G605,
PHILEO DAMANSARA 1, NO 9, JALAN 16/11
OFF JALAN DAMANSARA
46350 PETALING JAYA
File Ref:PA-JK/CP myweb/easy2bid/048-99
H/d AO: micro-word\spa-shares\myweb\easy2bid
<PAGE> 3
THIS AGREEMENT is made this 3rd day of January 2000 between
DEEPA NILKANTH MAHAJAN (NRIC No. S7082401I/PASSPORT NO.:Z1004741) of 10
Cuscaden Walk, Four Seasons Park, #02-03 Summer Block, Singapore 249693
(hereinafter referred to as "the Vendor") of the one part; and
MYWEB INC.COM a company incorporated in Nevada, United States of America, which
is publicly traded on the United States NASD OTC BB and having its registered
office at 595, Market Street, Suite 2500, San Francisco, CA 94105, United
States of (hereinafter referred to as "the Purchaser") of the other part.
WHEREAS:-
(1) Easy2Bid Pte Ltd (Company No. 199901508M), a company incorporated in
the Republic of Singapore and having its registered office at 1,
Temasek Avenue, #27-01, Millenia Tower, Singapore 039192 (hereinafter
referred to as "the Company") has an authorised share capital of
Singapore Dollar One Hundred Thousand (SGD100,000) divided into One
Hundred Thousand (100,000) ordinary shares of Singapore Dollar One
(SGD1-00) each of which One Hundred Thousand (100,000) ordinary shares
have been issued and are fully subscribed.
(2) The Company is presently involved in the business of online auctions.
(3) The Vendor is the registered and beneficial owner of Ninety Five
Thousand (95,000) ordinary shares of Singapore Dollar One (SGD1-00)
each in the issued and paid-up capital of the Company representing
ninety five per centum (95%) of the issued and paid-up capital of the
Company (hereinafter referred to as "the Sale Shares").
(4) The present directors of the Company (hereinafter referred to as "the
Existing Directors") are the persons whose names and addresses appear
in the First Schedule hereto.
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(5) The Vendor is desirous of selling and the Purchaser is desirous of
purchasing the Sale Shares upon the terms and conditions and on the
basis of representations, warranties and undertakings hereinafter
contained.
(6) The financial position of the Company as at 17th day of December, 1999
(hereinafter called "the Accounts Date") is as indicated in the
Management Accounts of the Company annexed hereto and marked as
Appendix I (hereinafter referred to as "the Accounts").
NOW IT IS HEREBY AGREED AND DECLARED as follows:
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the
following expressions shall have the following meanings:-
"Accounts" the audited balance sheet and profit account
of the Company as at the Accounts Date and
annexed hereto as Appendix I
"Accounts Date" the 17th December 1999;
"Agreement" this Agreement for the sale and purchase of
the Sale Shares, and any such
modifications, variations, amendments or
additions, as the Parties to this Agreement
may agree in writing from time to time;
"Business" means the business of online auction;
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"Business Day" a day (excluding Saturday and Sunday) on
which banks are open for business in
Singapore;
"Business Records" means:
(a) all current marketing and customer
files and customer lists of the
Company;
(b) service promotional descriptive sales
and application literature and other
advertising material;
(c) supplier lists; and
(d) all records of the Service Contracts.
"Companies Act" means the Singaporean Companies Act 1965
and all regulations made thereunder;
"Company" means EASY2BID PTE LTD (Company No.
199901508M) a company incorporated in
Singapore and having its registered office
at 1, Temasek Avenue, #27-01, Millenia
Tower, Singapore 039192;
"Completion" means the day when the events specified in
Clause 5.2 occur;
"Completion Date" from the date of this Agreement (or such
later date as the parties may agree); means
a date which is not later than one (1)
month(s)
"Conditions Precedent" means the conditions referred to in the
Clause 3;
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"Employees" means the persons who are currently employed
by the Company for the purposes of the
Business and as listed in the Second
Schedule hereto;
"Encumbrance" includes any mortgage, charge, pledge, lien
and any other encumbrance whatsoever;
"Liabilities" means all the liabilities of the Business
outstanding as at the Accounts Date as
disclosed in the Accounts;
"Purchase Price" means the purchase price of the Sale Shares
as determined in accordance with Clause 4.1
of this Agreement;
"Purchaser's Solicitors" means MESSRS PEI ANIZA & PARTNERS Advocates
& Solicitors Block G, Unit G605, Philco
Damansara 1, No. 9, Jalan 16/11 off Jalan
Damansara 46350 Petaling Jaya, Malaysia.
"Sale Shares" means all the Ninety Five Thousand (95,000)
issued and fully paid shares of the Company
owned by the Vendor which are to be sold to
the Purchaser subject to the terms of this
Agreement;
"Service Agreements" means the several current contracts entered
into between the Company and the Employees;
"Tax" means all forms of tax whether of Singapore
or elsewhere whenever imposed (including
without limitation tax, income tax, property
tax, sales tax, payroll tax, withholding
tax, profits tax, capital gains tax, capital
transfer tax, development tax, development
land tax, estate duty, national insurance
tax, stamp duty, capital duty, value
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added tax, custom or other import or export
duties) and all statutory, governmental,
state, provincial, local governmental or
municipal impositions duties rates and
levies and all penalties, charges, costs and
interest relating thereto;
"Warranties" means the warranties as set out in the Third
Schedule;
1.2 In this Agreement, unless the context otherwise requires:
(a) words denoting the singular number include the plural and
vice-versa;
(b) words denoting a gender include every gender;
(c) words denoting natural persons include bodies corporate and
unincorporated;
(d) reference to clause and schedules are to clauses and schedules
to this Agreement;
(e) references to any legislation or to any provision of
legislation shall include any modification or re-enactment of
that legislation or any legislative provision substituted for,
and all regulations and statutory instruments issued under
such legislation and or provision headings to the Clauses and
Schedules of this Agreement are included for convenience only
and shall not affect the construction or interpretation of
this Agreement;
(g) where a word or a phrase is defined, other parts of speech and
grammatical forms or that word or phrase have corresponding
meanings;
(h) references to any party to this Agreement or any other
agreement or instrument shall include the party's successors
and permitted assigns;
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(i) references to any agreement or instrument shall include
references to such agreement or instrument as amended,
novated, supplemental, varied or replaced from time to time;
(j) references to Singapore dollar or "SGD" shall be taken as
referring to amounts in Singapore currency; and
(k) all schedules and annexure to this Agreement and its recitals
and all certificates and other agreements delivered pursuant
to this Agreement shall form a part of this Agreement.
1.3 All warranties, representations, indemnities, covenants, agreements and
obligations given or entered into by more than one person are given or
entered into jointly and severally.
2. AGREEMENT FOR SALE
2.1 The Vendor shall sell and the Purchaser shall purchase the Sale Shares
for the consideration set out in Clause 4 hereof, free from all
charges, debentures, encumbrances or liens and with all rights,
benefits and advantages attached thereto including all rights to
dividends and other distributions declared made and paid as from the
Completion Date as hereinafter defined.
3. CONDITIONS OF SALE
3.1 It is hereby expressly agreed between the parties hereto that this
Agreement and the sale and purchase hereunder of Sale Shares in the
Company is subject to and conditional upon the following:
(i) the Vendor obtaining the approval of its board of directors
for the transfer of the Sale Shares from the Vendor to the
Purchaser or its nominee;
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(ii) the Vender delivering a certified true copy or extract of such
a resolution to the Purchaser on or before the Completion
Date;
(iii) completion of satisfactory due diligence; and
(iv) deposition of all relevant legal documentation as mentioned
under Clause 5.1 herein.
4. CONSIDERATION
4.1 The total consideration payable by the Purchaser to the Vendor for the
Sale Shares shall be by way of the issue and allotment to the Vendor of
Six Thousand and Two Hundred (6,200) ordinary shares at the agreed
value of Singapore Dollars Thirty Two and Twenty Six cents ($32-26)
each of the Purchaser on a willing buyer and willing seller basis which
is equivalent to Singapore Dollar Two Hundred Thousand (SGD200,000-00)
only (hereinafter referred to as "the Purchase Price"). There will be
no adjustment in the Purchase Price notwithstanding any change in the
value of the net tangible asset of the Company.
4.2 The Purchase Price shall be paid by the Purchaser in one lump sum to
the Vendor through the Purchaser's Solicitors on the Completion Date.
5. COMPLETION
5.1 DOCUMENTS
Notwithstanding any provisions to the contrary contained herein the
Vendor shall at anytime between execution of this Agreement and the
Completion Date deposit with the Purchasers Solicitors the following:-
5.1.1 Share Certificates of the Sale Shares together with the
relevant transfer forms duly executed for the same in favour
of the Purchaser;
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5.1.2 letters of resignation of the Existing Directors of the
Company to take effect on the Completion Date without the
payment of any compensation or damages or any other payment of
whatsoever nature arising from loss of office;
5.1.3 a resolution in accordance with the Memorandum and Articles of
Association of the Company approving the transfer of the Sale
Shares from the Vendor to the Purchaser or its nominee or
nominees and the registration of such transfer to take effect
on the Completion Date subject only to the same being stamped
at the expense of the Purchaser;
5.1.4 a resolution of the respective Board of Directors of the
Vendor approving the sale and transfer of the Sale Shares
to the Purchaser;
5.1.5 a resolution in accordance with the Memorandum and Articles of
Association of the Company approving the appointments of the
nominees of the Purchaser to the Board of Directors of the
Company to take effect on the Completion Date;
5.2 COMPLETION
5.2.1 Completion of the sale and purchase of the Sale Shares shall
take place at the registered office of the Purchaser or at
other places as may be determined by the Purchaser on the
Completion Date whereupon:
5.2.1.1 the Purchaser's Solicitors are hereby expressly or
irrevocably authorised to release all the documents
referred to under Clause 5.1 hereof to the Purchaser;
and
5.2.1.2 the Vendor shall cause the Company to give and
deliver to and the Purchaser shall take delivery of
the Business Records and the Service Contracts.
5.2.2 Concurrently on the Completion Date the Purchaser's Solicitors
shall release the Purchase Price to the Vendor.
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5.2.3 Upon completion and satisfaction of the matters referred to in
Clause 5.2.1 and 5.2.2, beneficial ownership of the Sale
Shares shall be vested on the Purchaser.
6. EMPLOYEES
6.1 It is hereby acknowledged by the Purchaser that after Completion the
Employees will continue to be employed by the Company in accordance
with the prevailing terms and conditions and without any change in
seniority of position.
7. PENDING COMPLETION
7.1 With effect from the date of the execution of this Agreement hereof the
Vendor hereby agrees and undertakes with the Purchaser:-
7.1.1 that the Vendor shall use his best endeavours to carry on the
business of the Company in a professional manner and shall not
carry out or omit to carry out any act which is or will be
detrimental to the business and affairs of the Company;
7.1.2 that no amendment whatsoever be made to the Memorandum and
Articles of Association of the Company without the prior
written consent of the Purchaser;
7.1.3 that the Company shall not issue or allot any shares or create
or issue any obligations or securities convertible into shares
whether fully paid or otherwise to any persons including the
Vendor himself without the prior written consent of the
Purchaser;
7.1.4 that the Company shall not, (save and except expressly
provided by this Agreement) consolidate or subdivide any
shares, create any new class of shares, grant any options over
shares or any rights to subscribe for shares
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or debentures or to convert any debentures or obligations into
shares, alter any of the rights attached to any shares, reduce
any share capital or otherwise re-organise or grant any rights
in respect of the share capital in any way without the prior
written consent of the Purchaser;
7.1.5 that the Company shall not (save and except as disclosed to
the Purchaser) in any way sell or dispose or grant any option
to sell or dispose any part of its undertaking, property or
assets in any manner howsoever save in the ordinary course of
business without the prior written consent of the Purchaser;
7.1.6 that the Company shall not (save and except in the ordinary
course of business or as disclosed to the Purchaser) enter
into any material or substantial transaction or incur any
material or substantial liability, whether actual or
contingent. For the purpose of this paragraph the term
"transaction" includes guarantees and indemnities;
7.1.7 that the Company will not without the consent of the Purchaser
in any way depart from the ordinary course of its day to day
business either as regards the nature or scope or manner in
conducting the same;
7.1.8 that the Company and all persons within the Vendor's control
shall not carry out or otherwise do or omit to do anything
which may cause or be likely to cause the licences for the
operations of the business of the Company to be suspended,
withdrawn or jeopardise the renewal thereof;
7.1.9 that since the Accounts Date, no dividend have been declared
or paid and no distribution of capital made in respect of
share capital of the Company and no loan (otherwise than in
the ordinary course of day to day business or which is
expressly provided by the terms of this Agreement) or loan
capital of the Company has been repaid in whole or in part and
before the Completion Date no such distribution made and no
loan (otherwise than in the ordinary course of day to day
business) or share or loan capital will be
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repaid in whole or in part save with the prior written consent
of the Purchaser;
7.1.10 that the Company is the sole beneficial owner and has a
good and marketable title to all of the assets included in the
Accounts and to all assets acquired thereafter prior to the
Completion Date;
7.1.11 that the Company have not done or omitted to do anything
whereby any policy of insurance effected by it has or may
become void or voidable and the Company will keep and maintain
insurance cover in respect of its assets;
7.1.12 that the Vendor shall not, without the Purchaser's knowledge
and approval, on behalf of the Company or cause the Company to
enter into any contracts or obligations whatsoever or incur
any capital expenditure or grant any options and/or enter into
any agreement for the sale of shares of the Company;
7.1.13 that the Company shall not borrow any money other than in the
ordinary and proper course of normal day to day business of
the Company, as carried on at the date of the Agreement; and
7.1.14 that the Company shall not make any material change to the
remuneration or benefits which are now payable to its
directors, officers or employees or any of them.
8. VENDOR'S WARRANTIES
-------------------
8.1 Subject to the matters specified herein and in the Accounts (which
matters the Vendor warrant to be true) and any matter or thing
hereafter done or omitted to be done at the request in writing or with
the approval in writing of the Purchaser, the Vendor hereby, to the
best of his knowledge, information and belief, warrants and represents
to the Purchaser in the terms set out in the Third Schedule hereto
(which paragraphs of the
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Third Schedule shall not be in any way construed to be limited or
restricted by reference or inference from the terms of any other
paragraphs in the Third Schedule or the provisions of this Agreement)
as terms and conditions of this Agreement and that insofar as any of
the said terms and conditions relate in whole or in part to present or
past matters of fact they shall be deemed to constitute representations
upon the faith of which the Purchaser has entered into this Agreement.
8.2 The Vendor hereby warrants to the Purchaser that the warranties and
representations set out in the Third Schedule will to the best of his
knowledge, information and belief, be true as if given immediately
prior to Completion with reference to facts then existing as well as
the date of this Agreement (where any matter occurs after execution of
this Agreement which will cause the warranties not to be true, the
Vendor shall immediately upon discovery of the same disclose to the
Purchaser).
8.3 The Vendor will forthwith prior to the Completion discloses in writing
any matter relating to the Company which becomes known to the Vendor
between the date of this Agreement and Completion which is inconsistent
with any of the said warranties or representations or which is material
to be known by any prudent purchaser of the Sale Shares.
8.4 In the event of any breach or non-fulfillment of any of the said
warranties or representations whenever occurring, any breach or
non-fulfillment of a material nature thereof or upon the happening or
discovery of any event or circumstance which would render untrue or
misleading any of the said warranties or representations or any
warranty or representation of a material particular, the Purchaser
shall be entitled to the following (without prejudice to and in
addition to any remedies which the Purchaser may be entitled to in law
or otherwise) upon failure by the Vendor to remedy any of the said
breach or non-fulfillment within thirty (30) days of the written notice
given by the Purchaser to the Vendor.
8.4.1 if prior to Completion, to rescind this Agreement whereupon
the Vendor shall pay compensation to the Purchaser by way of
damages in the amount of Singapore Dollar Two Hundred Thousand
(SGD200,000-00); or
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8.4.2 alternatively, to proceed with completion and to receive
compensation by way of damages from the Vendor damages in the
amount of Singapore Dollar One Hundred Thousand
(SGD100,000-00).
8.5 The Vendor agrees that notwithstanding any investigation of the
business assets and accounts of the Company made by or on behalf of
the Purchaser, the Vendor will indemnify the Purchaser and keep the
Purchaser harmless from and against any damages, deficiencies, losses,
costs, liabilities and expenses (including reasonable legal fees and
disbursements) resulting from or arising out of any breach of any of
the representations, warranties, covenants and agreements made by the
Vendor herein and from any claim for Tax against the Company arising
from the circumstances occurring prior to Completion.
8.6 All undertakings, warranties, representations, indemnities and other
obligations of whatsoever type given made or undertaken pursuant to
this Agreement shall subject always to the provisions of Clause 8.7
below (except for any obligations fully performed prior to or at the
Completion Date) continue in full force and effect notwithstanding
completion of this Agreement.
9. NOTICES
9.1 Any notice or other document to be given under this Agreement and all
other communications between the parties with respect to this
Agreement shall be in writing and may be given or sent by:
9.1.1 hand; or
9.1.2 registered post, first class post or express or air mail or
other fast postal service; or
9.1.3 telex, facsimile or other electronic media,
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to the other party at the addresses or facsimile transmission
numbers set out below or such other person, addresses or
facsimile transmission numbers as either party may give notice
of the to the other:-
(i) For the Vendor:
10 Cuscaden Walk, Four Seasons Park
#02-03, Summer Block
Singapore 249693
ATTN: MS. DEEPA NILKANTH MAHAJAN
(ii) For the Purchaser:
Block G Unit G606, Phileo Damansara 1
No. 9 Jalan 16/11, Off Jalan Damansara
46350 Petaling Jaya, Malaysia
ATTN: MR. T.S. WONG
9.2 All such notices and documents shall be in the English language.
9.3 Any notice or other document shall be deemed to have been duly served
upon and received by the addressee -
9.3.1 if delivered by hand, at the time of delivery;
9.3.2 if sent by registered post, first class post or express or air
mail or other fast postal service, within five (5) days of
despatch; and
9.3.3 in the case of telegram, telex or facsimile, on a business day
immediately following the date of the telegram, telex or
facsimile transmission, as the case may be, to be
authenticated by the receipt by the sender of a transmission
controlled report appearing on its face to emanate from the
sendees machine showing the answer-back code of the recipient,
the relevant number of pages,
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the correct facsimile number of the recipient and the result
of the transmission being described as "O.K." or any
equivalent description indicating that the communication has
been properly transmitted.
9.4 In proving the giving of a notice or any other document under or in
respect of this Agreement it shall be sufficient to show:
9.4.1 in the case of registered post, first class post or express
or air mail or other fast postal service, that the notice or
other document was contained in an envelope which was duly
addressed and posted; or
9.4.2 in the case of facsimile transmission or telex or other
electronic media was duly transmitted from the despatching
terminal as evidenced by a transmission report generated by
the despatching terminal.
9.5 No change in the address of the parties hereto as specified in
sub-clause 9.1 howsoever brought about shall be effective or binding on
either party unless that party has given to the other actual notice of
such change of address.
10. MISCELLANEOUS
10.1 Agreement to Subsist
10.1.1 Notwithstanding the completion of the sale and purchase of the Sale
Shares, the provisions warranties undertakings and agreements contained
herein shall continue thereafter to subsist for so long as may be
necessary for the purpose of giving effect to each and every of these
clauses in accordance with the terms hereof.
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10.2 Assignment
10.2.1 The parties hereto shall not assign or otherwise part with their rights
and interests in this Agreement provided always that the Purchaser may
transfer the Sale Shares to any of the Purchaser's subsidiary or
related or associated companies.
10.3 Entire Agreement
10.3.1 This Agreement (together with any documents referred to herein)
constitutes the entire agreement between the parties hereto and it is
expressly declared that no variation hereof shall be effective unless
made in writing.
10.4 Specific Performance
10.4.1 The parties hereto shall be entitled to specific performance of the
sale and purchase of the Sale Shares herein.
10.5 Rescission
10.5.1 Any right of rescission conferred upon a party herein shall be in
addition to and without prejudice to all other rights and remedies
available to it and no exercise or failure to exercise such a right
shall constitute a waiver by it of any such right or remedy.
10.6 Costs
10.6.1 Each party to this Agreement shall pay their own solicitors costs of
and incidental to this Agreement and the sale and purchase hereby
agreed to be made but the stamp duty for the said transfers of shares
and for this Agreement shall be paid by the Purchaser.
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10.7 EFFECT OF HEADINGS
10.7.1 The headings and sub-headings in this Agreement are inserted for
convenience only and shall not be considered in construing the
provisions of this Agreement.
10.8 SCHEDULES
10.8.1 The Schedules hereto shall have full effect and shall be read as part
and parcel of this Agreement as if they were incorporated.
10.9 BINDING
10.9.1 THIS AGREEMENT shall be binding upon and inure for the benefit of the
respective permitted assigns and successors-in-title of the parties.
10.10 GOVERNING LAW
10.10.1 The validity, performance, interpretation and effect of the terms and
conditions of this Agreement shall be governed by and construed in all
respects in accordance with the laws of Singapore and each party hereto
shall duly submit to the non-exclusive jurisdiction of the Singapore
Courts.
10.10.2 Any dispute arising out of or in connection with this Agreement shall
be referred to the jurisdiction of the Courts of Singapore.
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IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals
the day and year first above written.
