U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE FISCAL YEAR ENDED MARCH 31, 1999
GLOBAL GAMES CORPORATION
(Name of Small Business Issuer in its Charter)
Nevada 13-3500-677
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 South Fourth Street, Suite 720M
Minneapolis, Minnesota 55415
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (612)672-0834
SECURITIES REGISTERED UNDER SECTION 12(B) OF THE EXCHANGE ACT:
None
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:
Title of each class to be so registered
Common Stock
Check whether the issuer (1) filed all reports 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 there is no 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
informationstatements incorporated by reference in Part III of this Form 10-KSB
or any amendments to this Form 10-KSB. [ ]
The issuer's revenues for the Fiscal Year ended March 31, 1999 were $0
The aggregate market value of the voting stock (which consists solely of shares
of Common Stock) held by non-affiliates of the issuer as of November 23,
1999computed by reference to the close price as at November 23, 1999 of
79,378,291 of the registrant's Common Stock as quoted on the OTC Bulletin Board
service on such date, was approximately $8,731,612 As at November 23, 1999,
there were 79,378,291 shares of the issuer's common stock outstanding.
<PAGE>
PART 1
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Statements contained in the annual report that are not historical facts are
forward-looking statements as that term is defined in the Private Securities
Litigation Reform Act of 1995. Such forward-looking statements are subject to
risks and uncertainties, which could cause actual results to differ materially
from estimated results. Such risks and uncertainties are detailed in filings
with the Securities and Exchange Commission, including without limitation in
Item 1. "BUSINESS" and Item 6 "MANAGEMENT'S DISCUSSION AND DESCRIPTION OR PLAN
OF OPERATION" below.
ITEM 1. DESCRIPTION OF BUSINESS
A. BUSINESS DEVELOPMENT.
Global Games Corporation (the "Company") was incorporated in the state of
Nevada on April 10, 1987 as Amber Venture Corp. On August 30, 1989, it changed
its name to Air Entertainment Corp. On March 18, 1992, the Company changed its
name to East Consult Corp. On January 30, 1995, the Company merged with
Consolidated Spectrum Acquisition Corp., a New York Corporation for the purpose
of engaging in the middle market of the gaming entertainment industry.
Consolidated Spectrum Acquisition Corp. (CSAC) was incorporated in November 1993
under the laws of the State of New York and began operations in June 1994 for
the purpose of engaging in the middle market of the gaming entertainment
industry. Consolidated was a company subject to the reporting requirements of
Section 12g of the Securities Act of 1934 and its securities were quoted on the
NASD OTC Bulletin Board. Under the plan of merger, East Consult Corp. was the
surviving corporation and the name of the corporation was changed to Global
Games Corporation. The original purpose of the Company was to develop and
license leading edge software technologies for the Internet gaming industry. In
June, 1998, the Company issued 20,000,000 shares to Tofflerone Corporation in
reliance upon the exemption contained in Regulation D, Rule 504, and 40,000,000
shares of restricted common stock to Tofflerone Corporation, in reliance upon
the exemption from registration contained within Section 4(2) of the Securities
Act of 1933, as amended, in consideration for the Company's agreement to acquire
all of the issued and outstanding shares of Wolf Key, Ltd. ("Wolf"), a Canadian
corporation. The Company has since brought suit against the sellers in the
transaction, claiming breach of contract, among other things, and has attempted
to effect rescission of the acquisition and a return of the shares. The
Company's efforts to regain the shares has been unsuccessful so far, but is
continuing.
B. BUSINESS OF ISSUER:
IN GENERAL
Global Games Corporation (the "Company" or "Global") designs and licenses
software to a variety of companies. It has been engaged in development and
licensing of software associated with Internet gaming. It currently has one
licensee, Euromontecarlo.com, in the British West Indies, which licensee has
limited operations due to a shortage of capital. The Company has not generated
any revenue from this license, and there can be no assurance that it will
generate future revenue from the license. The Company is developing certain
casino software games (such as blackjack, roulette and craps), a sports book,
and is completing development of an interactive Bingo game. The Company's
innovative gaming software has been designed to: (I) offer customers a
user-friendly interface, superior interactive experience and a wide selection of
gaming options; (ii) provide licensees with financially attractive returns, easy
site maintenance and limited administration; and (iii) protect customers and
licensees through its proprietary fully integrated technology. The Company is
currently seeking to restructure its balance sheet in a program oriented to
converting a majority of the notes payable and accounts payable to common stock.
It also is seeking additional capital to broaden its software base and increase
the number of licensees. At the time of the merger with Consolidated Spectrum
Acquisition Corp., the Company intended to be a gaming service provider. It has,
since then, chosen to limit its activities to software development in order to
stay within what the Company believes to be the likely boundaries of U.S. laws
in future years. The initial generation of software developed between 1996 and
1998 has been scrapped, as it proved ineffective. The Company has a policy not
to license its products to any U.S. company. New software has been designed in
1998 and 1999, and these efforts continue.
THE INDUSTRY
The development of telecommunications and the emergence of new technology have
created opportunities to develop new, efficient and secure ways to deliver
information and entertainment to customers. As one of the first companies to
employ these new technologies on the Internet, Global intends to capitalize on
its technological lead and expertise to become a world leader in online gaming
systems. Global's key strategic objectives are to: (I) maintain its role as a
leading provider of Internet gaming technologies; (ii) expand geographically
to other attractive markets; and (iii) selectively pursue opportunities in
other market segments using its Internet and marketing technologies.
Global intends to implement its business strategy by: (I) maintaining and
enhancing its technological lead; (ii) seeking key strategic alliances and;
(iii) developing Global into a recognized brand name. The following summarizes
Global's strategic focus and operating strategy:
PRODUCTS AND SERVICES
Global's products are currently under development. The completion of the
development of these products requires additional development costs and there
can be no assurance that the products will be fully developed. However, the
Company anticipates it will be able to raise the capital required to satisfy
these costs and to complete product development. The Company provides the
licensee with an installed fully integrated gaming system. Global receives a
percentage of the licensee's revenues in exchange for use of Global's gaming
software. In addition, the licensee must obtain a gaming license from the
jurisdiction where domiciled. The Company develops the new licensee's site to
reflect its intended market segment. This development can reflect a particular
motif (i.e. sports theme or French Riviera theme) or ethnic market (e.g., Japan,
Indonesia, or Latin America). The Company develops and provides its software
products, electronic funds transfer and online gaming management services to the
independent licensees. To its licensees, Global intends to provide:
* Assistance in procuring of initial Internet gaming license
* Concept development and design of virtual casino "theme" in
multiple languages
* All odds-making rules and calculations
* Complete graphical user interface with sophisticated visual and
sound effects to create a total gaming experience
* Retention and analysis of all gaming data, including win/loss,
game preferences and monitoring of player activities
* Continuing customization of website
* Monitoring of all funds flow
* Customization and system integration
* Provision of credit card processing and other banking services
* Discussion, liaison and co-operation with testing agencies,
regulatory boards, governing bodies and governments
* Market consulting
Global's software products are in three categories, each organized into
three basic sections. The first category includes sports book, which lists daily
spreads or odds on most major sports in the world. The second category is the
casino games. Global is developing blackjack, craps, roulette and a slot machine
game that are interactive, allow multiple players and a chat line capability.
The third category is bingo, the most popular game in the world. Global's new
game has been beta tested and is expected to be running by the end of the first
quarter of 2000. The game is unique in that it will accommodate hundreds of
simultaneous players. The Company chose to scrap its previous Bingo game because
of technical limitations and in order to accommodate a broader, simultaneous
usage allowing its clients to provide a "bigger" and more attractive game to
their markets. Each of the games includes the game itself, a customer I.D. and
accounting section as well as a "banking" capability, whereby credit card (with
follow up authorizations) and other forms of account payments are accommodated
efficiently. Competitive Advantages. The Company believes that its games have
certain characteristics making them advantageous in comparison with other games
being offered worldwide. The NT processing along with multiple player capability
give licensees the capability to capture more gaming revenue in the same period
of time. Current Market Emphasis. Throughout the period ending March 31, 1999,
the Company's emphasis has been the completion of the new generation of games in
order to broaden its market in the future. The Company is now engaged in
conversation with several potential licensees and continues efforts to complete
its casino game offerings and the bingo site.
DESCRIPTION OF CASINO GAMES IN DEVELOPMENT BY GLOBAL
Blackjack: The traditional game of 21, where the player tries to beat the
dealer's hand, without exceeding 21. Roulette: A wheel oriented game where the
player chooses a potential number or other parameter that could result from the
next spin. Craps: A dice game where the player bets with or against the "roller"
on the potential outcome of the next roll. Slots: The players spins the wheels
and hopes to achieve a winning combination of symbols. Bingo: The traditional
"blot out the pattern and win a prize" game.
SPORTS BOOK
The Company is offering sports wagering on North American Sports, European
Soccer, International Sports, such as rugby, horse racing, car racing, track &
field, boxing, tennis, golf, and cricket. The Sports Book is designed to achieve
profits based on what is called a vigorish. This is a percentage (usually
between 6 - 8%) that is added to the money line of the wager. For example, if a
player were to bet on a team that was a 6 point favorite, he would have to bet
$100 to win $90 based on a 10% vigorish. Hence, the sports book makes a profit
by making the net wager uneven.
LICENSEES AND END USERS
Global has focused its growth strategy on licensing its software and services in
order to become a leading technology provider to the online gaming industry.
LICENSEES The Company licenses its filly integrated systems to licensees engaged
in World Gaming. At present, the Company has only one licensee,
Euromontecarlo.com, in the British West Indies, which licensee has limited
operations due to a lack of capital. The Company has not generated any revenue
from this license, and there can be no assurance that it will generate future
revenue from the license. A one time license fee provides an installed fully
integrated operation. The licensee's site is generally operational within 90 -
120 days of signing a license agreement. Global receives a continuing percentage
of 10% of net gaming revenue derived from the software. The licensee must obtain
a gaming license from the jurisdiction where domiciled.
* The initial term of the licensing agreement is one year, renewable
indefinitely unless the licensee gives written notice of termination of
the agreement at least 45 days prior to the end of any one year period.
Global will also provide continuous support both from a software and
hardware perspective, 24 hours, 7 days a week.
* Should any licensee become delinquent in payment to Global, the Company
has full legal and technological ability to remotely "shut down" the
website(s).
It is anticipated that the majority of Global's future revenue and earnings
growth will come from its ongoing participation in the licensees' revenue
stream. Global receives a percentage of a licensee's gross revenue (wagers less
payout). For all customers, it converts available credit on credit cards to
gaming funds through its offshore EFS division. The Company's primary cost
against continuing license income is software development amortization and
direct site operating costs. Global intends to capitalize on its early market
entry to capture a significant share of the Internet Gaming market. The Company
believes it is well positioned to achieve this goal since it possesses the
competitive advantage of being one of the first companies to both operate and
license proprietary turnkey gaming systems. Global has achieved its
technological lead through the development of its proprietary software and
networked architecture. Furthermore, Global has made a strong commitment to
continue research and development activities to enhance its products and
software and to develop new applications for potential markets. Global will
continue to use such methods to protect its technology and mitigate competition
from current and future entrants.
SALES AND MARKETING STRATEGY
Sales. Currently, the President, Gary Borglund, conducts the majority of the
Company's sales activities. Given the nature of the business, different
licensees typically contact different licensors to get previews of the software
and enter discussions on pricing and contract terms. The Company currently has a
contract with Euromontecarlo.com, a West Indies corporation, to utilize the
Company's software. Terms include ten percent (10%) of net gaming revenue being
paid to Global for use of the software. To date, Global has been unable to
receive revenue due to the financial condition of the licensee, and has chosen
to not book revenue until the licensee is properly capitalized. Internet Sales.
Global maintains different web sites to demonstrate its games to potential
licensees. As new games are developed or new features added to current games,
these sites are altered to coincide. Trade Marketing. When Global has desired to
put out information to the market on products, it has only needed to notify a
couple of trade web sites and trade journals. These information exchange
vehicles are very prompt and thorough in reporting new technology and software
at virtually no cost to the Company. Trade Shows. The Company has attended trade
shows to review competition, but it has elected to date to not use this method
of marketing in order to maintain confidentiality and protect its development
plans and abilities. Global's sales and marketing are conducted through its
Minneapolis offices. The Company intends to assemble a full time staff of sales
and marketing professionals and field technicians. The Company will seek to hire
managers who are experienced people, who have many contacts with operators and
in-depth knowledge of the Internet and gaming industries. Global has fully
embraced the importance of marketing and maintaining a customer-driven
organization and has aggressively recruited and trained a full marketing
department to assist the Company in achieving its sales goals. Global's sales
professionals will work with a portfolio of 6-9 licensees to consult on design,
branding, marketing plans, strategy, implementation and evaluation. The Global
marketing team will be very active in developing programs that benefit licensees
including negotiation of discounted ad rates, market research, development of
vertical portals and ongoing web marketing training.
COMPETITION
The Internet gaming industry, although young, is growing rapidly. There are
estimated to be between 400 and 800 Internet gaming sites currently in operation
on the world wide web. 1999 is expected to see in excess of $1 billion wagered
on the Internet. Various market analysts predict volumes over $2 billion in two
years and continued double-digit annual growth for the next ten years. There are
fewer providers of software. The number of software providers is estimated by
the Company to be about 20. No assurance can be given that the Company will be
able to compete effectively in the gaming software market or that one ore more
competitors with financial resources superior to the Company may develop
products noticeably better than the Company's. There are currently several
competitors for the licensing of Internet Gaming Software, including
Microgaming, Atlantic International Entertainment, Ltd., Chartwell Technology,
Inc., Cryptologic, Inc., Boss Media AB and Starnet Communications Corp.
MEASURES FOR SECURITY
Global will use the most advanced technologies, such as site identification,
data encryption, and secure servers to provide users with the safest
environments to perform secure transactions, and data transmission, over the
Internet. Any transaction made with Global's licensees online is completely
secure and convenient. Data encryption hides sensitive information such as the
customer's name, address, and credit card number. Even if someone manages to
obtain a player's personal information from the transaction process, data
encryption will not allow them to either read or use it.
END-USER/PLAYER SCREENING
The Company has developed a secure network both to preserve the absolute
integrity of the millions of financial transactions executed over their network
as well as to screen out potential website customers who may be residents of the
jurisdictions blocked from using the systems. World Gaming is in the process of
implementing additional country and address screening. By matching the credit
card number with the customer's country, postal code, and address, Global is
able to successfully block customers from the jurisdictions blocked from using
the systems. Global also outlines on its web pages, and within the software
itself, for World gaming that it does not accept wagers from U.S. or Canadian
citizens, nor will it pay out funds to any address within North America. As an
additional security, the Company provides players with a Personal Identification
Number (PIN) which is required before any funds can be withdrawn.
RESEARCH AND PRODUCT DEVELOPMENT
Global is currently developing an interactive bingo system. Global's new game
has been beta tested and is expected to be running by the end of the first
quarter of 2000. The game is unique in that it will accommodate hundreds of
simultaneous players. The Company chose to scrap its previous Bingo game because
of technical limitations and in order to accommodate a broader, simultaneous
usage allowing its clients to provide a "bigger" and more attractive game to
their markets. The Company plans to develop games such as Pai Gow Poker, Sic Bo,
Pan Ni, Baccarat and Chemin de Fer in the future, to appeal to the International
Gaming Market.
