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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-SB/A
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of the Securities Exchange Act of 1934
WorldWide Data, Inc.
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(Name of Small Business Issuer in its Charter)
Delaware 98-0185548
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
36 Toronto Street, Suite 250
Toronto, Ontario M5C 2C5
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, (416) 304-0224
Securities to be registered under Section 12(b) of the Act:
Title of each class Name of each exchange on which
to be so registered each class to be registered
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- ----------------------------------- ------------------------------------
Securities to be registered under Section 12(g) of the Act:
Common Stock
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(Title of Class)
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(Title of Class)
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INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 1. Description of Business.
(a) Business Development.
We were incorporated in Delaware on April 9, 1995. In February 1998,
we acquired all of the outstanding equity securities of WorldWide Online Corp.,
an Internet service provider located in Toronto and a company organized under
the laws of the Province of Ontario. Through our wholly-owned subsidiary
Worldwide Online, we provide individuals and businesses an array of e-business
solutions and services that enable enterprises to capitalize on the power of the
Internet to reach and support customers and markets.
(b) Business of Issuer.
Industry/Market Overview
Businesses today are using the Internet to create new revenue
opportunities by enhancing their interactions with new and existing customers.
Businesses are also using the Internet to increase efficiency in their
operations through improved communications, both internally and with suppliers
and other business partners. This emerging business use of the Internet
encompasses both business-to-business and business-to-consumer communications
and transactions.
The projected growth of these markets over the next five years is
dramatic, particularly in business-to-business e-commerce. Forrester Research,
an independent research firm, projects that the market for business-to-business
e-commerce will grow from $43 billion in 1998 to $1.3 trillion in 2003. In
comparison, Forrester Research projects that the market for business-to-consumer
e-commerce will grow from $8 billion to $108 billion over the same period. In
order to capitalize fully on the new opportunities presented by the Internet,
businesses demand Internet-based applications that process transactions and
deliver information far more effectively than static web pages.
The extensive reach of the Internet can enable growing enterprises to
compete effectively with larger competitors. However, growing enterprises face
significant challenges in their efforts to capitalize on the opportunities that
the Internet offers, including:
- The need to develop a comprehensive strategic understanding of how
Internet technologies can help a growing enterprise create an e-
business;
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- The need to implement and stay abreast of new and rapidly changing
technologies, frequently without the benefit of a substantial internal
information technology staff;
- Significant integration and interoperability issues caused by the
patchwork of legacy systems that businesses often implemented without
a focused information technology strategy;
- Greater budgetary constraints than large enterprises, making purchase
price, total cost of ownership and technological obsolescence key
issues; and
- The need to maintain significant technological infrastructure and to
support e-business applications.
We believe that the needs of small and growing enterprises will make
them a significant factor in the overall market for Internet services.
International Data Corporation, an independent research firm, defines Internet
services as the consulting, design, systems integration, support, management and
outsourcing services associated with the development, deployment and management
of Internet sites. International Data Corporation expects the market for these
services, which includes both growing and all other enterprises, to grow at a
five year compounded annual growth rate of 59% from $7.8 billion in 1998 to
$78.5 billion in 2003.
Large companies which provide services to assist businesses in using
information technology, including the Internet, have primarily focused their
service offerings on large enterprises, such as Fortune 500 companies, while
largely ignored small or growing enterprises and their unique needs. These
traditional service providers generally operate by deploying large numbers of
personnel to the client's site to conduct lengthy studies before proposing a
solution. We believe that this approach does not yield effective solutions
within the time and budgetary constraints of growing enterprises.
Small or growing enterprises need to get to market very quickly and
often face significant obstacles in capitalizing on the opportunities that the
Internet provides because of the technological complexity, cost of
implementation and support and scarcity of qualified professionals.
Accordingly, they increasingly demand a single source provider of strategy,
systems integration, hosting and support that is focused on their specific
needs.
The Worldwide Data Solution
We have specifically tailored our service offerings for small or
growing enterprises seeking rapid delivery of cost-effective, high value-added,
comprehensive solutions for their e-business initiatives. Our services consist
of (i) e-Business
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Consulting, (ii) Internet Solutions, (iii) Application Hosting, (iv) Providing
Internet Service and (v) Customer Support. By offering a seamless integration of
these services, we believe that we are a full service provider of e-business
solutions for small or growing enterprises. We enable our clients to overcome
the obstacles described above by combining high quality cost effective e-
business services with application hosting and Internet access to deliver
sophisticated e-business solutions and services that otherwise might be
unavailable to them.
From our inception in 1995 through 1998, our operating activities
primarily consisted of providing Internet access to individuals and small and
medium size businesses. Since 1998, however, the focus of our business and the
significant portion of our revenues has been derived from our e-Business
Consulting, Internet Solutions, Application Hosting and Customer Support
services.
Our services enable us to develop, build and maintain e-commerce
websites for our clients, and create revenue-generating programs for our clients
that attract consumers to their respective sites. In addition, we complement
these offerings with a call center and related services that provide customer
service and support.
Target Market
Our plan is to focus our service offerings on the needs of small and
medium-sized businesses. We believe that these businesses are becoming
increasingly reliant on Internet access to significantly enhance communications
with other offices, employees, customers and suppliers. We also believe that
the Internet enables such businesses to reduce operating costs, access valuable
information and reach new markets. As a result, we believe that small and
medium-sized businesses increasingly are utilizing the Internet for crucial
business needs such as sales, customer service and project coordination.
Internet use by this market is expected to grow substantially from its current
low level. Small and medium sized business customers are also increasingly
seeking a variety of advanced products and services to take full advantage of
the Internet and allow them to compete with larger corporations cost-
effectively.
PRINCIPAL SERVICES
e-Business Consulting
We advise our customers on the use of e-business solutions to reach
and support customers and markets. The goal of these solutions is typically the
achievement of a qualifiable, sustainable competitive advantage within a short
time frame. Our strategy services include analyzing the client's market,
business processes and existing technology infrastructure, evaluating both
packaged and custom alternative solutions and formulating recommendations for a
solution or strategy. We provide a road map that our
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client can implement immediately, as opposed to the type of high level advice
that requires additional strategy planning prior to being implementable.
Internet Solutions
We develop and implement e-business applications for high transaction
volume revenue generation activities. We both develop custom applications and
tailor packaged applications. We design our e-business applications to be
flexible and easily scalable. Clients require flexibility so that they can
easily integrate our solutions with their existing systems, upgrade solutions
for technological changes and respond to developments in how business is
conducted on the Internet. Scalability is critical to our clients because they
often experience very significant increases in transaction volumes within a
short time period.
Application Hosting
We host a variety of custom and package applications, including
customer relationship management applications, database applications, corporate
Web sites and complex transaction intensive e-business applications. Our
application hosting service enables clients to rent applications through payment
of a monthly service fee instead of incurring a large one-time, initial
investment. Our application hosting operations team provides active monitoring
and application level support for Internet-based applications 15 hours a day,
Monday through Friday and 8 hours a day on Saturdays and Sundays. These support
capabilities often reduce the client's need for a large information technology
staff.
Our service delivery infrastructure is designed to provide our clients
with a fast response time, reliability, scalability and security. Our
application hosting infrastructure is located in Toronto, Ontario. We currently
provide application hosting services to approximately 100 small to medium
companies.
Internet Service Provider
We provide subscribers with direct access to the Internet. As of
December 1999, we had approximately 2000 subscribers. Our business model is to
create high user density in greater Toronto, Ontario. Although our Internet
Service Provider division is no longer the division from which the Company
derives substantial revenue or the division for which the Company devotes
substantial resources, it complements the Company's Internet Solutions and e-
Business Consulting divisions. Our most popular service package provides
unlimited dial-up Internet access to individuals and businesses for $25.00 and
$50.00 a month, respectively. We also offer value-added services for additional
fees, including multiple e-mail boxes, personalized e-mail addresses and
personal Web sites. We provide subscribers with a full range of services
including
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dedicated high speed access (such as T-1, xDSL, ATM and ISDN service), web
hosting, server co-location and domain name registration and hosting.
Customer Support
Outstanding service and customer care are crucial to subscriber
acquisition, cost containment and retention in our industry. Our goal is to
attain customer satisfaction by providing superior systems and network
performance along with high quality service and technical support. Our Customer
Support department, which is open 15 hours-a-day, Monday through Friday and 8
hours-a-day on Saturday and Sunday, is structured to provide prompt, effective
and friendly support. We plan to implement 24 hour/7 day a week customer
support in the first quarter of 2000. All customer support representatives have
on-line capabilities to provide customer and technical support and order entry
to provide solutions for both in-house products as well as clients' web-based
applications.
Sales and Marketing
We offer our products and services through resellers and indirect
sales channels. We do not employ a direct sales force to target customers, and
we currently have no plans to hire a direct sales force. We employ reseller and
referral programs and enter into joint marketing agreements to market and
distribute our services. Resellers are persons or entities not directly
employed or affiliated with us who agree to market and sell our products. Our
reseller program offers resellers services-in-kind or commissions for each new
customer they bring to us. We have established reseller arrangements with
several Internet-related companies. Referral partners will receive a fee or
some other form of compensation for referring customers or customer leads to us.
Our referral partners will include organizations such as local computer
companies, information technology consultants, web page designers, advertising
agencies or other entities that do not generally sell Internet services
directly.
In addition, we have in the past periodically used direct mail and
newspaper and billboard advertising to market our services and products.