Signed by )
DEEPA NILKANTH MAHAJAN )
(NRIC No.: S7082401I/ )
PASSPORT NO.: Z1004741) )
In the presence of:- )
Signed by )
)
for and on behalf of )
MYWEB INC.COM )
in the presence of:- )
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THE FIRST SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
THE DIRECTORS
1) DEEPA NILKANTH MAHAJAN (NRIC No. S7082401I/PASSPORT NO.: Z1004741)
Address: 10 Cuscaden Walk, Four Seasons Park,
#02-03 Summer Block, Singapore 249693
2) PULAK CHANDAN PRASAD
Address: 10 Cuscaden Walk, Four Seasons Park,
#02-03 Summer Block, Singapore 249693
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THE SECOND SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
THE LIST OF EMPLOYEES
Name Designation Length of Service
NONE NONE NONE
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THE THIRD SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
WARRANTIES AND REPRESENTATIONS
THE VENDOR
1. VENDOR'S AUTHORITY
(a) The Vendor has authority and power to enter into and perform
this Agreement.
(b) This Agreement constitutes valid and binding obligations of
the Vendor in accordance with its terms.
(c) There is no outstanding indebtedness or other liability
(actual or contingent) owing by the Company to the Vendor or
any director of or any person connected with the Vendor, nor
is there any indebtedness owing to the Company by any such
person.
(d) The vendor further warrants and represents that in the event
there are contingent liabilities, capital or burdensome
commitments, deferred taxation and any other liabilities
arising from contracts entered into by the Vendor with others
which have not been disclosed hereunder as at the Accounts
Date, the Vendor, agrees that he shall fully and solely bear
all payments to be made towards the settlement of the said
liabilities.
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THE COMPANY
2. SALE SHARES
(a) The Vendor is the registered and beneficial owner of the
number of Sale Shares and is entitled to sell and transfer the
full legal and beneficial ownership of the same to the
Purchaser.
(b) Subject to this Agreement, there is no option, right to
acquire, mortgage, charge, pledge, lien or other form of
security or encumbrances over or affecting any of the Sale
Shares or any of the paid up capital of the Company and there
is no agreement or commitment to give or create any of the
foregoing and no claim has been made by any person to be
entitled to any of the foregoing.
(c) The Sale Shares comprise ninety five percentum (95%) of the
registered capital of the Company and the rights and interest
in the Company.
3. MEMORANDUM AND ARTICLES OF ASSOCIATION
(a) The copy of the Memorandum and Articles of Association
provided to the Purchaser is accurate and complete in all
respects.
(b) The Company has complied with its Memorandum and Articles of
Association in all respects.
4. OPTIONS
Subject to this Agreement, there is no agreement or commitment
outstanding which accords to any person the right to call for any right
or interest in the Company.
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5. LAW
(a) The Company:
(i) is duly incorporated and organised and validly exist
in good standing under the laws of Singapore and has
all the necessary power, authority and capacity to:
(1) own or otherwise hold its property and
assets (including, without limitations, the
property and assets shown in its balance
sheet); and
(2) carry on its business as presently
conducted; and
(ii) has conducted its business in all material respects
in accordance with all applicable laws and
regulations of Singapore.
(b) There is no order, decree or judgment of any court or any
Governmental Agency in Singapore or any foreign country
outstanding against the Company or which may have a material
adverse effect upon the assets or business of the Company.
6. LICENSES
All necessary licenses, consents, permits and approvals:
(a) have been obtained by the Company to enable it to carry on its
business effectively in the manner which such business is now
carried on; and
(b) are valid and subsisting and there is no reason why any of
them will be suspended, cancelled or revoked.
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ACCOUNTS AND RECORDS
7. BOOKS AND RECORDS
All accounts, books, ledgers and financial and other records of the Company:-
(a) have been fully, properly and accurately maintained in all
material respects;
(b) are in the possession of or under the control of the Company;
and
(c) contain true and accurate records of all matters required by
law to be incorporated.
8. THE ACCOUNTS
The Accounts:-
(a) have been prepared in accordance with the requirements of all
relevant statutes and approved accounting standards
consistently applied in Singapore;
(b) show a true and fair view of the assets and liabilities of the
Company as at the Accounts Date and the profits of the Company
for the year ended on the Accounts Date;
(c) disclose and make proper provision or reserve for or note all
contingent liabilities, capital or burdensome commitments and
deferred taxation as at the Accounts Date; and
(d) disclose and make full provision or reserve for all actual
liabilities.
9. RETURNS
All returns, particulars, resolutions and other documents required
under any legislation to be delivered on behalf of the Company to the
authorities responsible for regulating
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corporate entities in Singapore or to any other authority whatsoever
have been properly made and delivered.
BUSINESS
10. BUSINESS SINCE THE ACCOUNTS DATE
10.1 Since the Accounts Date:-
(a) there has been no interruption or alteration in the nature,
scope or manner of the business which business of the Company
and such business has been carried on lawfully and in the
ordinary and proper course of business so as to maintain it as
a going concern:
(b) there has been no material adverse change in business and
there has been no damage or destruction affecting the
Company's business or its assets;
(c) the Company has not acquired, sold, transferred or otherwise
disposed of any asset of any nature or cancelled or waived or
released or discounted in whole or in part any debts or
claims, except in the ordinary and proper course of business;
(d) the Company has not knowingly waived or released any rights
which are of a material or substantial value;
(e) no distribution of capital has been declared, made or paid in
respect of any share of the Company; and
(f) the Company has not incurred or become subject to any
liability or obligation (absolute or contingent), except
current liabilities and obligations incurred under those
contracts entered into by it in the ordinary and proper course
of business.
26
<PAGE> 28
11. Consequence of Purchase
The Company is not a party to, nor is it bound or affected by or
subject to, any statute, legislation, regulation, judgment, order,
decree or law which would be violated, contravened or under which
default would occur, as a result of the purchase of the Sale Shares by
the Purchaser or complied by the Company with the terms of this
Agreement, and such purchase or compliance will not:-
(a) result in the Company losing the benefit of any right or
privilege it presently enjoys;
(b) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable
prior to its stated maturity; or
(c) give rise to or cause to become exercisable any right of
pre-emption.
12. Insurance
(a) All assets of the Company which are of an insurable nature
have at all times been and are insured in accordance with good
commercial practice.
(b) The Company has at all times been adequately insured against
accident, third party, public liability and other risks
normally covered by insurance.
(c) Nothing has been done or omitted to be done by or on behalf of
the Company which would make any policy of insurance void or
voidable or enable the insurers to avoid any claim made under
such policies of insurance.
(d) The Company has not suffered any uninsured extraordinary or
unusual losses nor waived any rights of material or
substantial value nor allowed any insurance to lapse.
27
<PAGE> 29
(e) There are no existing circumstances which might lead to
liability under any such policies of insurance being avoided
by the insurers.
ASSETS
13. CHARGES
(a) The Company is the owner of and has good title to all assets
included in the Accounts.
(b) All assets which have been acquired by the Company since the
Accounts Date or after the Accounts Date are not subject to
any encumbrances or is the subject of any agreement or
commitment to give or create any encumbrances other than
those encumbrances specified in the Accounts.
(c) Since the Accounts Date, the assets of the Company have been
in the possession of, or with the control of the Company.
14. INTELLECTUAL PROPERTY
(a) The Company has not disclosed to any person to whom
disclosure would be improper, of any of its know-how, trade
secrets, technical processes, lists of customers or
suppliers, or other confidential information.
(b) The Company is not using any processes which involve the
exercise of rights covered by patent or other rights of third
parties.
(c) The Company's activities do not infringe any intellectual
property rights of any third party.
28
<PAGE> 30
CONTRACTS
15. GENERAL
The Company is not a party to:-
(a) any contract for hire or rent, hire-purchase or purchase by
way of sale or credit sale otherwise than in the ordinary and
proper course of business; and
(b) any other contract or instrument involving or likely to
involve obligations or liabilities which by reason of their
nature or magnitude ought reasonably to be made known to the
Purchase as intending Purchaser of the Sale Shares.
16. POWERS OF ATTORNEY
There are no powers of attorney given by the Company which are currently in
force.
17. INSIDER CONTRACTS
(a) There is no agreement or arrangement outstanding to which
the Company is a party and in which the Vendor or any
Director or any person connected with any of them is or has
been interested, whether directly or indirectly.
(b) The Company is not a party to, and its profits or financial
position have not been affected by any agreement or
arrangements which is not entirely on an arm's length nature.
29
<PAGE> 31
EMPLOYEES
18. Disputes and Employees
There is no existing, threatened or pending industrial dispute
involving the Company and/or any of its employees and there is no
arrangement between the Company and any trade union or Organisation
representing any such employees.
TAX
19. Returns
The Tax returns which ought to have been made by or in respect of the
Company for any corporate income tax have been made and are up-to-date,
correct and have been made and filed are not the subject of any dispute
with the Inland Revenue or other appropriate authorities and there is
no circumstances which are likely to give rise to any such dispute.
20. Provision
(a) The provision made on the Accounts are sufficient to cover all
Tax in respect of all accounting periods ended on or before
the Accounts Date for which the Company may at any time
hereafter become liable.
(b) Proper provision or reserve for deferred Tax in accordance
with generally accepted accounting principles and standards
has been made in the Accounts.
30
<PAGE> 32
GENERAL
21. Accuracy of Information
(a) The information provided in this Agreement and in the Accounts
is true and accurate in all material respects.
(b) All written information given to the Purchaser and its
professional advisers by the officers or employees of the
Vendor or the Company, the Vendor's professional advisers and
the Company's advisers during the negotiations prior to this
Agreement was, when given, and remains (insofar as not
superseded by information subsequently supplied by the Vendor)
true and accurate in all material respects and all documents
supplied have been true and complete copies of such documents.
31
<PAGE> 33
APPENDIX I
(which is taken read and construed as an essential part of this Agreement)
THE ACCOUNTS
[***]
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
32
<PAGE> 1
EXHIBIT 10.45
<PAGE> 2
DATED THIS 2ND DAY OF JANUARY 2000
BETWEEN
TAN TIAN SIN
(NRIC No. 601110-04-5319)
CHEW SIAU FONG
(NRIC No. 640714-04-5418)
AND
TECHNOCHANNEL TECHNOLOGIES SDN BHD
(Company No. 426318-M)
---------------------------------------------------
SALE AND PURCHASE AGREEMENT
[relating to 13,334 ordinary shares of Ringgit Malaysia One
(RM1.00) only each in Pacific Office Supplies Sdn Bhd
(Company No. 354391-M) totalling
Ringgit Malaysia Four Million Six Hundred and Sixty Six Thousand and
Six Hundred and Sixty Seven (RM4,666,667-00) only]
---------------------------------------------------
MESSRS PEI ANIZA & PARTNERS
ADVOCATES & SOLICITORS
BLOCK G, UNIT G605
PHILEO DAMANSARA 1, NO 9, JALAN 16/11
OFF JALAN DAMANSARA
46350 PETALING JAYA
<PAGE> 3
THIS AGREEMENT is made this 1st day of January 2000 between TAN TIAN SIN (NRIC
No. 601110-04-5319) and CHEW SIAU FONG (NRIC NO. 640714-04-5418) both of No. 1,
Wisma MBG, Jalan PJS 11/8, Bandar Sunway, 46150 Petaling Jaya, Selangor Darul
Ehsan (hereinafter referred to as "the Vendors") of the one part and
TECNOCHANNEL TECHNOLOGIES SDN BHD (Company No. 426318-M) a company incorporated
in Malaysia and having its registered office at Block G, Unit G-606, Phileo
Damansara 1, No 9, Jalan 16/11 Off Jalan Damansara 16350 Petaling Jaya,
Selangor (hereinafter referred to as "the Purchaser") of the other part.
WHEREAS:-
(1) Pacific Office Supplies Sdn Bhd (Company No. 354391-M), a company
incorporated in Malaysia and having its registered office at No. 79M,
Jalan Bunga Tanjung 6A, Taman Muda, Cheras, 56100 Kuala Lumpur
(hereinafter referred to as "the Company") has an authorised share
capital of Ringgit Malaysia One Hundred Thousand (RM100,000.00) only
divided into One Hundred Thousand (100,000) ordinary shares of Ringgit
Malaysia One (RM1.00) each of which Twenty Thousand (20,000) ordinary
shares have been issued and are fully subscribed.
(2) The Company is presently involved in the business of selling stationery
and other related products.
(3) The Vendors are the registered and beneficial owner of Thirteen
Thousand Three Hundred Thirty-Four (13,334) ordinary shares of Ringgit
Malaysia One (RM1.00) each in the issued and paid-up capital of the
Company representing sixty six point sixty seven per centum (66.67%) of
the issued and paid-up capital of the Company (hereinafter referred to
as "the Sale Shares"). The respective shareholdings of the Vendors in
the Company are as follows:
(i) TAN TIAN SIN 10,000 shares (50%)
(ii) CHEW SIAU FONG 10,000 shares (50%)
1
<PAGE> 4
(4) The present directors of the Company (hereinafter referred to as "the
Existing Directors") are the persons whose names and addresses appear
in the First Schedule hereto.
(5) The Vendors are desirous of selling and the Purchaser is desirous of
purchasing the Sale Shares upon the terms and conditions and on the
basis of representations, warranties and undertakings hereinafter
contained.
(6) The financial position of the Company as at 31st day of December, 1999
(hereinafter called "the Accounts Date") is as indicated in the audited
Accounts of the Company annexed hereto and marked as Appendix I
(hereinafter referred to as "the Accounts") which Account shall be
subject to final adjustment on mutual agreement on completion of the
due diligence exercise.
NOW IT IS HEREBY AGREED AND DECLARED as follows:
1. DEFINITIONS
1.1 In this Agreement, unless the context otherwise requires, the following
expressions shall have the following meanings:-
"Accounts" the audited balance sheet and profit account
of the Company as at the Accounts Date and
annexed hereto as Appendix I
"Accounts Date" the 31st December 1999;
"Agreement" this Agreement for the sale and purchase of
the Sale Shares, and any such modifications,
variations, amendments or additions, as the
Parties to this Agreement may agree in
writing from time to time;
"Acquisition Date" the date of this agreement i.e. 2nd January
2000
2
<PAGE> 5
"Business" means the business of selling stationery and other
related products;
"Business Day" a day (excluding Saturday and Sunday) on which
banks are open for business in Malaysia;
"Business Records" means:
(a) all current marketing and customer files
and customer lists of the Company;
(b) service promotional descriptive sales and
application literature and other advertising
material;
(c) supplier lists; and
(d) all records of the Service Contracts.
"Companies Act" means the Malaysian Companies Act 1965 and all
regulations made thereunder;
"Company" means PACIFIC OFFICE SUPPLIES (Company No.
354397-M) a company incorporated in Malaysia and
having its registered office at No. 79M, Jalan
Bunga Tanjung 6A, Taman Muda, Cheras, 56100
Kuala Lumpur
"Completion" means the day when the events specified in Clause
5.2 occur;
"Completion Date" from the date of this Agreement (or such later
date as the parties may agree); means a date
which is not later than nine (9) month(s)
3
<PAGE> 6
"Conditions Precedent" means the conditions of sale referred to in
Clause 3 hereof:
"Employees" means the persons who are currently employed
by the Company for the purposes of the
Business and as listed in the Second Schedule
hereto:
"Encumbrance" included any mortgage, charge, pledge, lien
and any other encumbrance whatsoever;
"Liabilities" means all the liabilities of the business
outstanding as at the Accounts Date as
disclosed in the Accounts;
"Purchase Price" means the purchase price of the Sale Shares
as determined in accordance with Clause 4.1
of this Agreement;
"Purchaser's Solicitors: means MESSRS PEI ANIZA & PARTNERS Advocates
& Solicitors Block G, Unit G605, Phileo
Damansara 1, No. 9, Jalan 16/11 off Jalan
Damansara 46350 Petaling Jaya.
"Sale Shares: means all the Thirteen Thousand Three
Hundred Thirty-Four (13,334) issued and
fully paid shares of the Company owned by
the Vendors which are to be sold to the
Purchaser subject to the terms of this
Agreement;
"Service Agreements" means the several current contracts entered
into between the Company and the Employees;
"Tax" means all forms of tax whether of Malaysia
or elsewhere whenever imposed (including
without limitation tax, income tax, property
tax, sales tax, payroll tax,
4
<PAGE> 7
withholding tax, profits tax, capital gains
tax, capital transfer tax, development tax,
development land tax, estate duty national
insurance tax, stamp duty, capital duty,
value added tax, custom or other import or
export duties) and all statutory,
governmental, state, provincial, local
governmental or municipal impositions duties
rates and levies and all penalties, charges,
costs and interest relating thereto:
"Warranties" means the warranties as set out in the Third
Schedule;
1.2 In this Agreement, unless the context otherwise requires:
(a) words denoting the singular number include the plural and
vice-versa;
(b) words denoting a gender include every gender;
(c) words denoting natural persons include bodies corporate and
unincorporated;
(d) reference to clause and schedules are to clauses and
schedules to this Agreement;
(e) references to any legislation or to any provision of
legislation shall include any modification or re-enactment of
that legislation or any legislative provision substituted
for, and all regulations and statutory instruments issued
under such legislation and or provision, headings to the
Clauses and Schedules of this Agreement are inserted for
convenience only and shall not affect the construction or
interpretation of this Agreement;
(g) where a word or a phrase is defined, other parts of speech
and grammatical forms of that word or phrase have
corresponding meanings;
5
<PAGE> 8
(h) references to any party to this agreement or any other
agreement or instrument shall include the party's successors
and permitted assigns;
(i) references to any agreement or instrument shall include
references to such agreement or instrument as amended,
novated, supplemental, varied or replaced from time to time;
(j) references to Ringgit Malaysia or "RM" shall be taken as
referring to amounts in Malaysian currency; and
(k) all schedules and annexure to this Agreement and its recitals
and all certificates and other agreements delivered pursuant
to this Agreement shall form a part of this Agreement.
1.3 All warranties, representations, indemnities, covenants, agreements and
obligations given or entered into by more than one person are given or
entered into jointly and severally.
2. AGREEMENT FOR SALE
2.1 The Vendors shall sell and the Purchaser shall purchase the Sale
Shares for the consideration set out in Clause 4 hereof, free from all
charges, debentures, encumbrances or liens and with all rights,
benefits and advantages attached thereto including all rights to
dividends and other distributions declared made and paid as from the
Completion Date as hereinafter defined.
3. CONDITIONS OF SALE
3.1 It is hereby expressly agreed between the parties hereto that this
Agreement and the sale and purchase hereunder of Sale Shares in the
Company is subject to and conditional upon the following:
6
<PAGE> 9
(i) the Vendors obtaining the approval of its board of directors
for the transfer of the Sale Shares from the Vendors to the
Purchaser or its nominee;
(ii) the Vendors delivering a certified true copy or extract of
such a resolution to the Purchaser on or before the Completion
Date;
(iii) completion of satisfactory due diligence; and
(iv) deposition of all relevant legal documentations as mentioned
under Clause 5.1 herein
4. CONSIDERATION
4.1 The total consideration payable by the Purchaser to the Vendors for
the Sale Shares shall be Ringgit Malaysia Four Million Six Hundred and
Sixty Six Thousand and Six Hundred and Sixty Seven (RM4,666,667-00)
only (hereinafter referred to as "the Purchase Price") and shall be
payable by the Purchaser nine (9) months after the Acquisition Date by
cash.
4.2 The parties hereby agree and confirm that in the event of any variation
of the value of the revenue and net tangible assets of the Company upon
completion of a satisfactory due diligence by more than three per
centum (3%) from the value of the revenue and net tangible assets of
the Company as the date of this Agreement, the Purchase Price as stated
in Clause 4.1 above shall be renegotiated.
There shall be no adjustment to the Purchase Price if such variation of
the revenue and net tangible assets of the Company is less than three
per centum (3%).
48. DEVELOPMENT OF AN E-COMMERCE WEBSITE
It is hereby agreed between the parties that the development and
execution of a complete office supplies E-Commerce Website shall be
undertaken and financed solely by the purchaser at no cost to the
company.
7
<PAGE> 10
5. COMPLETION
5.1 DOCUMENTS
Notwithstanding any provisions to the contrary contained herein the
Vendors shall at anytime between execution of this Agreement and the
Completion Date deposit with the Purchasers Solicitors the following:-
5.1.1 Share Certificates of the Sale Shares together with the
relevant transfer forms duly executed for the same in favour of
the Purchaser by September 30th 2000;
5.1.2 letters of resignation of the Existing Directors of the Company
to take effect by September 30th 2000 without the payment of
any compensation or damages or any other payment of whatsoever
nature arising from loss of office;
5.1.3 a resolution in accordance with the Memorandum and Articles of
Association of the Company approving the transfer of the Sale
Shares from the Vendors to the Purchaser or its nominee or
nominees and the registration of such transfer to take effect
on the Completion Date subject only to the same being stamped
at the expense of the Purchaser;
5.1.4 a resolution of the respective Board of Directors of the
Vendors approving the sale and transfer of the Sale Shares to
the Purchaser;
5.1.5 a resolution in accordance with the Memorandum and Articles of
Association of the Company approving the appointments of the
nominees of the Purchaser to the Board of Directors of the
Company to take effect on the Completion Date;
5.2 COMPLETION
5.2.1 Completion of the sale and purchase of the Sale Shares shall
take place at the registered office of the Purchaser or at
other places as may be determined by the Purchaser on the
Completion Date whereupon:-
8
<PAGE> 11
5.2.1.1 the Purchaser's Solicitors are hereby expressly or
irrevocably authorized to release all the documents
referred to under Clause 5.1 hereof to the
Purchaser; and
5.2.1.2 the Vendors shall cause the Company to give and
deliver to and the Purchaser shall take delivery of
the Business Records and the Service Contracts.