NUMBER OF EMPLOYEES
As of November 23, 1999, the Company employs 2 full time employees and 8
independent contractors, who devote their part time efforts to the Company.
GOVERNMENT REGULATION
Regulatory Environment
---------------------
The Company and its licensees are subject to applicable laws in the
jurisdictions in which they operate. While some jurisdictions have introduced
regulations to attempt to restrict or prohibit Internet gaming, other
jurisdictions, such as several Caribbean countries and Australia, have taken the
position Internet gaming is legal and/or have adopted or are in the process of
reviewing legislation to regulate Internet gaming in such jurisdictions. As
companies and consumers involved in Internet gaming are located around the
globe, including the end-users of the Company's licensees, there is uncertainty
regarding exactly which government has jurisdiction or authority to regulate or
legislate with respect to various aspects of the industry. Furthermore, it may
be difficult to identify or differentiate gaming-related transactions from other
Internet activities and link those transmissions to specific users, in turn
making enforcement of legislation aimed at restricting Internet gaming
activities difficult. The uncertainty surrounding the regulation of Internet
gaming could have a material adverse effect on the Company's business, revenues,
operating results and financial condition. However, legislation designated to
restrict or prohibit Internet gaming may be adopted in the future in the United
States or other jurisdictions. After previous similar proposals failed to pass
in 1998, on March 23, 1999, Senator Jon Kyl of the United States Senate
introduced a revised proposal intended to prohibit and criminalize Internet
gambling. There can be no assurance whether any such bill will become law. As
well, existing legislation, including United States and federal statutes, could
be construed to prohibit or restrict gaming through the use of the Internet and
there is a risk governmental authorities may view the Company's licensees or the
Company as having violated such statutes. There is a risk that criminal and
civil proceedings could be initiated in such jurisdictions against the Company's
licensees or the Company and such proceedings could involve substantial
litigation expense, penalties, fines, diversion of the attention of key
executives, injunctions or other prohibitions being invoked against the
Company's licensees or the Company. Such proceedings could have a material
adverse effect on the Company's business, revenues, operating results and
financial condition. The Company intends to minimize the effect of the potential
risks of government restrictions on gaming by continuing with its policy not to
offer its gaming software to licensees within the United States. In addition, as
electronic commerce further develops, it may generally be the subject of
government regulation. As well, current laws which pre-date or are incompatible
with Internet electronic commerce may be enforced in a manner that restricts the
electronic commerce market. Any such developments could have a material adverse
effect on the Company's business, revenues, operating results and financial
condition.
RESEARCH AND DEVELOPMENT
Research and Development expenses reported for the fiscal year ended March
31, 1998 was $71,000. Research and Development expenses reported for the fiscal
year ended 1999 was $25,298. The Company estimates research and development
costs for the upcoming fiscal year will not exceed $50,000. ITEM 2. DESCRIPTION
OF PROPERTY The Company operates from its office facilities at 400 South Fourth
Street, Suite 720M, Minneapolis, Minnesota, from Red Oak Management, a company
in which its President, Gary Borglund, has an interest. This facility houses all
of Global's operations including production, technical, marketing, and
administration. The annual cost of the space at this location is $8,100. The
lease is a month to month lease, as a result of a one year lease which expired
in March, 1999. The Company owns the web sites, www.globalgames.com and
www.americandsl.com.
ITEM 3. LEGAL PROCEEDINGS
From time to time the Company may be involved in litigation in the ordinary
course of business. In the opinion of Management, there are no actions, suits,
proceedings or governmental investigations pending, or to their knowledge,
threatened against Global or any of its subsidiaries which, either singly, or in
the aggregate, will have a material effect on the Company. The Company is
currently the defendant in an action brought by David Stuffacher in the State of
Wisconsin Circuit Court for Dane County, Case No. 98-CV-1677. In this action,
the plaintiff alleges that Gary Jamieson borrowed funds from the plaintiff, and
secured such borrowing with a pledge of stock of the Company. Plaintiff alleges
that the Company interfered with his efforts to exercise his rights in such
collateral stock. It is the Company's position that the stock that was pledged
was not validly issued. The Company intends to contest the case vigorously. It
is the evaluation of the Company's attorneys that there is not a substantial
likelihood of an unfavorable outcome. However, there can be no assurance that
there will not be an unfavorable outcome, and counsel for the Company is unable
to estimate the likely range of the potential loss. The Company is the subject
of a consent cease and desist order, issued by the State of Minnesota,
Commissioner of Commerce, in response to formal action instituted against the
Company by the State of Minnesota, which alleged that the Company, through its
former offices, had sold shares of its common stock to investors in the state of
Minnesota without registration as required by Minn Stat Section 80A.08, and
without an applicable exemption from registration. The Consent Order, agreed to
by the Company and its officers, provides that the Company shall cease and
desist from offering or selling its securities in the state of Minnesota unless
it complies with Minn. Statute chapter 80A (1998), with the exception that it
was allowed to issue shares of stock to its existing creditors in an attempt to
retire corporate debt. The consent order was issued in March, 1999. The Company
is a defendant in a lawsuit in Nevada, entitled Joseph Gould v. Global Games,
Clark County District Court, Case No. A 362348, which relates to a disputed
merger transaction and which names former officers of the Company as
co-defendants. Management is of the opinion that the action is without merit,
and is vigorously defending the Company. There is no other litigation to which
the Company is subject.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
There were no matters submitted to a vote of security holders through the
solicitation of proxies or otherwise during the fourth quarter of the fiscal
year covered by this report.
PART II
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ITEM 5. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.
MARKET INFORMATION
The Company's common stock is reported by the NASD Over-The-Counter
Bulletin Board under the symbol "GLOW." The Company recently had an "E" added to
its symbol by the National Association of Securities Dealers ("NASD,")
indicating that it has been placed on the eligibility list of the NASD Bulletin
Board for delisting effective December 1, 1999. There can be no assurance that
the Company's securities will remain listed on the NASD OTC Bulletin Board, and
they will not remain so listed unless and until the NASD finds that the Company
is current in its reporting obligations. The current market price of the
Company's common stock is $.11 per share. From June 30, 1997 through March 31,
1999, the highest and lowest sale prices were $.063 per share and $.4063 per
share, respectively. The Company considers its Common stock to be thinly traded
and that any reported bid or sale prices may not be a true market-based
valuation of the Common Stock. As of December 31, 1998, there were 84 record
holders of the Company's Common Stock. As of September 30, 1999, there were 70
shareholders of record of the Company's common stock. The Company has not paid
any cash dividends since its inception and does not contemplate paying dividends
in the foreseeable future. It is anticipated that earnings, if any, will be
retained for the operation of the Company's business. The company has not agreed
to register any restricted securities for selling security holders.
The following table sets forth the range of high and low bid information
for each full quarterly period of the last fiscal year: Quarter ended Average
High Bid Average Low Bid
June 30, 1997 .............................. .188 .141
September 30, 1997 ......................... .094 .078
December 31, 1997 .......................... .078 .063
March 31, 1998 ............................. .078 .063
June 30, 1998 .............................. .25 .219
September 30, 1998 ......................... .10 .09
December 31, 1998 .......................... .20 .18
March 31, 1999 ............................. .4063 .1563
June 30, 1999 .............................. .156 .141
September 30, 1999 ......................... .10 .08
PENNY STOCK STATUS
The Company's common stock is a "penny stock," as the term is defined by
Rule 3a51-1 of the Securities Exchange Act of 1934. This makes it subject to
reporting, disclosure and other rules imposed on broker-dealers by the
Securities and Exchange Commission requiring brokers and dealers to do the
following in connection with transactions in penny stocks:
1. Prior to the transaction, to approve the person's account for
transactions in penny stocks by obtaining information from the person regarding
his or her financial situation, investment experience and objectives, to
reasonably determine based on that information that transactions in penny stocks
are suitable for the person, and that the person has sufficient knowledge and
experience in financial matters that the person or his or her independent
advisor reasonably may be expected to be capable of evaluating the risks of
transactions in penny stocks. In addition, the broker or dealer must deliver to
the person a written statement setting forth the basis for the determination and
advising in highlighted format that it is unlawful for the broker or dealer to
effect a transaction in a penny stock unless the broker or dealer has received,
prior to the transaction, a written agreement from the person. Further, the
broker or dealer must receive a manually signed and dated written agreement from
the person in order to effectuate any transactions is a penny stock.
2. Prior to the transaction, the broker or dealer must disclose to the
customer the inside bid quotation for the penny stock and, if there is no inside
bid quotation or inside offer quotation, he or she must disclose the offer price
for the security transacted for a customer on a principal basis unless exempt
from doing so under the rules.
3. Prior to the transaction, the broker or dealer must disclose the
aggregate amount of compensation received or to be received by the broker or
dealer in connection with the transaction, and the aggregate amount of cash
compensation received or to be received by any associated person of the broker
dealer, other than a person whose function in solely clerical or ministerial.
4. The broker or dealer who has effected sales of penny stock to a
customer, unless exempted by the rules, is required to send to the customer a
written statement containing the identity and number of shares or units of each
such security and the estimated market value of the security. The imposition of
these reporting and disclosure requirements on a broker or dealer make it
unlawful for the broker or dealer to effect transactions in penny stocks on
behalf of customers. Brokers or dealers may be discouraged from dealing in penny
stocks, due to the additional time, responsibility involved, and, as a result,
this may have a deleterious effect on the market for the company's stock.
(1) The above quotations reflect inter-dealer prices, without retail mark
up, mark down or commission and may not represent actual transactions.
(2) Source of information: Stockmaster Stock Quotation Service
(Stockmaster.com) and Freerealtime.com, NASD Bulletin Board.
SECURITY HOLDERS
The approximate number of record holders of shares of the common stock of
the Company outstanding as of November 23, 1999 was 79,378,291.
DIVIDENDS
No dividends have been declared or paid on the Company's common stock.
ITEM 6. MANAGEMENT DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
PLAN OF OPERATIONS
The Company is engaged in the business of development and licensing of software
associated with Internet gaming. It has one licensee, Euromontecarlo.com, in the
British West Indies, although that licensee has limited operations because of a
shortage of capital. The Company has not generated any revenue from this
license, and there can be no assurance that it will generate future revenue from
the license. The Company is developing certain casino software games (such as
blackjack, roulette and craps), a sports book, and is completing development of
an interactive Bingo game. The Company's innovative gaming software has been
designed to:
(I) offer customers a user-friendly interface, superior interactive
experience and a wide selection of gaming options;
(ii) provide licensees with financially attractive returns, easy site
maintenance and limited administration; and
(iii)protect customers and licensees through its proprietary fully
integrated technology.
The Company has financed its operations to date through the sale of its
securities. The Company's plan of operations over the next 12 months includes
the further development and marketing of its computer gaming software to
licensees. This will require the raising of additional capital, and there can be
no assurance that the Company will be able to raise the capital required to
accomplish these goals. During the next twelve months, the Company plans to
satisfy its cash requirements by additional equity financing. There can be no
assurance that the company will be successful in raising additional equity
financing unless its securities can remain quoted on the NASD OTC Bulletin
Board, and, even if the Company is able to maintain the quotation of its
securities on the NASD Bulletin Board, there still can be no assurance that the
Company can raise the capital it requires to operate. If the company is not able
to raise equity capital, it will not be able to satisfy its cash requirements
for the next twelve months, and will only be able to satisfy its cash
requirements for the next 60 days. The company will not be able to operate if it
does not obtain equity financing. The Company intends to undertake a subsequent
private placement of its common stock in order to raise future development and
operating capital. The Company depends upon capital to be derived from future
financing activities such as subsequent offerings of its stock. Due to the
recent drop in market value of the Company's common stock, which the Company
attributes to being placed on the NASD's eligibility list for delisting, there
can be no assurance that the Company will be successful in raising the capital
it requires unless and until the Company's position with regard to the quotation
of its securities has been resolved. The company anticipates that research and
development costs over the next twelve months will not exceed $50,000. The
company does not expect the purchase or sale of plant or any significant
equipment, and it does not anticipate any change in the number of its employees.
The Company has no current material commitments. The Company has just recently
commenced operations, has no significant revenue, and is dependent upon the
raising of capital through placement of its common stock. There can be no
assurance that the Company will be successful in raising the capital it requires
through the sale of its common stock.
PATENTS
The Company holds no patents for its service-related software. However, the
Company's software is proprietary and is protected by United States copyright
law. The Company owns the web sites, www.globalgames.com and www.americandsl.
com.
FORWARD LOOKING STATEMENTS
This registration statement contains forward-looking statements. The Company's
expectation of results and other forward-looking statements contained in this
registration statement involve a number of risks and uncertainties. Among the
factors that could cause actual results to differ materially from those expected
are the following: business conditions and general economic conditions;
competitive factors, such as pricing and marketing efforts; and the pace and
success of product research and development. These and other factors may cause
expectations to differ.
YEAR 2000 COMPLIANCE
Currently, many computer systems, hardware and software products are coded to
accept only two digit entries in the date code field and, consequently, cannot
distinguish 21st century dates from 20th century dates. The interactions between
various software and hardware platforms often rely upon the date coding system.
As a result, many companies' software and computer systems may need to be
upgraded or replaced in order to function properly after the turn of the
century. The Company, its customers, and suppliers are reliant on computers and
related automated systems for daily business operations. Failure to achieve at
least a minimum level of Year 2000 systems compliance by both the company and
its suppliers would have a material adverse effect on the Company. With respect
to Year 2000 compliance, the Company has performed an audit of all of its
computer hardware, internal accounting and software applications; in short, all
of its information technology and non information technology systems, and found
all to be Year 2000 compliant. As of this date, the Company has been given
assurances from its banking institution and transfer agent that they are working
toward compliance or are in compliance. The Company has completed an audit of
its suppliers to identify relevant Year 2000 issues, and has found them all to
be Year 2000 compliant. The status of the company's progress is that it has
completed all that it must do in order to be considered Year 2000 compliant. The
Company has completed the process of identifying computer systems that could be
affected by the Year 2000 issue as it relates to the Company's internal hardware
and software, as well as third parties that provide the Company with goods or
services. Three categories or general areas have been identified for review and
analysis:
1. Systems providing customers services. These include hardware and software
systems that are used to provide services to the Company's customers in
the form of Internet connectivity, e-mail servers, authentication
servers, gaming servers, database servers, etc. Hardware in the form of
routers and switches are also included in this area.
2. Third party vendors providing critical services including circuits,
hardware, long distance Internet connectivity and related products. These
include telephone providers, suppliers of routers, modems, switches, odds
feeds, etc.
3. Critical internal systems that support the Company's administrative
systems for billing and collecting, general accounting systems, computer
networks, and communication systems.
The Company has completed its Year 2000 compliance review and testing. With
regards to Item (1) listed above, systems providing customers services, the
Company's critical existing systems are no more than two and one-half years old
and none of these systems have Year 2000 problems. These systems have been
inventoried and a systems test has been completed. Many of the critical systems
have been migrated to new hardware and software platforms to increase
reliability and capacities. All newly acquired hardware systems, operating
systems, and software are required to have vendor certification for Year 2000
compliance.