Clients
We focus our marketing and sales activities on small and growing
enterprises. The use and functionality of our services are applicable to a
variety of industries. Therefore, we provide our services to a number of types
of businesses. Our clients include, but are not limited to, high technology
firms, insurance brokers, traditional product/services firms, law firms and a
municipality.
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COMPETITION
The market for Internet access and related services is extremely
competitive. We face a high level of competition in all of our service areas.
Our competitors include consulting companies, Internet professional service
firms, systems integration firms, application hosting firms, web-hosting firms
and Internet service providers. Barriers to entry in most of our service areas
are low. Therefore, we expect additional competitors to develop.
We also believe that new competitors will continue to enter the
Internet access market. These new competitors may also include large computer
hardware and software companies, media and telecommunications entities and
companies that provide direct service to residential customers, including cable
television operators, wireless communication companies, local and long-distance
telephone companies and electric utility companies.
Almost all of our competitors are larger than us and have
substantially greater financial, technical, and operating resources than we do.
We cannot assure you of our survival in this intensely competitive environment.
We will need to distinguish ourselves by our technical knowledge, our
responsiveness to our target customers, our ability to market and sell
customized combinations of services within our markets and our capacity to offer
diverse Internet services.
PATENTS, TRADEMARKS AND SERVICEMARKS.
We do not currently hold patents, copyright marks or servicemarks on
any of our products, however, we may apply for such intellectual property right
protections if future conditions indicate that this would be in our best
interests.
GOVERNMENT APPROVAL AND REGULATIONS.
We are subject to certain federal, state and provincial laws and
regulations that are applicable to certain activities on the Internet.
Legislative and regulatory proposals under consideration by federal, state,
provincial local and foreign governmental organizations concern various aspects
of the Internet, including, but not limited to, online content, user privacy,
taxation, access charges, liability for third-party activities and jurisdiction.
Such government regulation may place our activities under increased regulation,
increase our cost of doing business, decrease the growth in Internet use and
thereby decrease the demand for our services or otherwise have a material
adverse effect on our business, results of operations and financial condition.
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COST AND EFFECTS OF COMPLIANCE WITH
ENVIRONMENTAL COMPLIANCE.
Our business is not subject to any specific federal, state or local
environmental laws, and, consequently, we have neither incurred any costs nor
has it been affected adversely or otherwise by any existing environmental laws.
EMPLOYEES.
We employ fifteen full-time individuals and have retained two
independent contractors on a temporary project-by-project basis. We are not a
party to any collective bargaining agreements, and we have never experienced a
work stoppage. We consider our relations with our employees to be good. We
believe that our success will in large part depend upon our ability to recruit
and retain qualified professional with a high degree of information technology
skills and experience needed to provide our sophisticated services.
(c) Reports to Security Holders.
By virtue of us filing this Registration Statement on Form 10-SB, we
are subject to the informational requirements of the Securities Exchange Act of
1934, as amended, and in accordance therewith file reports, proxy statements and
other information with the Securities and Exchange Commission (the
"Commission"). This Form 10-SB, proxy statements and other information, as
amended, may be inspected without charge at the Securities and Exchange
Commission's Public Reference Room, 450 Fifth Street, N.W., Washington, D.C.
20549 or on the Commission's website at http://www.sec.gov. The public may
obtain information on the operation of the Public Reference Room by calling the
Commission at 1-800-SEC-0330.
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
We are a Delaware corporation and incorporated in 1995. In 1998, we
acquired all of the Common Stock of WorldWide Online Corp., an Internet Service
provider located in Toronto, Ontario and organized under the laws of the
Province of Ontario.
We are a full service provider of e-business solutions that allow
growing enterprises to capitalize on the power of the Internet to reach and
support customers and markets. Our five divisions consist of e-Business
Consulting, Internet solutions, providing Internet Service and Customer Support
and Application Hosting. From our inception in 1992 through 1998, our operating
activities primarily consisted of providing Internet access to individuals and
small business in our capacity as an Internet Service Provider (ISP). Prior to
1998, we derived no or limited revenues from application
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hosting, e-Business consulting or Internet Solution services. We believe, ho
wever, that application hosting, e-Business Consulting and Internet Solutions
Services will account for a significantly greater portion of our total revenues
in the future.
Historically, we have offered our services to clients primarily under
time and materials contracts. For these projects, we recognize revenues based
on the number of hours worked by consultants at a rate per hour agreed upon with
our clients. We have also performed some services under fixed-fee contracts.
We recognize revenues from fixed-fee contracts on a percentage of completion
method based on project hours worked.
We expect that the portion of our revenues attributable to fixed-fee
contracts will increase for 1999 and in the future.
Due to our use of fixed-fee contracts, our operating results may be
affected adversely by inaccurate estimates of costs required to complete
projects. Therefore, we employ a series of project review processes designed to
help provide accurate project cost and completion estimates, including a
detailed review at the end of each specified reporting period to determine
project percentage of completion to date.
We generally derive our initial pricing for a contract from our
internal cost and fixed-fee pricing model. This model helps our professionals
estimate pricing based on the scope of work and materials required. The model
also takes into account project complexity and technical risks.
We seek to mitigate our risks under fixed-fee contracts by providing
fixed-fee quotes for discrete phases of each project. Using this approach, we
are able to price more accurately the next phase of the engagement by virtue of
having greater knowledge of the client's needs and the project's complexity. We
reflect any loses on projects in process in the period in which they become
known.
We typically receive an advance payment from our strategy consulting
services clients upon contract signing, with additional payments required upon
our attainment of project milestones. Deferred revenues consist principally of
these advance payments. We recognize those payments upon performance of
services.
We price our application hosting contracts on a fixed-fee basis. We
recognize revenues from these contracts as services are completed each month.
In addition, we charge our application hosting clients a one time set-up fee,
which we recognize when set-up is complete. Pricing varies for each client
based on the prospective application to be hosted. Factors which determine
pricing generally include telecommunications bandwidth required, physical space
requirements in our leased hosting facilities and the technological complexity
of supporting the hosted application.
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To date, we have depended upon a few clients for the majority of our
revenues. This dependence on a small number of clients is primarily
attributable to the relatively limited range of services that we offered from
1995-1998. We expect our reliance on a small number of clients to decrease due
to our addition of application hosting capabilities and the continued growth of
our e-Business Consulting and Internet Solutions Services.
We believe that we have achieved a number of important accomplishments
since making the strategic decision in 1998 to expand our service offerings.
These accomplishments include:
. application hosting
. increased hiring
. e-Business Solutions
. increased customer support
We hope to build on theses accomplishments to become the leading full
service provider of business-to-business e-business solutions that enable
growing enterprises to increase their revenues and market share. We are seeking
to increase revenues in the near term by continuing to:
. Increase our sales and marketing efforts;
. Expand our professional staff; and
. Add to our existing application hosting infrastructure to increase
our capacity to provide application hosting services.
We will need to make significant expenditures in connection with all
of these activities. In particular, expanding our application hosting capacity
involves capital expenditures for equipment and software as well as costs for
leasing facilities to house that equipment. These capital expenditures will
result in significant depreciation and amortization expenses.
Our expense items include project personnel costs, sales and marketing
expense and general and administrative expenses:
. Projected personnel costs consist of payroll and payroll-related
expenses for personnel dedicated to client assignments;
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. Sales and marketing expenses consist primarily of salaries (including
sales commissions), consulting fees, trade show expenses, advertising
and the cost of marketing literature; and
. General and administrative expenses consist primarily of
administrative salaries, salaries, fees for professional services,
and other operating costs, such as rent.
Our revenues in the past were generated by the Company in its capacity
as an Internet Service Provider providing strategy and systems integration
solutions services. We developed and began implementation of our current
strategy to become a leading full service provider of Internet solutions for
businesses in late 1998. We began recognizing revenues from these services in
the first quarter of 1999. Because we are increasing our marketing and sales
strategy initiatives and are adding to our application hosting infrastructure,
we expect our revenue streams to increase.
Results of Operations
Year Ended December 31, 1999 as compared to Year ended December 1998
The Company had net sales from online services of $495,000 for the
year ended December 31, 1999 as compared to $338,000 for the year ended December
31, 1998. The increase of $157,000 (46%) is attributed to the change in
business mix from internet connection service to web page design maintenance and
e-business consulting.
Cost of sales for on-line services increased during the year ended
December 31, 1999 to $279,000 from $222,000 for the year ended December 31,
1998. The increase of $57,000 (26%) is attributed to an increase in personnel
costs due to the increased sales.
Cost of sales for aircraft leasing increased to $151,000 for the year
ended December 31, 1999 from $66,000 for the year ended December 21, 1998. The
net increase of $85,000 (129%) is attributable to the start of leasing
operations. However, the company recorded no depreciation on the aircraft
during 1999 due to its sale.
Selling general and administrative expenses remained approximately the
same at $417,000 for 1999 and 1998 as the company only had an increase in those
costs related to sales.
Year Ended December 31, 1999 as Compared to December 31, 1997
The Company had net sales of $338,000 for the year ended December 31,
1998 as compared to $332,000 for the year ended December 31, 1997. The increase
of $6,000 (1.8%) is attributable to increased internet usage by customers.
There were no sales from aircraft leasing.
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Costs of sales for aircraft leasing during 1998 was $66,000. Although
the company had no related sales the company recorded $38,000 in depreciation
expense and incurred $28,000 in maintenance and repair expense on the newly
acquired aircraft.