5.2.2 Concurrently on the Completion Date BUT SUBJECT ALWAYS to the
fulfilment of all the conditions of sale under Clause 3.1,
the Purchaser's Solicitors shall release the Purchase Price
to the Vendors Nine (9) months (i.e. September 30th 2000)
after the Acquisition Date.
5.2.3 Upon completion and satisfaction of the matters referred to
in Clause 5.2.1 and Clause 5.2.2, beneficial ownership of the
Sale Shares shall be vested on the Purchaser. However, the
sales of the shares shall be binding upon signing of this
agreement.
6. EMPLOYEES
6.1 It is hereby acknowledged by the Purchaser that after Completion the
Employees will continue to be employed by the Company in accordance
with the prevailing terms and conditions and without any change in
seniority of position.
7. PENDING COMPLETION
7.1 With effect from the date of the execution of this Agreement hereof
the Vendors hereby agree and undertake with the Purchaser:-
7.1.1 that the Vendors shall use their best endeavours to carry on
the business of the Company in a professional manner and
shall not carry out or omit to carry out any act which is or
will be detrimental to the business and affairs of the
Company;
9
<PAGE> 12
7.1.2 that no amendment whatsoever be made to the Memorandum and
Articles of Association of the Company without the prior
written consent of the Purchaser.
7.1.3 that the Company shall not issue or allot shares or create or
issue any obligations or securities convertible into shares
whether fully paid or otherwise to any persons including the
Vendors themselves without the prior written consent of the
Purchaser.
7.1.4 that the Company shall not, (save and except expressly
provided by this Agreement) consolidate or subdivide any
shares, create any new class of shares, grant any options over
shares or any rights to subscribe for shares or debentures or
to convert any debentures or obligations into shares, alter
any of the rights attached to any shares, reduce any share
capital or otherwise re-organise or grant any rights in
respect of the share capital in any way without the prior
written consent of the Purchaser;
7.1.5 that the Company shall not (save and except as disclosed to
the Purchaser) in any way sell or dispose any part of its
undertaking, property or assets in any manner howsoever save
in the ordinary course of business without the prior written
consent of the Purchaser;
7.1.6 that the Company shall not (save and except in the ordinary
course of business or as disclosed to the Purchaser) enter
into any material or substantial transaction or incur any
material or substantial liability, whether actual or
contingent. For the purpose of this paragraph the term
"transaction" includes guarantees and indemnities;
7.1.7 that the Company will not without the consent of the Purchaser
in any way depart from the ordinary course of its day to day
business either as regards the nature or scope or manner in
conducting the same;
10
<PAGE> 13
7.1.8 that the Company and all persons within the Vendors' control
shall not carry out or otherwise do or omit to do anything
which may cause or be likely to cause the licenses for the
operations of the business of the Company to be suspended,
withdrawn or jeopardise the renewal thereof;
7.1.9 that since the Accounts Date and save and except for the
dividend to be paid for the year ending December 31st 1999
amounting to fifty per centum (50%) of the audited retained
earnings as at December 31st 1999 no dividend have been
declared or paid and no distribution of capital made in
respect of share capital of the Company and no loan
(otherwise than in the ordinary course of the day business or
which is expressly provided by the terms of this Agreement)
or loan capital of the Company has been repaid in whole or in
part and before the Completion Date no such distribution made
and no loan (otherwise than in the ordinary course of day to
day business) or share or loan capital will be repaid in whole
or in part save with the prior written consent of the
Purchaser;
7.1.10 that the Company is the sole beneficial owner and has a good
and marketable title to all of the assets included in the
Accounts and to all assets acquired thereafter prior to the
Completion Date;
7.1.11 that the Company have not done or omitted to do anything
whereby any policy of insurance effected by it has or may
become void or voidable and the Company will keep and
maintain insurance cover in respect of its assets;
7.1.12 that the Vendors shall not, without the Purchaser's knowledge
and approval, on behalf of the Company or cause the Company
to enter into any contracts or obligations whatsoever or
incur any capital expenditure or grant any options and/or
enter into any agreement for the sale of shares of the
Company;
11
<PAGE> 14
7.1.13 that the Company shall not borrow any money other than in the
ordinary and proper course of normal day to day business of
the Company, as carried on at the date of the Agreement; and
7.1.14 that the Company shall not make any material change to the
remuneration or benefits which are now payable to its
directors, officers or employees or any of them.
8. VENDORS' WARRANTIES
8.1 Subject to the matters specified herein and in the Accounts (which
matters the Vendors warrant to be true) and any matter or thing
hereafter done or omitted to be done at the request in writing or with
the approval in writing of the Purchaser, the Vendors hereby, to the
best of his knowledge, information and belief, warrants and represents
to the Purchaser in the terms set out in the Third Schedule hereto
(which paragraphs of the Third Schedule shall not be in any way
construed to be limited or restricted by reference or inference from
the terms of any other paragraphs in the Third Schedule or the
provisions of this Agreement) as terms and conditions of this Agreement
and that insofar as any of the said terms and conditions relate in
whole or in part to present or past matters of fact they shall be
deemed to constitute representations upon the faith of which the
Purchaser has entered into this Agreement.
8.2 The Vendors hereby warrants to the Purchaser that the warranties and
representations set out in the Third Schedule will to the best of his
knowledge, information and belief, be true as if given immediately
prior to Completion with reference to facts then existing as well as
at the date of this Agreement (where any matter occurs after execution
of this Agreement which will cause the warranties not to be true, the
Vendors shall immediately upon discovery of the same disclose to the
Purchaser).
8.3 The Vendors will forthwith prior to the Completion disclose in writing
any matter relating to the Company which becomes known to the Vendors
between the date of this Agreement and Completion which is inconsistent
with any of the said warranties or
12
<PAGE> 15
representations or which is material to be known by any prudent
purchaser of the Sale Shares.
8.4 In the event of any breach or non-fulfilment of any of the said
warranties or representations whenever occurring, any breach or
non-fulfilment of a material nature thereof or upon the happening or
discovery of any event or circumstance which would render untrue or
misleading any of the said warranties or representations or any
warranty or representation of a material particular, the Purchaser
shall be entitled to the following (without prejudice to and in
addition to any remedies which the Purchaser may be entitled to in law
or otherwise) upon failure by the Vendors to remedy any of the said
breach or non-fulfilment within thirty (30) days of the written notice
given by the Purchaser to the Vendors:
8.4.1 If prior to Completion, to rescind this Agreement; or
8.4.2 alternatively, to proceed with completion.
8.5 The Vendors agree that notwithstanding any investigation of the
business assets and accounts of the Company made by or on behalf of the
Purchaser, the Vendors will indemnify the Purchaser and keep the
Purchaser harmless from and against any damages, deficiencies, losses,
costs, liabilities and expenses (including reasonable legal fees and
disbursements) resulting from or arising out of any breach of any of
the representations, warranties, covenants and agreements made by the
Vendors herein and from any claim for Tax against the Company arising
from the circumstances occurring prior to Completion.
8.6 All undertakings, warranties, representations, indemnities and other
obligations of whatsoever type given made or undertaken pursuant to
this Agreement shall subject always to the provisions of Clause 8.7
below (except for any obligations fully performed prior to or at the
Completion Date) continue in full force and effect notwithstanding
completion of this Agreement.
13
<PAGE> 16
9. NOTICES
9.1 Any notice or other document to be given under this Agreement and all
other communications between the parties with respect to this Agreement
shall be in writing and may be given or sent by:
9.1.1 hand; or
9.1.2 registered post, or other fast postal service; or
9.1.3 telex, facsimile or other electronic media,
to the other party at the addresses or facsimile transmission numbers
set out below or such other person, addresses or facsimile transmission
numbers as either party may give notice of to the other:-
(i) For the Vendors:
No. 1, Wisma MBG, Jalan PJS 11/8,
Bandar Sunway, 46150 Petaling Jaya, Selangor Darul Ehsan
Attention: Mr. TAN TIAN SIN
(ii) For the Purchaser:
TECNOCHANNEL TECHNOLOGIES SDN BHD
Block G, Unit G-606, Phileo Damansara 1,
No 9, Jalan 16/11 Off Jalan Damansara
46350 Petaling Jaya, Selangor
Attention: Mr T.S. WONG
9.2 All such notices and documents shall be in the English language.
9.3 Any notice or other document shall be deemed to have been duly served
upon and received by the addressee -
14
<PAGE> 17
9.3.1 if delivered by hand, at the time of delivery;
9.3.2 if sent by registered post, or other fast postal service,
within three (3) days of despatch; and
9.3.3 in the case of telegram, telex or facsimile, on a business
day immediately following the date of the telegram, telex or
facsimile transmission, as the case may be, to be
authenticated by the receipt by the sender of a transmission
controlled report appearing on its face to emanate from the
sendees machine showing the answer-back code of the
recipient, the relevant number of pages, the correct
facsimile number of the recipient and the result of the
transmission being described as "O.K." or any equivalent
description indicating that the communication has been
properly transmitted.
9.4 In proving the giving of a notice or any other document under or in
respect of this Agreement it shall be sufficient to show;
9.4.1 in the case of registered post or other fast postal service,
that the notice or other document was contained in an
envelope which was duly addressed and posted; or
9.4.2 in the case of facsimile transmission or telex or other
electronic media was duly transmitted from the despatching
terminal as evidenced by a transmission report generated by
the despatching terminal.
9.5 No change in the address of the parties hereto as specified in
sub-clause 9.1 howsoever brought about shall be effective or binding
on either party unless that party has given to the other actual notice
of such change of address.
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<PAGE> 18
10. MISCELLANEOUS
10.1 Agreement to Subsist
10.1.1 Notwithstanding the completion of the sale and purchase of the Sale
Shares, the provisions warranties undertakings and agreements contained
herein shall continue thereafter to subsist for so long as may be
necessary for the purpose of giving effect to each and every of these
clauses in accordance with the terms hereof.
10.2 Assignment
10.2.1 The parties hereto shall not assign or otherwise part with their rights
and interests in this Agreement provided always that the Purchaser may
transfer the Sale Shares to any of the Purchaser's subsidiary or
related or associated companies as allowed under the Companies Act
1965.
10.3 Entire Agreement
10.3.1 This Agreement (together with any documents referred to herein)
constitutes the entire agreement between the parties hereto and it is
expressly declared that no variation hereof shall be effective unless
made in writing.
10.4 Specific Performance
10.4.1 The parties hereto shall be entitled to specific performance of the
sale and purchase of the Sale Shares herein.
10.5 Rescission
10.5.1 Any right of rescission conferred upon a party herein shall be in
addition to and without prejudice to all other rights and remedies
available to it and no exercise or failure to exercise such a right
shall constitute a waiver by it of any such right or remedy.
16
<PAGE> 19
10.6 COSTS
10.6.1 Each party to this Agreement shall pay their own solicitors
costs of and incidental to this Agreement and the sale and
purchase hereby agreed to be made and the Stamp Duty for the
transfer of shares and any other incidental cost thereto shall
be borne solely by the Purchaser.
10.7 EFFECT OF HEADINGS
10.7.1 The headings and sub-headings in this Agreement are inserted
for convenience only and shall not be considered in
construing the provisions of this Agreement.
10.8 SCHEDULES
10.8.1 The Schedules hereto shall have full effect and shall be read
as part and parcel of this Agreement as if they were
incorporated.
10.9 BINDING
10.9.1 THIS AGREEMENT shall be binding upon and inure for the
benefit of the respective permitted assigns and
successors-in-title of the parties.
10.10 GOVERNING LAW
10.10.1 The validity, performance, interpretation and effect of the
terms and conditions of this Agreement shall be governed by
and construed in all respects in accordance with the laws of
Malaysia and each party hereto shall duly submit to the non-
exclusive jurisdiction of the Malaysian Courts.
10.11 Any dispute arising out of or in connection with this
Agreement shall be referred to the jurisdiction of the Courts
of Malaysia.
17
<PAGE> 20
IN WITNESS WHEREOF the parties hereto have hereunto set their hands and seals
the day and year first above written.
Signed by )
TAN TIAN SIN ) /s/ TAN TIAN SIN
(NRIC No. 601110-04-5319) )
)
CHEW SIAU FONG ) /s/ CHEW SIAU FONG
(NRIC No. 640714-04-5418) )
in the presence of:- ) /s/ [Signature illegible]
Signed by )
)
for and on behalf of ) /s/ T.S. Wong
TECHNOCHANNEL TECHNOLOGIES SDN BHD )
(Company No. 426318-M) )
in the presence of:- ) /s/ [Signature illegible]
<PAGE> 21
THE FIRST SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
THE DIRECTORS
TAN TIAN SIN (NRIC NO. 601110-04-5319)
CHEW SIAU FONG (NRIC NO. 040714-04-5440)
19
<PAGE> 22
THE SECOND SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
THE LIST OF EMPLOYEES
<TABLE>
<CAPTION>
Name Designation Length of Service
<S> <C> <C>
Sales Department
TAN TIAN KUAN Sales Manager 10 Years
TAN TIAN GOH Sales Manager 10 Years
TAN ENG CHUAN Sales Executive 5 years 9 months
LEE CHEE SUM Sales Executive 9 months
TAN YIN HO Sales Executive 8 months
WONG YONG CHAN Sales Executive 1 1/2 months
VOO TIAN FATT Sales Executive 1 month
TAN SIEW HWA Sales Coordinator 5 years 3 months
ROHAYAH BT DEGHAFAR Sales Coordinator 2 years 10 months
WANG KIN YAN Sales Coordinator 7 months
NORAMIZA BT ABD RAZAK Processing Clerk 6 months
Operation
TAN SIEW CHAN Operation Executive 10 months
Purchasing Department
CHEW FEI FEI Procurement Executive 4 years 5 months
TAN TECK MEE Purchasing Assistant 4 months
Admin Department
TAN OOI LING Sales Administrator 2 months
MUHAMMAD KHAIRUL B Despatch Clerk 8 months
CHE HARUN
</TABLE>
20
<PAGE> 23
Accounts Department
LIM HSIA HWA Account Executive 2 years 3 months
BONG KUI CHIN Account Clerk 3 years 3 months
Store Department
KUMAR A/L ARUMGAN Store Supervisor 3 years
MAH KA YIP Store Assistant
CHANDRA SEGERAN A/L RENGIAH Store Supervisor 3 years 3 months
Van Driver
MURUGAN A/L KHRISHNAN Van Driver 4 years
JAINUL ABIDEEN BIN Van Driver 3 years 4 months
ABDUL GAFFOOR
BURHAM BIN AMAT Van Driver 2 years 7 months
ABDUL RAHMAN B MOHD SALLEH Van Driver 7 months
ABDULLAH SIDEK B AHMAD Van Driver 7 months
ZAIAZMI B ZAINUL ABIDIN Van Driver 7 months
CHANDRAN A/L PERIANICKEN Van Driver 3 months
ASAT BIN HARUN Van Driver 1 month
KUMARESAN A/L KARUPANNAN Van Driver
Attendant
RANJIT A/L SUBRAMANIAM Attendant 2 years 6 months
21
<PAGE> 24
THE THIRD SCHEDULE ABOVE REFERRED TO
(which is taken read and construed as an essential part of this Agreement)
WARRANTIES AND REPRESENTATIONS
THE VENDORS
1. Vendors' Authority
(a) The Vendors have authority and power to enter into and perform
this Agreement.
(b) This Agreement constitutes valid and binding obligations of
the Vendors in accordance with its terms.
(c) There is no outstanding indebtedness or other liability
(actual or contingent) owing by the Company to the Vendors or
any director of or any person connected with the Vendors, nor
is there any indebtedness owing to the Company by such person.
(d) The Vendors warrant and represent that in the event there are
contingent liabilities, capital or burdensome commitments,
deferred taxation and any other liabilities arising from
contracts entered into by the Vendors with others which have
not been disclosed hereunder as at the Accounts Date, the
Vendors agree that they shall fully bear the same.
THE COMPANY
2. Sale Shares
(a) The Vendors are the registered and beneficial owner of the
number of Sale Shares and is entitled to sell and transfer the
full legal and beneficial ownership of the same to the
Purchaser.
22
<PAGE> 25
(b) Subject to the Agreement, there is no option, right to
acquire, mortgage, charge, pledge, lien or other form of
security or encumbrances over or affecting any of the Sale
Shares or any of the paid up capital of the Company and there
is no agreement or commitment to give or create any of the
foregoing and no claim has been made by any person to be
entitled to any of the foregoing.
(c) The Sale Shares comprise sixty six point sixty seven percentum
(66.67%) of the registered capital of the Company and the
rights and interest in the Company.
3. Memorandum and Articles of Association
(a) The copy of the Memorandum and Articles of Association
provided to the Purchaser is accurate and complete in all
respects.
(b) The Company has complied with its Memorandum and Articles of
Association in all respects.
4. Options
Subject to this Agreement, there is no agreement or commitment
outstanding which accords to any person the right to call for any right
or interest in the Company.
5. Law
(a) The Company:
(i) is duly incorporated and organised and validly exist
in good standing under the laws of Malaysia and has
all the necessary power, authority and capacity to:
23
<PAGE> 26
(1) own or otherwise hold its property and
assets (including, without limitations, the
property and assets shown in its balance
sheet); and
(2) carry on its business as presently
conducted; and
(ii) has conducted its business in all material respects
in accordance with all applicable laws and
regulations of Malaysia.
(b) There is no order, decree or judgment of any court or any
Governmental Agency in Malaysia or any foreign country
outstanding against the Company or which may have a material
adverse effect upon the assets or business of the Company.
6. Licences
All necessary licences, consents, permits and approvals:
(a) have been obtained by the Company to enable it to carry on its
business effectively in the manner which such business is now
carried on; and
(b) are valid and subsisting and there is no reason why any of
them will be suspended, cancelled or revoked.
ACCOUNTS AND RECORDS
7. Books and Records
All accounts, books, ledgers and financial and other records of the Company;-
(a) have been fully, properly and accurately maintained in all
material respects;
(b) are in the possession of or under the control of the Company;
and
24
<PAGE> 27
(c) contain true and accurate records of all matters required by
law to be incorporated.
8. The Accounts
The Accounts:-
(a) have been prepared in accordance with the requirements of all
relevant statutes and approved accounting standards
consistently applied in Malaysia;
(b) show a true and fair view of the assets and liabilities of the
Company as at the Accounts Date and the profits of the Company
for the year ended on the Accounts Date;
(c) disclose and make proper provision or reserve for or note all
contingent liabilities, capital or burdensome commitments and
deferred taxation; and
(d) disclose and make full provision or reserve for all actual
liabilities.
9. Returns
All returns, particulars, resolutions and other documents required
under any legislation to be delivered on behalf of the Company to the
authorities responsible for regulating corporate entities in Malaysia
or to any other authority whatsoever have been properly made and
delivered.
BUSINESS
10. Business since the Accounts Date
10.1 Since the Accounts Date:-
25
<PAGE> 28
(a) there has been no interruption or alteration in the nature,
scope or manner of the business which business of the Company
and such business has been carried on lawfully and in the
ordinary and proper course of business so as to maintain it as
a going concern;
(b) there has been no material adverse change in business and
there has been no damage or destruction affecting the
Company's business or its assets;
(c) the Company has not acquired, sold, transferred or otherwise
disposed of any asset of any nature or cancelled or waived or
released or discounted in whole or in part any debts or
claims, except in the ordinary and proper course of business;
(d) the Company has not knowingly waived or released any rights
which are of a material or substantial value;
(e) no distribution of capital has been declared, made or paid in
respect of any share of the Company; and
(f) the Company has not incurred or become subject to any
liability or obligation (absolute or contingent), except
current liabilities and obligations incurred under those
contracts entered into by it in the ordinary and proper course
of business.
11. Consequence of Purchase
The Company is not a party to, nor is it bound or affected by or
subject to, any statute, legislation, regulation, judgment, order,
decree or law which would be violated, contravened or under which
default would occur, as a result of the purchase of the Sale Shares by
the Purchaser or complied by the Company with the terms of this
Agreement, and such purchase or compliance will not:-
(a) result in the Company losing the benefit of any right or
privilege it presently enjoys;
26
<PAGE> 29
(b) result in any present or future indebtedness of the Company
becoming due or capable of being declared due and payable prior
to its stated maturity; or
(c) give rise to or cause to become exercisable any right of
pre-emption.
12. Insurance
(a) All assets of the Company which are of an insurable nature have
at all times been and are insured in accordance with good
commercial practice.
(b) The Company has at all times been adequately insured against
accident, third party, public liability and other risks
normally covered by insurance.
(c) Nothing has been done or omitted to be done by or on behalf of
the Company which would make any policy of insurance void or
voidable or enable the insurers to avoid any claim made under
such policies of insurance.
(d) The Company has not suffered any uninsured extraordinary or
unusual losses nor waived any rights of material or substantial
value nor allowed any insurance to lapse.
(e) There are no existing circumstances which might lead to
liability under any such policies of insurance being avoided by
the insurers.
ASSETS
13. Charges
(a) The Company is the owner of and has good title to all assets
included in the Accounts.
27
<PAGE> 30
(b) All assets which have been acquired by the Company since the
Accounts Date or after the Accounts Date are not subject to
any encumbrances or is the subject of any agreement or
commitment to give or create any encumbrances other than
those encumbrances specified in the Accounts.