With regard to Item (2) above - third party products and services - the
Company's significant vendors are large public companies such as Sun
Microsystems, Microsoft, Oracle, Silicon Graphics Cisco, Lucent Technologies,
etc. These companies are all under SEC mandates to report their compliance in
all publicly filed documents. The Company has initiated a compliance review
program with these vendors during the first full quarter of 1999 and will
continue to track progress of all critical vendors for compliance.
Item (3) above, critical internal systems, relates to internal systems for
company administrative and communications requirements. The Company has tested
the existing systems for Year 2000 compliance. It has been determined that the
existing billing and billing presentment systems are Year 2000 compliant.
The costs to address the Year 2000 compliance issues have not been determined at
this time. Based on growth the Company plans to implement new hardware platforms
and software systems that should be Year 2000 compliant and therefore costs
specifically allocated to Year 2000 compliance may not be significant, and have
not been significant to date.
The nature of the Company's business makes it dependent on computer hardware,
software, and operating systems that are susceptible to Year 2000 issues.
Failure to attain at least minimum levels of Year 2000 compliance would have a
material adverse effect on the Company's ability to deliver services.
The Company has not developed a contingency plan for dealing with Year 2000
risks at this time.
<PAGE>
ITEM 7. FINANCIAL STATEMENTS
GLOBAL GAMES CORPORATION
INDEX TO FINANCIAL STATEMENTS
Independent Auditors' Report..............................................F-2
Balance Sheet.............................................................F-3
Statements of Operations..................................................F-4
Statement of Stockholders' Deficit........................................F-5
Statements of Cash Flows..................................................F-6
Notes to Financial Statements......................................F-7 - F-11
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders of
Global Games Corporation
Minneapolis, Minnesota
We have audited the accompanying balance sheet of Global Games
Corporation as of March 31, 1999 and the related statements of operations,
changes in stockholders' deficit and cash flows for the years ended March 31,
1999 and 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We conducted our audit in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit also includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides 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 Global Games
Corporation as of March 31, 1999 and the results of its operations and cash
flows for the years ended March 31, 1999 and 1998 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. As discussed in Note
2 to the financial statements, the Company incurred significant losses of
$645,000 and $1,650,000 in 1999 and 1998, respectively. Additionally, the
Company had working capital and total capital deficiencies in excess of
$3,600,000 each at March 31, 1999. These conditions raise substantial doubt
about the Company's ability to continue as a going concern. Management's plans
with respect to these matters are also described in Note 2 to the financial
statements. The accompanying financial statements do not include any adjustments
that might result should the Company be unable to continue as a going concern.
/s/ Feldman Sherb Horowitz & Co. P.C.
Certified Public Accountants
November 15, 1999
New York, New York
F-2
<PAGE>
GLOBAL GAMES CORPORATION
BALANCE SHEET
MARCH 31, 1999
ASSETS
CURRENT ASSETS - CASH ........................................... $ 889
===========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Notes payable .............................................. $ 2,416,435
Accounts payable ........................................... 746,087
Accrued expenses ........................................... 339,827
Note payable - officer ..................................... 124,399
-----------
TOTAL CURRENT LIABILITIES ....................................... 3,626,748
-----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' DEFICIT:
Common stock, $.01 par value, 100,000,000 shares
authorized; 65,064,063 shares issued and outstanding ..... 650,640
Additional paid-in capital ................................. 5,224,084
Accumulated deficit ........................................ (9,452,531)
Subscriptions receivable (4,800,000 shares) ................ (48,052)
-----------
TOTAL STOCKHOLDERS' DEFICIT ..................................... (3,625,859)
-----------
$ 889
===========
See notes to financial statements.
F-3
<PAGE>
GLOBAL GAMES CORPORATION
STATEMENTS OF OPERATIONS
Year Ended March 31,
----------------------------
1999 1998
----------------------------
REVENUES ................................. $ -- $ --
------------ ------------
COSTS AND EXPENSES:
General and administrative ............ 291,017 1,102,430
Interest .............................. 282,645 322,147
Software development costs ............ 71,000 25,298
Loss on acquisition ................... -- 200,000
------------ ------------
TOTAL COSTS AND EXPENSES .. (644,662) (1,649,875)
------------ ------------
NET LOSS ................................. $ (644,662) $ (1,649,875)
============ ============
BASIC AND DILUTED LOSS PER COMMON SHARE .. $ (0.01) $ (0.03)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 61,061,500 49,663,300
============ ============
See notes to financial statements.
F-4
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GAMES CORPORATION
STATEMENT OF STOCKHOLDERS' DEFICIT
Common Stock Additional Tota
------------------------- Paid-in Accumulated Subscriptions Stockholders'
Shares Amount Capital Deficit Receivable Deficit
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance, March 31, 1997 ....... 37,308,813 $ 373,088 $ 4,954,084 $(7,157,994) $ -- $(1,830,822)
Issuance of shares:
Acquisition .............. 20,000,000 200,000 -- -- -- 200,000
Services ................. 2,700,000 27,000 270,000 -- -- 297,000
Exercise of warrants ..... 250,000 2,500 -- -- -- 2,500
Net loss ...................... -- -- -- (1,649,875) -- (1,649,875)
----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 1998 ....... 60,258,813 602,588 5,224,084 (8,807,869) -- (2,981,197)
Shares issued for subscriptions 4,805,250 48,052 -- -- (48,052) --
Net loss ...................... -- -- -- (644,662) -- (644,662)
----------- ----------- ----------- ----------- ----------- -----------
Balance, March 31, 1999 ....... 65,064,063 $ 650,640 $ 5,224,084 $(9,452,531) $ (48,052) $(3,625,859)
=========== =========== =========== =========== =========== ===========
</TABLE>
See notes to financial statements.
F-5
<PAGE>
<TABLE>
<CAPTION>
GLOBAL GAMES CORPORATION
STATEMENTS OF CASH FLOWS
For the Years Ended March 31,
----------- -----------
1999 1998
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net loss ...................................................... $ (644,662) $(1,649,875)
----------- -----------
Adjustments to reconcile net loss to net cash
used in operations:
Common stock issued for services ........................... -- 297,000
Loss on acquisition ........................................ -- 200,000
Changes in assets and liabilities:
Decrease in notes receivable .............................. -- 230,137
Decrease in other assets .................................. -- 30,392
Increase in accounts payable .............................. 115,794 100,704
Increase in accrued expenses .............................. 282,653 22,603
----------- -----------
Total adjustments .................................................. 398,447 880,836
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES .............................. (246,215) (769,039)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in notes payable ..................................... 122,112 769,632
Increase in notes payable - officer ........................... 124,399 --
----------- -----------
NET CASH FLOWS PROVIDED BY FINANCING ACTIVITIES .................... 246,511 769,632
----------- -----------
NET INCREASE IN CASH ............................................... 296 593
CASH - beginning of year ........................................... 593 --
----------- -----------
CASH - end of year ................................................. $ 889 $ 593
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash payments made:
Income taxes ....................................................... $ -- $ --
=========== ===========
Interest ........................................................... $ -- $ --
=========== ===========
Noncash financing activities
Common stock issued for:
Subscriptions ............................................... $ 48,052 $ --
=========== ===========
Services .................................................... $ -- $ 297,000
=========== ===========
</TABLE>
See notes to financial statements.
F-6
<PAGE>
GLOBAL GAMES CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED MARCH 31, 1999 AND 1998
1. THE COMPANY
Global Games Corporation (the "Company"), formerly known as
East Consult Corp., a Nevada corporation, merged with Consolidated
Spectrum Acquisition Corp. for the purpose of engaging in the middle
market of the gaming entertainment industry. The Company is currently
redirecting its efforts towards the development of software for the
gaming industry and its commercialization over the Internet.
2. GOING CONCERN
The accompanying financial statements have been prepared
assuming that the Company will continue as a going concern. The Company
incurred significant losses of $645,000 and $1,650,000 in 1999 and
1998, respectively. Additionally, the Company had working capital and
total capital deficiencies of $3,600,000 each at March 31, 1999. These
conditions raise substantial doubt about the Company's ability to
continue as a going concern. Management's plans with respect to these
matters include restructuring its existing debt, raising additional
capital through future issuances of stock and debentures and ultimately
developing a viable business. The accompanying financial statements do
not include any adjustments that might be necessary should the Company
be unable to continue as a going concern.
3. SIGNIFICANT ACCOUNTING POLICIES
A. USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles
requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and
disclosure of contingent assets and liabilities at the date of
the financial statements.
Actual results could differ from these estimates.
B. NET INCOME (LOSS) PER SHARE - Basic earnings (loss) per share
was computed using the weighted average number of shares of
outstanding common stock. Diluted per share amounts when
applicable also include the effect of dilutive common stock
equivalents from the assumed exercise of warrants.
C. SOFTWARE DEVELOPMENT COSTS - Software development costs are
charged to operations when incurred.
F-7
<PAGE>
D. INCOME TAXES - Income taxes are accounted for under Statement
of Financial Accounting Standards No. 109, "Accounting for
Income Taxes", which is an asset and liability approach that
requires the recognition of deferred tax assets and
liabilities for the expected future tax consequences of events
that have been recognized in the Company's financial
statements or tax returns.
E. FAIR VALUE OF FINANCIAL INSTRUMENTS - The carrying amounts of
the assets and liabilities reported in the balance sheet
approximate their fair market value based on the short-term
maturity of these instruments.
F. STOCK BASED COMPENSATION - The Company accounts for stock
transactions in accordance with APB No. 25, "Accounting for
Stock Issued to Employees." In accordance with Statement of
Financial Accounting Standards No. 123 ("SFAS 123"),
"Accounting for Stock-Based Compensation," the Company adopted
the pro forma disclosure requirements of SFAS 123.
4. ACCRUED EXPENSES
At March 31, 1999, accrued expenses consisted of the
following:
Interest $282,645
Payroll taxes 48,882
CONSULTING FEES 8,300
---------
$339,827
5. NOTE PAYABLE - OFFICER
The note is payable to Gary Borglund, President of the Company
for various loans and advances made to the Company during the year.
Such amount is unsecured, due on demand and payable with interest at
ten percent per annum.
6. NOTES PAYABLE
The notes are payable on demand to unsecured lenders, with
interest, at twelve percent per annum.
As of November 15, 1999, substantially all the note holders
had agreed to accept common stock and warrants in payment of a balance
owed at March 31, 1999 of $2,493,000 of outstanding principal and
interest. The Company has placed 14,314,228 common shares and 3,391,057
warrants in escrow pending completion of the conversion of debt.
F-9
<PAGE>
The warrant holders are entitled to purchase shares at $0.25
per share for a period of three years commencing with the closing of
the transaction. The completion of the transaction is subject to the
approval of the Securities Division of the Minnesota Attorney General's
office.
7. COMMON STOCK WARRANTS
At March 31, 1999, the Company had reserved 350,000 common
shares for issuance upon exercise of a like number of outstanding
common stock warrants. The warrants are exercisable at $0.01 per share
through January, 2000.
8. INCOME TAXES
The following is a reconciliation of income taxes and amounts
computed using the U.S. Federal statutory rate and the effective tax
rate for the years ended March 31, 1999 and 1998:
<TABLE>
<CAPTION>
1999 1998
---------------- ---------
<S> <C> <C>
CONSOLIDATED PRE-TAX LOSS $(645,000) $(1,650,000)
========= ==========
Tax benefit at Federal statutory rate (226,000) $(578,000)
Effect of permanent differences 2,000 2,000
TAX BENEFIT NOT RECOGNIZED 224,000 576,000
----------- ----------
TAXES PER FINANCIAL STATEMENTS $ - $ -
=============== ==============
</TABLE>
The Company has adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes". Under this standard,
the Company records as an asset its net operating loss carryforward
("NOL") based upon current tax returns, and establishes a valuation
allowance to the extent of any NOL which will not be utilized in the
foreseeable future. At this time, the Company can not reliably predict
future profitability. Accordingly, the deferred tax asset has been
reduced in its entirety by the valuation allowance. As of March 31,
1999, the Company had net operating loss carry forwards of
approximately $9,000,000 expiring variously through 2014.
A significant portion of these carry forwards may be subject
to limitations on annual utilization due to "equity structure shifts"
or owner shifts" involving "5 percent stockholders" (as defined in the
Internal Revenue Code), which resulted in more than a 50% change in
ownership.
F-10
<PAGE>
9. RELATED PARTY TRANSACTIONS
The Company is provided with office and administrative
facilities under an informal arrangement with a shareholder. Amounts
charged to operations for such services in 1999 and 1998 were $7,500
and $12,700, respectively. At March 31, 1999, the Company owed $89,749
to the shareholder.
10. LOSS ON ACQUISITION
In October 1997, the Company agreed to acquire all the issued
and outstanding shares of Wolf Key Ltd. ("Wolf") a Canadian corporation
and concurrently issued 20 million common shares to the Wolf
shareholders to complete the transaction. The Company subsequently
brought suit against the sellers claiming breach of contract, among
other things, and thereby attempted to effect rescission of the
acquisition and the return of all the issued shares. The Company's
efforts at rescission and restitution of the shares were ultimately
unsuccessful and accordingly a loss of $200,000 resulted which is
reflected in the financial statements for the year ended March 31,
1998.
11. PRO FORMA BALANCE SHEET (UNAUDITED)
The following unaudited, condensed pro forma balance sheet
assumes that the prospective conversion of debt to equity (see Note 6)
occurred as of March 31, 1999. Notes payable of $2,493,000 were
converted to 14,314,228 shares of the Company's common stock.
BALANCE SHEET MARCH 31, 1999
HISTORICAL PRO FORMA
CURRENT ASSETS $ 889 $ 889
========= =========
CURRENT LIABILITIES $ 3,626,748 $1,133,748
---------- ---------
Common Stock 650,640 793,782
Additional Paid-In Capital 5,176,032 7,525,890
DEFICIT (9,452,531) (9,452,531)
---------- ----------
TOTAL STOCKHOLDERS' DEFICIT (3,625,859) (1,132,859)
---------- ----------
$ 889 $ 889
============== ===============
F-11
<PAGE>
12. CONTINGENCIES
The Company is a defendant in an action brought in the Wisconsin
Circuit Court. The plaintiff alleges that a former officer borrowed
funds and secured such borrowings with the Company's stock and that the
Company illegally interfered with efforts to acquire such stock. Legal
counsel considers it unlikely that a loss will be incurred and,
accordingly, no provision for liability has been made in the financial
statements.
The Company is a defendant in a lawsuit brought in Nevada. This suit
relates to a disputed merger transaction and names former officers of
the Company as co-defendants. Management is of the opinion that the
action is without merit and, accordingly, no provision for potential
loss, if any, has been made in the financial statements.
In 1996, the Company's former officers sold unregistered securities to
Minnesota residents without approval from Minnesota's office of
securities regulation. Such action resulted in the state's issuance of
a "cease and desist" order in February 1999 causing the Company to be
effectively prohibited from selling shares to Minnesota residents. The
Company is permitted, subject to state approval, to issue shares to
creditors in exchange for the extinguishment of agreed upon liabilities
(See notes 6 and 11).
F-12
<PAGE>
Information with respect to this item is contained in the financial statements
appearing on Item 13 of this Report. Such information is incorporated herein by
reference.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There were no changes in, or disagreements with accountants on accounting and
financial disclosure for the two most recent fiscal years.