Selling general and administrative expense increased to $417,000 from
$169,000 for the year ended December 31, 1998 as compared to 1997, an increase
of $248,000 (46%). The net increase is attributable to goodwill of $78,000,
aircraft depreciation and maintenance of $70,000, $40,000 in expenses related to
the NASD inquiry and increased marketing costs of $60,000.
The Company had a net loss for the year ended December 31, 1998 of
$443,000 as compared to a net loss of $204,000 for the year ended December 31,
1997, an increase of $239,000 (117%). The increased loss is attributable to the
aforementioned increases in expenses.
Liquidity and Capital Resources
December 31, 1999 to December 31, 1998
At December 31, 1999 the Company had cash of $217,000 as compared to
$58,000 at December 31, 1998. During 1999, the Company completed stock sales
for $265,000, a debenture financing of $250,000 and sold the aircraft in the
aircraft leasing business for $680,000.
During the year ended December 31, 1999 WorldWide used cash of
$740,000 to reduce outstanding debt and $215,000 for operations.
December 31, 1998 to December 31, 1997
At December 31, 1998, the Company had cash of $58,000 as compared to
cash of $14,000 at December 31, 1997. During 1998, the Company completed equity
sales whereby it received net proceeds of approximately $1,000,0000. The
Company used $240,000 of the proceeds as part of the purchase price of 761395
Alberta Ltd an aircraft leasing company. The balance of the proceeds have been
used to reduce debt by $376,000 and for working capital $384,000.
WorldWide believes that its cash, cash flow from operations together
with the expected net proceeds from this offering will be sufficient to fund its
capital expenditures and working capital requirements for at least the next 12
months.
WorldWide may require additional capital in the future for the new
business activities related to its current and planned businesses, or in the
event it decides to make additional acquisitions or enter into joint ventures
and strategic alliances. Sources of additional capital may include cash flow
from operations, public or private equity and debt financings, bank debt and
vendor financings. However, we cannot assure
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you that WorldWide will be successful in producing sufficient cash flow or
raising debt or equity capital to meet its strategic business objectives or that
such funds, if available, will be available on a timely basis and on terms that
are acceptable to WorldWide. If WorldWide is unable to obtain such capital, it
may have to delay or curtail business operations. In addition, WorldWide may
increase the number of consulting projects it takes on, which in turn may
accelerate WorldWide's need for additional capital.
MARKET RISK
To date, we have not utilized derivative financial instruments or
derivative commodity instruments. We do not expect to employ these or other
strategies to hedge market risk in the foreseeable future.
Item 3. Description of Property.
We do not own any real property and lease all of our facilities. We
are located at 36 Toronto Street, Suite 250, Toronto, Ontario M5C 2C5. The
premises measures approximately 3,200 square feet and is used for the Company's
general office and administrative purposes and is the location from which the
Company provides customer support and application hosting services to our
clients. The initial term of the lease commenced in September 1995 and expires
on August 31, 2000. We believe that the above referenced properties are
acceptable for our current operating needs.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
The following table, based upon information known to us, sets forth
certain information regarding beneficial ownership of our Common Stock as of
March 31, 2000 by (i) each person who is known by us to beneficially own more
than five percent of our Common Stock; (ii) each of our officers and directors;
and (iii) all executive officers and directors as a group. Except as otherwise
indicated, the persons named in the table have sole voting and investment power
with respect to all shares beneficially owned, subject to community property
laws where applicable. As of March 31, 2000, there were 3,763,100 ] shares of
Common Stock issued and outstanding. Each share of Common Stock is entitled to
one vote per share.
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<TABLE>
<CAPTION>
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Name and Address Number of Shares of Percent
of Beneficial Owner the Company's Common Stock of Class
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<S> <C> <C>
Romeo Colacitti 135,000 3.5%
42 Leosmith Drive
Aurora, Ontario
Canada
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BC Trust 120,000 3.1%
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
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Bronson B. Conrad 120,000 3.1%
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
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A-Z Professional Consultants Inc. 300,000 7.9%
268 W. 400
Salt Lake City, UT 84101
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Bournemouth Capital Corp. 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
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Finnish Investment Limited 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Bridgewater Capital Corp. 225,000 5.9%
Saffrey Square Suite 103A
Bay Street & Bank Lane
Nassau NP The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Alpha Securities Ltd. 225,000 5.9%
P.O. Box N8318
Charlotte Street
Nassau The Bahamas
- ---------------------------------------------------------------------------------------------------------------
David A. Rapaport, as Escrow Agent2 400,000 5.0%
333 Sandy Spring's Circle
Suite 230
Atlanta, GA 30328
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Name and Address Number of Shares of Percent
of Beneficial Owner the Company's Common Stock of Class
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
KEW International Ltd. 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Sunnyview International Ltd. 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
Goldcoast International 225,000(3) 5.6%
P.O. Box N. 8303
NASSAU - The Bahamas
- ---------------------------------------------------------------------------------------------------------------
JBS Holdings Ltd 225,000(3) 5.6%
3369 Amboy Road
Staten Island, NY 10506
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Somu Holdings Ltd. 825,000 23.1%
32 Upper Fitzwilliam Street
Dublin 2 Ireland
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Officers and Directors 455,000(4) 10.7%
as a Group (2 persons)
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
_______________________
(1) The shares of our common stock are beneficially owned by Bronson B. Conrad,
our President, Secretary, Treasurer and Sole Director. Mr. Conrad holds
the shares for the benefit of certain our employees' benefit of certain
employees of the Company. The BC Trust is not a formal trust, and,
consequently, there is no appointed trustee.
(2) Includes 400,000 shares of our Common Stock held in escrow for the benefit
of Generation Capital Associates and 25,000 shares of our Common Stock
underlying warrants to purchase our Common Stock held by Generation. In
connection with a financing transaction which closed on September 30, 1999,
the Company issued to Generation convertible debentures in the aggregate
principal amount of $250,000 for $250,000. The debentures are convertible
into our Common Stock at any time after September 30, 1999. Pursuant to
the terms of the transaction, we issued 400,000 shares of our Common Stock,
which represent the share underlying the convertible debentures to an
escrow agent. The debenture shares held by the escrow agent represent the
shares that Generation is entitled to under the convertible debentures'
conversion provisions. The price at which the convertible debentures are
converted shall be the average closing bid price of our Common Stock quoted
by Nasdaq level III for a five-day trading period ending on the date prior
to the date set fort on Generation's conversion notice times (x) 60% (the
"Multiplier"). The Multiplier is subject to being decreased in the event
we do not register the debenture shares under the Securities Act. In
connection with the above referenced financing transaction, we issued
Generation 25,000 cashless exercise warrants to purchase 25,000 shares of
our Common Stock exercisable at $2.50 for five years until September 30,
2004. The Generation warrant has a value of $250.00 ($0.01 per warrant).
The shares are issuable upon the exercise of the Generation warrant.
Although 400,000 of such shares are held in escrow for the benefit of
Generation in connection with a convertible debenture financing transaction
which closed on September 30, 1999, and such 425,000 shares held in escrow
for the benefit of
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Generation represent approximately 11.2% of our issued and outstanding
Common Stock, the terms of the convertible debentures provide that in no
event shall the holder(s) of the convertible debentures and/or the
Generation warrant be permitted to convert any debenture or exercise the
Generation warrant to the extent that such conversion or exercise would
cause any such holder to be the beneficial owner of more than 5% of our
then outstanding Common Stock as determined in accordance with Section
13(d) of the Securities and Exchange Act of 1934. Accordingly, the number
of shares of Common stock set forth in the table for Generation exceeds the
number of shares of our Common Stock that Generation could own beneficially
at any given time through its ownership of the convertible debentures and
warrants. In that regard, the beneficial ownership of Generation set forth
in the table is not determined in accordance with Rule 13d-3 under the
Securities and Exchange Act of 1934.
(3) Represents shares underlying our Class B Warrants. The Warrant entitled
the holder to purchase one share of our Common Stock at a price of $1.50
per share at any time between April 15, 1999 and April 5, 2001.
(4) Includes 150,000 owned by Bronson B. Conrad which are held for the benefit
of certain of our employees.
Item 5. Sole Director, Executive Officers, Promoters and Control Persons.
The following table sets forth-certain information regarding directors
and executive officers of the Company:
Name Age Position
- ---- --- --------
Bronson B. Conrad 55 President, Secretary, Treasurer and Sole
Director
Romeo Colacitti 38 Chief Executive Officer
Romeo Colacitti, the Company's Chief Executive Officer, is the
brother-in-law of Bronson B. Conrad, the Company's President, Secretary,
Treasurer and Sole Director.
BUSINESS EXPERIENCE
BRONSON B. CONRAD. Since incorporation in 1995, Mr. Conrad has served
as our President, Secretary and Treasurer and the sole director. Mr. Conrad was
the co-founder of, and from 1988 to 1994, served as the Chairman of the Board of
Directors of All-Quotes, Inc., a provider of electronically distributed
financial information. Mr. Conrad served as All-Quotes' Treasurer and Secretary
from 1993 to 1994. From 1988 through 1993, Mr. Conrad served as the President
of All-Quotes. He was the co-founder of National Hav-Info Ltd. ("Hav-Info"), a
former electronic distributor of financial information in Canada, and from March
1985 until October 1988 he was the Chief Executive Officer and Chairman of the
Board of Hav-Info.