(c) Since the Accounts Date, the assets of the Company have been
in the possession of or under the control of the Company.
14. Intellectual Property
(a) The Company has not disclosed to any person to whom
disclosure would be improper, of any of its know-how, trade
secrets, technical processes, lists of customers or
suppliers, or other confidential information.
(b) The Company is not using any processes which involve the
exercise of rights covered by patent or other rights of
third parties.
(c) The Company's activities do not infringe any intellectual
property rights of any third party.
CONTRACTS
15. General
The Company is not a party to:-
(a) any contract for hire or rent, hire-purchase or purchase by
way of sale or credit sale otherwise than in the ordinary and
proper course of business; and
(b) any other contract or instrument involving or likely to
involve obligations or liabilities which by reason of their
nature or magnitude ought reasonably to be made known to the
Purchase as intending Purchaser of the Sale Shares.
28
<PAGE> 31
16. Powers of Attorney
There are no powers of attorney given by the Company which are currently in
force.
17. Insider Contracts
(a) There is no agreement or arrangement outstanding to which the
Company is a party and in which the Vendors or any Director or
any person connected with any of them is or has been
interested, whether directly or indirectly.
(B) The Company is not a party to, and its profits or financial
position have not been affected by any agreement or
arrangements which is not entirely on an arm's length nature.
EMPLOYEES
18. Disputes and Employees
There is no existing, threatened or pending industrial dispute
involving the Company and/or any of its employees and there is no
arrangement between the Company and any trade union or Organisation
representing any such employees.
TAX
19. Returns
The Tax returns which ought to have been made by or in respect of the
Company for any corporate income tax have been made and are up-to-date,
correct and have been made and filed are not the subject of any
dispute with the Inland Revenue or other appropriate authorities and
there is no circumstances which are likely to give rise to any such
dispute.
29
<PAGE> 32
20. Provision
(a) The provision made on the Accounts are sufficient to cover all
Tax in respect of all accounting periods ended on or before
the Accounts Date for which the Company may at any time
hereafter become liable.
(b) Proper provision or reserve for deferred Tax in accordance
with generally accepted accounting principles and standards
has been made in the Accounts.
21. GENERAL
21. Accuracy of Information
(a) The Information provided in this Agreement and in the
accounts is true and accurate in all material respects.
(b) All written information given to the Purchaser and its
professional advisers by the officers or employees of the
Vendors or the Company, the Vendors' professional advisers and
the Company's advisers during the negotiations prior to this
Agreement was, when given, and remains (insofar as not
superseded by information subsequently supplied by the
Vendors) true and accurate in all material respects and all
documents supplied have been true and complete copies of such
documents.
30
<PAGE> 33
APPENDIX I
(which is taken read and construed as an essential part of this Agreement)
THE ACCOUNTS
[***]
<TABLE>
<CAPTION>
RM
<S> <C>
[***] [***]
</TABLE>
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
31
<PAGE> 1
EXHIBIT 10.47
<PAGE> 2
LICENSE AND SERVICE AGREEMENT
LICENSE AGREEMENT ("Agreement") made this 15 day of February, 2000, by and
between MyWeb Inc.com., a Nevada corporation ("Licensor") of Block G, Unit
606, Phileo Demansara 1, No. 9 Jalan 16/11, Off Jalan Demansara, 46350
Petaling Jaya, Selangor, Malaysia and MyWeb Americas, Inc. of Rus do Rocio
220, Conjunto 132, Edificio Atrium 1, Vila Olimpia 04552-000, Sao Paulo, Brazil,
a Delaware corporation ("Licensee").
RECITALS
A. Licensor has: (i) developed software for internet set-top
boxes which permit users to access the Internet via television
sets, and (ii) developed and operates internet portals (the
"Online Service") in several countries;
B. Licensee has been incorporated to develop and offer: (i)
television Internet access in North, Central and South
America; and (ii) develop and offer country-specific portals
for users accessing the Internet via television sets
(together, the "Business");
C. Licensor desires to have its Licensed Technology (as defined
in Section 5.1 below) commercialized in the Territory (as
defined in Section 3 below) through the granting of an
exclusive license, and Licensee desires to acquire an
exclusive license to commercialize and otherwise use the
Licensed Technology in the Territory, pursuant to terms and
conditions of this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. RECITALS.
The recitals to this Agreement are true and correct and hereby
incorporated by reference into this Agreement.
2. TERM.
This Agreement and the license granted hereby shall, unless terminated
in accordance with the terms of this Agreement, remain and continue in full
force and effect for a period of five years from the date first above written
(the "Term") and upon expiration of the Term, this Agreement and the license
granted hereby shall automatically be renewed for successive three-year terms
(each such new term, a "Renewal Term") unless either party has given to the
other party at least ninety days prior written notice to expire on the end of
the Term or any Renewal Term of their intention not to renew the Agreement.
3. TERRITORY.
This Agreement is for South America, Central America, Mexico and the
Caribbean (the "Territory").
<PAGE> 3
4. EXCLUSIVE LICENSE IN THE TERRITORY.
4.1 Subject to the payment of consideration as provided in Section 8 below,
Licensor hereby grants to Licensee the [***] exclusive right and license to the
Licensed Technology (as defined below) in the Territory. The exclusive license
granted above shall include, but is not limited to, the right to use, reproduce,
display, perform, transmit, distribute, market and promote the Licensed
Technology within the Territory.
4.2 Licensor also hereby grants to Licensee the exclusive right to
sublicense the Licensed Technology in the Territory to other parties
("Sub-licensees"). The Licensee shall be responsible for all acts and omissions
of each Sub-licensee during the term of that Sub-licensee's sub-license as
though they were by the Licensee. Any sub-licenses that are exclusive shall
become non-exclusive if and when Licensee's right and license to the Licensed
Technology becomes non-exclusive, except to the extent that Licensee may bind
itself to an exclusive relationship with a Sub-licensee to the extent that it
does not bind Licensor to an exclusive relationship when Licensee's right and
license to the Licensed Technology is non-exclusive.
5. LICENSED TECHNOLOGY.
5.1 For purposes of this Agreement, the Licensed Technology shall mean:
(i) all software offered or sold by Licensor during the Term, or
any Renewal Term (including its "Thunder" and "ThunderServe" software
and the other software listed in Annex A hereto) in object format,
including all modifications, improvements, enhancements, additions,
derivative works, updates, releases and versions thereof (collectively,
the "Software");
(ii) Licensor's copyright and any other intellectual property
rights related to its Online Service and the Software;
(iii) Licensor's mark "MyWeb" and any other marks (including the
marks listed in Annex B hereto) used in Licensor's business and/or in
respect of the Software or the Licensor's Online Service (collectively,
the "Marks");
(iv) all copyrights, patent rights, trade secret rights, trademark
rights, mask works rights and all other intellectual property in,
incorporated or embodied in, used to develop, or related to any of the
foregoing, including but not limited to any documentation, manuals,
marketing and promotional materials (collectively "Intellectual
Property"); and
(v) any documentation related to the foregoing.
5.2 Licensee acknowledges that title to and ownership of the Licensed
Technology shall at all times remain with Licensor. Licensee further agrees not,
during the Term, any Renewal Term or at any time after the expiry or
termination of this Agreement, to decompile or reverse engineer any of the
Software (as defined above) included in the Licensed Technology.
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 4
6. INTELLECTUAL PROPERTY
6.1 The Licensee shall not use (other than in relation to this Agreement)
or seek to register outside the Territory without the written consent of the
Licensor as a trade mark or domain name, "MyWeb" or any other mark which is
identical to or confusingly similar with or incorporates any trade mark or trade
name in which the Licensor claims rights anywhere in the world.
6.2 Licensee acknowledges that (i) the Intellectual Property including
any goodwill associated therewith is owned solely and exclusively by Licensor
(or its respective licensors) whether or not specifically recognised or
perfected under the laws of the Territory; (ii) nothing contained under this
Agreement shall give to Licensee or Sub-licensee(s) any right title or interest
in the Intellectual Property other than that granted under this Agreement,
(iii) to the extent that new inventions, designs, processes, modifications, or
improvements are made to the Licensed Technology by Licensor, they are subject
to the terms of this Agreement, shall be promptly provided to Licensee
hereunder and title shall remain with Licensor. The parties acknowledge that,
to the extent that new inventions, designs, processes, modifications, or
improvements are made to the Licensed Technology by the Licensee, title shall
belong to Licensee and a royalty-free non-exclusive license shall be given to
Licensor outside the Territory.
7. CONFIDENTIALITY
7.1 The Licensee agrees to maintain in strict confidence any confidential
information of the Licensor including but not limited to the Licensed
Technology, obtained pursuant to this Agreement and prior to and in
contemplation of it and all other information that it may acquire from the
Licensor in the course of this Agreement, to respect the Licensor's (or its
respective licensors') proprietary rights therein, to use the same exclusively
for the purposes of this Agreement, and to disclose the same only to those of
its employees and Sub-licensees pursuant to this Agreement (if any) to whom and
to the extent that such disclosure is contemplated by this Agreement.
7.2 The foregoing obligations of Section 7.1 above shall not apply to
information which:
(i) prior to receipt thereof from the Licensor was in the
possession of the Licensee and at its free disposal;
(ii) is subsequently disclosed to the Licensee without any
obligation of confidence by a third party who has not derived
it directly or indirectly from the other;
(iii) is or becomes generally available to the public through no
act or default of the Licensee or its agents or employees.
7.3 The Licensee shall procure that all its employees and Sub-licensees
pursuant to this Agreement (if any) who have access to any information
of the other to which the obligations of this Section 7 apply shall be
made aware of and subject to these obligations.
8. CONSIDERATION.
<PAGE> 5
Licensee shall issue to Licensor 3,405,405 shares ("Shares") of
Licensee's common stock, par value $.001 per share, which Shares shall represent
40% of the presently issued and outstanding capital stock of the Licensee,
prior to any financing, including, without limitation, the financing
contemplated by the Capital Increase Agreement, dated December 22, 1999, as
amended, between Licensee and Southern Cross Latin American Private Equity
Fund, L.P. The Shares shall be issued to Licensor no later than February 18,
2000, and in connection with and as a requirement of such issuance, the parties
hereto and the other shareholders of Licensee shall enter into the shareholders'
agreement contemplated by the Capital Increase Agreement. If the Shares are not
so issued by February 18, 2000, Licensor may terminate this Agreement upon
written notice to Licensee, provided that such notice is received by the
Licensee prior to February 29, 2000. The Shares shall be the only consideration
required of the Licensee with respect to the subject matter of this Agreement.
9. SERVICES.
9.1 Licensor shall provide the necessary technical support to Licensee in
order to successfully develop and launch the Business in the Territory. Without
limiting the generality of the foregoing, Licensor shall provide the following
services at no additional cost to Licensee:
(i) translate and fully adapt the Software to Spanish and
Portuguese by no later than February 29, 2000;
(ii) assist the Company to develop and launch a portal that is
substantially the same as the Online Service in each of the
countries in which Licensee operates or may operate in the
Territory, including, without limitation, providing the
Licensee with the site map, content, features, graphic user
interface, back-end applications and other components of
Licensor's Online Service;
(iii) provide two dedicated engineers familiar with the Licensed
Technology for a minimum period of 6 months from the date of
this Agreement to support and provide in-person assistance to
the Licensee at Licensee's principal place of business in Sao
Paolo, Brazil, including assistance with all aspects of the
Software and the development and launch by the Licensee of
the online services; and
(iv) promptly provide Licensee with all upgrades and enhancements
to the Software.
All Licensor personnel involved in providing services to Licensor
hereunder (including the two dedicated engineers) shall sign a confidentiality
agreement offering at least the same level of protection of Licensee's
confidential information as Section 7 above provides Licensor's confidential
information.
9.2 The parties acknowledge that the Licensor shall not be responsible for
providing first-line support to Sub-licensees and End Users. Without limiting
the generality of the foregoing, it is acknowledge that Licensor shall not have
any obligation with respect to the following:
(i) establishing a help desk for Sub-licensees and End Users;
<PAGE> 6
(ii) creating and maintaining a localised web site to provide help
and other useful information;
(iii) creating and distributing localised user documentation
and manuals; and
(iv) distributing to Sub-licensees and End Users all upgrades and
enhancements to the Software received by the Licensee during
the term of this Agreement.
10. LICENSOR'S REPRESENTATIONS.
The Licensor represents that:
(i) Licensor is the exclusive owner of all rights, title and
interest in the Licensed Technology;
(ii) Licensor has not assigned, transferred, licensed, pledged or
otherwise encumbered any Licensed Technology in the Territory;
(iii) Licensor has full power and authority to enter into this
Agreement; and
(iv) to the best of Licensor's knowledge, the Licensed Technology
does not violate, infringe, or misappropriate any third
party's rights.
11. WARRANTY.
11.1 Licensor warrants to Licensee that when delivered, the Software shall
perform substantially in accordance with its specification and accompanying
documentation. This warranty shall apply for a period of [***] from the date of
delivery ("Warranty Period"). In the event of any breach of this warranty during
the Warranty Period, Licensor shall, at its own cost and expense, as Licensee's
sole and exclusive remedy, use its best efforts to correct any problem(s)
specifically identified by the Licensee or at its option replace the defective
Software. The Licensor's warranty as provided above shall only apply provided
that (i) the Software has been used at all times properly and in accordance with
instructions of use; (ii) no alteration, modification or addition has been made
to the Software by the Licensee.
11.2 EXCEPT AS EXPRESSLY PROVIDED IN SECTION 11.1 ABOVE, THERE ARE NO
TERMS, CONDITIONS, REPRESENTATIONS, WARRANTIES, EXPRESS OR IMPLIED, INCLUDING,
BUT NOT LIMITED TO, ANY CONDITIONS OR WARRANTIES OF MERCHANTABILITY OR FITNESS
FOR PARTICULAR PURPOSE.
12. INDEMNIFICATION.
12.1 Licensor hereby indemnifies Licensee and any Sub-licensee thereof
against any claim, demand or action related to any breach of this Agreement by
Licensor, and/or any allegation that any of Licensed Technology furnished under
this Agreement infringes any patent, copyright, trademark, moral right, trade
secret or other proprietary right.
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 7
12.2 The Licensee undertakes that the Licensor shall be given prompt notice
of any claim specified in 12.1 above that is made against the Licensee
and the Licensor shall have the right to defend any such claims and
make settlements thereof at its own discretion and the Licensee shall
give such assistance as the Licensor may reasonably require to settle
or oppose any such claims.
12.3 In addition to indemnifying the Licensee as provided above, in the
event that any such infringement occurs or may occur, the Licensor may
at its expense and in consultation with Licensee:
(i) procure for the Licensee the right to continue using the
Software or infringing part thereof;
(ii) modify or amend the Software or infringing part thereof so
that the same becomes non-infringing;
(iii) replace the Software or infringing part thereof by other
software of substantially similar capability; or
(iv) return the Shares to the Licensee.
12.4 Licensee hereby indemnifies Licensor against any claim, demand or
action arising out of any breach of this Agreement by Licensee.
13. RIGHT OF FIRST REFUSAL AND MOST FAVORED NATIONS.
If Licensor offers the right to license the Licensed Technology to a
person in any of the following states: Arizona, Florida, New Mexico, California,
Texas or New York, then Licensor shall, prior to the making of such an offer,
notify the Licensee in writing of the terms and conditions of such offer and
then offer to Licensee the opportunity to accept such offer according to
comparable terms and conditions. Additionally, if Licensor has agreed to license
or agrees to license the Licensed Technology, directly or indirectly, pursuant
to any agreement, understanding or arrangement (including orally) to any third
party located anywhere in the world under any term, provision or condition which
is more favorable to such third party than those set forth in this Agreement,
Licensor shall give written notice thereof to Licensee and, at Licensee's
election, this Agreement shall be deemed to have been modified so that Licensee
shall receive such more favorable provision (retroactive to the date first
provided to the third party).
14. SOURCE CODE ESCROW ACCOUNT.
All Source Code associated with the Licensed Technology shall be kept
in escrow and updated on a regular basis, and will be updated and released to
Licensee in the event of one of the following:
(i) liquidation of Licensor;
<PAGE> 8
(ii) filing of insolvency or bankruptcy by Licensor which is not
dismissed within ninety (90) days;
(iii) appointment of a trustee or receiver for Licensor which is
not dismissed within ninety (90) days; or
(iv) Licensor's material breach resulting in termination.
15. TERMINATION
Either party may terminate this Agreement if the other party:
(i) is in breach of any material term, condition or provision of
this Agreement or required by the applicable law and fails to
remedy such breach (if capable of remedy) within 30 days of
having received written notice of such breach from the party
wishing to terminate; or
(ii) shall commence a voluntary case concerning itself under Title
11 of the United States Code entitled "Bankruptcy" as now or
hereafter in effect or any successor thereto (the "Bankruptcy
Code"); or an involuntary case is commenced against the other
party and the petition is not controverted within ten (10)
days or is not dismissed within sixty (60) days, after the
commencement of the case; or a custodian (as defined in the
Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of the other party or the
other party commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar
law of any jurisdiction whether now or hereafter in effect
relating to the other party or there is commenced against the
other party any such proceeding which remains undismissed for
a period of sixty (60) days, or the other party is
adjudicated insolvent or bankrupt; or any relief of any order
approving any such case or proceeding is entered; or the
other party suffers the appointment of any custodian or the
like for it or any substantial part of its property to
continue undischarged or unstayed for a period of sixty (60)
days; or the other party makes a general assignment for the
benefit of creditors, or any corporate action is taken by the
other party for the purpose of effecting any of the foregoing.
<PAGE> 9
16. CONSEQUENCES OF TERMINATION.
Neither party may terminate this Agreement before the end of the Term
or, in the event of a renewal pursuant with the term hereof, before the end of a
Renewal Term, except as provided under Section 15 hereof. In the event of
termination due to material breach by the Licensor, the exclusive right and
license to the Licensed Technology (including updates) in the Territory shall
remain in force until the end of the Term, and then become a perpetual
royalty-free, fully paid, nonexclusive right and license. Otherwise, upon
expiration of the Term or other termination of this Agreement, the exclusive
right and license to the Licensed Technology in the Territory shall become a
perpetual royalty-free, fully paid, nonexclusive right and license to the
Licensed Technology (including updates) in the Territory. Licensor shall, upon
termination of this Agreement, provide Licensee with any material, including
source code, documentation, software, and instructions, necessary for Licensee
to continue the Business.
17. MISCELLANEOUS.
17.1 Assignment
This Agreement shall not be assignable or transferable by a party
hereto (other than to an affiliate of such party) without the prior written
consent of the other party and any attempt to do so shall be void.
17.2 Force Majeure
For the purpose of this Agreement, "Force Majeure" shall mean any event
which is beyond the control of the parties and which is unforeseen, or if
foreseen, unavoidable, and which prevents total or partial performance by a
party. Such event shall include but are not limited to any strikes, lock-outs or
other industrial action; civil commotion, riot, invasion, war threat or
preparation for war, fire, explosion, storm, flood, earthquake, subsidence,
epidemic or other nature physical disaster; impossibility of the use of
railways, shipping, aircraft, motor transport or other means of public or
private transport; political interference with the normal operations of any
party; and any other events that are accepted as force majeure in general
international commercial practice. If an event of Force Majeure occurs, to the
extent that the commercial obligations of the parties to this Agreement cannot
be performed as a result of such event, performance of such contractual
obligations shall be suspended during the period of delay caused by the Force
Majeure and shall automatically be extended, without penalty and without
constituting a breach of contract, for a period equal to such suspension. The
party claiming Force Majeure shall promptly inform the other party in writing
and shall furnish within 10 days thereafter sufficient evidence of the
occurrence and duration of such Force Majeure. The party claiming Force Majeure
shall also use all reasonable endeavours to terminate the Force Majeure. In the
event of Force Majeure, the parties shall immediately consult with each other in
order to find an equitable solution and shall use all reasonable endeavours to
minimise the consequences of such Force Majeure.
<PAGE> 10
17.3 Notice
All notices, reports, approvals, consents or other communications
required, desired or permitted to be given under this Agreement shall be in
writing and shall be deemed "given" (a) upon personal delivery to the party to
be notified, (b) upon deposit with the official governmental postal service, and
addressed to the recipient at the address set forth below, postage prepaid,
return receipt requested, or (c) upon transmission via facsimile to the
recipient at the facsimile number set forth below during the business hours at
the location of the recipient, subject to a confirmed answerback at the end of
the transmission and dispatch. Any notice given in any other manner shall be
deemed "given" only when actually received.
Licensor:
Attn:
Facsimile No.:
Licensee:
Attn: Fernando Mendez
Facsimile No.: 55-11-8280295
17.4 Waivers
No failure to exercise, and no delay in exercising, on the part of
either party, any privilege, power or right hereunder will operate as a waiver
thereof. No single or partial exercise of any right or power hereunder will
preclude further exercise of any other right or power hereunder. Any waivers
shall be effective only if made in writing and signed by a representative of the
respective parties authorized to bind the parties.
17.5 Amendment
This Agreement cannot be changed or terminated orally. Any amendments
shall be effective only if made in writing and signed by a representative of the
respective parties authorized to bind the parties.
17.6 Enforceability
If any provision of this Agreement shall be adjudged by any court of
competent jurisdiction to be uneforceable or invalid, that provision shall be
limited or eliminated to the minimum extent necessary so that this Agreement
shall otherwise remain in full force and effect and enforceable.