PART III.
---------
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE
WITH SECTION 16(A) OF THE EXCHANGE ACT.
Directors are elected by the shareholders to terms of one year. Officers serve
at the pleasure of the Board of Directors, and serve one year terms unless
removed by the Board prior to their terms.
The Executive Officers of the Company and its subsidiaries, and their ages, are
as follows:
Name Age Position
---------- --- --------
Gary L. Borglund 52 President,Director, CEO
Barry W. Phillips 60 Treasurer, Director
Dennis P. McCarter 55 Secretary, Director
Gary L. Borglund. Mr. Borglund is President, Director and Chief Executive
Officer of the Company, and has served as such since August 21, 1997. He also
serves as a Director of Red Oak Management Company, from which the Company
leases its offices, and which is in the business of assisting companies needing
management redirection and help with financial problems. He is also a Director
of Nortech Forest Technologies, Inc., and has served in that capacity since
April, 1997. From 1990 through 1996, Mr. Borglund was Executive Vice President
of Northern Financial Partners, a direct mail contractor. From 1985 through
1990, he was Vice President of Sales for Greenhaven Marketing Corp., a direct
mail/insurance company. Prior to that time, Mr. Borglund was a self employed
management consultant. Mr. Borglund attended the University of Minnesota, where
he majored in Business. Barry W. Phillips. Mr. Phillips is a current Treasurer
and Director of the Company, ans has acted in that capacity since April, 1997.
For the past 10 years, Mr. Phillips has been the president and owner of B.W.
Phillips and Associates, Inc., specializing in assisting companies with
strategic and corporate business plans and assisting with arranging funding from
banks, term lenders and venture capital sources. He has over 21 years'
experience with CBC, a major Canadian bank, and has spent over 10 years in its
international division with experience in corporate lending, export financing,
foreign exchange and money markets.
Dennis P. McCarter. Mr. McCarter is the Secretary and Director of the
Company, and has acted in that capacity since July, 1998. He is currently the
president of The Newport Group, a corporate finance consulting firm, and has
served in such capacity since 1986.. Mr. McCarter was previously the President
of Incap Corporation, a commercial real estate syndication company with four
offices and fifty employees, from 1984 through 1987. He was previously employed
by Arthur Young & Company from 1968 through 1973, where he managed various
consulting and management projects. Mr. McCarter received a BA degree from the
University of Oregon, 1965, and an MBA from the University of Washington, 1968,
and has done post graduate work in accounting and finance at Northwestern
University.
FAMILY RELATIONSHIPS.
There are no family relationships among directors, executive officers or other
persons nominated or chosen by the Company to become officers or executive
officers.
INVOLVEMENT IN CERTAIN LEGAL PROCEEDINGS.
The Company is not aware of any material legal proceedings involving any
director, director nominee, promoter or control person including criminal
convictions, pending criminal matters, pending or concluded administrative or
civil proceedings limiting one's participation in the securities or banking
industries, or findings of securities or commodities law violations.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE.
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership and changes in ownership with the Securities and Exchange Commission
(the "SEC"). Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on its review of the copies of such forms received by it, or
written representations from certain reporting persons, the Company believes
that, during the fiscal year ended March 31, 1999, all filing requirements
applicable to its officers, directors and greater than ten percent beneficial
owners were complied with.
ITEM 10. EXECUTIVE COMPENSATION.
The Company has made no provisions for cash compensation to its officers and
directors. The only non-cash compensation paid to officers and directors is
reflected in the following table of shares and warrants granted to executive
officers. No salaries are being paid at the present time, and will not be paid
unless and until there is available cash flow from operations to pay salaries.
There were no grants of options or SAR grants given to any executive officers
during the last fiscal year. There were exercises of warrants by executive
officers in the last fiscal year, enumerated below.
-------------------------------------------------------------------------
Annual Compensation Awards Payout
-------------------------------------------------------------------------
Underlying
Securities Shares issued
Name and Options/ In lieu of
Principal Year Salary Stock SARs compensation
Position ($) ($)
Gary Borglund 1998 $0 -0-
(CEO)
Gary Borglund 1997 $0 650,000(1) 500,000
(CEO)
Dennis McCarter 1997 $0 700,000(2)
(Sec)
---------------
(1) These shares represent securities underlying warrants which have been
issued in lieu of compensation. The warrant for 250,000 of the 650,000
shares has been canceled by the Company.
(2) These warrants were issued to The Newport Group, a company in Dennis
McCarter has an interest. The warrants were assigned to non-affiliated
trusts, in which Mr. McCarter has no beneificial interest or fiduciary
relationship. The warrants were subsequently exercised.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND FY-END OPTION/SAR VALUES
Number of
Securities
Underlying Value of
Unexercised In-the-Money
Options/SARs Options/SARs
Shares At Fy-End(#) at FY-End($)
Acquired on Value Exercisable/ Exercisable/
Name Exercise (#) Realized($) Unexercisable Unexercisable
---- ------------ ----------- ------------- -------------
Dennis McCarter 700,000(1) 112,000(2) 700,000/0 -0-/-0-
----------------
(1) These warrants were issued to The Newport Group, a company in Dennis
McCarter has an interest. The warrants were assigned to non-affiliated
trusts, in which Mr. McCarter has no beneificial interest or fiduciary
relationship. The warrants were subsequently exercised. Based on
200,000 shares exercised by June 13, 1997, and 500,000 shares
exercised on June 25, 1997.
(2) Based on the average of high and low stock prices in the quarter ended
June 30, 1997.
LONG-TERM INCENTIVE PLANS -- AWARDS IN LAST FISCAL YEAR
The Company has no long-term incentive plans or awards to report for last fiscal
year other than that which has already been reported.
COMPENSATION OF DIRECTORS
The members of the Company's Board of Directors are reimbursed for actual
expenses incurred in attending Board meetings.
EMPLOYMENT CONTRACTS AND TERMINATION OF EMPLOYMENT, AND CHANGE-IN-CONTROL
ARRANGEMENTS
There are no written contracts or agreements. Employee compensation is set by
the members of the Board of Directors.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the beneficial
ownership of the shares of Common Stock of the Company as of the date of this
disclosure(1), by (I) each person who is known by the Company to be the
beneficial owner of more than five percent (5%) of the issued and outstanding
shares of common stock, (ii) each of the Company's directors and executive
officers, and (iii) all directors and executive officers as a group.
Name and Address Number of Shares Percentage Owned
---------------- ---------------- ----------------
Gary Borglund 500,000 .006%
P.O. Box 15103
Minneapolis, MN 55415
Dennis McCarter -0- 0%
3857 Birch Street, Suite 126
Newport Beach, CA 92660
Barry Phillips 150,000 .002%
1661 Portage Avenue
Winnipeg, Manitoba
Canada R3J 3T7
B.V. Edli 5,000,000 6.29%
Hoogwerflaan 12
2594 BJ Den Haag
The Nethrelands
Officers and Directors 650,000 .008%
as a Group
(1) Table is based on current outstanding shares of 79,378,291, as opposed
to the total shares reported on the March 31, 1999 audited financial
statements.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company rents its offices from Red Oak Management, a company in which its
President, Gary Borglund, has in interest, on a month to month basis on an arms
length basis for an insignificant amount of monthly rental. On June 10, 1997, as
modified June 16, 1997, the Company issued a warrant to The Newport Group to
purchase 200,000 shares of restricted common stock at $.10 per share, in
reliance upon an exemption from registration contained within Section 4(2)of the
Securities Act of 1933, as amended, which warrant was exercised on June 13,
1997. The warrant was issued in consideration for past services rendered. On
June 23, 1997, as modified June 25, 1997, the Company issued a warrant to The
Newport Group to purchase 500,000 shares of restricted common stock at $.10 per
share, in reliance upon an exemption from registration contained within Section
4(2)of the Securities Act of 1933, as amended, which warrant was exercised on
June 13, 1997. The warrant was issued in consideration for past services
rendered. On June 16, 1997, the Company issued 500,000 shares to Gary Borglund
in lieu of compensation, in reliance upon an exemption from registration
contained within Section 4(2)of the Securities Act of 1933, as amended. On June
16, 1997, the Company issued 1,700,000 shares of restricted common stock to
Transworld Online Corp. for marketing and software licensing services, in
reliance upon an exemption from registration contained within Section 4(2)of the
Securities Act of 1933, as amended. On June 16, 1997, the Company issued 500,000
to an independent contractor for compensation, in reliance upon an exemption
from registration contained within Section 4(2)of the Securities Act of 1933, as
amended. On August 1, 1997, the Company issued warrants to purchase 150,000
shares of restricted common stock to Red Oak Management, in lieu of management
fees owed, in reliance upon an exemption from registration contained within
Section 4(2)of the Securities Act of 1933, as amended. The warrant has expired
without exercise. On August 7, 1997, the Company issued warrants to purchase
500,000 shares of restricted common stock in lieu of compensation, in reliance
upon an exemption from registration contained within Section 4(2)of the
Securities Act of 1933, as amended. The warrants have expired without exercise.
On August 15, 1997, the Company issued warrants to purchase 1,300,000 shares to
four individuals connected with Red Oak Management in lieu of compensation for
services rendered. The warrants have expired without exercise. On October 10,
1997, the Company issued 20,000,000 shares to Tofflerone Corporation in reliance
upon the exemption contained in Regulation D, Rule 504, and 40,000,000 shares of
restricted common stock to Tofflerone Corporation, in reliance upon the
exemption from registration contained within Section 4(2) of the Securities Act
of 1933, as amended, in consideration for the Company's agreement to acquire all
of the issued and outstanding shares of Wolf Key, Ltd. ("Wolf"), a Canadian
corporation. The Company has since brought suit against the sellers in the
transaction, claiming breach of contract, among other things, and has attempted
to effect rescission of the acquisition and a return of the shares. The
Company's efforts to regain the shares whave been unsuccessful so far, but are
continuing. On January 29, 1998, the Company issued 150,000 shares of restricted
common stock to Gary Borglund, the President of the Company, and 150,000 shares
to Wallace C. Wilsey, of Red Oak Management, in lieu of compensation for
management services, in reliance upon an exemption from registration contained
within Section 4(2)of the Securities Act of 1933, as amended. The warrants
expire January 29, 2000. On February 15, 1998, the Company issued a warrant to
purchase 500,000 shares of restricted common stock at $.25 per share, to Gary
Borglund in lieu of compensation, in reliance upon an exemption from
registration contained within Section 4(2)of the Securities Act of 1933, as
amended. The warrant expires on February 15, 2000. On June 24, 1999, the warrant
was canceled as to 250,000, leaving a warrant outstanding to purchase 250,000
shares of restricted common stock at an exercise price of $.25 per share. On
August 24, 1999, the Company issued 14,314,228 restricted common shares, and
3,391,057 warrants to purchase restricted common shares, as part of a Unit, to
Company creditors, in exchange for the retirement of an aggregate $2,493,000 in
debt owed to the creditors by the Company, in reliance upon an exemption from
registration contained within Section 4(2)of the Securities Act of 1933, as
amended. The warrants entitle each creditor to purchase restricted common stock
at $.25 per share up to the year 2002, or until one year after their common
stock already issued as part of the Unit become eligible for sale under Rule
144. On November 23, 1999, the Company issued 100,000 shares of its restricted
common stock to its securities counsel, in exchange for services rendered in
assisting the Company in drafting its Form 10K-SB, in reliance upon an exemption
from registration contained within Section 4(2)of the Securities Act of 1933, as
amended.
ITEM 13. INDEX TO EXHIBITS AND REPORTS ON FORM 8-K
(a) Financial Statements (included in Part II of this Report):
Report of Independent Certified Public Accountant
Financial Statements
Balance Sheets
Statement of Loss And Accumulated Deficit
Statements of Cash Flows
Statements of Stockholder's Equity
Notes to Consolidated Financial Statements
(b) Reports on Form 8-K: Not Applicable
(c) Exhibits
Exhibit No. Description
----------- -----------
3(a) Articles of Incorporation Amber Venture Corp.
3(a)1 Amendment to Articles of Incorporation Amber Venture Corp.
3(a)2 Amendment to Articles of Incorporation Amber Venture Corp.
3(a)3 Amendent to
Articles of Incorporation Air Entertainment Corp.
3(a)4 Certificate of Merger of Consolidated Spectrum Acquisition Corp. and East
Consult Corp.
3(b) By-laws Amber Venture Corp.
4(a) Specimen certificate of common stock
4(a)1 Specimen Certificate of Warrant
10 Other Documents
(a)Global Games Corporation End User License Agreement
(b) Memorandum of Agreement between Global Games and Tofflerone Corp.
(c) Acquisition Agreement of American DSL
Pursuant to the requirements of Section 12 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, there unto duly authorized.
Global Games Corporation
/s/ O. Gary L. Borglund
By______________________________________________
GARY L. BORGLUND, President, CEO and Director
Date: November 26, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ O. Gary L. Borglund
---------------------------------------------
GARY L. BORGLUND, President/ CEO/Director
Date: November 26, 1999
/S/ Barry Phillips
---------------------------------------
BARRY PHILLIPS, Chief Financial Officer/Director
Date: November 26, 1999
/s/ Dennis McCarter
-------------------------------------------
DENNIS MC CARTER, Secretary/Director
Date: November 26, 1999
Exhibit 3(a)
ARTICLES OF INCORPORATION
FILED
In the Office of the Secretary of State of the
STATE OF NEVADA
April 10, 1987
2594-87
ARTICLES OF INCORPORATION
AMBER VENTURE CORP.
We, the undersigned natural personal of the ages of twenty-one (21) or more,
acting as incorporations of a corporation under the general corporation law of
Nevada, adopt the following Articles of Incorporation:
Article I NAME: The name of the corporation is AMBER VENTRE CORP.
Article II REGISTERED OFFICE AND AGENT: The address of the corporation's
principal office is 2050 Ellis Way, in the City of Elko, County of Elko,
State of Nevada. The initial agent for service of process at that will be
Gateway Enterprises, Inc.
Article III PURPOSE The purposes for which the corporation is organized are
to engage in any activity ro business not in conflict with the laws of the
State of Nevada or of the United States of America, and without limiting
the generality of the foregoing, specifically:
1. To have and to exercise all the powers now or hereafter conferred by
the laws of the State of Nevada upon corporations organized pursuant
to the laws under which the corporation is organized and any and all
acts amendatory thereof and supplemental thereto.
2. To discount and negotiate promissory notes, drafts, bill of exchange
and other evidence of debts, and to collect for others money due them
on notes, checks, drafts, bill of exchange, commercial paper and other
evidence of indebtedness.
3. To purchase or otherwise acquire, own, hold, lease, sell, exchange.
assign, transfer, mortgage, pledge, or otherwise dispose of, to
guaranty, to invest, trade, and deal in and with personal property of
every class and description.
4. To enter any kind of contract or agreement, cooperative or profit
sharing plan with its officers or employees that the corporation may
deem advantageous expedient or otherwise to reward or pay such persons
for their services as the Directors may deem fit.
5. To purchase, lease, or otherwise acquire in whole or in part, the
business, the good will, rights, franchises and property of every
kind., and to undertake the whole or any part of THE assets or
liabilities, of any person, firm, association, non-profit or profit
corporation, or own property necessary or suitable for its purposes,
and to pay the same in cash, in the stocks or bonds of this company or
otherwise, to hold or in any manner dispose of the whole or any part
of the business or property so acquired and to exercise all of the
powers necessary or incidental to the conduct of such business.