ROMEO COLACITTI. Since July of 1999, Mr. Colacitti has served as our
Chief Executive Officer. From April 1998 to the present, Mr. Colacitti has
served as
16
<PAGE>
the President of our wholly owned subsidiary Worldwide Online. From October 1995
to March 1998, Mr. Colacitti served as the Vice President and General Manager of
Worldwide Online. Prior to joining WorldWide Online Corp. in October of 1995,
Mr. Colacitti served as a business executive with Bell Canada.
Item 6. Executive Compensation.
The following table sets forth the annual and other compensation of
our Chief Executive Officer. No other executive officer had a total salary and
bonus, which exceeded US$ 100,000 for the reported period.
SUMMARY COMPENSATION TABLE
Annual Compensation
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Name Other Stock
Principal Position Year Salary Compensation Option
Romeo Colacitti 1998 CDN$ 80,000 N/A N/A
Chief Executive Officer 1999 CDN$100,000 N/A N/A
</TABLE>
COMPENSATION OF THE COMPANY'S SOLE DIRECTOR
Our sole director does not receive a salary or fees for serving as a
director, nor does he receive any compensation for being on committees. We may
decide to compensate our sole director in the future.
Item 7. Certain Relationships and Related Transactions.
Romeo Colacitti, our Chief Executive Officer, is the brother-in-law of
Bronson B. Conrad, our President, Secretary, Treasurer and Sole Director.
On December 31, 1998, our Company loaned US$177,685 to AmCan Mining
Limited, a British Columbia corporation, for which Bronson B. Conrad, our
President, Secretary, Treasurer and Sole Director, serves as Chairman and Chief
Executive Officer. The loan is evidenced by a promissory note. The note is
payable on demand and bears interest at a rate of 10% per annum. The note is
personally guaranteed by Mr. Bronson B. Conrad.
On February 27, 1998, our Company, Bridgewater Capital Corp.
("Bridgewater") and Bronson B. Conrad ("Conrad"), our President, Secretary,
Treasurer and Sole Director, (Conrad, together with Bridgewater, the "WWOC
Shareholders" entered into a Share Exchange Agreement whereby we exchanged
1,500,000 shares of our Common Stock with the WWOC Shareholders for an aggregate
of 1,500,000 shares of Common Stock of Worldwide Online in the amounts and
proportions as set forth below:
17
<PAGE>
<TABLE>
<CAPTION>
Seller No. of WWOC No. of Worldwide Data, Inc. Shares
- ------ ------------------ ----------------------------------
Shares Exchanged Received
------------------ --------
<S> <C> <C>
Conrad 1 1
Bridgewater 1,500,000 1,500,000
</TABLE>
Subsequently, in March of 1998, Bridgewater distributed 1,275,000 of
its shares of our common stock to certain persons and entities, including but
not limited to, Bronson B. Conrad, Romeo Colacitti and the BC Trust. The number
of shares received by Messrs. Conrad and Colacitti and the BC Trust in
connection with Bridgewater's distribution is as follows:
Name Number of Shares Received
- ---- -------------------------
Bronson B. Conrad 150,000
Romeo Colacitti 135,000
BC Trust 150,000
With respect to the 150,000 distributed by Bridgewater to the BC
Trust, Bronson B. Conrad, our President, Secretary, Treasurer and Sole Director
beneficially owns such shares and holds the shares for the benefit of certain
employees of our Company. The BC Trust is not a formal trust, and,
consequently, there is no appointed trustee.
In November 1998, in order to partially finance the purchase of all of
the issued and outstanding common stock of 761395 Alberta Ltd. (the "761395
Alberta Common Stock"), an Alberta corporation which is wholly-owned by Bronson
B. Conrad, the President, Secretary, Treasurer and Sole Director of the Company,
and which had as its sole asset, an aircraft, we issued and sold pursuant to a
certain Stock Purchase Agreement between us and CBC Holdings, Inc., a Bahamian
corporation, 240,000 shares of our Common Stock to CBC Holdings, Inc. for $1.00
per share.
In a related transaction, also in November, 1998, we purchased all of
the issued and outstanding shares of the 761315 Alberta Common Stock pursuant to
a certain Stock Purchase Agreement dated November 17, 1998, between Bronson B.
Conrad, 761395 Alberta Ltd. and our Company, whereby we purchased the 761395
Alberta Common Stock for a purchase price of US$627,000. To effect payment of
the purchase price, we (i) delivered US$240,000 of such purchase price to
Bronson B. Conrad immediately following the execution of the Stock Purchase
Agreement; (ii) executed and delivered to Mr. Conrad a promissory note in the
principal amount of US$189,631.58 and (iii) assumed a certain $350,000 CDN
Promissory Note from 761395 Alberta Ltd. and Bronson B. Conrad payable to
Textron Financial Corporation (Canada), an Ontario corporation.
18
<PAGE>
Item 8. Legal Proceedings.
We are not currently involved in any pending legal proceeding and it
is not aware of any material legal proceeding threatened against it.
Item 9. Market for Common Equity and Related Stockholder Matters.
Since 1996, our Common Stock has traded on the Over-the-Counter
Electronic Bulletin Board maintained by the National Association of Securities
Dealers under the symbol "WWDI". Before that date, there was no established
public trading market for the Common Stock. There is no assurance that the
Common Stock will continue to be quoted or that there will be any liquidity for
our Common Stock. Trading in our Common Stock is episodic. The following table
sets forth the range of high and low bid quotations for the Company's Common
Stock on the Over-the-Counter Electronic Bulletin Board for each quarter of
1997, 1998 and 1999.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------
Quarter Low Bid $ High Bid $
- ------------------------------------------------------------------------
<S> <C> <C>
1st Qtr. 1997 .16 .38
- ------------------------------------------------------------------------
2nd Qtr. 1997 .16 .38
- ------------------------------------------------------------------------
3rd Qtr. 1997 .13 .91
- ------------------------------------------------------------------------
4th Qtr. 1997 .09 .25
- ------------------------------------------------------------------------
1st Qtr. 1998 1.50 7.00
- ------------------------------------------------------------------------
2nd Qtr. 1998 7.25 9.25
- ------------------------------------------------------------------------
3rd Qtr. 1998 4.38 7.03
- ------------------------------------------------------------------------
4th Qtr. 1998 6.63 8.25
- ------------------------------------------------------------------------
1st Qtr. 1999 6.00 7.50
- ------------------------------------------------------------------------
2nd Qtr. 1999 4.63 5.50
- ------------------------------------------------------------------------
3rd Qtr. 1999 2.50 3.88
- ------------------------------------------------------------------------
4th Qtr. 1999 3.00 3.13
- ------------------------------------------------------------------------
</TABLE>
The high and low information was obtained from Track Data, a fee-based
provider of financial information.
In January 1999, NASD Regulation, Inc. commenced an inquiry with
respect to trading in our Common Stock and has requested information from us.
We have fully cooperated with NASDR Regulation, Inc. in providing such
information.
Item 10. Recent Sales of Unregistered Securities.
In connection with the Financial Advisory Agreement dated January 31,
2000, between our company and A-Z Professional Consultants, Inc., our company
retained A-Z Consultants, Inc. to provide us with advice with respect to
possible
19
<PAGE>
mergers, acquisitions, strategic partnerships and similar arrangements,
we issued A-Z Consultants, Inc. 300,000 restricted shares of our common stock as
compensation for services rendered under the Agreements. We have had various
sales of unregistered securities. In issuing unregistered shares, we relied on
the exemption from registration provisions as promulgated under Section 4(2) of
the Securities Act of 1933, as amended (the "Act"), or Rule 504 of Regulation D
promulgated under the Act for issuer transactions not involving a public
offering (as defined). Principals of each transaction were aware and
represented that they were taking the shares for investment purposes and not
with the view to distributing the same and further represented that they were
aware of the restricted nature of the securities and that the same could not be
transferred or resold absent a Registration Statement, in effect for the same or
an exemption therefrom, or otherwise sold in reliance on Rule 144.
In connection with a financing transaction which closed on September
30, 1999, we issued to Generation Capital Associates convertible debentures in
the aggregate principal amount of $250,000 for $250,000. The debentures are
convertible into our Common Stock at any time after September 30, 1999.
Pursuant to the terms of the transaction, we issued 400,000 shares of our Common
Stock, which represent the shares underlying the convertible debentures the
("Debenture Shares") to an escrow agent. The debenture shares held by the
escrow agent represent the shares that Generation is entitled to under the
convertible debentures' conversion provisions. The price at which the
convertible debentures are converted shall be the average closing bid price of
the Company's Common Stock quoted by Nasdaq level III for a five-day trading
period ending on the date prior to the date set forth on Generation's conversion
notice times (x) 60% (the "Multiplier"). The Multiplier is subject to being
decreased in the event the Company does not register the debenture shares under
the Securities Act. Also, in connection with the financing transaction which
closed on September 30, 1999, the Company issued to Generation 250,000 cashes
exercise warrants to purchase 25,000 shares of our Common Stock exercisable at
$2.50 for five years until September 30, 2004. The Generation warrant has a
value of $250.00 ($0.01 per warrant). The shares of our Common Stock are
issuable upon the exercise of the GCA Warrants. Although 400,000 of such shares
are held in escrow for the benefit of Generation in connection with a
convertible debenture financing transaction which closed on September 30, 1999,
and such 400,000 shares held in escrow for the benefit of GCA, together with the
GCA Warrants, represent approximately 11.2% of the Company's issued and
outstanding Common Stock, the terms of the convertible debentures provide that
in no event shall the holder(s) of the convertible debentures and/or the GCA
Warrants be permitted to convert any debenture or exercise the GCA Warrants to
the extent that such conversion or exercise would cause any such holder to be
the beneficial owner of more than 5% of the then outstanding Common Stock of the
Company as determined in accordance with Section 13(d) of the Securities and
Exchange Action of 1934. Accordingly, the number of shares of Common Stock set
forth in the table for Generation exceeds the number of shares of our Common
Stock that Generation could own beneficially at any given time
20
<PAGE>
through its ownership of the convertible debentures and warrants. In that
regard, the beneficial ownership of Generation set forth in the table is not
determined in accordance with Rule 13d-3 under the Securities and Exchange Act
of 1934.