<PAGE> 11
17.7 Governing Law
This Agreement shall be deemed to have been made in, and shall be
governed and construed in accordance with the domestic laws of the State of New
York, without giving effect to any choice of law or conflicting provision or
rule that would cause the laws of any jurisdiction other than the State of New
York to be applied. In furtherance of the foregoing, the internal law of the
State of New York will control the interpretation and construction of this
Agreement, even if under such jurisdiction's choice of law or conflict of law
analysis, the substantive law of some other jurisdiction would ordinarily apply.
17.8 Entire Agreement
Both parties agree that this Agreement is the complete and exclusive
statement of the mutual understanding of the parties and supersedes and cancels
all previous written and oral agreements and communications relating to the
subject matter of this Agreement, including but not limited to that certain
letter agreement, dated November 1, 1999 between the parties.
17.9 Arbitration/Forum
In the event of any dispute, claim, question, or disagreement arising
from or relating to this agreement or the breach thereof, the parties hereto
shall use their best efforts to settle the dispute, claim, question, or
disagreement. To this effect, they shall consult and negotiate with each other
and, recognizing their mutual interests, attempt to reach a final solution
satisfactory to both parties. If they do not reach such solution within a period
of 60 days, then, upon notice by either party to the other any dispute,
controversy or claim arising out of or relating to this Agreement or to a breach
hereof, including its interpretation, performance or termination, shall be
finally resolved by arbitration. The arbitration shall be conducted by one (1)
arbitrator appointed jointly by Licensor and Licensee or, if they cannot agree,
by the President of the American Arbitration Association ("AAA"). The
arbitration shall be conducted in English in accordance with the commercial
arbitration rules of the AAA. The arbitration, including the rendering of the
award, shall take place in New York, New York and shall be the exclusive forum
for resolving such dispute, controversy or claim. The decision of the arbitrator
shall be final and binding upon the parties hereto, and the expense of the
arbitration (including without limitation the award of reasonable attorney's
fees to the prevailing party) shall be allocated as determined by the
arbitrator. The decision of the arbitrator may be entered by any court of
competent jurisdiction.
17.10 Consent
Without limiting the rights granted hereunder, Licensor irrevocably
consents to Licensee's perpetual use of the MyWeb name for its business,
wherever located, including the use of such name in connection with listing
securities on any securities exchange, over-the-counter market or the like.
<PAGE> 12
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed as of the date first above written.
SIGNED by ) /s/
for and on behalf of ) ----------------------------
MyWeb Americas, Inc. ) /s/
in the presence of:- ) ----------------------------
) /s/
) ----------------------------
) /s/
) ----------------------------
) /s/
) ----------------------------
SIGNED by ) /s/
for and on behalf of ) ----------------------------
MyWeb Inc.com ) /s/
in the presence of:- ) ----------------------------
)
<PAGE> 1
EXHIBIT 10.50
<PAGE> 2
LOAN AGREEMENT
BORROWER - MYWEB NETWORK SYSTEMS (BEIJING) CO. LTD
LENDER - CHINA CONSTRUCTION BANK BEIJING BRANCH QIANMEN SUB-BRANCH
The Lender has agreed to approve the loan application from the Borrower upon the
completion of the audit/review of the Borrower's turnover. Both parties hereby
agree to the terms and conditions listed below:-
1. LOAN AMOUNT - RMB3,000,000
2. PURPOSE OF THE LOAN - for working capital purposes
3. TERM/DURATION OF THE LOAN - 19/1/2000 until 13/1/2001
4. INTEREST RATE - 0.53625 % per month, the interest will be paid to bank
every season. Interest will be computed from the date the loan was
transferred to the Borrower's account. If there are changes to the
official interest rate on the contract date, all necessary interest
rate changes must made to the contract interest rate by the People's
Bank of China. (i.e. If the official governmental interest rate
changes, the contract's interest rate will also be changed)
5. USAGE PROPOSAL - RMB 3,000,000 will be fully released by the Lender on
January 2000
6. PAYBACK PROPOSAL - RMB 3,000,000 will be fully repaid on January 2001
If the Borrower intends to repay the loan earlier, the Borrower must
get prior approval from China Construction Bank 10 working days before
the intended date of repayment.
7. INTEREST PAYING OPTION - Borrower must guarantee to pay interest on the
loan on time. Interest will be debited to the Borrower's bank account
(Account Number 2610016131) every season. If the Borrower default in
the interest payments, China Construction Bank has the authority to
debit the money from other accounts belonging to Borrower or cease the
release of the loan.
8. DEDUCTION OPTION - The Borrower must pay the loan on time according to
the payback proposal (stated in term No 6). If the Borrower defaults in
the payments, the Lender has the authority to instruct other parties
(other bank accounts of MyWeb Network System (Beijing) Corp, Ltd.) to
debit money for paying interest and other necessary expenses.
9. AMENDMENTS TO THE AGREEMENT -
(1) No amendments are allowed once the agreement is signed by both
parties
(2) If the Borrower delays in the payment of the loan under
special and acceptable circumstances, the Borrower is allowed
to extend their payback period. However, the Borrower must
obtain necessary approval from the China Construction Bank 30
working days in advance prior to the payback maturity date.
(3) If the Borrower intends to assign the loan to a third party,
the Borrower shall prepare the necessary documents one (1)
month in advance and obtain approval from the Lender. This
document can only be legally valid when both parties have
signed the documents.
<PAGE> 3
(4) If either of the parties above are involve in any merger,
de-merger or takeover process, the controlling party of the
original Lender/Borrower will assume the authority and
responsibility of the original Lender or the Borrower after
the matter occurs.
10. LOAN GUARANTEE
The principal and interest of this agreement is guaranteed by the
mortgage property provided by the borrower. The signed mortgage
contract will be a co-contract of this loan agreement.
11. If the Borrower is involve in any legal processes such as a merger,
de-merger or takeover, that will subsequently affect the whole
operation of the Company, a permission document shall be submitted to
the lender 90 days in advance. Any amendments to the agreement can only
be made with the approval of the Lender.
12. ROLES AND RESPONSIBILITIES OF THE TWO PARTIES
(1) The Borrower has the right to instruct the Lender to release
the loan according to this loan agreement.
(2) The Borrower shall repay the loan according to payback
proposal above.
(3) The Borrower must utilize the loan for the purpose stated
above.
(4) The Borrower shall provide monthly financial proposals to the
Lender.
(5) The Lender has the authority to investigate the utilization of
the Borrower's loan.
(6) The Lender has the authority to monitor the Borrower's
business situation.
(7) The Lender should release their loan to Borrower on time.
13. BREACH OF CONTRACT
(1) If the loan was utilized for purposes other than that as
stated above, the Lender has the authority to charge 0.05% per
day on the portion of the loan which is used for the other
purposes.
(2) If the Borrower defaults in payment, the Lender has the
authority to charge 0.021 % per day on this overdue amount. If
the Borrower attempts to transfer the sum of money to another
bank account in order to avoid repayment of the loan, the
Lender has the authority to collect the money from the other
Bank and charge the Lender 0.021% per day.
(3) If the Borrower breaches Clause No. 11, where he/she tries to
make unnecessary changes that will affect the operation of the
whole Company, the Lender has the authority to terminate the
loan and/or charge 2% of the loan amount for breaching the
contract.
(4) If the Borrower breaches Clause No. 15, the Lender has the
authority to charge them 2% for breaching the contract.
(5) If the Borrower breaches the contract during the duration of
this agreement, the Lender has the authority/right to
terminate the loan agreement and amend the existing repayment
period to an earlier repayment period in order to collect the
loan from the Borrower. Furthermore, the Lender also has the
right to directly transfer money from the Borrower's account
to recall the amount of loan outstanding subject to the
conditions below:-
(1) The Borrower's utilisation of the loan was for
purposes other than that specified above, even after
prior warning from the Lender.
(2) The financial reports and other proposals which were
provided by the Borrower was incorrect.
(3) Third party guarantees or mortgaged properties for
this loan agreement. Where the Borrower is unable to
provide a new guarantee or a new mortgage property if
the third party breaches the terms of this contract
or the property was accidentally damaged with the
result that the fair market value is not able to
cover the loan principal and interest.
<PAGE> 4
(4) The Borrower was involved in a legal suit or is
likely to be involved in a legal suit
(5) The occurrence of any event which affects the ability
of the Borrower to repay the amount of the loan.
14. SOLUTIONS FOR ANY DISAGREEMENTS
If there is any disagreement between the two parties, they shall
attempt to resolve it by discussion between both parties.
Alternatively, the Borrower can present the disagreement to the court.
15. BOTH PARTIES HAVE AGREED ON THE TERMS AND CONDITIONS BELOW:-
(1) Borrower cannot use this existing loan as mortgage and lend to
third parties while the loan is not fully repaid to Lender.
(2) Borrower cannot act as a guarantor for other parties when this
existing loan has not been fully repaid to Lender.
16. Both parties must strictly adhere to the legal and financial
requirements during the term of this agreement.
17. This agreement is only legally binding once both parties have signed
and stamped on this agreement. This agreement shall be deem to be
terminated once the Borrower has fully repaid the loan to the Lender.
18. There are two original copies of this agreement and each party is to
keep an original copy. There are also two (2) photocopies of this
contract.
Signature Signed Signature Signed
Stamped MYWEB NETWORK SYSTEM STAMPED CHINA CONSTRUCTION BANK BEIJING
(BEIJING) CO. LTD. BRANCH QIANMEN SUB-BRANCH
Date 18 February 2000 Date 19 January 2000
<PAGE> 1
EXHIBIT 10.51
<PAGE> 2
MORTGAGE AGREEMENT
The Mortgage Agreement (No 43000002) can only be activated legally if:-
MyWeb Network Systems (Beijing) Co., Ltd. agrees to mortgage their property and
China Construction Bank agrees to accept the mortgage from MyWeb.
Terms and Conditions
1. MyWeb Network Systems (Beijing) Co., Ltd. must mortgage the property to
China Construction Bank (Beijing) for the purpose of getting the loan.
2. The amount of the loan is RMB3,000,000 and the term of the loan is from
19/1/2000 to 13/1/2001
3. MyWeb must have legal ownership title or operation management of the
mortgage property.
4. MyWeb must pass all the mortgage property to China Construction Bank
(Beijing) on 19/1/2000
5. Scope of mortgage: principal and interest, compensation and fine,
mortgage property keeping fee and any other expenses which may arise
when the creditor dispose of the mortgage property due to debtor's
failure of executing the loan agreement.
6. This is a separate and independent agreement and the
invalidation/termination of the loan agreement has no effect on this
agreement.
7. All the necessary expenses such as insurance, transportation fees etc.
shall be paid by MyWeb
8. Before this mortgage agreement expires, if China Bank make any losses
on their (MyWeb's) property, China Bank shall:-
1. Compensate all the losses once MyWeb repays the full amount of
the loan.
2. The lender can avoid their responsibility for full or partial
compensation if the borrower is unable to repay the full
amount of the loan.
9. The lender shall always be the beneficiary of the mortgage property and
the lender must have an original copy of this agreement.
10. If the value of the mortgaged property decreases due to certain
circumstances which are covered by insurance, compensation will be
given but this amount of money will be credited to the Lender's account
and must not be utilized until the mortgage period has expired.
11. If the value of the mortgaged property decreases and the Creditor does
not take any responsibility for such decreases, the Debtor shall credit
an equal amount of property to the Lender's account within thirty days.
12. Borrower must be liable for any losses arising from their mortgage
property which pollutes/affects the environment.
<PAGE> 3
13. Borrower is not allowed to rent out, change owners or re-mortgage this
property to other parties unless authority has been given (such as
legal document).
14. Once authority has been obtained from the lender, the borrower must
transfer all the money to the lender after selling their mortgage
property.
15. If the borrower is unable to repay the full amount of their loan upon
the maturity date of this agreement, the lender has the right to sell
off the mortgage property.
16. If the situation above occurs, the lender has the right to stop
releasing the balance of the loan to the borrower. Furthermore, the
lender can minimize their losses by selling off existing mortgage
property under the conditions below:-
(1) borrower has been declared bankrupt;
(2) borrower has breach clauses no 9,11,13 and 14;
(3) borrower has been declared bankrupt, is sued in court, has not
followed exactly the loan usage in contract or some
circumstance that affect to payback ability.
17. The Debtor shall pay 2% of principal as compensation, if any economic
loss arise due to the Debtor disguising the exact situation of the
mortgaged property (such as already being shared, disputed,
sequestered, detained or mortgaged). If the compensation amount is
unable to cover the loss, the Debtor should pay for the uncovered
portion of the loss. The Creditor could offset directly with capital
from the Debtor's accounts.
18. if the lender has to sell off the mortgage property, the fund
allocation and payment must be made with the following condition,
(1) fund must deduct all the selling expenses first
(2) payback loan interest
(3) payback loan, compensate and fine from breaching the contract
(4) pay for other expenses
19. The Creditor can directly sell the deposit received in order to
implement its right in the event the Debtor is unable to perform the
contract.
20. If both parties cannot come to an agreement, these problems shall be
resolved by bringing the case to court.
21. This agreement is only certified legal once the Borrower has signed
this agreement and transferred the mortgage property to the Lender.
22. This agreement shall be signed and stamped by both Parties.
23. There are two original copies of this agreement and each party is to
keep an original copy.
Signature Signed Signature Signed
Stamped MYWEB NETWORK SYSTEM STAMPED CHINA CONSTRUCTION BANK BEIJING
(BEIJING) CO. LTD. BRANCH QIANMEN SUB-BRANCH
Date 18 February 2000 Date 19 January 2000
<PAGE> 1
EXHIBIT 10.56
<PAGE> 2
MYWEB INC.COM (MYWB)
TECNOCHANNEL TECHNOLOGIES SDN. BHD. (425318-M)
Block G Unit G606, Phileo Damansara 1.
No. 9 Jalan 16/11, Off Jalan Damansara,
46350 Petaling Jaya.
Tel: 03-460 9282 - Fax: 03-460 9272
Website: www.myweb.com.my
SERVICE AGREEMENT
BETWEEN:
TECNOCHANNEL TECHNOLOGIES SDN BHD
Block G Unit G G605 / 606
Phileo Damansara 1
No 9 Jalan 16/11
Off Jalan Damansara
46350 Petaling Jaya
hereinafter referred as "TecnoChannel"
AND
CORPCOM SERVICES SDN BHD (340200-A)
179, Jalan Dato'Sulaiman 4
Taman Tun Dr. Ismail
60000 Kuala Lumpur
hereinafter referred to as "Corpcom"
WHEREAS
The parties hereby agree that TecnoChannel shall be appointed by Corpcom to
develop and maintain the website on the Internet located at www.mom4mom.com
("the Website").
WHEREBY THE PARTIES AGREE as follows:-
1. TERM OF AGREEMENT
The term of this agreement shall commence on November 25, 1999 for the
period of 6 (six) months. This Agreement shall be deemed to continue to
be in force on a yearly basis unless either party gives to the party
not less than 20 days notice of termination in writing.
2. CONDITION PRECEDENT
<PAGE> 3
TecnoChannel hereby represents to have obtained and to be in possession
of all Government approvals, licenses and permits required for
TecnoChannel to carry out its functions and obligations as set forth in
this Agreement and that the said licenses and approvals continue to be
existing and valid during the continuance of this Agreement.
3. SERVICE OBLIGATIONS BY TECNOCHANNEL
TecnoChannel shall:
a. create and ensure that the Website is updated from time to
time with the latest information and contribution from M4M in
respect of the website content;
b. record and administer all responses from the readers and
customers, which will form a database ("the Members
Database"). The ownership and copyright of the Members
Database shall belong jointly to CORPCOM and TECNOCHANNEL;
c. furnish to Corpcom the Members Database whenever requested by
Corpcom.
d. Corpcom shall have full copyright of the website and its
domain name. (www.mom4mom.com)
4. SERVICE OBLIGATION BY CORPCOM
Corpcom shall:
a. Allow a MyWeb banner space to appear on a number of pages in
the website that is mutually agreed by both parties.
b. Incorporate the website into their Advertising and Promotion
campaign.
c. Contribute articles from the website as content for the MyWeb
portal website at an interval mutually agreed by both parties
([***] articles per week).
5. PRICE
a. The total cost of the development and of updating the website
will be [***] TecnoChannel.
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 4
b. In return for the development, hosting and maintenance of the
website, Corpcom will provide to Technochannel, articles to be
used as content for MyWeb at an interval mutually agreed by
both parties ([***] articles per week). Corpcom still retains
full copyright over the articles.
6. AGENT/REPRESENTATIVE
It is specifically understood and agreed that this Agreement does not
constitute TecnoChannel as the agent or legal representative of the
Corpcom for any purpose whatsoever. Accordingly, TecnoChannel has no
authority to assume or to create any obligation on behalf of or in the
name of the Website (www.mom4mom.com).
7. TERMINATION
Either parties may terminate this Agreement by giving the other party 20
days notice in writing.
8. NON-ASSIGNABILITY
TecnoChannel shall not assign or sub-contract any rights or obligations
under this Agreement in whole or in part to any third party without
prior consent from Corpcom.
9. BINDING ON SUCCESSORS
This Agreement shall be binding on the successors in title and the
permitted assigns of the Parties hereto.
In witness whereof the parties hereto set their hands the day and above written.
- ----------------------
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 5
Signed by: /s/
------------------------------------------
Company's chop: Corpcom Services Sdn. Bhd.
(Company No. 340200-A)
179, Jalan Dato Sulaiman 4
P.O. Box 3031
Taman Tun Dr. Ismail
60000 Kuala Lumpur
Malaysia
-------------------------------------
In presence of:
--------------------------------------
Signed by: /s/
-------------------------------------------
For and behalf of: TECNOCHANNEL TECHNOLOGIES SDN BHD
-----------------------------------
Company's chop: TecnoChannel Tecnologies Sdn Bhd
(Company No. 426318-M)
Block G Unit G606
Phileo Damansara 1
No. 9 Jalan 16/11
Off Jalan Damansara
46350 Petaling Jaya
-------------------------------------
In the presence of: /s/ SHOBANA DEV. A/P LAYANDRAN
---------------------------------
(SHOBANA DEV. A/P LAYANDRAN)
<PAGE> 1
EXHIBIT 10.59
<PAGE> 2
["KUALA LUMPUR MUTUAL FUND" LOGO]
DISTRIBUTION AGREEMENT
This agreement is made on the 15th July, 1999 between Kuala Lumpur Mutual Fund
Berhad, Block B, Sri Damansara Business Park, Persiaran Industri, Bandar Sri
Damansara, 52200 Kuala Lumpur (hereinafter called the "Publisher") on one part
and TechnoChannel Technologies Sdn Bhd, Block G, Unit G605 & G606, Phileo
Damansara 1, No 9 Jalan Damansara, 46350 Petaling Jaya (hereinafter called the
"Distributor") on the other part.
Whereas the publisher publishes the book entitled FINANCIAL FREEDOM (the
Publication) and the Distributor shall act as an Agent of the Publisher to sell
and distribute the publication throughout Malaysia.
NOW IT IS HEREBY AGREED AS FOLLOWS:
1. The Publisher hereby appoints the Distributor to be its Agent for the
sales of the soft cover and hard cover edition of the publication
throughout Malaysia.
2. The Distributor will distribute through website.
3. The retail price per copy of the book is RM29.90 (Soft Cover) and
RM39.90 (Hard Cover) and the Publisher would offer the Distributor a
discount of [***] off the retail price. The selling price to the
distributor shall be [***] and [***] respectively per book.
4. The publication will be delivered to the Distributor's customers by the
Distributor and all delivery charges will be borne by the Distributor
unless other arrangements are agreed upon.
5. The Distributor agrees to pay the Publisher 30 days after each delivery
of the books from the Publisher to the Distributor.
6. Both sides agreed that this agreement may be ended by either side by
giving 3 months notice.
7. Notwithstanding Clause 6 above, the Publisher reserves the right to
terminate the agreement immediately if the Distributor is in breach of
any of the clauses herein mentioned before.
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 3
Distribution Agreement
Page 2
IN WITNESS WHEREOF the parties hereto have executed these presents and
duplicate hereof on the day, month and year first above written.
Signed by Wong Boon Choy Signature /s/ Wong Boon Choy
-----------------------------
Company's chop
For and on behalf of Date:
KUALA LUMPUR MUTUAL FUND BERHAD Witnessed by: /s/ Alex Sito
-------------------------
Name: Alex Sito
Signed by Ricky Tam Signature /s/ Ricky Tan
-----------------------------
Company's chop
For and on behalf of
TechnoChannel Technologies Sdn Bhd Date:
Witnessed by: /s/ Roger Koh
-------------------------
Name:
<PAGE> 1
EXHIBIT 10.62
<PAGE> 2
QNX(TM) OEM LICENSE AGREEMENT
(Agreement No. OEM00-000126.PGWOCB- Single-Tier Target Systems)
This QNX Standard Manufacturing Agreement (comprising Part A - Business Terms
& Sign Off, Part B - Standard Terms and Conditions, and, if applicable, Part C
- - Supplementary Terms, collectively "this Agreement"), is made by and between
QNX Software Systems Ltd. ("QSS") and "OEM" (defined below) as of June 29, 1999
("Effective Date"). For value received the parties agree as follows:
PART A - BUSINESS TERMS & SIGN OFF
A1 DEFINITIONS. The following chart supplements definitions provided in
section B2 and elsewhere in the body of this Agreement.