6. To lend or borrow money and to negotiate and make loans, either on
wits own account or as agent, or broker for others.
7. To enter into, make, perform and carry out contracts of every kind and
for any lawful purpose, without limit as to amount with any person,
firm, association, cooperative profit or non--profit corporation,
municipality, state or government or any subdivision, district or
department thereof.
8. To buy, sell, exchange, negotiate, or otherwise deal in, or
hypothecate securities, stocks, bonds, debentures, mortgages, notes or
other collaterals or securities, created or issued by any corporation
wherever organized including this corporation, within such limits as
may be provided by law, and while owner of any such stocks or other
collaterals to exercise all rights, powers and privileges of
ownership, including the right to vote the same; to subscribe for
stock of any corporation to be organized, other than o promote the
organization thereof.
9. To purchase or otherwise acquire, own, hold, lease, sell, exchange,
assign, transfer, mortgage, pledge, license, or otherwise dispose of
any letters, patents, copyrights, or trademarks of every class and
description.
10. To do any and all other such acts, things, business or businesses in
any manner connected with or necessary, incidental convenient or
auxiliary to do any of these objects hereinbefore enumerated, or
calculated, directly or indirectly, to promote the interest of the
corporation; and in carrying on these purposes, of for the purpose of
obtaining or furthering any of its business, to do any and all acts
and things, and to exercise and all other powers which a co- partner
or natural person could do or exercise and which now or hereafter may
be authorized by law, here in any other part of the world.
11. The several clauses contained in this statement of powers shall be
construed as both purposes and powers. And the statements contained in
each of these clauses shall be in no way limited or restricted, by
reference to or inference from, the terms of any other clauses, but
shall be regarded as independent purposes and powers; and no
recitations, expression or declaration of specific or special powers
or purposes herein enumerated shall be deemed to be exclusive; but is
hereby expressly declared that all other lawful powers not
inconsistent herewith, are hereby included.
ARTICLE IV
STOCK: The aggregate number of shares which the corporation shall have authority
to issue is 500,000,000 shares at a par value of .001 per share.
All stock when issued shall be fully paid and non-assessable. No holder of
shares of common stock of the corporation shall be entitled, as such, to any
preemptive or preferential rights to subscribe to any unissued stock or any
other securities which the corporation may or thereafter be authorized to issue.
The Board of Directors of the Corporation may, however, at its discretion, by
resolution determine that any unissued securities of the corporation shall be
offered for subscription solely to the holders of common stock of the
corporation or solely to the holders of any class or classes of such stock, in
such proportions based on stock ownership as said Board at its discretion may
determine. Each share of common stock shall be entitled to one vote at
stockholders meetings, either in person or by proxy. Cumulative voting in
elections of directors and all other matters brought before stockholders
meetings, whether they be annual or special, shall not be permitted.
ARTICLE V
STOCKHOLDERS MEETING: Meetings of the shareholders shall be held at such place e
within or without eh State of Nevada as may be provided by the by- laws of the
Corporation. Special meetings of the shareholders may be called by the President
or any other executive officer of the corporation, the Board of Directors, or
any member thereof, or by the record holder or holders of at least ten percent
(10%) of all shares entitled to vote at the meeting. Any action otherwise
required to be taken at a meeting of the shareholders, except election of
directors, may be taken without a meeting if a consent in writing, setting forth
the action so taken, shall be signed by shareholders having at least a majority
of the voting power.
ARTICLE VI
COMMENCING BUSINESS: The corporation shall not commence business until at least
$1,000.00 has been received by it as consideration for the issuance of shares.
ARTICLE VII
STOCK RIGHTS : The Board of Directors shall have the authority to determine the
classes and series of any subsequent stock issued by the Corporation and the
right sand preferences pertaining thereto.
ARTICLE VIII
Board of Directors: A majority of the Board of Directors shall be necessary to
constitute a quorum; and when so constituted, the Board shall be authorized to
transact such business as may be delegated to it by the stockholders and
whenever the Board of Directors shall be so assembled and act as a Board, either
within or without the State of Nevada, any action taken shall be the action of
the Board of Directors and shall be binding upon the corporation, provided that
three days prior notice, given either orally or in writing , of the time and
place of the meeting and of the nature of the business proposed to be transacted
shall have been given to the entire Board of Directors, unless such notice be
waived as hereinafter provided. Any director may waive notice of any meeting;
and in the event of such waiver, notice shall be in writing or a written
memorandum shall be made of an oral waiver of notice.
ARTICLE IX
OFFICERS: The officers of the corporation shall consist of a Board of Directors,
a president, a vice-president, a secretary and a treasurer, who shall perform
such duties and have such authority as usually pertains to such officers of a
corporation or as may be prescribed by the Board of Directors from time to time.
QUALIFICATION OF OFFICERS: Officers and directors of the corporation need not be
resident s of the State of Nevada and need not own shares of the corporations
stock. The secretary and treasurer may, but need not be, the same person.
ELECTION: Directors shall be elected at the annual meeting of the shareholders,
and the persons receiving the highest number of votes shall be declared duly
elected, providing such numbers shall represent a majority of all votes cast.
Within ten (10) days after the election, the directors shall meet and elect a
president, vice-president, secretary and treasurer.
TERM OF OFFICE.: The term of office of all directors and officers shall be one
year, provided all directors and officers shall hold office until their
successors are duly elected and qualified.
RESIGNATION OF OFFICERS Any officer or director may resign by filing his written
resignation with e secretary of the corporation, or in the case of the
secretary, with the president of the corporation and upon acceptance thereof by
the Board of Directors or if such Board shall neglect to act upon such
resignation within fourteen (14) days after receipt, the resignation shall
become effective and the office shall be deemed vacant.
REMOVAL OF OFFICERS: Any officer or director of this corporation may be removed
at any time without cause in the manner provided by the laws of the State of
Nevada for the removal of such officer or director, or by a majority vote of the
outstanding stock of the corporation at any special meeting of the stockholders
called for that purpose as herein provided.
VACANCIES: In the case of death, disability, or resignation of any officer or
director of the company, the remaining directors or director of the company,
even though less than a quorum, shall fill vacancies for the unexpired term or
terms.
ORIGINAL DIRECTORS: The number of directors constituting the initial Board of
Directors of the corporation is three (3), and the names and addresses of the
persons who are the incorporators and who are to serve as directly until the
first annual meeting of shareholders or until their successors are elected and
qualified are:
1. Shirrell W. Hughes
2929 Hillsden Drive
Salt Lake City, Utah 84111
2. Sydney L. Hoagland
3942 South River Hollow Road
Salt Lake City, Utah 84123
3. Sindie Spencer
11131 South 2820 West
South Jordan, Utah 84065
ARTICLE X
AMENDMENT: These Articles of Incorporation, by vote of not less than fifty
percent of the issued and outstanding capital stock of the corporation, may e
deemed amended in any respect amendable at law at any meeting. A copy of the
proposed amendment shall be given to the stockholders as provided in
ARTICLE VI
hereof, and calling and holding meetings of the stockholders.
ARTICLE VIII:
BY-LAWS The Board of Directors of the corporation shall have authority to adopt
such by-laws in their judgment may be deemed necessary or advisable for the
management and transaction of the business of the corporation provided that such
by-laws are not in conflict with these Articles of Incorporation or the
Constitution of the State of Nevada.
IN WITNESS WHEREOF, the undersigned Incorporators have hereunto affixed their
signatures at Salt Lake City this 31st day of March 1987.
/s/ Shirrell W. Hughes
----------------------
Shirrell W. Hughes
/s/ Sydney L. Hoagland
----------------------
Sydney L. Hoagland
/s/ Sindie Spencer
----------------------
Sindie Spencer
State of Utah )
:
County of Salt Lake )
I, Kurtis D. Hughes, A Notary Public, do hereby certify that Shirrell W. Hughes,
Sydney L. Hoagland, and Sindie Spencer did personally appear before me to affix
their signatures to this document.
--------------------------
Notary Public, Residing in
Salt Lake County.
VENTURE
CORP.
FILED
In the Office of the
Secretary of State of the
STATE OF NEVADA
Dec. 07, 1988
CERTIFICATE OF AMENDMENT OF ARTICLES OF
ARTICLES OF INCORPORATION
Amber Venture Corp. ("Company"), a Nevada Corporation, by its
President and Director does hereby certify:
The stockholders of the corporation pursuant to Article V of the Articles of
Incorporation and Nevada State Statutes by informal action as of September 22,
1988, passed a resolution declaring that the following change and amendment to
the Company's Articles of Incorporation be amended to read as follows:
"OFFICERS: The officers of the Corporation shall consist of a Board of
Directors of not less than one nor more than twenty-five. A chairman of the
Board of Directors, a president, a vice-president, a secretary and a
treasurer, who shall perform such duties and have such authority as usually
pertains to such office4rs of a corporation or as may be prescribed th the
Board of Directors from time to time. More than one office may beheld by the
same individual."
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by
its President and its Secretary on September 22, 1988/
/s/ Peter E. Klenner
--------------------
Peter E. Klenner
President and Director
State of New York )
)ss.:
County of New York)
On this 22nd day of September, 1988, before me, a Notary Public, personally
appeared, Peter E. Klenner, who acknowledged that he is the President of Amber
Venture Corp. and that he executed the above instrument in such capacity on
behalf of Amber Ventura Corp.
-------------------
Notary Public
Edward M. Grushko
Notary Public, State
of New York
No.: 02GR4753027
Qualified in Nassau County
Commission Expires Sept.
30, 1989
VENTURE
CORP.
FILED
In the Office of the
Secretary of State of the
STATE OF NEVADA
Aug 30, 1989
2594-87
CERTIFICATE OF AMENDMENT OF ARTICLES OF
ARTICLES OF INCORPORATION
Amber Venture Corp. ("Company"), a Nevada Corporation, by its
President, Secretary-Treasurer and Director does hereby certify:
The stockholders of the corporation pursuant to Article V of the Articles of
Incorporation and Nevada State Statutes by informal action as of 8/24/1989
passed a resolution declaring that the following re following change and
amendments to the Company's Articles of Incorporation are advisible:
That Article I of the Company's Articles of Incorporation be amended so as to
read as follows:
"Name: The name of the corporation is on Aior Entertainment Corp."
That the firtst paragraph of Article IV of the Copmpany's Articles of
Incorporation be amended to read as follows:
"Stock: The agregate number of shares which the corporation shall
have authority to issue is 50,000,000 shares at a par value of .01
per share. All stock when issued shall be fully paid and
non-assessable."
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by
its President and its Secretary on 8/24/89.
AMBER VENTURE CORP.
/s/ Peter E. Klenner
--------------------
Peter E. Klenner
President and Director
State of Colorado )
)
County of "illigible")
On this 25th day of August, 1989, before me, a Notary Public, personally
appeared, Peter E. Klenner, who acknowledged that he is the President of Amber
Venture Corp. and that he executed the above instrument in such capacity on
behalf of Amber Ventura Corp.
-------------------
Notary Public
Exhibit 3(a)3
ENTERTAINMENT CORP.
FILED
In the Office of the
Secretary of State of the
STATE OF NEVADA
March 18, 1992
2594-87
CERTIFICATE OF AMENDMENT OF ARTICLES OF
ARTICLES OF INCORPORATION OF AIR ENTERTAINMENT CORP.
On Air Entertainment Corp. ("the Company"), a Nevada Corporation, by
its President and Secretary do hereby certify:
The stockholders of the corporation pursuant to Article V of the Articles of
Incorporation and Section 78.320 of the Nevada General Corporation Law, by
informal action by written consent of at least a majority of the shares of
common stock outstanding, as of February 14, 1992 passed a resolution adopting
the following amendment to the Company's Articles of Incorporation:
The Article I of the Company's Articles of Incorporation be amended so as to
read as follows:
"Name: The name of the corporation is on East Consult Corp."
The undersigned further certifies that noticed to all shareholders not joining
in the consent to this action has been given in accordance with the Nevada
General Corporation Law.
IN WITNESS WHEREOF, the Company has caused this Certificate to be signed by
its President and its Secretary on February 14, 1992.
AMBER VENTURA CORP.
/s/ Peter E. Klenner
--------------------
Peter E. Klenner
President and Secretary
State of New York )
)
County of New York)
On this 13th day of March 1992, August, 1989, before me, a Notary Public,
personally appeared, Peter E. Klenner, who acknowledged that he is the
President and Secretary-treasurer of On Air Entertainment Corp., its sole
officer and that he executed the above instrument in such capacity on behalf
of On Aire Entertainment Corp.
-------------------
Notary Public
CONSULT
CORP.
CERTIFICATE OF MERGER
OF
CONSOLIDATED SPECTRUM ACQUISITION CORP.
AND
EAST CONSULT CORP.
Under Section 907 of the
Business Corporation Law
The undersigned, Garry Jamieson and Karien Jamieson, being, respectively, the
President and Secretary of Consolidated Spectrum Acquisition Corp., a
corporation duly organized and existing under and by virtue of the laws of the
State of New York, and Garry Jamieson and Karien Jamieson, being,
respectively, the President and Secretary of East Consult Corp., a foreign
corporation duly organized and existing under and by virtue of the laws of the
State of Nevada, do hereby certify and set forth:
FIRST: The name of each constituent corporation is as follows:
Consolidated Spectrum Acquisition Corp.
East Consult Corp.
SECOND: The name of the surviving corporation is East Consult Corp.,
a corporation of the State of Nevada.
THIRD: The designation, number and voting rights of the outstanding
shares of each class and series of the constituent corporations are
as follows:
NAME CLASS NUMBER
Consolidated Spectrum Acquisition Corp COMMON 3.301,100
East Consult Corp. COMMON 1,150,313
FOURTH: The date when the Certificate of Incorporation of
Consolidated Spectrum Acquisition Corp. was filed by the Department
of State is the 30th day of April, 1987.
FIFTH: The jurisdiction of incorporation of East Consult Corp. is
the State of Nevada and the date of its incorporation is the 10th
day of April, 1987.
SIXTH: Said corporation has not filed an Application for Authority to do
business in the State of New York and will not do business in New York until
such Application for Authority has been filed with the New York Department of
State.
SEVENTH: A vote of the holders of two-thirds of all outstanding
shares entitled to vote thereon at a meeting of shareholders.
EIGHTH: The merger is permitted by the laws of the jurisdiction of
each constituent corporation and is in compliance therewith. For
accounting purposes, the effective date of the merger is January 12,
1995.
NINTH: The surviving corporation hereby agrees that it may be served with
process in this state in any action or special proceeding for the enforcement
of any liability or obligation of any domestic corporation or of any foreign
corporation, previously amenable to suit in this state, which is a constituent
corporation in such merger, and for the enforcement of the right of amount, if
any, to which they shall be entitled under the provisions of this chapter.
TENTH: The surviving corporation hereby designates the Secretary of
State as the agent of the corporation upon whom process against it
may be served. The post office address to which the Secretary of
State shall mail a copy of any process against the corporation
served upon him is c/o The Law Office of Steven A. Sanders, P.C., 50
Broad Street, Suite 1814, New York, New York 10004
IN WITNESS WHEREOF, we hereunto sign our names and affirm that the statements
made herein are true under the penalties of perjury,.
this 5th day of January, 1995.