Pursuant to a Purchase Agreement dated March 19, 1999, we sold
Montaque Securities International Ltd., a Bahamian corporation 200,000 shares of
the our Common Stock at a purchase price of $1.00 per share.
Pursuant to a Purchase Agreement dated April 6, 1999, we sold Montaque
Securities International Ltd. 65,000 shares of our Common Stock at a purchase
price of $1.00 per share.
Pursuant to Purchase Agreement dated November 17, 1998, the Company
sold to CBC Holdings, Inc., a Bahamian corporation 240,000 shares of the
Company's Common Stock at a purchase price of $1.00 per share. We effected the
transaction with CBC Holdings, Inc. to partially finance the purchase of all of
the outstanding common stock of 761395 Alberta Ltd., an Alberta corporation,
which is wholly owned by Bronson B. Conrad, the President, Secretary and
Treasurer of our company.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to
Gold Coast International Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase a share of our Common Stock at any time after April 5, 1999 but before
April 5, 2001 at an exercise price of $1.00. Gold Coast International Ltd.
exercised its Class A Warrants and purchased 110,000 shares of our Common Stock
underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to
Sunnyview International Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase one share of our Common Stock at any time after April 5, 1999 but
before April 5, 2001 at an exercise price of $1.00. Sunnyview International
Ltd. exercised a portion of its Class A Warrants and purchased 55,000 shares of
our Common Stock underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, we sold to KEW
Holdings Ltd., a Bahamian corporation 5,000 Units at a purchase price of $5.00
per Unit. Each Unit consisted of one share of our Common Stock, 22 Class A
Warrants (each to purchase one share of our Common Stock on or before July 31,
1998 at an exercise price of $1.50) and 45 Class B Warrants (each to purchase
one share of the Company's Common Stock at any time after April 5, 1999 but
before April 5, 2001 at an exercise
21
<PAGE>
price of $1.00. KEW Holdings Ltd. exercised its Class A Warrants and purchased
110,000 shares of our Common Stock underlying such warrants.
Pursuant to Purchase Agreement dated February 27, 1998, the Company
sold to JBS Holdings Ltd., a Bahamian corporation 5,000 Units at a purchase
price of $5.00 per Unit. Each Unit consisted of one share of our Common Stock,
22 Class A Warrants (each to purchase one share of our Common Stock on or before
July 31, 1998 at an exercise price of $1.50) and 45 Class B Warrants (each to
purchase one share of the Company's Common Stock at any time after April 5, 1999
but before April 5, 2001 at an exercise price of $1.00. JBS Holdings Ltd..
exercised a portion of its Class A Warrants and purchased 55,000 shares of our
Common Stock underlying such warrants.
In connection with a Share Exchange Agreement dated as of February 27,
1998 by and among our Company, Bridgewater Capital Corp. ("Bridgewater") and
Bronson B. Conrad ("Conrad") (Conrad, together with Bridgewater, the "WWOC
Shareholders"), the Company exchanged 1,500,000 shares of our Common Stock with
the WWOC Shareholders for an aggregate of 1,500,000 shares of Common Stock of
WWOC in the amounts and proportions as set forth below:
<TABLE>
<CAPTION>
Seller No. of Worldwide No. of World Wide Data, Inc.
- ----- Online Shares Exchanged Shares Received
----------------------- ---------------
<S> <C> <C>
Conrad 1 1
Bridgewater 1,500,000 1,500,000
</TABLE>
Item 11. Description of Securities
The authorized capital stock of our Company consists of 10,000,000
shares of Common Stock, $0.001 par value and 10,000 shares of Preferred Stock,
$0.01 par value.
Holders of our Common Stock are entitled to one vote per share held of
record on all maters requiring a vote of shareholders, including the election of
directors. There is no right to cumulative voting in the election of directors,
accordingly, holders of more than fifty percent (50%) of our Common Stock, if
any, who vote for elections of directors can elect one hundred percent (100%) of
our directors if they so choose. Subject to the prior rights of holders of
Preferred Stock and any contractual restrictions against the payment of
dividends, the holders of our Common Stock are entitled to receive dividends on
a pro-rata basis when, if and as declared by the Board of Directors out of funds
legally available therefore. Upon liquidation or dissolution, each outstanding
share of our Common Stock will be entitled to share equally in the assets of our
Company legally available for distribution to shareholders after the payment of
all debts, liabilities, and other obligations, including
22
<PAGE>
the preferences of any outstanding share of Preferred Stock. Shares of Common
Stock are not redeemable, have no conversion rights and carry no preemptive or
other rights to subscribe to or purchase additional shares in the event of a
subsequent offering. All outstanding shares of our Common Stock are duly
authorized and validly issued, fully paid and non-assessable and free of
preemptive rights.
In addition, our Company's Certificate of Incorporation provides that
our Company may, without further action by our Company's stockholders, issue
shares of Preferred Stock in one or more series. The Board of Directors of our
Company is authorized to established from time to time the number of shares to
be included in any such series and to fix the relative rights and preferences of
the shares of any such series, including without limitation dividend rights,
dividend rate, voting rights, redemption rights and terms, liquidation
preferences and sinking fund provisions. The Board of Directors of our Company
may authorize and issue Preferred Stock with voting or conversion rights that
could adversely affect the voting power or other rights of the holders of our
Common Stock. In addition, the issuance of Preferred Stock could have the
effect of delaying or preventing a change in control of our Company. No shares
of our Preferred Stock have been issued.
Warrants
Our Company's Class B Warrants entitle the holder to purchase one
share of common stock at a price of $1.50 at any time between April 15, 1999 and
April 5, 2001. The warrants may be exercised upon surrender of the Warrant
Certificate during the exercise period to our Company, together with a duly
completed Notice of Exercise and full payment of an amount equal to the purchase
price times the number of Warrants to be exercised. The Class B Warrant holders
do not have the rights or privileges of holders of our Common Stock.
The Generation warrants entitle the holder to purchase 25,000 shares
of our Common Stock exercisable at $2.50 for five years until September 30,
2004. The Generation warrant has a value of $250.00 ($0.01 per warrant). The
Generation warrant holders do not have the rights or privileges of holders of
our Common Stock.
Debentures
We have issued convertible debentures in the aggregate principal
amount of $250,000 for $250,000. The price at which the convertible debentures
are converted shall be the average closing bid price of our Common Stock quoted
by Nasdaq level III for five day trading period ending on the date prior to the
date set forth on the conversion notice relating to such convertible debentures
times 60% (the "Multiplier"). The Multiplier is subject to being decreased in
the event we do not register the shares underlying the convertible debentures
under the Securities Act. Holders of the
23
<PAGE>
debentures do not have the rights or privileges of holders of our Common Stock.
The convertible debentures mature on September 30, 2000 and the unconverted
principal balance and any accrued and unpaid interest shall be due and payable
on such date. The maturity date of the convertible debentures automatically
extends for up to eighteen one-month periods, unless the purchaser or any
subsequent holder notifies us in writing not less than 10 days prior to any
expiration that the convertible debenture will not be extended.
Item 12. Indemnification of Directors and Officers.
We are permitted to indemnify our directors and officers in accordance
with and as limited by our Certificate of Incorporation, By-laws and Delaware
and federal law.
The relevant provisions in our Certificate of Incorporation and By-
laws may have the effect of reducing the likelihood of derivative litigation
against directors and may discourage or deter stockholders or management from
bringing a lawsuit against directors for breach of their fiduciary duty, even
though such an action, if successfully, might otherwise have benefited the
company and our stockholders. However, we believes the relevant provisions of
our By-laws and Certificate of Incorporation are necessary to attract and retain
qualified persons as directors and officers.
For liabilities against directors and officers arising under the
federal securities laws, the Securities and Exchange Commission has stated that,
in its opinion, indemnification of directors and officers for such liabilities
is against public policy and is therefore unenforceable.
Item 13. Financial Statements.
Our audited balance sheet for the period at December 31, 1998 and the
Audited Statements of Operations, Stockholders' Equity and Statements Cash Flows
for the years ended December 31, 1998 and 1997 are submitted herewith. The
index setting forth the page numbers for the foregoing Financial Statements is
found under "Item 15 Financial Statements, Accompanying Notes and Exhibits."
Item 14. Changes In and Disagreements With Accountants on Accounting
and Financial Disclosure.
None.
24
<PAGE>
Item 15. Financial Statements, Accompanying Notes and Exhibits.