<TABLE>
<CAPTION>
TARGET A WEB BROWSER OF SET-TOP BOX MANUFACTURED AND
SYSTEMS DISTRIBUTED BY OEM KNOWN AS "MYWEB".
- ------- ---------------------------------------------------
CORRESPONDING SOFTWARE
COMPONENTS ESTIMATED
CONFIG- (*** INDICATES THIRD PARTY SOFTWARE ANNUAL
URATION ** INDICATES BSD SOFTWARE COPIES
- ------- --------------------------------------- ---------
<S> <C> <C>
801242 A single node configuration of QNX 4.25 [***]
Software consisting of the following
modules:
- Proc32, part #4691
- day, part #4674
- ** TCP/IP Socklet (no NFS), part
#4667
- Photon core runtime version 1.13,
part #4662
- Efsys part #4682
- * Bitstream fonts, part #4664
- * Voyager runtime version 2.00,
part #7014
</TABLE>
A2 ROYALTIES. OEM will prepay royalties to QSS for all copies of Software to
be created for Target Systems ("Manufactured") under this Agreement. Each
prepaid order must be for at least five hundred copies ("Order"). QSS will
provide one serialized sticker ("Sticker") to OEM for each pre-paid Software
royalty to authenticate licensed copies. OEM will affix at least one Sticker
(i.e., one sticker per licensed node) on the outside of each Target System
manufactured pursuant to this Agreement. Software royalties will be calculated
for each order for each Configuration by multiplying the desired number of
whole or partial copies thereof to be Manufactured by the then-effective Per
Copy Royalty specified in Section A2(c-d). Total Software royalties due will be
computed by summing the royalties calculated for all Configurations ordered.
Due to prepayment of royalties, Section B6(a) (Reporting) and the first
sentence of Section B6(b) (Payment) shall not apply to this Agreement.
(a) ESTIMATED FSC & VOLUME. OEM estimates in good faith that it will begin
commercial shipments of the Targets System in April 1, 2000. If it begins
shipping Target Systems at an earlier date it will notify QSS. The earlier
of the estimated and actual dates will be "First Commercial Shipment" or
"FCS". In the 12 months after FCS ("First Year"), OEM estimates in good
faith that it will Manufacture the number of copies of Software indicated
above, by Configuration, as "Estimated Annual Copies".
(b) INITIAL PURCHASE. OEM shall pay [***] to QSS on or before the Effective
Date for its initial prepayment of Software royalties for [***] copies of
Configuration 801242.
(c) PER COPY ROYALTIES. On the basis of OEM's estimated volume and/or
prepayment in section A2(a-b), OEM's "Per Copy Royalty" will be determined
for each Order for each Configuration as follows:
(i) Prior to FCS, 15.15 for Configuration 801242.
(ii) In the First Year, either:
(A) the Per Copy Royalty in section A2(d) that corresponds to the
number of Estimated Annual Copies of the Configuration in
section A1; or
(B) if more favourable to OEM, the Per Copy Royalty in section
A2(d) that corresponds to the actual number of Configurations
Manufactured in the First Year to the date of the Order,
including the amount of the Order;
OEM may not terminate this Agreement without cause until all royalty
payments for the First Year have been paid to QSS.
(iii) In each consecutive 12 month period after the First Year, either:
(A) the lowest Per Copy Royalty previously sustained under this
section A2(c), or
(B) if more favourable to OEM, the Per Copy Royalty in section
A2(d) that corresponds to the actual number of Configurations
Manufactured in the then-current 12 month period to the date of
the Order, including the amount of the Order.
(d) PER COPY ROYALTIES. The Per Copy Royalty for each Configuration copy/node
is specified in US Dollars in the following chart.
<TABLE>
<CAPTION>
PER COPY ROYALTY
CONFIGURATION
ANNUAL COPIES 801242
------------- ----------------
<S> <C>
1 [***]
2-10 [***]
11-24 [***]
25-99 [***]
100-249 [***]
250-499 [***]
500-999 [***]
1,000-2,499 [***]
2,500-4,999 [***]
5,000-9,999 [***]
10,000-24,999 [***]
25,000-49,999 [***]
50,000* Speak to QSS
</TABLE>
A3 UPDATES. OEM shall be entitled to update new and existing Target Systems
with Updates during any period for which it has paid QSS the following
non-refundable subscription fees ("Update Fees"). A minimum Update Fee of [***]
must be paid each year in advance, beginning with payment on or before FCS for
the First Year. If the minimum annual prepayment is less than 15% of the total
royalties paid or payable to QSS for any subscription-year, then OEM will remit
the difference to QSS with its last royalty report for the period. OEM may end
its Update rights and obligations at any time by providing QSSL with written
notice at least 30 days prior to the next anniversary of FCS. Update rights may
not be reinstated once discontinued.
In witness whereof the parties have caused this Agreement to be signed by
their duly authorized representatives:
QNX Software Systems Ltd., 175 Terence Matthews Cr., Kanata, Ontario, Canada
K2MIWO, Tel. 913-591-0931, Fax 613-591-3579
/s/ Gordon Bell 6-4-2000
- ------------------------------ ----------------------
Gordon Bell, President Date
OEM: TechnoChannel Technologies Sdn Bhd, Block G, Unit G808, Phileo Damansara
1, No. 9, Jalan 16/11, Off Jalan Damansara, 46350 Petaling Jaya, Malaysia, Tel.
603 4609282, Fax 603-4609272
/s/ Jason Chan Ling Khee 28-3-2000
- ------------------------------ ----------------------
Signature Date
/s/ Jason Chan Ling Khee Senior Tech Manager
- ------------------------------ ----------------------
Name Title
(OEM-PartA.PGOWOB.003a.wpd Printed: March 22, 2000 (5:01PM))
- -------------------------------------------------------------------------------
QSS CONFIDENTIAL
[***] Portions of this page have been omitted pursuant to a request for
Confidential Treatment and filed separately with the Commission.
<PAGE> 3
PART B -- OEM STANDARD TERMS & CONDITIONS
B1 BACKGROUND. QSS has developed and licenses a general purpose modular real
time operating system, as well as associated software accessories (e.g., GUI,
browser, etc.) and development tools (e.g., compilers, debuggers, SDKs, etc.).
Developers select and license the components they need ("Development System") to
develop their custom hardware and software product. Development includes
integrating unaltered QNX linked object code program and data files ("Runtime
Files") with files generated by the developer using QNX development tools (e.g.,
to tailor the operation and appearance of the operating system) and with files
that have been independently created or licensed. This Agreement authorizes OEM
to make and distribute copies of certain Runtime Files (see section B2(b)) as an
integral part of OEM's product (see section B2(c)). It does not supercede OEM's
Development System license(s).
B2 GENERAL DEFINITIONS. In this Agreement:
(a) "Documentation" means any Software and Update documentation that
QSS makes generally available for use by QNX developers;
(b) "Software" means any Runtime Files that make up the software
modules listed in section A1 (Definitions), any Updates that OEM is
authorized to distribute under this Agreement, any Freeware and any
improvements (as defined in section B4(b)).
(i) "Configuration" means any subset of the Software, as specified
in section A1, which may be Target-System specific if so
described.
(ii) "QNX Software" means any Software other than Third Party
Software and Freeware.
(iii) "Third Party Software" means any Runtime File that QSS
sublicenses to OEM, as specified in section A1 and Part C (if
applicable).
(iv) "Freeware" means any published software source or object code
and data files that QSS makes generally available to QNX
licenses for use and distribution on a royalty free basis;
(c) "Target System" means any of the products described in section A1 into
which the Software has been wholly or partially integrated, and each of
which must: (i) significantly enhance the function and value of the
Software, and (ii) have substantially different principal purposes than
those of the Software:
(d) "Update" means any new version of the Software or Documentation that
QSS makes generally available to its licensees to correct errors and
provide minor enhancements; and
(e) Other capitalized terms defined in any Part of this Agreement will
have their indicated meaning throughout this Agreement.
B3 LICENSE. Subject to the terms and conditions of this Agreement, including
those specific to Third Party Software (see Part C, if applicable), QSS hereby
grants to OEM for the term of this Agreement a non-exclusive, non-transferable,
world-wide limited license as follows:
(a) to reproduce the Software as an integral part of the Target System
software as necessary to: (1) manufacture Target Systems, and (2)
produce Target System software updates and back-up media (i.e., not
for productive use, such as in redundant systems);
(b) to reproduce, abridge, condense and translate portions of QSS-authored
parts of the Documentation, but only as necessary to create,
distribute and update Target System user documentation;
(c) to sub-license rights granted under section B3(a-b) to third parties
contracted to manufacture Target Systems and/or produce documentation
on OEM's behalf ("Subcontractors"), subject to an agreement at least
as protective of QSS' rights as the terms and conditions of this
Agreement, containing, at a minimum, the terms described in section
B5(d);
(d) to sub-license Software copies made under section B3(a) or (c) to end
users solely for use as an integral part of a Target System under the
terms and conditions of an end user license agreement that contains,
at a minimum, the terms described in section B5(c) ("EULA");
(e) to distribute copies of the Software and Documentation made under
section B3(a-c) to end-users as part of and only for use in
association with Target Systems under the terms and conditions of an
EULA: (1) directly; and (2) indirectly by authorizing third party
distributors ("Distributors") to resell Target Systems and associated
EULAs;
(f) to update Target System software by making replacement copies available
by any means of distribution. Such replacement copies may only include
Updates that OEM is authorized to distribute hereunder and
(g) to sub-license any rights under section 83(a-f) to third parties
("Sub-licensees") as part of any license granted by OEM to manufacture,
distribute and maintain Target Systems, subject to an agreement at
least as protective of QSS' rights as the terms and conditions of this
Agreement, containing, at a minimum, the terms described in section
B5(d).
B4 RESERVATIONS.
(a) LIMITED LICENSE. No license is granted to use the Software or
Documentation except in connection with the Target Systems as expressly
provided in section B3. QSS and its licensors reserve all right, title
and interest in and to the Software and Documentation, including all
associated copyright, patent, trade secret, trademark and other
proprietary rights. All whole or partial copies of the Software remain
the property of QSS or its licensors and form part of the Software for
the purpose of this Agreement.
(b) IMPROVEMENTS. OEM shall own authorized modifications (made using
Development Systems pursuant to the QSS and user license agreement(s)
or otherwise) that it makes to the Software and Documentation, except
for improvements. In this Agreement, "Improvements" means work-arounds,
error corrections or enhancements that are not specific to the Target
System and that OEM discloses or suggests to QSS. All right, title and
interest in and to Improvements shall be owned by QSS, unless QSS has
otherwise expressly agreed in writing. OEM acknowledges that it is
under no obligation to make such disclosures or suggestions to QSS.
(c) PROHIBITIONS. Except as expressly provided in this Agreement, or
otherwise by QSS in writing, OEM will not (and will not authorize or
assist others to): (i) use copies of the Software or Documentation made
hereunder for development purposes; (ii) rent, lease, license, transfer
or otherwise provide third party access to the Software; (iii) update
Target Systems with new Software versions or releases, except Updates
that OEM is authorized to distribute hereunder; (iv) translate,
decompile, disassemble, or otherwise attempt to reverse engineer or
create derivative works of the Software, except as necessary, when
permitted by applicable law, to correct defects or achieve
interoperability with other Target-System related programs, but only if
QSS has refused to provide the necessary information or assistance; or
(v) use any part of the Software for any use other than the intended
use of the Software in the Target System. Unless QSS has provided its
express written consent, the Software may not be used in any
application in which the failure of the Software could lead directly to
death, personal injury or severe physical or property damage
(collectively, "High-Risk Activities"), including but not limited to
the operation of nuclear facilities, mass transit systems, aircraft
navigation or communication systems, air traffic control, weapon
systems and direct life support machines. QSS expressly disclaims any
express or implied warranty or condition of fitness for High-Risk
Activities.
(d) RESTRICTED RIGHTS. The Software is maintained under this Agreement in
non-DOD agencies of the US Government with Restricted Rights and the
Documentation with Limited Rights as provided by subparagraph (c) of
FAR 52.227-19 ("Commercial Computer Software-Restricted Rights:, June
1987). The rights of DOD agencies of the U.S. Government in the
Software, Documentation, and related technical data are governed by the
restrictions set forth in the Technical Data Commercial Items clause at
DFARS 252.227-7015 (Nov. 1995) and DFARS Subpart 227.72 ("Rights in
Computer Software and Computer Software Documentation"). QNX Software
Systems Ltd.
(e) NO SUPPORT. QSS has no obligation under this Agreement to provide OEM
or its Subcontractors, Distributors, Sub-licensees or Target System end
users with maintenance, support, training or consulting services.
B5 REQUIREMENTS.
(a) DISTRIBUTION OF COPIES. Any update or back-up media copy of the Target
System software that includes any part of the Software must: (1) only
be made available to Subcontractors, Distributors, Sub-licensees and
licensed Target System end users; or (ii) have measures to ensure that
such software will only work on licensed Target Systems.
(b) DOCUMENTATION. Any portions of the Target System documentation that is
derived in whole or in part from the Documentation shall: (i) be
technically accurate, (ii) meet or exceed the quality of the
Documentation, (iii) conform to all marking requirements in section
B5(f), and (iv) be promptly delivered to QSS for review upon written
request.
(c) EULA. All EULAs shall be consistent with the terms and conditions of
<PAGE> 4
this Agreement and shall provide, at a minimum:
(i) that the end user: (1) may only use the Software in association with
one Target System, (2) acquires no right, title or interest in or to
the Software, (3) may only copy the Software as necessary to use the
Target System as intended, to follow normal archiving practices, and
as otherwise permitted by applicable law, (4) may not translate,
de-compile, disassemble, or otherwise attempt to unbundle, reverse
engineer or create derivative works of the Software, except as
permitted by applicable law, (5) may not remove, cover or alter any
proprietary notices, labels or marks in or on the Software and shall
ensure that all copies bear any notice contained on the original, (6)
may not export the Software in contravention of applicable export
control laws, and (7) shall allow reasonable tracing of Target System
software copies by OEM or its licensors.
(ii) that QSS and its licensors, either by name or generically as OEM's
licensors, are intended third party beneficiaries of all terms and
conditions that apply to the Software, including all warranty and
liability limitations and any OEM right of indemnification.
(d) OTHER SUB-LICENSING. OEM shall have written agreements with all
Subcontractors, Distributors and Sub-licenses ("Sub-license Agreements")
that:
(i) are consistent with and sufficient to secure compliance with the
terms and conditions of this Agreement, including the license
restrictions, EULA requirements, reporting, recordkeeping and audit
provisions, export restrictions, and marking requirements; and
(ii) expressly provide that QSS and its licensors, either by name or
generically as OEM's licensors, are intended third party beneficiaries
of all of the terms and conditions that apply to the Software,
including all warranty and liability limitations and any OEM right of
indemnification.
(e) ENFORCEMENT. if OEM becomes aware of any material breach of any EULA of
Sub-license Agreement, as applied to the Software or Documentation, then
OEM shall promptly notify QSS and use commercially reasonable efforts to
enforce the breached terms. If OEM fails to take effective action within 30
days of notice, then QSS may, either in its own name or in the name of OEM,
maintain or participate in, by way of joinder or otherwise, any action or
proceeding against the offender in respect of such breach. If QSS is unable
or unwilling to enforce the breached terms, and OEM refuses to initiate
termination of the breached agreement, then OEM shall remain responsible
for the acts or omissions of the end user or Sublicensee as if they were
the acts or omissions of OEM. OEM agrees to do such acts and execute such
documents as may reasonably be required to fully give effect to the
provisions of this section 85(e). Any attempt by QSS to enforce, or any
election not to enforce, the terms of any EULA of Sub-license Agreement
against an offender shall not prejudice QSS's rights and remedies under
this Agreement.
(f) MARKING. OEM shall not remove, cover or alter any proprietary notices,
labels or marks in or on the Software, Documentation or related storage
media and shall ensure that all copies bear those of originals.
(i) COPYRIGHT. OEM shall ensure that all Target Systems and associated
documentation that include any part of the QNX Software or associated
Documentation each include prominent copyright notices as follows:
"1982 - 1999, QNX Software Systems Ltd. All rights reserved."
(ii) SERIALIZATION. OEM shall mark each Target System with a unique
identifier and shall maintain records sufficient to identify the
Configuration and version of the Software installed and the customer
to whom it shipped the Target System. OEM shall also maintain, or
require its Subcontractors, Distributors and Sub-licensees to
maintain equivalent destination records for indirect distribution.
(iii) TRADEMARKS. OEM will eliminate screen display references to QSS
trademarks unless OEM has elected to license such marks (see Part C -
if applicable). Unless so licensed, any display of QSS' or its
licensors' trademarks, trade names, logos, or other words identifying
the Software, Documentation, related services or QSS' or its
licensors' businesses ("Trademarks") shall be for information purposes
only, shall be marked with the symbol (TM), and shall clearly identify
the owner of the Trademark displayed.
(g) PRESERVATION OEM will take whatever actions and precautions necessary to
preserve and protect all ownership and other rights of QSS and its
licensors in the Software and Documentation when sub-licensing rights
therein to any agency, department or unit of any government or
quasi-government authority.
(h) SUPPORT. OEM shall be responsible for Target System development,
manufacturing, reproduction, assembly, marketing, distribution, licensing,
installation, training, maintenance, updating and support.
(i) COMPLIANCE WITH LAWS. OEM shall comply with all applicable laws, rules
and regulations and obtain all permits, licenses and authorizations or
certificates that may be required in connection with its activities
pursuant to this Agreement. This includes any laws, regulations, orders or
other restrictions on the export of the Software from Canada and the USA
which may be imposed from time to time by the Canadian or United States
Governments. OEM shall not export or re-export, directly or indirectly, the
Software or information pertaining thereto to any country for which either
such government or any agency thereof requires an export license or
governmental approval at the time of export or re-export without first
obtaining such license or approval. QSS will make reasonable efforts to
provide to OEM necessary information required by OEM in support of OEM
obtaining necessary government export/import clearances for Software
included in Target Systems.
(j) OEM INDEMNITY. OEM shall indemnify and hold QSS harmless from any damages
finally awarded, and any costs and expenses (including reasonable
attorney's fees) incurred, in any third party action against QSS, its
affiliates, or their distributors or suppliers, based on bodily injury,
property damage or any other injury, damage, or claim arising out of the
use or inability to use the Target System, provided QSS promptly notifies
OEM and gives complete information and reasonable assistance to OEM (at
OEM's expense). This section B5(j) shall not apply to any claims under
section B8 that QSS is obliged to defend, other allegations that the
Software or Documentation infringe third party rights, or any final award
of a court of competent jurisdiction based on a finding of gross negligence
or wilful misconduct of QSS.
(k) THIRD PARTY SOFTWARE & QSS LICENSORS. Applicable terms and conditions that
are unique to Third Party Software (if any) are provided in Part C. OEM is
hereby notified that QSS licensors are third-party beneficiaries to this
Agreement in respect of provisions of this Agreement which relate to Third
Party Software and other Software which QSS sub-licenses to OEM. OSS'
licensors include, but are not limited to, those parties identified in
Part C (if any). The identities of other applicable QSS licensors are
available on request.
B6 PAYMENT & RECORDKEEPING. Except as otherwise provided by QSS in writing,
OEM shall pay to QSS the royalties and fees specified in Part A for all Target
Systems manufactured and/or updated by OEM, Sub-contractors, Distributors or
Sub-licensees.
(a) REPORTING. Within 30 days of the end of each Reporting Period, including
the last day of any Reporting Period following termination of this
Agreement, OEM shall provide QSS with a written report of the number of
copies of the Software Manufactured during such period and the
corresponding royalty payment due, as specified in Part A. Configuration
copies must be reported by Target System and, if applicable, by the
manufacturer. Sample royalty reports are available from QSS.
(b) PAYMENT. OEM shall remit royalty payments with corresponding royalty
reports. All other amounts specified herein will be paid either on the
indicated payment date or within 30 days of receipt of QSS' invoice,
whichever is earlier. All unpaid amounts will bear interest at a rate equal
to 15% per annum, or at the highest rate permitted by law, of the
outstanding payment from the date due until the date paid. All payments
made shall be in United States Dollars, without deduction of any kind,
except as otherwise required by applicable laws. Should any such deduction
be taken, OEM shall obtain and provide to QSS evidence issued by the
relevant authority acknowledging their receipt of the deducted amount.
(c) TAXES. All royalty fees specified under this Agreement are exclusive of
taxes. OEM shall be solely responsible for all sales or equivalent tax
consequences which may flow from any delivery of the Software by QSS to
OEM, or OEM's use thereof, and shall pay all taxes (including sales, use,
value-added and similar taxes) payable with respect to payments made by
OEM to QSS under this Agreement, except for taxes based solely upon QSS'
net income and legally required withholding taxes.
(d) AUDITS. OEM shall maintain for a period of 3 years accurate records that
- --------------------------------------------------------------------------------
QSS /s/ OEM /s/
__________________ ______________
(Initial) (Initial)
B-2
<PAGE> 5
are sufficient; (i) to determine the correct royalties to be paid to
QSS pursuant to this Agreement, and (ii) to identify OEM's customers
and their Target Systems (including associated EULAs - section B5(c)
and identification marks -- section B5(f)(ii)). Upon 15 days prior
notice, QSS may have an independent auditor of its choice audit royalty
records, trace Software copies and/or review OEM's compliance with this
Agreement during normal business hours. OEM shall also provide QSS with
reasonable assistance, at QSS' expense, to trace Software copies and to
audit Software-related records of Subcontractors, Distributors and
Sub-licensees. Audits shall not occur more than once each year unless
discrepancies are discovered indicating an underpayment of more than
10% of the proper amount owed. Payment errors shall be corrected
immediately by an adjustment payment, which shall include interest on
the overdue amount in accordance with section B6(b). OEM shall also
reimburse QSS for its out of pocket audit costs if the underpayment is
more than 10% of the proper amount owed.