EAST CONSULT CORP.
By: /s/Garry Jamieson, President
----------------------------
Garry Jamieson, President
By: /s/Karien Jamieson, Secretary
---------------------------
Karien Jamieson, Secretary
CONSOLIDATED SPECTRUM
ACQUISITION CORP.
By: /s/ Karien Jamieson, Secretary
---------------------------
Karien Jamieson, Secretary
Exhibit 3.3
BY-LAWS OF AMBER VENTURE CORP.
ARTICLE I - OFFICES
The office of the Corporation shall be located in the City and State
designated in the Articles of Incorporation. The Corporation may also maintain
offices at such other places within or without the United States as the Board of
Directors may, from time to time determine.
ARTICLE II - MEETING OF SHAREHOLDERS
Section 1 - Annual Meeting:
The annual meeting of the shareholders of the Corporation shall be held\within
five months after the close of the fiscal year of the Corporation, for the
purpose of electing directors, and transacting such other business as may
properly come before the meeting.
Section 2 - Special Meetings:
Special meetings of the shareholders may be called at any time by the Board of
Directors or by the President, and shall be called by the President or the
Secretary at the written request of the holders of ten per cent (10%) of the
shares then outstanding and entitled to vote thereat, or as otherwise required
under the provisions of the Business Corporation Law.
Section 3 - Place of Meetings:
The directors may designate any place, either within or without the State unless
otherwise prescribed by statute, as the place of meeting for any annual meeting
of for any special meeting called by the directors. A waiver of notice signed by
all stockholders entitled to vote at a meeting may designate any place, either
wither within or without the state unless otherwise prescribed by statute as the
place for holding such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of meeting shall be the principal office
of the corporation.
Section 4 - Notice of Meeting:
Written or printed notice stating THE place, day and hour of the meeting, and,
in cases of a special meeting, the purpose of purposes for which the meeting is
called, shall be delivered not less than 10 nor more than 50 days before the
date f THE meeting, either personally or by mail, by or at the direction of the
president or the secretary, or the officer or persons calling the meeting, to
each shareholder or record entitled to both at such meeting. If mailed, such
notice shall be deemed to be delivered when deposited in the United States mail,
addressed to the stockholder sat his address as it appears on the stock transfer
books of the corporation with postage thereon prepaid.
5. Closing of Transfer Books or Fixing of Record Date: For the purposes
of determining stockholders entitled to notice of or to vote at any
meeting of stockholders or any adjournment thereof, or stockholders
entitled to receive payment of any dividends, or in order to make a
determination of stockholders for any other proper purpose, the
directors of the corporation may provide that the stock transfer books
shall be closed for a stated period but not to exceed, in any case, 30
days. If the stock transfer books shall be closed for the purpose of
determining stockholders entitled to notice of or to vote at a meeting
of stockholders, such books shall be closed for at least 15 days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the directors may fix in advance a date as the record
date for any such determination of stockholders, such date in any case
to be note more than 45 days and, in case of a meeting of
stockholders, not less than 15 days prior to the dates on which the
particular action requiring such determination of stockholders is to
be taken. If the stock transfer books are not closed an no record date
is fixed for the determination of stockholders entitled to notice of
the meeting is of stockholders, or stockholders entitled to receive
payment of a dividend, the date on which notice of the meeting is
mailed or the date on which the resolution of the directors declaring
such dividend is adopted, as the case may be, shall be the record date
for such determination of stockholders. When a determination of
stockholders entitled to vote at any meeting of stockholders has been
made as provided in this section, such determination shall apply to
any adjournment thereof.
6. Quorum: At any meeting of stockholders 50% of the outstanding share of
the corporation entitled to vote, represented in person or by proxy,
shall constitute a quorum at a meeting of stockholders. If less than
said number of the outstanding share are represented at a meeting, a
majority of the shares so represented may adjourn the meeting from
time to time without further notice. At such adjourned meeting at
which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as
originally notified. The stockholders present at a duly organized
meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough stockholders to leave less
than a quorum.
7. Proxies: At all meetings of stockholders, a stockholder may bote by
proxy executed in writing by the stockholder or by his duly authorized
attorney in fact. Such proxy shall be filed with the secretary of the
corporation before or at the time of the meeting.
8. Voting: Each stockholder entitled to vote in accordance with the terms
and provisions of the certificate of incorporation and these by-laws
shall be entitled to one vote, in person or by proxy, for each share
of stock entitled to vote held by such stockholder. Upon the demand of
any stockholder, the vote for directors and upon any question before
the meeting shall be by ballot. All elections for directors shall be
decided by majority vote; all other questions shall be decided by
majority vote except as otherwise provided by the Certificate of
Incorporation or the laws of this state.
ARTICLE III - BOARD OF DIRECTORS
1. General Powers: The business and affairs of the corporation shall be managed
by its Board of Directors. The directors shall in all cases act as a board, and
they may adopt such rules and regulations for the conduct of their meetings and
the management of the corporation, as they may deem proper, not inconsistent
with these by laws and the laws of this State.
2. Number, Tenure and Qualifications The number of directors of the corporation
shall be a minimum of one and a maximum of twenty five . Each director shall
hold office until the next annual meeting of stockholders any until his
successor shall have been elected an qualified.
3. Regular meetings. A regular meeting of the directors, shall be held without
other notice than this by-law immediately after, and at the same place as the
annual meeting of stockholders. The directors may provide, by resolution, the
time and place for the holding of such additional regular meetings without other
notice than such resolution.
4. Special Meetings. Special meetings of the directors may be called by or at
the request of the president or any two directors. THE person or persons
authorized to call special meetings. Of the directors may fix the place of or
holding of any special meeting of the directors called by them.
5. Notice Notice of any special meeting shall be given at lease 5 days
previously thereto by written notice delivered personally, or by telegram or
mailed to each director at his business address. If mailed such notice shall be
deemed to be delivered when deposited in the United State mail so addressed,
with postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. The attendance of a director at a meeting shall constitute a waiver of
notice of such meeting, except where a director attends a meeting for the
express purpose of objecting to the transaction of any business because the
meting is not lawfully called or convened.
6. Quorum At any meeting of the directors a majority of the directors shall
constitute a quorum for the transaction of business, but if less than the said
number is present at a meeting, a majority of the directors present may adjourn
the meeting from time to time without further notice.
7. Manner of acting The act of the majority of the directors present at a
meeting at which a quorum is present shall be the act of the directors.
8. Newly created directorships and vacancies Newly created directorships
resulting from an increase in the number of directors and vacancies occurring in
the board for any reason except the removal of directors without cause may be
filled by a cote of a majority of the directors then in office, although less
than a quorum exits. Vacancies occurring by reason of the removal of directors
without cause shall be filled by a vote of the stockholders. A director elected
to fill a vacancy caused by resignation, death or removal shall be elected to
hold office for the unexpired term of his predecessor.
9. Removal of directors Any or all of the directors may be removed for cause by
vote of the stockholders or by action of the board. Directors may be removed
without cause only by vote of the stockholders.
10. Resignation A director may resign at any time by giving written notice to
the board, the president or the secretary of the corporation. Unless otherwise
specified in the notice, the resignation shall take effect upon receipt thereof,
by the board or such officer, and the acceptance of the resignation shall not be
necessary to make it effective.
11. Compensation No compensation shall be paid to directors, as such, for their
services, but by resolution of the board a fixed sum and expenses for actual
attendance at each regular or special meeting of the board may be authorized.
Nothing herein contained shall be construed to preclude any director from
serving the corporation in any other capacity and receiving compensation
therefor.
12. Presumption of assent A director of the corporation who is present at a
meeting of the directors at which action on any corporate matter is taken shall
be presumed to have assented to the action taken unless his dissent shall have
been entered in the minutes of the meeting, or unless he shall file his written
dissent to such action with the person acting as the secretary of the meeting
before THE adjournment thereof or shall forward such dissent by registered mail
to the secretary of the corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a director who voted in favor
of such action.
13. Executive and other committees The Board, by resolution, may designed from
among its members an executive committee and other committee, each consisting of
three or more director. Each such committee shall serve at the pleasure of the
Board.
ARTICLE IV - OFFICERS
Section 1 - Number, Qualifications, Election and Term of Office:
(a) The officers of the Corporation shall consist of a President, a Secretary,
a Treasurer, and such other officers, including a Chairman of the Board of
Directors, and one or more Vice Presidents, as the Board of Directors may
from time to time deem advisable. Any officer other than the Chairman of
the Board of Directors may be, but is not required to be, a director of the
Corporation. Any two or more offices may be held by the same person.
(b) The officers of the Corporation shall be elected by the Board of Directors
at the regular annual meeting of the Board following the annual meeting of
shareholders.
(c) Each officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have
been elected and qualified, or until his death, resignation or removal.
Section 2 - Resignation:
Any officer may resign at any time by giving written notice of such
resignation to the Board of Directors, or to the President or the Secretary of
the Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors or
by such officer, and the acceptance of such resignation shall not be necessary
to make it effective.
Section 3 - Removal:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
Section 4 - Vacancies:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
Section 5 - Duties of Officers:
Officers of the Corporation shall, unless otherwise provided by the Board
of Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these by-laws, or may from time to time be specifically conferred or imposed by
the Board of Directors. The president shall be the chief executive officer of
the Corporation. ARTICLE VI - SHARES OF STOCK
Section 1 - Certificate of Stock:
(a) The certificates representing the shares of the Corporation shall be in
such form as shall be adopted by the Board of Directors, and shall be
numbered and registered in the order issued. They shall bear the holder's
name and the number of shares, and shall be signed by (I) the Chairman of
the Board of the Present or a Vice President, and (ii) the Secretary or
Treasurer, or any Assistant Secretary or Assistant Treasurer, and shall
bear the corporate seal.
(b) No certificate representing shares shall be issued until the full amount of
consideration therefor has been paid, except as otherwise permitted by law.
(c) To the extent permitted by law, the Board of Directors may authorize the
issuance of certificates for fractions of a share which shall entitle the
holder to exercise voting rights, receive dividends and participate in
liquidating distributions, in corporation to the fractional holdings; or it
may authorize the payment in cash of the fair value of fractions of a share
as of the time when those entitled to receive such fractions are
determined; or it may authorize the issuance, subject to such conditions as
may be permitted by law, of scrip in registered or bearer form over the
signature of an officer or agent of the Corporation, exchangeable as
therein provided for full shares, but such scrip shall not entitle the
holder to any rights of a shareholder, except as therein provided.
Section 2 - Lost or Destroyed Certificates:
The holder of any certificate representing shares of the Corporation shall
immediately notify the Corporation of any loss or destruction of the certificate
representing the same. The Corporation may issue a new certificate in the place
of any certificate theretofore issued by it, alleged to have been lost or
destroyed. On production of such evidence of loss or destruction as the Board of
Directors in its discretion may require, the Board of Directors may, in its
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the Corporation a bond in such sum as the Board may
direct, and with such surety or sureties as may be satisfactory to the Board, to
indemnify the Corporation against any claims, loss, liability or damage it may
suffer on account of the issuance of the new certificate. A new certificate may
be issued without requiring any such evidence or bond when, in the judgement of
the Board of Directors, it is proper so to do.
Section 3 - Transfers of Shares:
(a) Transfers of shares of the Corporation shall be made on the share records
of the Corporation only by the holder of record thereof, in person or by
his duly authorized attorney, upon surrender for cancellation of the
certificate or certificates representing such shares, with an assignment or
power of transfer endorsed thereon or delivered therewith, duly executed,
with such proof of the authenticity of the signature and of authority to
transfer and of payment of transfer taxes as the Corporation or its agents
may require.
(b) The Corporation shall be entitled to treat the holder of record of any
share or shares as the absolute owner thereof for all purposes and,
accordingly, shall not be bound to recognize any legal, equitable or other
claim to, or interest in, such share or shares on the part of any other
person, whether or not it shall have express or other notice thereof,
except as otherwise expressly provided by law.
Section 4 - Record Date:
In lieu of closing the share records of the Corporation, the Board of
Directors may fix, in advance, a date not exceeding fifty days, or less than ten
days, as the record date for the determination of shareholders entitled to
receive notice of, or to vote at, any meeting of shareholders, or to consent to
any proposal without a meeting, or for the purpose of determining shareholders
entitled to receive payment of any dividends, or allotment of any rights, or for
the purpose of any other action. If no record date is fixed, the record date for
the determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be at the close of business on the day next preceding the
day on which notice is given, or, if no notice is given, the day on which the
meeting is held; the record date for determining shareholders for any other
purpose shall be at the close of business on the day on which the resolution of
the directors relating thereto is adopted. When a determination of shareholders
of record entitled to notice of or to vote at any meeting of shareholders has
been made as provided for herein, such determination shall apply to any
adjournment thereof, unless the directors fix a new record date for the
adjourned meeting.
Section 6 - Sureties and Bonds:
In case the Board of Directors shall so require, any officer, employee or
agent of the Corporation shall execute to the Corporation a bond in such sum,
and with such surety or sureties as the Board of Directors may direct,
conditioned upon the faithful performance of his duties to the Corporation,
including responsibility for negligence and for the accounting for all property,
funds or securities of the Corporation which may come into his hands.
Section 7 - Shares of Other Corporations:
Whenever the Corporation is the holder of shares of any other corporation,
any right or power of the Corporation as such shareholder (including the
attendance, acting and voting at shareholders' meetings and execution of
waivers, consents, proxies or other instruments) may be exercised on behalf of
the Corporation by the President, any Vice President, or such other person as
the Board of Directors may authorize.
ARTICLE VII - FISCAL YEAR
The fiscal year of the corporation shall end on the 31st day of March in
each year.
ARTICLE VIII - DIVIDENDS
Subject to applicable law, dividends may be declared and paid of any funds
available therefor, as often, in such amounts, and at such time or times as the
Board of Directors may determine.
ARTICLE IX-CORPORATE SEAL
The corporate seal, if any, shall be in such form as shall be approved from
time to time by the Board of Directors.
ARTICLE X - WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be
given to any stockholder or director of the corporation under THE provisions of
these by-laws or under the provisions of the articles of incorporation, a waiver
of notice thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice.
ARTICLE XI - AMENDMENTS
These by-laws may be altered, amended or repealed and new by-laws may be
adopted by a vote of the stockholders representing a majority of all the share
issued and outstanding, at any annual stockholder's's meeting or any special
stockholders meeting when the proposed amendment has been set out in the notice
of such meeting, or by a unanimous vote of the Board of Directors provided that
the amendment is not inconsistent with the powers provided the Board of
Directors by the Articles of Incorporation.
S/sPeter E. Klenner
- -------------------
PETER E. KLENNER
Exhibit 4.1
EXHIBIT
Global Games Corp.
[________]NUMBER
SHARES[________]
INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA
COMMON STOCK
SEE REVERSE FOR CERTAIN
DEFINITIONS
CUSIP 378917 10 8
THIS CERTIFIES THAT
Is the RECORD HOLDER OF FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK
OF THE COMMON STOCK, PAR VALUE $.01 PER SHARE OF GLOBAL GAMES CORPORATION
TRANSFERABLE ON THE BOOKS OF THE CORPORATION IN PERSON OR BY DULY AUTHORIZED
ATTORNEY UPON SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED. THIS
CERTIFICATE IS NOT VALID UNLESS COUNTERSIGNED BY THE TRANSFER AGENT AND
REGISTERED BY THE REGISTRAR.