(a) Index to Financial Statements
<TABLE>
<CAPTION>
Financial Statements Page
-------------------- ----
<S> <C>
Independent Auditors' Report F2
Consolidated Balance Sheet as of December 31, 199 and 1998 F3
Consolidated Statements of Operations for the Two Years Ended F4
December 31, 1999 and 1998
Consolidated Statements of Changes in Shareholders' Equity F5
Consolidated Statements of Cash Flows for the Two Years Ended F6
December 31, 1999 and 1998
Notes to Consolidated Financial Statements` F7-F16
</TABLE>
(b) Exhibit Table - The following exhibits are filed as part of the
Registration Form 10-SB General Registration Statement
Exhibit Description of Exhibit
------- ----------------------
3.1 Certificate of Incorporation of the Company
3.2 Bylaws of the Company.
4.1 Warrant Certificate issued to Gold Coast for 225,000
warrants to purchase common stock of the Company, dated
February 27, 1998
4.2 Warrant Certificate issued to Sunnyview for 225,000
warrants to purchase common stock of the Company dated
February 27, 1998
4.3 Warrant Certificate issued to KEW for 225,000 warrants to
purchase common stock of the Company dated February 27,
1998
4.4 Warrant Certificate issued to JBS for 225,000 warrants to
purchase common stock of the Company dated February 27,
1998
4.5 Warrant Certificate for 25,000 shares of common stock of
the Company issued to GCA dated September 27, 1999
10.1 Convertible Debenture of WorldWide Data, Inc. (the
"Company") in the amount of $50,000 issued to Generation
Capital Associates ("GCA") dated September 30, 1999.
10.2 Financing Terms Agreement by and between the Company and
GCA dated September 20, 1999;
10.3 Escrow Agreement by and between the Company and GCA dated
September 20, 1999
10.4 Purchase Agreement by and between the Company and
Montaque Securities International Ltd., dated April 6,
1999
10.5 Purchase Agreement by and between the Company and
Montaque Securities International Ltd dated March 19,
1999.
10.6 Purchase Agreement by and between the Company and CBC
Holdings, Inc., dated November 17, 1998
10.7 Stock Purchase Agreement by and among the Company,
Bronson B. Conrad and 761395 Alberta ("Alberta") Ltd.
dated November 17, 1998
10.8 Aircraft Security Agreement by and between the Company
and Alberta dated March 10, 1998
10.9 Stock Exchange Agreement by and between the Company,
Bridgewater Capital Corp. and Conrad, dated February 27,
1999
10.10 Purchase Agreement by and between the Company and Gold
Coast International Ltd. ("Gold Coast") dated February 27,
1998
10.11 Purchase Agreement by and between the Company and
Sunnyview International Ltd. ("Sunnyview") dated February
27, 1998
10.12 Purchase Agreement by and between the Company and KEW
Holdings Ltd. ("Kew") dated February 27, 1998
10.13 Purchase Agreement by and between the Company and JBS
Holdings Ltd., ("JBS") dated February 27, 1998
10.14 Guaranty of Bronson B. Conrad to WorldWide Data, Inc.
relating to US$177,685 Promissory Note.
10.15 Advisory Agreement between the Company and A-Z
Professional Consultants, Inc., dated January 31, 2000.
20.1 Promissory Note for $189,631.58 by and between the
Company and Conrad dated November 17, 1998
20.2 Promissory Note for CDN $350,000 by and between 761395
Alberta Ltd, Bronson B. Conrad and Textron Financial
Corporation
23.1 Consent of Kempisty & Company, Certified Public
Accountants to be filed by Amendment
27 Financial Data Schedule (b) Financial Statement Schedules
25
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934,
the Company caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WORLDWIDE DATA, INC.
By: /s/ Romeo Colacitti
___________________________
Name: Romeo Colacitti
Title: Chief Executive Officer
Date: April 26, 2000
______________________
* Print the name and title of each signing officer under his or her signature.
26
<PAGE>
WORLDWIDE DATA, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999
INDEX
-----
PAGE
----
INDEPENDENT AUDITORS' REPORT F2
CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 1999 AND 1998 F3
CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE TWO YEARS ENDED
DECEMBER 31, 1999 AND 1998 F4
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY F5
CONSOLIDATED STATEMENTS CASH FLOWS FOR THE TWO YEARS ENDED
DECEMBER 31, 1999 AND 1998 F6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS F7-F16
F1
<PAGE>
KEMPISTY & COMPANY
CERTIFIED PUBLIC ACCOUNTANTS, P.C.
- -------------------------------------------------------------------------------
15 MAIDEN LANE - SUITE 1003 - NEW YORK, NY 10038 - TEL (212) 406-7272 -
FAX (212) 513-1930
INDEPENDENT AUDITORS' REPORT
The Board of Directors
Worldwide Data, Inc.
We have audited the consolidated balance sheets of Worldwide Data, Inc. as of
December 31, 1999 and 1998 and the related consolidated statements of
operations, shareholders' equity and cash flows for the years then ended. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our 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 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 Worldwide Data, Inc. as of
December 31, 1999 and 1998 and the results of its' operations and cash flows for
the years then ended in conformity with generally accepted accounting
principles.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 12 conditions
exist which raise substantial doubt about the Company's ability to continue as a
going concern unless it is able to generate sufficient cash flows to meet its
obligations and sustain its operations. Management's plan regarding these
matters is also described in Note 12. The financial statements do not include
any adjustments that might result from the outcome of this uncertainty.
Kempisty & Company
Certified Public Accountants PC
New York, New York
March 2, 2000
F2
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
December 31, December 31,
1999 1998
---- ----
ASSETS
------
CURRENT ASSETS:
<S> <C> <C>
Cash $ 216,993 $ 58,374
Accounts receivable (net of allowances of bad debts
of $10,368 for 1999) 47,065 43,524
Prepaid expenses 9,412 8,191
-------------- ---------------
TOTAL CURRENT ASSETS 273,470 110,089
PROPERTY AND EQUIPMENT (net of accumulated
depreciation of $130,899 and $136,869 in 1999 and 1998) 81,753 433,685
GOODWILL (net of accumulated amortization of $168,639
and $78,157 in 1999 and 1998) 751,209 1,022,039
OTHER ASSETS:
Organization expense 1,380 2,761
Deposit receivable 7,327 6,889
Loan and receivables from affiliates 177,685 123,570
-------------- ---------------
TOTAL ASSETS $ 1,292,824 $ 1,699,033
============== ===============
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Debenture payable $ 250,000 $ -
Accounts payable and accrued expenses 139,355 109,454
Accrued interest payable 2,002 3,345
Current portion of long-term debt (Note 8) 34,563 71,518
Short-term loan from officer (Note 7) - 189,631
Deferred income 4,404 8,123
-------------- ---------------
TOTAL CURRENT LIABILITIES 430,324 382,071
PAYABLE TO OFFICER (NOTE 3) 55,185 344,336
LONG TERM DEBT (NOTE 8) - 191,802
COMMITMENTS AND CONTINGENCIES (NOTE 6)
SHAREHOLDERS' EQUITY
Common stock $.001 par value 10,000,000 shares
authorized; 3,487,500 and 2,822,500 shares issued and
outstanding at 12/31/99 and 12/31/98 respectively (Note 11) 3,088 2,823
Preferred stock $.01 par value 10,000 shares authorized;
issued and outstanding, none -
Additional paid-in capital 2,532,260 2,267,525
Deficit (1,740,372) (1,491,569)
Translation adjustment 12,339 2,045
-------------- ---------------
TOTAL SHAREHOLDERS' EQUITY $ 807,315 $ 780,824
-------------- ---------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 1,292,824 $ 1,699,033
============== ===============
</TABLE>
See Notes to Financial Statements
F3
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Operations
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
---- ----
Sales revenues:
<S> <C> <C>
Online services $ 495,448 $ 338,069
Aircraft leasing 63,859 -
------------- -------------
559,307 338,069
Cost of sales:
Online services 278,508 221,920
Aircraft leasing 150,954 66,460
------------- -------------
429,462 288,380
Gross profit 129,845 49,689
Goodwill expense 104,009 78,157
Selling, general and administrative expenses 417,469 416,877
------------- -------------
521,478 495,034
Loss from operations (391,633) (445,345)
Other income and expenses
Gain from sale of aircraft 119,822 -
Interest income 23,008 2,187
------------- -------------
Income (loss) before taxes (248,803) (443,158)
Provision for income taxes - -
------------- -------------
Net income (loss) $ (248,803) $ (443,158)
============= =============
Basic and diluted income (loss) per share $ (0.08) $ (0.20)
============= =============
Basic and diluted average shares outstanding 3,026,568 2,246,308
============= =============
</TABLE>
See Notes to Financial Statements.