B7 LIMITED WARRANTY.
(a) ACKNOWLEDGEMENT. QSS cannot warrant the Software will function in
accordance with the Documentation, or other published specifications,
in the case of every hardware platform, software environment and
Software configuration, OEM acknowledges that Software bugs are likely
to be identified when used in the Target System and that OEM must
satisfy itself that the Software is suitable for use in the Target
System. OEM shall conduct exhausting testing of the Target System prior
to its initial and any update release.
(b) LIMITED WARRANTY. QSS warrants to OEM for a period of 6 months
commencing upon the Effective Date, that the QNX Software as
originally shipped by QSS, is capable of performing the functions
described in the applicable Documentation when used on appropriate
hardware. QSS' sole obligation, and OEM's sole remedy, for any
breach of this warranty will be either: (i) to use any patch or
work-around that QSS makes available as an interim fix, and then
promptly upgrade the Software to the next Update that corrects the
problem or (ii) receive a refund any amount that OEM has paid to QSS
under this Agreement during the warranty period. OEM acknowledges that
work-arounds and/or patches made available by QSS may not have been
quality assurance tested. EXCEPT AS EXPRESSLY WARRANTED ABOVE, THE
SOFTWARE AND DOCUMENTATION ARE PROVIDED "AS IS" WITHOUT OTHER
REPRESENTATIONS, WARRANTIES OR CONDITIONS OF ANY KIND, INCLUDING
IMPLIED REPRESENTATIONS, WARRANTIES AND CONDITIONS OF MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT EXCEPT FOR THE
LIMITED REMEDIES PROVIDED ABOVE, OEM ASSUMES THE ENTIRE RISK AS TO THE
RESULTS AND PERFORMANCE OF THE SOFTWARE AND DOCUMENTATION. NOTHING
STATED IN THIS AGREEMENT WILL IMPLY THAT THE OPERATION OF ANY SOFTWARE
WILL BE UNINTERRUPTED OR ERROR FREE OR THAT ERRORS WILL BE CORRECTED.
OTHER WRITTEN OR ORAL STATEMENTS BY QSS, ITS REPRESENTATIVES, OR
OTHERS DO NOT CONSTITUTE WARRANTIES OF QSS.
(c) The limited warranties set forth in this Section B7 are made solely
and exclusively to OEM and OEM shall be solely responsible for any
warranty to, or claims by, its Distributors, or end users of the
Target System concerning performance of the Software. OEM SHALL NOT
HAVE THE RIGHT TO MAKE OR PASS ON, AND SHALL TAKE ALL MEASURES
NECESSARY TO ENSURE THAT NEITHER IT NOR ANY OF ITS AGENTS OR EMPLOYEES
SHALL MAKE OR PASS ON ANY WARRANTY OR REPRESENTATION ON BEHALF OF QSS
TO ANY DISTRIBUTOR, END USER CUSTOMER OR THIRD PARTY.
B8 QSS INDEMNITY.
(a) INDEMNITY. QSS shall defend OEM against any infringement claims, and
indemnify and hold OEM harmless from any infringement damages finally
awarded, in any third party action against OEM, or its Subcontractors,
Distributors, Sub-licensees or Target System end users, based on the
reproduction, use or distribution of QNX Software in accordance with
the terms of this Agreement, provided OEM gives QSS prompt notice of,
as well as all authority, information, and assistance (at QSS'
expense) necessary to defend, such claims. In this section B8
"Infringement" means: (i) infringement of copyright by the QNX
Software; (ii) misappropriation of trade secrets by QSS; or (iii)
infringement of any US, Canadian, Japanese or EEC country national
patent that had issued as of the Effective Date, where such patent
infringement can be attributed to the reproduction, use or
distribution of QNX Software alone or in conjunction with equipment
that is essential for use of the QNX Software, where such equipment
cannot be replaced with a generic functional equivalent to avoid the
infringement. "Infringement" shall not include any infringement or
misappropriation of any kind resulting from modifications of the
Software made by or for OEM.
(b) REMEDY. With respect to any finding of infringement, or any reasonable
belief of QSS that Infringement may occur, QSS shall, at its sole
expense and option: (i) procure for OEM the right to continue using
the QNX Software; (ii) replace the QNX Software with non-infringing
software of comparable function; (iii) modify the QNX software to be
non-infringing; or (iv) if none of the foregoing alternatives is
reasonably available to QSS, terminate OEM's rights to the QNX
Software, but only to the extent necessary to avoid the infringement.
OEM shall have the right to terminate all of its rights if OEM
determines such partial termination renders OEM's remaining rights
ineffective. Upon such full or partial termination QSS shall refund to
OEM pro-rata in the event of such termination, the royalties paid by
OEM that are associated with the terminated rights.
(c) This section B8 states OEM's exclusive remedy and QSS sole remedy for
infringement of intellectual property rights by the Software.
B9 LIMITED LIABILITY. IN NO EVENT WILL QSS (OR ITS OFFICERS, EMPLOYEES,
AGENTS, SUPPLIERS, DISTRIBUTORS, OR LICENSORS COLLECTIVELY, "ITS
REPRESENTATIVES") BE LIABLE TO OEM OR ANY THIRD PARTY FOR ANY INDIRECT,
INCIDENTAL, SPECIAL, OR CONSEQUENTIAL DAMAGES WHATSOEVER, INCLUDING BUT
NOT LIMITED TO LOST REVENUE, LOST OR DAMAGED DATA OR OTHER COMMERCIAL
OR ECONOMIC LOSS, ARISING OUT OF OR RELATING TO ANY BREACH OF THIS
AGREEMENT. ANY USE OR INABILITY TO USE THE SOFTWARE OR DOCUMENTATION,
OR ANY CLAIM MADE BY A THIRD PARTY, EVEN IF QSS OR ITS REPRESENTATIVES
HAVE BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE OR CLAIM. IN NO
EVENT WILL THE AGGREGATE LIABILITY OF QSS AND ITS REPRESENTATIVES FOR
ANY DAMAGES OR CLAIMS ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE
SOFTWARE OR THE DOCUMENTATION, WHETHER IN CONTRACT, TORT, OR OTHERWISE,
EXCEED THE TOTAL FEES OEM HAS PAID TO QSS UNDER THE AGREEMENT IN THE 12
MONTH PERIOD PRECEDING THE EVENT GIVING RISE TO THE CLAIM. QSS' AND
ITS REPRESENTATIVES' LIMITATION OF LIABILITY IS CUMULATIVE WITH ALL OF
QSS' AND ITS REPRESENTATIVES' PAYMENTS IN SATISFACTION OF THEIR
LIABILITIES BEING AGGREGATED TO DETERMINE SATISFACTION OF THE LIMIT.
THIS SECTION B9 SHALL SURVIVE AND APPLY NOTWITHSTANDING THE FAILURE OF
ESSENTIAL PURPOSE OF ANY LIMITED REMEDY. OEM AGREES THAT THESE
LIMITATIONS OF LIABILITY ARE AGREED ALLOCATIONS OF RISK AND ARE
REFLECTED IN THE FEES AGREED UPON BY THE PARTIES.
B10 TERM & TERMINATION.
(a) TERM. This agreement commences on the Effective Date and ends when
terminated in accordance with this section B10.
(b) TERMINATION BY OEM AFTER FIRST YEAR. Provided it is in full compliance
with the other terms of this Agreement. OEM may terminate this
Agreement at any time after the first anniversary of the Effective Date
upon 90 days' prior written notice.
(c) TERMINATION BY QSS. QSS may, terminate this agreement immediately by
written notice any time after OEM fails to provide royalty reports for
6 months.
(d) IMMEDIATE TERMINATION. QSS or OEM may, to the extent permitted by
applicable law, terminate this agreement immediately by written notice
if the other
(i) breaches a material term of this Agreement that: (1) is
incapable of cure, (2) could have been cured within 30 days of
written notice but was not, or (3) required more than 30 days
to cure but the defaulting party has either failed to commence
or diligently pursue the cure during such period.
(ii) files, or has filed against it: (1) a petition in bankruptcy,
reorganization, debit arrangement, or other proceeding under
any
- -------------------------------------------------------------------------------
QSS /S/ OEM /S/
------------------------------ ------------------------------
(Initial) (Initial)
- -------------------------------------------------------------------------------
<PAGE> 6
bankruptcy law; or (2) any dissolution or liquidation
proceeding; and any such proceeding under (1) or (2) is not
dismissed within 60 days from filing; or
(iii) becomes insolvent or ceases to carry on business on a
regular basis, and within 30 days thereafter the defaulting
party (or some financially and technically responsible
successor in interest acceptable to the aggrieved party who
assumes the defaulting party's obligations) fails to resume
doing business on a regular basis.
(e) Implication of Termination
(i) Surviving Licenses. If either party terminates this
Agreement for any reason all EULAs granted in accordance
with the terms of this Agreement shall continue. All license
rights of OEM and its Subcontractors, Distributors, and
Sub-licenses shall immediately cease upon termination.
(ii) Surviving Provisions. The provisions of the Agreement that
are expressed or by their sense and context are intended to
survive the termination of this Agreement shall so survive,
including section B5(e) B5(g), B5(i-j), B6-9 and this
section B10(e).
(iii) Other Rights. Termination is without prejudice to any right
or remedy which may have accrued or be accruing to either
party prior to termination. Termination shall not relieve
OEM from its obligation to pay QSS any and all fees or other
amounts due under this Agreement at any time or for any
period until the date of such termination.
B11 GENERAL
(a) ENTIRE AGREEMENT. Except as expressly provided, this Agreement,
comprising Part A and Part B (and Part C if applicable) constitutes
the entire agreement between the parties pertaining to its subject
matter and supercedes any prior or contemporaneous agreement,
representation, statement, negotiation or undertaking dealing with
the same subject matter. No amendment, modification or waiver of any
provision of this Agreement will be binding unless in a written
document that expressly refers to this Agreement and is signed by
both parties.
(b) ASSIGNMENT. Neither party may assign this Agreement, or assign any
rights or delegate any obligations under this Agreement, without the
prior written consent of the other party. An assignment shall be
deemed to include any merger of OEM with another party, whether or
not OEM is the surviving entity, the acquisition of more than 50% of
any class of OEM's voting stock by another party, or the sale of more
than 50% of OEM's assets, Any attempted assignment or delegation in
violation of the foregoing shall be void and of no effect. This
Agreement will inure to the benefit of and be binding upon the parties
and their respective successors and permitted assigns.
(c) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws in force in the Providence of Ontario,
Canada without regard to the conflicts of laws provisions thereof.
The parties expressly waive the provisions of the United Nations
Convention on Contracts for the International Sales of Goods.
(d) NOTICE. All notices must be in writing and delivered either in
person or by means evidenced by a delivery receipt to the person and
address specified at the end of Part A. Such notice will be effective
upon receipt.
(e) SEVERANCE. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability
without invalidating the remaining provisions hereof or affecting
the validity or enforceability of such provision in any other
jurisdiction.
(f) INDEPENDENT PARTIES. The parties hereto are independent
contractors. Neither party has any express or implied right or
authority to assume or create any obligations on behalf of the other
or to bind the other to any contract, agreement or undertaking with
any third party. Nothing in this Agreement shall be construed to
create a partnership joint venture, employment or agency relationship
between QSS and OEM.
(g) INTERPRETATION. The divisions and headings in this Agreement have
been included for convenience only and will not affect its
construction or interpretation. Words importing the singular will
include the plural and vice versa. Unless expressly stated otherwise:
(i) the words "hereof", "herein", "hereto", "hereunder", "therein",
"thereto", and similar expressions used in this Agreement mean and
refer to the whole of this Agreement and not to any particular part,
section, subsection or paragraph; (ii) "includes" means "includes
without limitation", "including" means "including without limitation",
"any" means "any and all" and "law" means "law, by-law, regulation,
order, decision and rule"; and (iii) any reference herein by numerical
or alphabetical designation to a part section, subsection or paragraph
bearing that designation to a part, section, subsection or paragraph
shall refer to the part, Section, subsection or paragraph bearing that
designation in this Agreement. The terms and conditions of this
Agreement shall prevail over any inconsistent or additional terms or
conditions of OEM's purchase orders or QSS' invoices.
(h) PROMOTION. Each party authorizes the other to indicate in its
advertising, marketing and other promotional materials and
undertakings that OEM uses the Software in the Target System. OEM
shall not represent the Software has performance, application or
reliability characteristics that do not appear in the Documentation
or in QSS marketing materials.
(OEM -- Part B.1 - 010c.wpd . Printed: March 22, 2000 (5:02PM)
<PAGE> 7
PART C2 - VOYAGER SUPPLEMENT
C2.1 DEFINITIONS. In this Part:
(a) "Run Time" means software programs in executable binary form; and
(b) "Voyager Software" means the Software module identified in s. A1
(Definitions) by a description which includes the trademarks "Voyager" or by
QSS part number(s) 007014, 007004, 004624, or 004684;
(c) "this Part" means this document entitled "Part C2 - Voyager
Supplement" and such parts of this Agreement as may be required to interpret
the provisions herein. In the event of a conflict between the terms of this
Part and other terms of this Agreement, the terms of this Part shall prevail.
C2.2 LICENSE. Subject to the terms and conditions of this Agreement, QSS
hereby grants OEM a non-exclusive, non-transferable, worldwide license to copy
and directly or indirectly distribute Run-Time copies of the Voyager Software
bundled with other elements of the Software and incorporated into Target
Systems for use solely in association with such Software and Target Systems
pursuant to the terms of an End User License Agreement.
C2.3 RESTRICTIONS. Except as expressly granted above, OEM obtains no
right, title or interest in or to the Voyager Software, including any copyright,
patent, trade-secret, trademark or other proprietary rights therein. OEM agrees
not to decompile, reverse engineer or otherwise inspect the functionality or
derive a source code version of the Voyager Software, or enhance, modify or
prepare derivative works of the Voyager Software except as expressly provided
in the Documentation. QSS and its licensors shall retain all their respective
rights, title and interest in the Voyager Software. Including any updates
thereof made available to OEM under this Agreement, and except for the rights
and licenses granted to OEM herein, OEM shall not take any action inconsistent
with such title and ownership. OEM shall not have any ownership interest in any
element, segment or component of the Voyager Software incorporated into the
Target System.
C2.4 END USER LICENSE AGREEMENTS. The Voyager Software shall be distributed to
each end users under an end user license agreement which may be a shrinkwrap or
break-the-seal agreement. In addition to meeting the requirements imposed by
section B5(c) (EULA), the end user license agreement shall include the material
substance of the following terms and conditions:
(a) The end-user shall be granted a license to use the Voyager
Software (in object code form only) only for their own internal business
purposes and only in association with the Software in the Target System;
(b) The end-user shall only be permitted to use as many instances of
the Voyager Software as the number for which they have paid the appropriate
license fees;
(c) The end-user shall not copy the Voyager Software in whole or in
part, except: (i) as permitted under applicable law, and (ii) as reasonably
required to install and use the Voyager Software in the Target System and to
follow normal back-up practices, but only with the inclusion of all copyright,
proprietary and other notices; and
(d) The end-user shall not decompile, disassemble or otherwise reverse
engineer the Voyager Software.
C2.5 MARKING. OEM shall not alter or delete any printed or on-screen
copyright, trade secret or proprietary and/or legal notices contained in or on
copies of the Voyager Software, and shall ensure that: (i) it reproduces the
copyright notices of the University of Illinois and Spyglass, Inc. on the
"splash screen" or in the same location where OEM reproduces its own copyright
notices; and (ii) it includes the following statements of identification and
attribution in the Voyager Software by (1) inclusion on a "splash screen";
and/or (2) inclusion in an "about box"; and (3) in the associated documentation:
NCSA Mosaic was developed by the National Center for
Supercomputing Applications at the University of Illinois at
Urbana-Champaign. This version is being distributed under a
license agreement with Spyglass, Inc. and QNX Software Systems
Ltd.
OEM agrees to provide an example of such "splash screens", "about boxes" and
other reproductions of all notices, copyrights, trademarks and logos prior to
distribution of the Voyager Software for approval by QSS and its licensors the
first time OEM reproduces such items and any time OEM substantially changes
such items. No right is being granted hereunder for OEM to use trademarks of
QSS, Spyglass, Inc. or their respective licensors.
C2.6 RESTRICTED RIGHTS. If the end user or any Subcontractor, Distributor or
Sub-licensee of any Target System is a department or agency of the United States
Government. OEM shall grant such agency only "restricted rights" or "limited
rights" (as defined in the applicable Federal Acquisition Regulations) to the
Voyager Software, and OEM shall take all actions reasonably necessary to
protect QSS' (and its licensors') rights and interest in the Voyager Software
in accordance with such regulations and successor regulations including, but
not limited to, the placement of appropriate legends in or on the Target System.
C2.7 DISCLAIMER OF WARRANTIES. THE VOYAGER SOFTWARE IS BEING PROVIDED "AS IS"
WITHOUT WARRANTIES OR CONDITIONS OF ANY KIND. QSS HEREBY DISCLAIMS ALL
WARRANTIES AND CONDITIONS OF ANY KIND, ORAL OR WRITTEN, WITH RESPECT TO THE
VOYAGER SOFTWARE INCLUDING, WITHOUT LIMITATION, ALL WARRANTIES AND CONDITIONS
OF MERCHANTABILITY, NON-INFRINGEMENT OR FITNESS FOR A PARTICULAR PURPOSE AND
THOSE ARISING BY STATUTE OR OTHERWISE IN LAW OR FROM A COURSE OF DEALING OR
USAGE OF TRADE.
C2.8 LIMITATIONS ON LIABILITY. QSS' LIABILITY FOR DAMAGES TO OEM FOR ANY CAUSE
WHATSOEVER RELATING TO THE VOYAGER SOFTWARE, REGARDLESS OF THE FORM OF ANY
CLAIM OR ACTION, SHALL NOT EXCEED THE AGGREGATE LICENSE FEES PAID BY OEM TO QSS
DURING THE PREVIOUS 12 MONTHS UNDER THE THIS AGREEMENT FOR THE VOYAGER
SOFTWARE. IN NO EVENT SHALL QSS BE LIABLE FOR ANY LOSS OF DATA, PROFITS OR USE
OF THE VOYAGER SOFTWARE, OR FOR ANY SPECIAL, INCIDENTAL, INDIRECT OR
CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN CONNECTION WITH THE USE OR
PERFORMANCE OF THE VOYAGER SOFTWARE. IN NO EVENT WILL QSS BE LIABLE TO END
USERS, RESELLERS OR OTHER THIRD PARTIES FOR ANY DAMAGES WHATSOEVER. OEM WILL
IMMEDIATELY INFORM QSS AS SOON AS OEM BECOMES AWARE OF ANY THREATENED OR ACTUAL
LIABILITY CLAIM BY A THIRD PARTY RELATING TO THE VOYAGER SOFTWARE.
C2.9 INTELLECTUAL PROPERTY. The provisions of section B8 (QSS Indemnity) shall
only apply to QSS-authored parts of or modifications to the Voyager Software.
C2.10 TERM. This Supplement will be effective as of the Effective Date and
will continue indefinitely thereafter until termination of this Agreement, or
termination of QSS' underlying license agreement with Spyglass, Inc. (the
"Spyglass Agreement"), whichever occurs first.
C2.11 CONSEQUENCE OF TERMINATION. Any termination of the Spyglass Agreement
shall not affect OEM's right to distribute existing inventory of Target Systems
for which OEM has paid QSS all applicable royalties. OEM agrees that after
termination of the Spyglass Agreement, OEM will owe to Spyglass, Inc. all
further obligations under this Agreement that pertain to the portions of the
Voyager Software authored by Spyglass, Inc. or its licensors.
OEM-PartC2(Voyager)-001d.wpd - Printed: March 22, 2000 (5:06 PM).
SPYGLASS MOSAIC is a trademark of Spyglass, Inc. QNX,
NEUTRINO and VOYAGER are trademarks of QNX Software
Systems Ltd.
- --------------------------------------------------------------------------------
SS /s/ OEM /s/
------------------------ -------------------------
(Initial) (Initial)
<PAGE> 8
AMENDMENT NO. 1
THIS AMENDMENT is made by and between.
QNX SOFTWARE SYSTEMS LTD. ("QSS"),
a Canadian federal corporation having offices at 175 Terence Matthews
Cres., KANATA, Ontario, Canada K2M 1W8 (Tel. (613) 591-0931, Fax
(613) 591-3579
AND: TECHNOCHANNEL TECHNOLOGIES SDN BHD, ("OEM")
a Malaysia corporation having offices at Block G, Unit G606,
Phileo Damansara 1, No 9, Jalan 16/11, Off Jalan Damansara,
46360 Dotaling Joyo, Moloycio (Tel. 603 4600383, Fax 603 4600373)
WHEREAS QSS and OEM mutually desire to amend the terms of an agreement they
executed contemporaneously herewith, known as the QNX(TM) OEM Litense
Agreement, No. OEM00-000126 (the "OEM Agreement");
NOW THEREFORE for good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties hereby agree as follows.