WITNESS the facsimile signatures of its duly authorized officers.
Dated:
/s/ GARY L. BORGLUND
/s/BARRY W.
PHILLIPS
- ----------------------- ---------------------
President Secretary
COUNTERSIGNED AND REGISTERED
NORWEST BANK MINNESOTA,
N.A.
TRANSFER AGENT AND
REGISTRAR
By:
Authorized
Signature
GLOBAL GAMES CORPORATION
The shares of stock represented by this certificate are subject to certain
rights, preferences and restrictions. A full statement of the classes of stock
and of the series thereof, the number of shares in each class and series, and
the relative rights, coting power, preferences and restrictions granted to or
imposed upon the shares of stock of each class and series is contained in the
Certificate of Incorporation of the corporation, as amended from time to time,
a copy of which will be furnished to any shareholder upon request and without
charge. Any such request should be addressed to the secretary of the
corporation at its principal office.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - ____Custodian____ TEN ENT -
as tenants by the entireties (Cust) (Minor) JT TEN - as joint tenants with
right under Uniform Gifts to Minors
of survivorship and not as Act
------------------------
tenants in common
(State)
Additional abbreviation may also be used though not in above
list.
FOR VALUE RECEIVED, _________hereby sell, assign and
transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------
- --------------------------------------
--------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of
assignee)
--------------------------------------------------------------------------
--------------------------------------------------------------------------
--------------------------------------------------------------------------
Shares of the capital stock represented by the within Certificate, and
do
hereby irrevocably constitute and appoint
--------------------------------------------------------------------------
Attorney to transfer the said stock on the books of the within-named
Corporation with full power of substitution in the premises.
Dated, ---------------------------------
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the Certificate, in every particular, without
alteration or enlargement, or any change whatever.
Exhibit 4.2
THE SECURITIES REPRESENTED BY THIS CERTIFICATE MAY NOT BE OFFERED FOR SALE, SOLD
OR OTHERWISE TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
MADE UNDER THE SECURITIES ACT OF 1933 AS AMENDED (THE "ACT" OR SECURITIES ACT"),
OR PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE ACT, THE AVAILABILITY OF
WHICH IS TO BE ESTABLISHED TO THE SATISFACTION OF THE COMPANY.
GLOBAL GAMES CORPORATION
2500 WEST COUNTY ROAD 42 - SUITE 295
BURNSVILLE, MINNESOTA 55337
WARRANT TO PURCHASE 500,000
SHARES OF COMMON STOCK
AT $0.01 PER SHARE
VOID AFTER 3:30 P.M., MINNEAPOLIS TIME, ON A DATE 18 MONTHS FROM AUGUST 15,
1997
1. This certifies that, for value received, Gary L. Borglund, Social Security
####-##-####, or his successors or assigns ("Holder") is entitled to
subscribe for and purchase, subject to the terms and conditions hereof,
from GLOBAL GAMES CORPORATION, a Nevada corporation (the "Company") at any
time before February 15, 1999 (eighteen (18) months from August 15, 1997),
five hundred thousand (500,000) shares of common stock, no par value, of
the Company ("Common Stock"), at a purchase price of one cent ($0.01) per
share. The shares of Common Stock deliverable upon exercise of this Warrant
are hereinafter sometimes referred to as "Warrant Shares."
2. This Warrant may be exercised in whole or in part by written notice
delivered to the Company at least twenty (20) days prior to the intended
date of exercise and by the surrender of this Warrant (properly endorsed if
required) stating the number of shares of Common Stock with respect to
which the Warrant is being exercised, together with cash or check in the
amount of the purchase price for such shares. The Company shall deliver a
share certificate or certificates evidencing the shares of Common Stock
purchased pursuant to such exercise promptly upon receipt of the items
described in this Paragraph 2.
3. The Company agrees that there shall be reserved such number of shares of
Common Stock as shall be required for issuance and/or delivery upon
exercise of this Warrant.
4. The Holder shall have no rights as a shareholder of the Company with
respect to Warrant Shares unless and until the date of the issuance of a
share certificate or certificates with respect thereto.
5. If the Company shall be the surviving entity in any merger or
consolidation, this Warrant (to the extent that it is still outstanding)
shall pertain to and apply to the securities to which a holder of the same
number of shares of Common Stock that are subject to the Warrant would have
been entitled. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving entity shall cause
this Warrant to terminate, unless the agreement of merger or consolidation
shall otherwise provide, provided that in such event the Holder shall have
the right immediately prior to such dissolution or liquidation, or merger
or consolidation in which the Company is not the surviving entity, to
exercise this Warrant in whole or in part.
6. (a) This Warrant or the Warrant Shares or any other security issued or
issuable upon exercise of this Warrant may not be offered or sold except in
conformity with the Act, and then only against receipt of an agreement of
such person to whom such offer or sale is made to comply with the
provisions of this Paragraph 6 with respect to any resale or other
disposition of such securities.
(b) The Company may cause the following legend (or one substantially
similar thereto) to be set forth on each Warrant and certificate
representing Warrant Shares or any other security issued or issuable
upon exercise of this Warrant not theretofore distributed to the
public or sold to underwriters for distribution to the public, unless
counsel for the Company is of the opinion as to any such certificate
that such legend is unnecessary: "The securities represented by the
within certificate for shares have not been registered under the Act,
or similar applicable state laws regulating the sale of securities.
Such securities may not be sold, transferred or otherwise disposed of
except pursuant to an effective registration statement or appropriate
exemption from registration under the foregoing laws. Accordingly,
these securities may not be transferred except upon the written
approval of the Company or its counsel. This legend represents a
restriction on transferability of the within certificate."
7. (a) If, prior to February 15, 2002, (three years after the expiration
date of the Warrant), the Company proposes to claim an exemption under
Section 3(b) of the Act for a public offering of any of its securities
or to register under the Act (except by form S-8 or S-4 registration
statement or other similar form of limited applicability) any of its
securities, it will give written notice to the Holder, all registered
holders of Warrants and all registered holders of shares of Common
Stock acquired upon the exercise of Warrants (collectively, the
"Registered Holders"), of its intention to do so and, on the written
request of any Registered Holders given within twenty (20) days after
receipt of any such notice (which request shall specify the number of
shares of Common Stock intended to be sold or disposed of by such
Registered Holder and describe the nature of any proposed sale or
other disposition thereof), the Company will use its best efforts to
cause all such shares, the Registered Holders of which shall have
requested the registration or qualification thereof, to be included in
such notification or registration statement proposed to be filed by
the Company. All expenses of such offering, except the fees of special
counsel and brokers' commissions to such Registered Holders, shall be
borne by the Company. Nothing herein shall prevent the Company from at
any time, abandoning or delaying any notification or registration,
whether or not such notification or registration statement has been
filed; and, furthermore, nothing herein shall require the Company to
take any action or to refrain from taking any action in respect of any
registration, it being agreed that any participating Holder shall
participate on the terms and the form of registration proposed by the
Company. If any notification or registration shall be underwritten, in
whole or in part, the Company may require that all shares of Common
Stock requested for inclusion in such notification or registration
statement be included in the underwriting on the same terms and
conditions as the securities otherwise being sold to the underwriters.
(b) Provided, however, if in the reasonable opinion of the Company,
underwriters, or managing agent in connection with any such offering,
inclusion of the Warrant Shares would have a materially adverse effect
upon the proposed sale of shares by the Company, then the Company
shall not be required to take any action with respect to the Warrant
Shares in such registration but the Holder's rights with respect to
future registration shall not be affected thereby.
( c) The Company hereby indemnifies the Registered Holder of any
Common Stock issued or issuable hereunder, its officers and directors,
if any, who control such holder of Common Stock within the meaning of
Section 15 of the Securities Act, against all losses, claims, damages
and liabilities caused
- 2 -
by any untrue statement of material fact contained in any registration
statement, prospectus, notification or offering circular (and as
amended or supplemented if the Company shall have furnished any
amendments or supplements thereto) or any preliminary prospectus or
caused by any omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading except insofar as such losses, claims, damages or
liabilities are caused by any untrue statement or omission contained
in information furnished in writing to the Company by such Registered
Holder of Common Stock or such underwriter expressly for use therein,
and each such Registered Holder by its acceptance hereof severally
agrees that it will indemnify and hold harmless the Company and each
of its officers, directors and any underwriter and each person, if
any, who controls the Company or any underwriter within the meaning of
Section 15 of the Securities Act with respect to losses, claims,
damages or liabilities which are caused by any untrue statement or
omission contained in information furnished in writing to the Company
or any underwriter by such Holder expressly for use therein.
8. This Warrant shall be governed by, and construed in accordance with,
the laws of the State of Nevada.
Dated:
GLOBAL GAMES CORPORATION
By__________________________
Garry L. Jamieson,
Chairman & CEO
Attest:
Exhibit 10(a)
Global Games Corporation, End User License Agreement This is a legal agreement
between you, the end user (either individual or an entity), and Global Games
Corporation (the Company). If you do not accept the terms of this Agreement, do
not install or use the software in any way. By using this software, you are
agreeing to become bound by the terms of this Agreement. Grant of License.
Global Games, as Licenser, grants to you, the licensee, a non-exclusive right
and License to use a copy of Global Games software currently known as Java
Sportsbook software(the software) on a single computer, (i.e. with a single CPU)
at single location so long as you comply with the terms of this License. Each
workstation upon which the software is used, whether such computer is a stand
- -alone computer, a networked computer, or a terminal on a multi-user computer
must separately have a licensed copy of the software. Site and Corporate License
Grant. If you acquired a site or corporate license, Global games grants you the
right to use the number of copies of the Software for which you paid. For
single-user computers or workstations attached to a network (network Stations),
the quantity of the Software in use is considered to be the maximum number of
Network Stations on which the Software is either loaded in memory, or virtual
memory, or stored on a hard disk, or other storage device at one time. For a
multi-user computer, a use is counted for every session of the Software running
on the computer. If the anticipated number of users of the Software will exceed
the number of applicable Licenses for which you have paid, you must have a
process in force to assure that the number of concurrent users of the Software
does not exceed the number Licenses. Ownership of the Software. Global Games
retains the copyright, title and ownership of the Software and the written
materials of the form or media in or on which the original and other copies may
exist. You may take one copy of the Software solely for backup or archival
purposes, provided that such copy must contain all of the original Software
proprietary and copyright notices. Transfers. You may physically transfer the
Software from one of your computers to another provided that the Software is
used on only one computer at a time. You may not distribute copies of the
Software or any accompanying written materials to others without prior written
consent of Global Games. In no event may you transfer, assign, rent, lease,
sell, grant a security interest in or otherwise dispose of or convey the
Software except as noted herein. Termination. This License is effective until
terminated. This License will terminate automatically without notice from Global
Games if you fail to comply with any provision of this License. Upon
termination, you shall destroy all copies of the Software, as well as any
accompanying written materials.
U.S. Government Restricted Rights. If the Software is acquired by or for the U.
S. Government, then it is provided with Restricted Rights. Use, duplication, or
disclosure by the U. S. Government is subject to restrictions as set forth in
subparagraph (c) (1) of the Rights in Technical Data and Computer Software
clause at DFARS 252 .227-7013, or subparagraphs (c) (1) and (2) of the
Commercial Computer Software - Restricted Rights at 48 CFR 52.227-19, as
applicable. Contractor/manufacturer is Global Games Corporation, 400 South
Fourth Street Suite 720, Minneapolis, Minnesota 55415. Limited Warranty. Global
Games warrants that, for a period of thirty (30) days from the date of initial
use by the original end user, the Software will operate substantially in
accordance with the published functional specifications current at the time of
delivery. If, during the warranty period, it appears that the Software is
defective or you are otherwise dissatisfied, you may terminate the License by
returning the Software and any accompanying materials within said thirty (30)
day period and Global Games will promptly refund the License fee you paid.
Global Games will provide product support and maintenance during said thirty
(30) day period. You may upgrade Global Games thirty (30) day product support
and maintenance obligation to one (1) year at an additional cost. Only if you
inform Global Games of your problem with the Software during the applicable
warranty period either by mail, phone call, or e-mail will Global Games be
obligated to honor this warranty. This warranty extends only to the original end
user and does not cover any Software that has been altered or changed in any way
by anyone other than the original end user. Global Games will use its best
efforts to repair, correct, or replace within a commercially reasonable period
of time any reported Software problem or error. Global Games does not warrant
that the Software will meet your requirements, that operation of the Software
will be uninterrupted or error free, or that all Software errors will be
corrected. Global Games and its Licensers are not responsible for problems
caused by changes in the operating characteristics of computer hardware or
computer operating systems which are made after the release of the Software nor
for problems in the interaction of the Software with software not furnished by
Global Games.
DISCLAIMER OF WARRANTIES. WITH THE EXCEPTION OF THE LIMITED WARRANTY DESCRIBED
HEREINABOVE, NETMASTERS DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE. SOME JURISDICTIONS DO NOT ALLOW THE EXCLUSION
OR LIMITATION OF AN IMPLIED WARRANTY SO THE ABOVE DISCLAIMER MAY NOT APPLY TO
YOU. NO LIABILITY FOR SPECIAL, CONSEQUENTIAL, OR INCIDENTAL DAMAGES. NETMASTERS
SHALL NOT BE LIABLE FOR ANY DIRECT, INDIRECT, SPECIAL, CONSEQUENTIAL, OR
INCIDENTAL DAMAGES WHATSOEVER, INCLUDING DAMAGES FOR LOSS OF BUSINESS PROFITS,
BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION, OR OTHER COMMERCIAL OR
ECONOMIC LOSS, ARISING OUT OF THE USE OR INABILITY TO USE THE SOFTWARE, EVEN IF
NETMASTERS HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES OR THEY ARE
FORESEEABLE. OUR MAXIMUM LIABILITY TO YOU AND THAT OF OUR DEALERS AND SUPPLIERS
SHALL NOT EXCEED THE AMOUNT PAID BY YOU FOR THE SOFTWARE. THE LIMITATIONS IN
THIS SECTION SHALL APPLY WHETHER OR NOT THE ALLEGED BREACH OR DEFAULT IS A
BREACH OF A FUNDAMENTAL CONDITION OR TERM, OR A FUNDAMENTAL BREACH. SOME
JURISDICTIONS DO NOT ALLOW THE EXCLUSION OR LIMITATION OF LIABILITY FOR
CONSEQUENTIAL OR INCIDENTAL DAMAGES SO THE ABOVE EXCLUSIONS OR LIMITATIONS MAY
NOT APPLY TO YOU.
Enhancements. From time to time, Global Games may, in its sole discretion,
advise you of updates, upgrades, enhancements, or improvements to the Software
and/or new releases of the Software (collectively, enhancements), and may
license you to use such Enhancements upon payment of prices as may be
established by Global Games from time to time. All such Enhancements to the
Software, which are provided to you, shall also be governed by the terms of this
License unless otherwise noted by Global Games. Governing Law. This License
shall be governed by and construed in accordance with the laws of the State of
Minnesota and shall be deemed to have been entered into in Hennepin County,
Minnesota, USA, for all purposes of jurisdiction and venue. Severability. If any
provision of this License is held by a court of competent jurisdiction to be
invalid or unenforceable to any extent of applicable law, that provision will be
enforced to the maximum extent permissible, and the remaining provisions of this
license will remain in full force and effect. License Fee. Fee to Global Games
Corporation is 20% of net win and is subject to audit by mutually agreed party.