F4
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Changes in Stockholders' Equity (Deficit)
Year ended December 31, 1999
<TABLE>
<CAPTION>
Common Stock Additional
($.001) Par Value Paid-In Translation
Shares Amount Capital (Deficit) Adjustments Total
------ ------ ------- --------- ----------- -----
<S> <C> <C> <C> <C> <C> <C>
Balance January 1, 1998 622,500 $ 623 $ 349,877 $ (1,048,411) $ (3,564) $ (701,475)
Stock issued to acquire
Worldwide Online 1,500,000 1,500 918,348 - - 919,848
Sale of units 20,000 20 99,980 - - 100,000
Exercise of warrants 440,000 440 659,560 - - 660,000
Sale of common stock 240,000 240 239,760 - - 240,000
Net Income (Loss) - - - (443,158) - (443,158)
Translation adjustment - - - - 5,609 5,609
-------------- ------- ------------- -------------- ----------- ------------
Balance December 31, 1998 2,822,500 2,823 2,267,525 (1,491,569) 2,045 780,824
Sale of common stock 265,000 265 264,735 - - 265,000
Net Income (Loss) - - - (248,803) - (248,803)
Translation adjustment - - - - 10,294 10,294
-------------- ------- ------------- -------------- ----------- ------------
Balance December 31, 1999 3,087,500 $ 3,088 $ 2,532,260 $ (1,740,372) $ 12,339 $ 807,315
============== ======= ============= ============== =========== ============
</TABLE>
See Notes to Financial Statements
F5
<PAGE>
WORLDWIDE DATA, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
For the Year Ended
December 31,
1999 1998
---- ----
Operating Activities
- --------------------
<S> <C> <C>
Net (loss) $ (248,803) $ (443,158)
Adjustments to reconcile net income or (loss)
to net cash used by operating activities:
Depreciation and amortization 131,707 149,312
Bad debt expense 12,610 -
Gain on sale of aircraft (119,822) -
Changes in operating assets and liabilities (net
of acquired companies):
Accounts receivable (13,909) (38,418)
Prepaid expenses (1,221) (4,012)
Accounts payable & accrued expenses 29,901 (3,043)
Accrued interest payable (1,343) 448
Deferred income (3,719) 8,123
------------- -------------
Net cash used by operating activities (214,599) (330,748)
Investing Activities (net of acquired companies):
- -------------------------------------------------
Purchase of Alberta Ltd net of cash acquired - (239,499)
Purchase of property and equipment (28,125) (2,935)
Sale of aircraft 680,000 -
Loans to affiliates (54,115) (123,570)
------------- -------------
Net cash provided (used) by investing activities 597,760 (366,004)
Financing Activities (net of acquired companies):
- -------------------------------------------------
Sale of common stock 265,000 240,000
Sale of common stock units - 100,000
Exercise of common stock warrants - 660,000
Loan payments (260,760) (39,886)
Debenture loan 250,000 -
Paydown of officer loan and payable (478,782) (218,755)
------------- -------------
Net cash (used) provided by financing activities (224,542) 741,359
------------- -------------
Increase in cash 158,619 44,607
Cash at beginning of period 58,374 13,767
------------- -------------
Cash at end of period $ 216,993 $ 58,374
============= =============
Supplemental Disclosures of Cash Flow Information:
Cash paid during year for:
Interest $ 49,773 $ 28,162
============= =============
Income taxes $ - $ -
============= =============
Non-cash transactions:
On February 26, 1998 the Company issued 1,500,000 shares of common stock for the 85% of
Worldwide On-line Corp common stock it did not own (Note 5).
On November 17, 1998 the Company issued a $189,631 face value 10% demand note as
part of the consideration given to acquire 100% of 761395 Alberta Ltd. (Notes 3 and 5).
</TABLE>
See Notes to Financial Statements.
F6
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 1- ORGANIZATION AND OPERATIONS
Worldwide Data, Inc., ("WDI") was incorporated in the State of
Delaware on February 27, 1995.
On August 16, 1995 Worldwide Online Corp. ("the Company" and "WWOL")
was incorporated in Ontario, Canada. On February 26, 1998 Worldwide
Data, Inc. exchanged 1,500,000 shares of the Company's common stock
for the 85% of Worldwide Online Corp. common stock it did not already
own. (See Note 5)
Worldwide Online creates intranets/extranets for corporations, designs
and develops corporate web sites and databases, and creates
client-specific applications.
During 1999, Worldwide Online added application hosting and e-business
consulting to its service offerings.
On November 17, 1998 WDI acquired all the outstanding shares of 761395
Alberta Ltd., a Canadian company in the aircraft leasing business.
(Note 3 and 5)
In August, 1999 761395 Alberta Ltd sold the aircraft that was used for
the leasing business and currently has no operations.
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
---------------------
The consolidated financial statements include the accounts of
Worldwide Data, Inc. and all of its subsidiaries. All significant
intercompany transactions and balances have been eliminated in
consolidation.
For accounting purposes, the 1998 acquisition of WWOL has been treated
as an acquisition of WDI by WWOL and as a recapitalization of WWOL.
The historical financial statements prior to February 26, 1998 are
those of WWOL giving effect to the acquisition as if the acquisition
took place on August 16, 1995.
Foreign Currency Translation
----------------------------
The Company has determined that the local currency of its Canadian
subsidiaries is the functional currency. In accordance with Statement
of Financial Accounting Standard No. 52, "Foreign Currency
Translation" ("SFAS No. 52") the assets and liabilities denominated in
foreign currency are translated into U.S. dollars at the current rate
of exchange existing at period-end and revenues and expenses are
translated at average monthly exchange rates. Related translation
adjustments are reported as a separate component of shareholders'
equity, whereas, gains or losses resulting from foreign currency
transactions are included in results of operations.
F7
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Cash and Cash Equivalents
-------------------------
For purposes of the statement of cash flows, the Company considers all
highly liquid investments with a maturity of three months or less at
acquisition to be cash equivalents.
Depreciation and Amortization
-----------------------------
The cost of furniture and equipment is depreciated over the estimated
useful lives of the related assets. The cost of leasehold improvements
is amortized over the lesser of the length of the related lease or the
estimated useful life of the assets. Depreciation is computed on a
straight line basis for financial reporting purposes and on an
accelerated basis for income tax purposes. For income tax purposes,
leasehold improvements are amortized in accordance with Internal
Revenue Service regulations.
Goodwill
--------
The goodwill recorded by the Company in connection with its
acquisitions is being amortized on a straight line basis over ten
years.
Organization Costs
------------------
Costs incurred in connection with the organization of the Company are
amortized over five years beginning with the commencement of
operations.
Income Taxes
------------
The Company previously adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes", ("SFAS No.109")
which requires the asset and liability method of accounting for income
taxes. Enacted statutory tax rates are applied to temporary
differences arising from the differences in financial statement
carrying amounts and the tax basis of existing assets and liabilities.
Due to the uncertainty of the realization of income tax benefits,
(Note 9), the adoption of SFAS 109 had no effect on the financial
statements of the Company.
Net Loss per Common Share
-------------------------
Net loss per common share is based on the weighted average number of
common shares outstanding during the period presented. Fully diluted
loss per share has not been disclosed as it is anti-dilutive. The
weighted average number of common shares outstanding used in the
computation of net loss per share has been adjusted to give effect for
the 1 for 10 reverse stock split discussed in Note 11.
F8
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 2- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires the Company's management to
make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reporting period. Actual
results could differ from those estimates.
Concentration of Credit Risk
----------------------------
Financial instruments which potentially subject the Company to
significant concentrations of credit risk consist principally of cash
investments at commercial banks and receivables from officers and
directors of the Company. Cash and cash equivalents are temporarily
invested in interest bearing accounts in financial institutions, and
such investments may be in excess of insurance limits.
Reverse Stock Split
-------------------
The Company's Board of Directors effected a 1 for 10 reverse stock
split of its common stock $.001 par value on February 12, 1998. All
share and per share amounts in the accompanying financial statements
have been retroactively adjusted to reflect this stock split.
Comprehensive Income
--------------------
Effective January 1, 1998 the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS
No. 130"). SFAS No. 130 requires an entity to report comprehensive
income and its components and increases financial reporting
disclosures. This standard has no impact on the Company's financial
position, cash flows or results of operations since the Company's
comprehensive income is the same as its reported net income for both
1999 and 1998.
Note 3- RELATED PARTY TRANSACTIONS
761395 Alberta Ltd.
-------------------
In November, 1998 the Company acquired 100% of the outstanding common
stock of 761395 Alberta Ltd. from the president of the Company for
$240,000 plus a $189,631.58 ten percent (10%) demand note. The demand
note was repaid in April, 1999. (See Notes 5 and 11)
F9
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 3- RELATED PARTY TRANSACTIONS (continued)
<TABLE>
<CAPTION>
Payable to Officer December 31,
------------------ 1999 1998
---- ----
<S> <C> <C>
Bronson Conrad, President $ 55,185 $ 344,336
The payable to officer is unsecured, non-interest bearing and has no specific terms
of repayment.
Loans and receivables from affiliates December 31,
------------------------------------- 1999 1998
---- ----
Receivables $ 11,204 $ 16,110
Loans 166,481 107,460
-------------- ---------------
Total $ 177,685 $ 123,570
============== ===============
</TABLE>
Receivables from affiliates for occupancy costs or services rendered
in the ordinary course of business represent amounts due from
companies that are controlled by the Chairman of the Board of
Directors or his family.
Loans to affiliate represents amounts due from AMCAN Minerals Limited,
a company controlled by the Chairman of the Board. The loan bears
interest at ten percent per annum and the loan repayment is guaranteed
by the Chairman.
Note 4- PROPERTY AND EQUIPMENT
<TABLE>
<CAPTION>
Property and equipment consists of the following: December 31,
1999 1998
---- ----
<S> <C> <C>
Aircraft $ 0 $ 384,849
Furniture and fixtures 28,346 26,402
Computer equipment 181,435 155,255
Leasehold improvements 2,871 4,048
-------------- ---------------
212,652 570,554
Less accumulated depreciation and amortization (130,899) (136,869)
-------------- ---------------
$ 81,753 $ 433,685
============== ===============
</TABLE>
Note 5- ACQUISITIONS
WDI owned 15% of Worldwide Online Corp until February, 1998 when it
acquired the remaining 85% of the common stock of the Company. The
combination was accounted for using the purchase method. The purchase
price for the common stock was 1,500,000 unregistered shares of the
Company's common stock, valued at $150,000. The resulting goodwill of
$919,848 is being amortized over ten (10) years. The acquisition was
recorded as a reverse merger.