1. Section B2 of the OEM Agreement is amended by adding a new
sub-sections as follows:
(g) "BSD Software" means those portions of Software modules
are identified in Part A as BSD Software and which contains
code licensed to QSS by the Regents of the University of
California Beckley. BSD Software is Third Party Software.
2. Section B5(k) of the OEM Agreement is hereby amended by striking the
last two sentences thereof and replacing them with the following:
QSS' licensors as at the Effective Date of the Agreement are
(i) Bitstream Inc. and (ii) those parties identified in
section B12 and Part C. QSS will identify any further
licensors for future Updates within a reasonable period of
time after being requested to do so by OEM in writing.
3. Section B6(a) of the OEM Agreement is hereby struck.
4. Section B6(b) of the OEM Agreement is hereby amended by striking the
first three sentences and replacing them with the following:
"All amounts specified in this Agreement, other than those
under section A2 (which amounts will accompany an Order), will
be paid on the indicated payment date whether or not OEM has
received an invoice from QSS. All unpaid amounts will bear
interest at a rate equal to the lesser of 15% per annum or at
the highest rate permitted by law, of the outstanding payment
from the date due until the date paid.
5. Section B8(a) of the OEM Agreement is hereby amended by adding the
following phrase between the words "awarded" and "in":
, and any costs and expenses (including reasonable attorney's
fees) incurred,
- --------------------------------------------------------------------------------
<PAGE> 9
6. The OEM Agreement is amended by adding a new Section B12 of as
follows:
B12. BSD Software. OEM is licensing BSD Software and is subject to, and
shall ensure any distribution of the BSD Software complies with, the
following terms:
(a) The BSD Software is: (C) Copyright, 1979, 1980, 1983, 1986,
1988, 1989, 1991. The Regents of the University of California.
All rights reserved.
(b) Redistribution and use in source and binary forms, with or
without modification, are permitted provided that the
following conditions are met:
(i) Redistributions of source code must retain the above
copyright notice, this list of conditions and the
following disclaimer (in B12(c)).
(ii) Redistributions in binary form must reproduce the
above copyright notice, this list of conditions and
the following disclaimer in the documentation and/or
other materials provided with the distribution.
(iii) All advertising materials mentioning features or use
of this software must display the following
acknowledgement: This product includes software
developed by the University of California, Berkeley
and its contributors. ______________
(iv) Neither name of the University nor the names of its
contributors may be used to endorse or promote
products derived from this software without specific
prior written permission.
(c) THIS SOFTWARE IS PROVIDED BY THE REGENTS AND CONTRIBUTORS "AS
IS" AND ANY EXPRESS OR IMPLIED WARRANTIES, INCLUDING, BUT NOT
LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY AND
FITNESS FOR A PARTICULAR PURPOSE ARE DISCLAIMED. IN NO EVENT
SHALL THE REGENTS OR CONTRIBUTORS BE LIABLE FOR ANY DIRECT,
INDIRECT, INCIDENTAL, SPECIAL, EXEMPLARY, OR CONSEQUENTIAL
DAMAGES (INCLUDING, BUT NOT LIMITED TO, PROCUREMENT OF
SUBSTITUTE GOODS OR SERVICES; LOSS OF USE, DATA, OR PROFITS;
OR BUSINESS INTERRUPTION) HOWEVER CAUSED AND ON ANY THEORY OF
LIABILITY, WHETHER IN CONTRACT, STRICT LIABILITY, OR TORT
(INCLUDING NEGLIGENCE OR OTHERWISE) ARISING IN ANY WAY OUT OF
THE USE OF THIS SOFTWARE, EVEN IF ADVISED OF THE POSSIBILITY
OF SUCH DAMAGE.
A. The terms of this Amendment shall be incorporated into the OEM Agreement
by this reference and shall take effect immediately upon the Effective
Date thereof. All capitalized terms used but not defined in this
Amendment shall have the respective meanings ascribed to them in the OEM
Agreement. The terms of this Amendment shall supercede any inconsistent
terms contained in the OEM Agreement, including but not limited to any
earlier-executed amendments. Except as specifically modified herein the
OEM Agreement shall remain in full force and effect.
QNX Software Systems Ltd. TechnoChannel Technologies Sdn Bhd
/s/ Jason Chan Ling Khee
- --------------------------------- ----------------------------------
Signature Signature
Jason Chan Ling Khee
- --------------------------------- ----------------------------------
Name Name
Senior Tech Manager 29-3-2000
- --------------------------------- ----------------------------------
Title/Date Title/Date
- -------------------------------------------------------------------------------
<PAGE> 1
EXHIBIT 10.63
<PAGE> 2
SUBSCRIPTION AGREEMENT
SUBSCRIPTION AGREEMENT made as of this 23rd day of March, 2000 between
MyWebInc.com, a Nevada, United States corporation with its registered office at
595 Market Street, Suite 2500, San Francisco, CA 94105 U.S. (the "Company"), and
Asia Internet Assets Inc. (the "Subscriber") with its office at No. 5, Shenton
Way, #12-08, UIC Building, Singapore 068808.
WHEREAS, the Company desires to issue 250,000 shares of its common
stock, (the "Common Stock") at a price of $10 per Share on the terms and
conditions hereinafter set forth and Subscriber desires to acquire that number
of shares of Common Stock set forth on the signature page hereof (the "Shares");
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do hereby agree as
follows:
I. SUBSCRIPTION FOR SHARES AND REPRESENTATIONS AND WARRANTIES BY
SUBSCRIBER
Subscriber hereby represents and warrants to the Company as follows:
1.1 Subject to the terms and conditions hereinafter set forth,
Subscriber hereby subscribes for and agrees to purchase from the Company the
Shares at a price equal to $10 per Share and the Company agrees to sell the
Shares to Subscriber for paid purchases price subject to the Company's right to
sell to Subscriber such lesser number of Shares as it may, in its sole
discretion, deem necessary or desirable. The purchase price is payable, in U.S.
Dollars, by certified or bank check made payable to the Company, or by wire
transfer to the Company's account at such bank as shall be designated by the
Company, contemporaneously with the execution and delivery of this Subscription
Agreement. In exchange therefore, the Company will deliver certificate(s)
registered in the name of Subscriber representing the shares purchased and which
shall bear the customary restrictive legend on transferability pursuant to Rules
502 and 506 of Regulation D promulgated under the United States Securities Act
of 1933, as amended (the "Act"). $1,250,000 of the total purchase price shall be
paid to the designated bank account by March 31, 2000 and the remaining sum of
$1,250,000 shall be paid within 30 days after the date of the first payment.
1.2 Subscriber recognizes and acknowledges that the purchase
of the Shares involves a high degree of risk in that (i) an investment in the
Company is highly speculative and only investors who can afford the loss of
their entire investment should consider investing in the Company and the
Shares; (ii) he may not be able to liquidate his investment; and (iii) in the
event of a disposition, an investor could sustain the loss of his entire
investment.
1.3 Subscriber represents that he is an "accredited investor"
as such term is defined in Rule 501 of Regulation D promulgated under the Act,
as indicated by his responses
<PAGE> 3
below, and that he is able to bear the economic risk of an investment in
the Shares.
ACCREDITED INVESTOR QUESTIONNAIRE: Please check all of the following that apply
to you:
---- (1) Any natural person whose individual net worth, or
joint net worth with that person's spouse, at the time of his purchase exceeds
$1,000,000;
---- (2) Any natural person who had an individual income in
excess of $200,000 in each of the two most recent years or joint income with
that person's spouse in excess of $300,000 in each of those years and has a
reasonable expectation of reaching the same income level in the current year;
---- (3) Any director, executive officer, or general partner
of the issuer of the securities being offered or sold, or any director,
executive officer, or general partner of a general partner of that issuer;
---- (4) Any trust with total assets in excess of $5,000,000,
not formed for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person as described in Rule
5076(b)(2)(ii);
---- (5) Any private business development company as defined
in Section 202(a)(22) of the Investment Advisers Act of 1940;
---- (6) Any organization described in Section 501(c)(3) of
the Internal Revenue Code, corporation, Massachusetts or similar business
trust, or partnership, not formed for the specific purpose of acquiring the
securities offered, with total assets in excess of $3,000,000,
---- (7) Any bank as defined in Section 3(a)(2) of the Act or
any savings and loan association or other institution as defined in Section
3(a)(5)(A) of the Act whether acting in its individual or fiduciary capacity;
---- (8) Any insurance company as defined in Section 2(13) of
the Act;
---- (9) Any investment company registered under the
Investment Company Act of 1940 or a business development company as defined in
Section 2(a)(48) of that Act;
---- (10) Any Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d) of the Small
Business Investment Act of 1958;
---- (11) Any plan established and maintained by a state, its
political subdivisions, or any agency or instrumentality of a state or its
political subdivisions, for the benefit of its employees, if such plan has
total assets in excess of $5,000,000;
<PAGE> 4
---- (12) Any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment decision is
made by a plan fiduciary, as defined in Section 3(21) of such Act, which is
either a bank, savings and loan association, insurance company, or registered
investment adviser, if the employee benefit plan has total assets in excess of
$5,000,000, or if a self-directed plan, with investment decisions made solely
by person that are accredited investor; and
---- (13) Any entity in which all of the equity owners are
accredited investors.
1.4 Subscriber acknowledges that he has prior investment experience,
including investment in non-listed securities, or he has employed the services
of an investment advisor, attorney or accountant to read all of the documents
furnished or made available by the Company to him and to all other prospective
investors of shares of Common Stock being offered by the Company and to
evaluate the merits and risks of such an investment on his behalf, and that he
recognizes the highly speculative nature of this investment.
1.5 Subscriber acknowledges that he has been furnished by the Company
during the course of this transaction with all information regarding the
Company which he had requested or desired to know; that all documents which
could be reasonably provided have been made available for his inspection and
review; that he has been afforded the opportunity to ask questions of and
receive answers from duly authorized officers or other representatives of the
Company concerning the terms and conditions of the offering, and any additional
information which he had requested.
1.6 Subscriber acknowledges that this offering of Shares has not been
reviewed by the United States Securities and Exchange Commission ("SEC")
because of the Company's representations that this is intended to be a
nonpublic offering pursuant to Sections 4(2) or 3(b) of the Act. The Subscriber
represents that the Shares are being purchased for his own account, for
investment and not for distribution or resale to others. Subscriber
acknowledges that the Shares have not been registered under the Act, or any
state or foreign securities laws, and may not be offered, sold or transferred
by the Subscriber unless registered under the Act and applicable state and
foreign securities laws, or an exemption from registration is available in the
opinion of Company counsel.
1.7 Subscriber understands that the Company will review this
Subscription Agreement and that the Company reserves the unrestricted right to
reject or limit any subscription and to close the offer at any time.
1.8 Subscriber hereby represents that the address of Subscriber
furnished by him at the end of this Subscription Agreement is the undersigned's
principal residence if he is an individual or its principal business address if
it is a corporation or other entity.
1.9 Subscriber hereby represents that, except as set forth in any
written material furnished by the Company to subscriber in connection with his
proposed investment, no
<PAGE> 5
representations or warranties have been made to Subscriber by the Company or
any agent, employee or affiliate of the Company and in entering into this
transaction, Subscriber is not relying on any information, other than that
contained in any such written material and the results of independent
investigation by Subscriber.
II. REPRESENTATIONS BY THE COMPANY
The Company represents and warrants to Subscriber as follows:
(a) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Nevada and has the corporate
power to conduct the business which it conducts and proposes to conduct.
(b) The execution, delivery and performance of this
Subscription Agreement by the Company has been duly approved by the Board of
Directors of the Company and all other actions required to authorize and effect
the offer and sale of the Shares has been duly taken and approved.
(c) The Shares have been duly and validly authorized and when
issued and paid for in accordance with the terms hereof, will be duly and
validly issued, fully paid and non-assessable.
(d) The Company has obtained all licenses, permits and other
governmental authorizations necessary to the conduct of its business; such
licenses, permits and other governmental authorizations are in full force and
effect; and the Company is in all material respects complying therewith.
(e) The Company knows of no pending or threatened legal or
governmental proceedings to which the Company is a party which could materially
adversely affect the business, property, financial condition or operations of
the Company.
(f) The Company is not in violation of or default under, nor
will the execution and delivery of this Subscription Agreement or the issuance
of the Shares, result in a violation of, or constitute a default under, the
certificate of incorporation or by-laws, in the performance or observance of any
material obligations, agreement, covenant or condition contained in any bond,
debenture, note or other evidence of indebtedness or in any material contract,
indenture, mortgage, loan agreement, lease, joint venture or other agreement or
instrument to which the Company is a party or by which it or any of its
properties may be bound or in violation of any material order, rule,
regulation, writ, injunction, or decree of any government, governmental
instrumentality or court, domestic or foreign.
(h) No commission or finder's fee will be payable by the
Company in connection with the sale of the Shares.
III. MISCELLANEOUS
<PAGE> 6
3.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt requested, addressed to the Company, at its address set forth above,
and to Subscriber at his address indicated on the last page of this
Subscription Agreement. Notices shall be deemed to have been given on the date
of mailing, except notices of change of address, which shall be deemed to have
been given when received.
3.2 This Subscription Agreement shall not be changed, modified or
amended except by a writing signed by the parties to be charged, and this
Subscription Agreement may not be discharged except by performance in
accordance with its terms or by a writing signed by the party to be charged.
3.3 This Subscription Agreement shall be binding upon and inure to the
benefit of the parties hereto and to their respective heirs, legal
representatives, successors and assigns. This Subscription Agreement sets forth
the entire agreement and understanding between the parties as to the subject
matter thereof and merges and supersedes all prior discussions, agreements and
understandings of any and every nature among them.
3.4 Notwithstanding the place where this Subscription Agreement may be
executed by any of the parties hereto, the parties expressly agree that all the
terms and provisions hereof shall be construed in accordance with and governed
by the laws of the State of New York. The parties hereby agree that any dispute
which may arise between them arising out of or in connection with this
Subscription Agreement shall be adjudicated before a court located in New York
City and they hereby submit to the exclusive jurisdiction of the courts of the
State of New York located in New York, New York and of the federal courts in
the Southern District of New York with respect to any action or legal
proceeding commenced by any party, and irrevocably waive any objection they now
or hereafter may have respecting the venue of any such action or proceeding
brought in such a court or respecting the fact that such court is an
inconvenient forum, relating to or arising out of this Subscription Agreement
or any acts or omissions relating to the sale of the securities hereunder, and
consent to the service of process in any such action or legal proceeding by
means of registered or certified mail, return receipt requested, in case of the
address set forth below or such other address as the undersigned shall furnish
in writing to the other.
3.5 This Subscription Agreement may be executed in counterparts. Upon
the execution and delivery of this Subscription Agreement by Subscriber, this
Subscription Agreement shall become a binding obligation of Subscriber with
respect to the purchase of the Shares as herein provided; subject, however, to
the right hereby reserved to the Company to enter into the same agreements with
other subscribers and to add and/or to delete other persons as subscribers.
3.6 The holding of any provision of this Subscription Agreement to be
invalid or unenforceable by a court of competent jurisdiction shall not affect
any other provision of this Subscription Agreement, which shall remain in full
force and effect.
<PAGE> 7
3.7 It is agreed that a waiver by either party of a breach of any
provision of this Subscription Agreement shall not operate, or be construed, as
a waiver of any subsequent breach by that same party.
3.8 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and further action as
may be necessary or appropriate to carry out the purposes and intent of this
Subscription Agreement.
IN WITNESS WHEREOF, the parties have executed this Subscription
Agreement as of the day and year first written above.
ASIA INTERNET ASSETS INC. /s/ Philip Ng
Name of Subscriber --------------------------------
Signature of Subscriber(s)
Philip Ng (Director)
Business Address of Subscriber(s)
No. 5, Shenton Way,
#12-08, UIC Building,
Singapore 068808
Number of Shares Subscribed For: 250,000 shares
Subscription Accepted:
/s/ T.S. Wong
--------------------------------
By: T.S. Wong (Chairman)
MyWeb Inc.com
Date:
---------------------------
<PAGE> 1
EXHIBIT 10.64
<PAGE> 2
[SAMSUNG ASIA LOGO]
SAMSUNG ASIA PTE LTD
83 Clemenceau Avenue
BOS-05 UE Square, Singapore 239920
BiB Tel : (85) 8994-928
Fax : (85) 8839-338
E-mail : [email protected]
- -------------------------------------------------------------------------------
DATE: THURSDAY, MARCH 23, 2000 TIME : 6:15:44 PM
TO: MYWEB INC.COM FAX : 02-02-450-0272
T.S. WONG
C.C DANNY TOE FAX : 844-1900
FRM : HERBERT KIM / AI-LING NEO REF : 18:16:44
CC :
RE : SAMSUNG INVESTMENT IN MYWEB
Number of pages including cover sheet: [3]
- -------------------------------------------------------------------------------
Dear T.S./Danny,
We, Samsung Corporation would like to confirm our acceptance to subscribe to
100,000 of common stock, par value of USD0.10 of MyWeb Inc.Com, a Nevada
Corporation, at USD8/share for a total consideration of USD800,000.
We look forward to a rewarding long term relationship with MyWeb Inc.Com.
Thank You.
Yours truly,
/s/ Herbert Kim
- --------------------------
Herbert Kim
General Manager
<PAGE> 1
EXHIBIT 21
<PAGE> 2
Exhibit (21): Subsidiaries of MyWeb Inc.com
The details of our subsidiaries, none of which are listed on any stock exchange,
are set out below:
<TABLE>
<CAPTION>
NAME OF COMPANY DATE AND PLACE OF PRINCIPAL BUSINESS EQUITY HELD BY THE
INCORPORATION GROUP
- --------------------------------------- ---------------------- ------------------------------- ---------------------
<S> <C> <C> <C>
HELD BY MYWEB, INC.COM.
MyWeb America Inc. April 30, 1999 / Handling investor relations 100%
United States of
America
MyWeb Network Systems (Beijing) Co August 23, 1999 / Design, development, and 100%
Ltd PRC production of set-top box;
operates MyWeb Services in China
TecnoChannel Technologies Sdn Bhd April 5, 1997 / Development, production and 100%
Malaysia marketing of internet
related products and services
MyWeb Asia Pte Ltd April 30, 1999 / Trading of set-top boxes and 100%
Singapore other internet related products
Easy2Bid Pte Ltd (1) March 26, 1999/ Operates the online auction 95%
Singapore site www.easy2bid.com
HELD BY TECNOCHANNEL
Unioffice Sdn Bhd August 11, 1999 / Internet trading of 75%
Malaysia stationery and other related products
MyWeb E-Commerce Sdn Bhd January 30, 1999 / Trading of consumer goods 80%
Malaysia
</TABLE>
- -----------
Note:
(1) Acquired in first quarter of 2000
The details of our associated company, which is not listed on any stock
exchange, is summarized below:
<TABLE>
<CAPTION>
NAME OF COMPANY DATE AND PLACE OF PRINCIPAL BUSINESS EQUITY HELD BY THE
INCORPORATION GROUP
- --------------------------------------- ---------------------- ------------------------------- ---------------------
<S> <C> <C> <C>
HELD BY MYWEB, INC.COM.
MyWeb Americas, Inc. September 23, 1999 Develop and offer television 26%
/ United States of internet access in Central
America and South America; and
develop and offer
country-specific portals for
users accessing the internet
via television sets
</TABLE>
<PAGE> 1
Exhibit (23): Consent of Experts
[ARTHUR ANDERSEN LETTERHEAD]
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
To The Board Of Directors And Shareholders
Of MyWeb Inc.Com
As independent public accountants, we hereby consent to the incorporation by
reference of our report dated April 13, 2000 included in this Form 10-KSB, into
My Web Inc.com's previously filed Registration Statement File Nos.
333-76289 and 333-81823 on Form S-8.
ARTHUR ANDERSEN
Kuala Lumpur
April 13, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from consolidated
balance sheets of MyWebInc.com and its subsidiaries as of December 31, 1999,
1998 and 1997 and the related consolidated statements of operations, changes in
shareholders' equity and cash flows for the years ended December 31, 1999 and
1998 and the nine-month period ended December 31, 1997, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1998 DEC-31-1997
<PERIOD-END> DEC-31-1999 DEC-31-1998 DEC-31-1997
<CASH> 2,362 0 6
<SECURITIES> 0 0 0
<RECEIVABLES> 1,818 1,100 100
<ALLOWANCES> 0 0 0
<INVENTORY> 43 0 0
<CURRENT-ASSETS> 4,689 1,106 112
<PP&E> 418 75 55
<DEPRECIATION> (66) (21) (9)
<TOTAL-ASSETS> 5,041 1,160 158
<CURRENT-LIABILITIES> 3,454 800 385
<BONDS> 0 0 0
0 0 0
0 0 0
<COMMON> 111 85 85
<OTHER-SE> 1,469 275 (312)
<TOTAL-LIABILITY-AND-EQUITY> 5,041 1,160 158
<SALES> 3,512 1,311 102
<TOTAL-REVENUES> 3,512 1,311 102
<CGS> 3,530 109 0
<TOTAL-COSTS> 3,530 109 0
<OTHER-EXPENSES> 13,381 826 355
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 0 0 0
<INCOME-PRETAX> (13,395) 376 (253)
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> 0 0 0
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> (13,395) 376 (253)
<EPS-BASIC> (1.31) 0.04 (0.03)
<EPS-DILUTED> 0 0 0
</TABLE>