Date: September 3, 1999
----------------------------
--------------------------------
Euromontecarlo/Rainbow Parrot
Global Games Corporation
CORP. AND
TOFFLERONE CORPORATION
This memorandum is evidence of an agreement between the parties hereto made as
of the 8th day of October 1997.
1. PARTIES
1.1 Global Games Corporation ("Global")
1.2 Garry L. Jamieson ("Jamieson")
1.3 Tofflerone Corporation, In trust ("TC")
NOW THIS AGREEMENT WITNESSES that in consideration of the mutual covenants and
agreements herein contained and the sum of $2.00 of lawful money of Canada and
other good and valuable consideration paid by each of the parties hereto to
each of the other parties hereto (the receipt and sufficiency of which are
hereby acknowledged), it is agreed between the parties hereto as follows:
2. AGREEMENT 2.1 The parties agree as follows:
(a) TC hereby subscribes for 60,000,000 common shares of Global (the
"Subscription Shares") for a subscription price of $3,000,000.00 Global
Accepts such subscription for shares of Global and agrees to issue the
Subscription Shares to TC or as TC may in writing direct. TC shall satisfy the
subscription price for such shares by delivering to Global all of the issued
and outstanding shares of Wolf Key Holdings Limited ("Ontario Co."), which
shares, Global agrees, after satisfying itself, have a value of $3,000,000.00
(which shares of Ontario Co. are referred to herein as the "Consideration For
The Subscription"). Upon receipt of the Consideration For The Subscription,
the Subscription shares shall be issued as fully paid ad nonassessable.
(b) The shares of Global, to the maximum extent permitted, shall be issu4ed
under Regulation D., Rule 504 made under sections 4(2) and 3(b) of the
Securities Act of 1993 (the "Securities Act"), and the balance of such shares
shall be issued using the least restrictive restrictions on resale permitted
by the Securities Act, and regulations and rules promulgated thereunder for
issuance of shares to a non-US person. Global agrees to prepare and file a
registration sttement in respect of this Subscription Shares forthwith after
delivery of the Subscription sShares to TC or as TC may in writing direct.
(c) It is acknowledged and agreed that TC has entered into this agreement as
agent and trustee for a num,ber of shareholders of Ontario Co. TC shall
deliver to Global a direction as to the names and addresses of the b4eneficial
shareholders to whom shares of Global shall be issued pursuant to this
agreement.
(d) Jamieson and Global agree to amend Jamieson's employment agreement with
Global as follows: (i) Jamieson's title shall be Chairman of the Executive
Committee: (ii) Jamieson's compensation shall be amended to provide that such
compensation shall be paid from the following sources only:
(a) from the proceeds of sale of assets contributed by TC to Global;
(b) from the proceeds of financing for Global raised by Jamieson;
(c) from the net revenues of Global (revenues minus cost of sales) from
sales generated by the sales efforts of Jamieson;
(e) Jamieson agrees to assume personal responsibility fo the outstanding
debts and obligations of Global, and shall pledge a sufficient number of
common shares of Global as are required as collateral for a personal loan to
be taken out for the purpose of paying in full, or in full and final
settlement, alll such debts and obligations.
(f) Contemporaneously with delivery of the Subscription Shares to TC or
as it may direct, the board of directors of Global shall deliver their
resignations to Global, to be accepted as and when new directors are elected
or appointed in replacements therefor.
2.2 All references to dollars herein shall be references to lawful currently
of the United States of American except where expressly provided to the
contrary.
2.3 Global, TC and Jamieson hereby covenant and agree that for a period of 90
days from the date of this agreement they will not cause, and will use their
best efforts to prevent, any reorganization, combination of its outstanding
shares into a smaller number of shares, reverse stock split, dividend or
distribution on its common stock in shares of common stock, reclassification
or other action directly impacting the number of shares of common stock,
reclassification or other action directly impacting the number of shares of
common stock of Global outstanding, except for the issuance of the
Subscription Shares.
3. REPRESENTATIONS AND WARRANTIES 3.1 Global and Jamieson represent dn warrant
that: (a) Global is duly organized and validly subsisting under the laws of
the State of Nevada. Global has the requisite corporate power and authority to
own its properties and to carry on its business in all material respects as it
is not being conducted and as proposed to be conducted. Global has the
requisite corporation and authority to authorize, issue, shall and deliver the
common shares of Global subscribed for in this agreement. Global is qualified
to do business in each jurisdiction in which the conduct of its business or
the ownership of its properties requires such qualification.
(b) Global is in good standing under the laws of the State of Nevada, and
there are no proceedings or actions pending to limit or impair any of its
powers, rights and privileges, or to dissolve it. (c) Jamieson is an
individual, resident in the State of Minnesota. (d) Jamieson has authority to
enter into and complete the contemplated herein. (e) The execution and
delivery of this agreement and the consummation of the transactions
contemplated hereby have been duly authorized by proper corporate action of
Global. This agreement has bene duly executed and delivered by Jamieson and by
authorized officers of Global and is a valid and binding agreement on the part
of Global and Jamieson that is enforceable against Global and Jamieson in
accordance with its terms, except as the enforceability thereof may be limited
by applicable bankruptcy, insolvency, moratorium, reorganization or other laws
of general application affecting enforcement of creditors rights or by general
principals of equity. (f) The common shares of Global to be issued pursuant to
this agreement are duly and validly authorized, validly issued and
outstanding, fully paid, nonassessable shares and will be free and clear of
all pledges, liens, encumbrances and restrictions. (g) All consents,
approvals, qualifications, orders and authorizations of, or filings with
local, state and federal governmental authorities required on the part of
Global in connection with Global's valid execution, delivery or performance of
this agreement, the offer, sale, issuance, or delivery of common shares of
Global, or the performance by Global of its obligations in respect thereof
have been obtained and all required filings have been made. (h) The execution,
delivery, or performance by Global and by Jamieson of this agreement, or
compliance with the terms and provisions hereof, or the consummation of the
transactions contemplated hereby will not: (i) contravene any applicable law,
statute, rule, regulation, order, writ, injunction or decree of any federal,
state or local government, court or governmental department, commission,
board, bureau, agency or instrumentality; (ii) conflict or be inconsistent
with, or result in any breach of any of the terms, covenant, conditions or
provisions of, or constitute a default (either immediately or with notice or
the passage of time or both) under any indenture, mortgage, deed of trust,
credit agreement or instrument or any other material agreement or instrument
to which Jamieson or Global is a party or by which it may be bound or to which
any of the foregoing may be subject; or (iii) violate any provisions of the
Articles of Incorporation or by-laws of Global, as amended. (i) The common
shares of Global are quoted for trading on the bulletin board OTC. (j) Global
is authorized to issue 100 million common shares of Global. There are
approximately 32.2 million common shares of Global issued and outstanding.
There are approximately 17.6 million non-restricted common shares of Global.
(k) There are presently subsisting options for 6.2 million common shares of
Global at an exercise price of USD$0.13, 3.1 million of such options expire
March 30, 1989 and 3.1 million of such options expire August 30, 1989. (l)
There are presently subsisting options for 3.3 million common shares of Global
at an exercise price of USD$0.50, 1.5 million of such options expire in the
year 2000, 1.8 million of such options expire in the year 2005. (m) There are
1,256,082 warrants to acquire 1,256,082 common shares of Global at an exercise
price of $0.25/share, expiring June 1, 1998. (n) There are no other subsisting
share purchase warrants, options, or other agreements or obligations whereby
additional shares of Global could be issued. (o) Except for Global debts that
have ben personally guaranteed by certain of its officers and directors and
more particularly set out in Schedule "A": to this agreement, Global has no
debt. (p) There are no legal actions, suits, arbitrations or other legal,
administrative or governmental proceedings pending or, to the best of Global's
knowledge, threatened against Global, or it properties, assets of business
which, if determined adversely, would have a material adverse effect on Global
or its properties, assets or business; and neither Global nor any of its
officers is aware of any facts which might result in or form the basis for any
such action, suit, or other proceeding. (q) The business of Global has been
and is being conducted in compliance with applicable law. (r) Global is not in
material default with respect to any judgment, order or decree of any court or
any governmental agency or instrumentality. (s) Global is not in default in
any of its regularity filings. (t) Global is not a reporting issuer in the
United States. (u) Global has no contingent liabilities, or material
contracts, except for a management agreement with Gary L. Jamieson
substantially in the form attached hereto as Schedule "B". For greater
certainty, Global has no outstanding obligations, or contingent obligations
under a letter agreement with The Fremont Group, L.L.C., dated July 19, 1997,
as amended, a copy of which is attached hereto as Schedule "C". (v) Except as
provided in this paragraph 3.1, the information contained in the business plan
for Global dated April 1997, including the Form 10-k of Global for the fiscal
year ended March 31, 1996 as modified by the business plan for Global, dated
August 20, 1997, copies of which are attached hereto as Schedule "D", contain
an accurate representation of the business and affairs of Global as of the
date hereof. There has been no material adverse change in the financial
condition or business, assets, or properties of Global since the date of the
Form 10-k of Global for the fiscal year ended March 31, 1996, and the
unaudited financial statements dated December 31, 1996, contained in the said
business plan.
3.2 TC represents and warrants that:
(a) Ontario Co. is duly organized and validly subsisting under the
laws of the Province of Ontario. Ontario Co. has the requisite
corporate power and authority to own its properties and to carry on
its business in all material respects as it is now being conducted
and as proposed to be conducted. Ontario Co. has the requisite
corporate power and authority to transfer the shares of Ontario Co.
to be transferred to Global pursuant to this agreement.
(b) There are no subsisting share purchase warrants, options, or other
agreements or obligations whereby additional shares of Ontario Co. could be
issued.
(c) TC is incorporated and organized under the laws of the Province of
Ontario.
(d) TC has authority to enter into and complete the transactions by TC
contemplated herein.
4. GENERAL
4.1 Each party shall have 30 days from the date of this agreement (the "Due
Diligence Period") to conduct such due diligence as such party desires to
satisfy itself as to the consideration paid and received by such party and
such other matters as such party considers material to its agreement. In the
event that any party is not satisfied with the results of its due diligence,
it shall give notice in writing to the other parties prior to 6:59 pm local
Toronto time on the 30th day after the execution and delivery of this
agreement and upon such notice, this agreement shall be null and void, failing
which such party shall be deemed to be satisfied with its due diligence.
4.2 Each of the parties shall make available to the other parties, in the City
of Toronto, all corporate and securities information, material contracts,
information concerning subsisting litigation, pending and contingent claims
against the company, and such other information with respect to the parry as
may be requested by such other parties for purposes of conducting due
diligence, and not for any other purpose. No party may disclose the existence
of this agreement or its terms prior to the expiration of the Due Diligence
Period without the prior written consent of the other parties hereto.
4.3 Time is of the essence of this agreement.
4.4 The terms of this agreement, and the existence of this agreement are
strictly confidential, and shall not be disclosed without the pri9or written
consent of all parties to this agreement.
All information received by a party from another party or its agent during
the Due Diligence Period shall be held in strict confidence., and all not be
disclosed or used by the party receiving such information, except for purposes
of due diligence.
4.5 This agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario, without giving effect to conflict of laws
principals thereof, and in any action to enforce or interpret or arising under
any of the provisions of this agreement, the parties expressly agreement to
submit to the jurisdiction of any Federal or Provincial court sitting in the
Municipality of Metropolitan Toronto, Ontario.
4.6 Each of the parties agrees to execute and to do all such further document,
transfers, assignments or things as may be necessary or desirable to give
effect to the agreement contained in this memorandum.
4.7 This agreement may only be amended by an instrument in writing signed by
all parties hereto.
4.8 This agreement constitutes the entire agreement of the parties hereto with
respect to the subject matter hereof.
4.9 The covenants, representations, warranties, agreements, and statements of
the respective parties contained herein shall survive the execution, delivery,
completion and consummation of the transactions contemplated herein.
4.10 Any provision of this agreement whcih is or becomes prohibited or
unenforceable in any jurisdiction shall not invalidate or impair the remaining
provisions of thisd agrteement snad such provisions shall be deemed severagble
lfrom the remaining provisions of this agreementn and any prohibition or
unenforceability in any jurisdiction of such provision shall not invalidate or
render unenforceable such provision in any other jurisdiction.
4.11 This agreement shall be binding upon and enure to the benefit of the
parties hereto, and their respective officers, directors, shareholders,
agents, representative, executors, heirs, affiliates representatives,
administrators, predecessors, successors, and assigns.
4.12 Each of the parties shall pay all of its own expenses (including
attorneys' and accountants' fees) in connection with the negotiation,
drafting, and performance of its respective obligations hereunder and the
consummation of the transactions contemplated hereby (whether consummated or
not).
4.13 In the event that this subscription agreement, or any other documents as
may have been delivered to the undersigned in respect of the offering of the
Subscription Shares or such other shares (such document, if any, is referred
to herein as the Offering Memorandum"), together with any amendments thereto,
contains an untrue statement of material fact or omits to state a material
fact that is required to be stated or is necessary in order to make an
educated investment decision (herein referred to as a ("misrepresentation")
and it was a misrepresentation on the date of the investment, TC shall have,
subject as hereinafter in this paragraph provided, a right of action,
exercisable on written notice to Global given not more than 90 days subsequent
to the date of investment, for damages or, while still the owner of the
Subscription Shares or such other shares as are offered, for rescission
against Global provided that:
(a) Global shall not be liable under this paragraph if TC purchased the
Subscription Shares or such other shares with knowledge of the
misrepresentation;
(b) in an action for damages, Global is not liable for all or any portion of
such damages that it proves do not represent the depreciation in value of the
Subscription Shares or such other shares as a result of the misrepresentation;
(c) in no case shall the amount recoverable under this paragraph exceed the
price at which the Subscription Shares or such other sha5re were sold to TC;
and
(d) the rights herein conferred are contractual rights, and are in addition
to, and without derogation from, any other right or remedy available at law to
TC.
4.14 This agreement may be executed in counterparts and may be delivered by
telecopier transmission and such c9mmunication shall be binding upon the
parties so long as such communication is legible in its entirely All executed
counterparts shall be construed together and shall constitute one (1)
agreement.
4.15 Each of the parties hereto acknowledges that it has read and understood
the terms of this agreement and has obtained, or has waived the need of, such
independent legal counsel as such party considers necessary or appropriate.
IN WITNESS WHEREOF, the parties hererto have hereunto set their hands and
seals as of the date first above written.
SIGNED, SEALED AND DELIVERED GLOBAL GAMES CORPORATION
in the presence of:
/s/ Ruth A. O'Connor /s/ Garry L. Jamieson
--------------------- ------------------------
Per:
/s/ Ruth A. O'Connor /s/
--------------------- ------------------------
[STAMP OF NOTARY PUBLIC] Per:
/s/ Garry L. Jamieson
-------------------------
Garry L. Jamieson
SIGNED, SEALED AND DELIVERED in the presence of:
-------------------------
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