F10
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 5- ACQUISITIONS (continued)
In November 1998, the Company acquired 100% of 761395 Alberta
Ltd., ("Alberta Ltd") an aircraft leasing company, from the
president of the Company. (See Notes 3 and 11) The combination
was accounted for using the purchase method. The resulting
goodwill of $180,348 is being amortized over ten (10) years. In
August, 1999 Alberta Ltd sold its aircraft and currently has no
operations. As part of the aircraft sale, the Company expensed
the balance of goodwill against the profit on the sale of the
aircraft.
Note 6- COMMITMENTS AND CONTINGENCIES
Leases
------
The Company entered into a lease agreement for office space
which expires in the year 2000. Also, the Company entered into a
sublease arrangement with a related party whereby approximately
50% of the Company's rent and certain fixed expenses are
reimbursed to the Company. Rent expense for the Company for 1999
was approximately $18,000. Remaining commitments under this
lease mature as follows:
Year ending
December 31, Amount
------------ ------
2000 $ 23,775
==================
Other
-----
The Market Regulation Division of the National Association of
Securities Dealers, Inc. has commenced an inquiry regarding the
trading of the Company's stock. The Company is unable to predict
the outcome of this matter.
Note 7- SHORT-TERM BORROWINGS
Debenture Payable
-----------------
On September 30, 1999, the Company issued to Generation Capital
Associates ("GCA") convertible debentures in the aggregate
principal amount of $250,000 for $250,000. The debentures are
convertible into the Company's Common Stock at any time after
September 30, 1999. Pursuant to the terms of the transaction,
the Company issued 400,000 shares of The Company's common stock,
which represents the shares underlying the convertible
debentures ("Debenture Shares") to an escrow agent. The
Debenture Shares held by the escrow agent represent the shares
GCA is entitled to under the conversion provisions of the
convertible debentures. The price at which the convertible
debentures are converted shall be the average closing bid price
of the Company's common stock quoted by Nasdaq Level III for a
five-day trading period ending on the date prior to the date set
forth on GCA's conversion notice times (x) 60% (the
"Multiplier"). The Multiplier is subject to being decreased in
the event the Company does not register the Debenture shares
under the Act by specific dates.
F11
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 7- SHORT-TERM BORROWINGS (continued)
<TABLE>
<CAPTION>
Short-term borrowings consisted of the following: December 31, December 31,
1999 1998
---- ----
10% Demand note payable to the president
<S> <C> <C>
of the Company $ - $ 189,631
Debenture payable 250,000 -
------------------ ------------------
$ 250,000 $ 189,631
================== ==================
At December 31, 1999 and 1998 the carrying value of short-term
borrowings approximated fair values.
Note 8- LONG-TERM DEBT
Long-term debt consists of the following at: December 31, December 31,
1999 1998
---- ----
12% term loan due February 10, 2003 $ - $ 198,325
Floating rate term loan due December 17, 2000 34,563 64,995
------------------ ------------------
34,563 263,320
Less current portion 34,563 71,518
------------------ ------------------
$ 0 $ 191,802
================== ==================
</TABLE>
The 12% term loan requires monthly principal and interest
payments of $7,785.56 Cdn (approximately $5,060.00 US) to
maturity. The loan is secured by the Company's aircraft and
engines. The loan payments are currently being paid for by the
Company's President. In August, 1999 the Company sold the
aircraft and paid off the 12% term loan due February 10, 2003.
The floating rate (bank's prime plus 3%, currently 9 3/4%) term
loan requires monthly principal payments of approximately $2,708
plus interest to maturity.
At December 31, 1999 and 1998 the carrying values of long-term
borrowings approximated their fair values.
F12
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 9- INCOME TAXES
The provision (benefit) for income taxes consisted of the
following (in thousands):
<TABLE>
<CAPTION>
Year ended December 31,
1999 1998
---- ----
Current:
<S> <C> <C>
Federal tax expense $ (76,000) $ (136,000)
State tax expense (25,000) (40,000)
Deferred:
Federal tax expense 76,000 136,000
State tax expense 25,000 40,000
---------------- ----------------
$ - $ -
================ ================
A reconciliation of differences between the statutory U.S. federal income tax rate and the
Company's effective tax rate follows:
Year ended December 31,
1999 1998
---- ----
Statutory federal income tax 34% 34%
State income tax-net of
federal benefit 6% 6%
Valuation allowance -40% -40%
---------------- ----------------
0% 0%
================ ================
The components of deferred tax assets and liabilities were as
follows:
December 31,
1999 1998
---- ----
Deferred tax assets:
Net operating loss carryforwards $ 541,000 $ 440,000
---------------- ----------------
Total deferred tax assets 541,000 440,000
Valuation allowance (541,000) (440,000)
---------------- ----------------
Net deferred tax assets $ - $ -
================ ================
</TABLE>
F13
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1999
Note 9- INCOME TAXES (continued)
SFAS No, 109 requires a valuation allowance to be recorded
when it is more likely than not that some or all of the
deferred tax assets will not be realized. At December 31,
1999, a valuation allowance for the full amount of the net
deferred tax asset was recorded because of continuing losses
and uncertainties as to the amount of taxable income that
would be generated in future years.
The Company recognized losses for the years ended December
31, 1999 and 1998. The amount of available additional net
operating loss carry forwards are approximately $250,000 for
1999 $350,000 for 1998, $150,000 for 1997, $500,000 for 1996
and $142,000 for 1995. The net operating loss carry forwards,
if not utilized, will expire in the years 2001 through 2019.
Note 10- FAIR VALUE OF FINANCIAL INSTRUMENTS
The following estimated fair value amounts have been
determined using available market information and appropriate
valuation methodologies. However, considerable judgement is
necessarily required in interpreting market data to develop
the estimates of fair value.
Accordingly, the estimates presented herein are not
necessarily indicative of the amounts that the Company could
realize in a current market exchange. The use of different
market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
<TABLE>
<CAPTION>
December 31, 1999
Carrying Amount Fair Value
--------------- ----------
Assets:
<S> <C> <C>
Cash $ 216,993 $ 216,993
Accounts receivable, net 47,065 47,065
</TABLE>
The carrying amounts of cash and accounts receivable are a
reasonable estimate of their fair market value.
F14
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999
Note 11-- SHAREHOLDERS' EQUITY
Common Stock
------------
On February 12, 1998 the Company effected a one for ten reverse stock
split of its common stock and changed the par value of the common
stock from $.0001 per share to $.001 per share. All references to
number of shares, except shares authorized, and to per share
information in the consolidated financial statements have been
adjusted to reflect the stock split on a retroactive basis.
On February 26, 1998 the Company exchanged 1,500,000 shares of its
common stock $.001 par value for 1,500,000 shares of Worldwide Online
Corp. stock on a share for share basis.
On February 27, 1998 the Company sold to unrelated third parties,
under Rule 504 of the Securities and Exchange Act of 1933, as
amended, for net proceeds of $100,000, 20,000 units consisting of one
share of common stock $.001 par value, twenty-two (22) class A
warrants, each warrant to purchase one share of the Company's common
stock for $1.50 per share on or before March 30, 1998, and forty-five
(45) class B warrants, each to purchase a share of the Company's
common stock at any time after April 5, 1999 and expiring on April 5,
2001 for one dollar ($1.00) per share.
On November 17, 1998 the Company sold to an unrelated third party,
under Rule 504 of the Securities and Exchange Act of 1933, as
amended, 240,000 $0.001 par value shares at one dollar ($1.00) per
share, for net proceeds of $240,000. The proceeds of this offering
were used to pay for the acquisition of 761395 Alberta Ltd. (See
Notes 3 and 5)
Stock sales under Securities and Exchange Commission Rule 504 of
Regulation D:
On March 21, 1999 the Company sold 200,000 shares of $.001 par value
common stock in a private placement for net proceeds to the Company
of $200,000. Approximately $190,000 of the proceeds was used to
complete the acquisition of 761395 Alberta Ltd., a company owned by
the President of World Wide Data, Inc.
On April 6, 1999 the Company sold 65,000 shares of $.001 par value
common stock in a private placement for net proceeds of $65,000 for
working capital.
On September 30, 1999 as part of the sale of the convertible
debenture (Note 7), the Company issued 400,000 shares of common stock
to be held in escrow in the event of the exercise of the convertible
debenture. These shares while issued are not considered outstanding.
F15
<PAGE>
WORLDWIDE DATA, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS--(Continued)
December 31, 1999
Note 11 -- SHAREHOLDERS' EQUITY (continue)
Warrants
In connection with the debenture financing on September 30, 1999
(Note 7) the Company issued 25,000 cashless warrants to purchase the
Company's common stock at $2.50 per share until September 30, 2004.
During 1998 all 440,000 class A warrants issued as part of the
February 27, 1998 unit sale were exercised for $660,000 net proceeds
to the Company. The 900,000 class B warrants issued as part of the
same unit sale remain outstanding as of December 31, 1999.
The per share exercise price of the outstanding warrants at December
31, 1999 are as follows:
<TABLE>
<CAPTION>
Exercise Year of
Shares Price Expiration
------ -------- ----------
<S> <C> <C>
900,000 $1.00 2001
25,000 $2.50 2004
</TABLE>
The following is a summary of warrant transactions:
<TABLE>
<CAPTION>
Year ended
December 31,
-----------------
1999 1998
------- ---------
<S> <C> <C>
Outstanding at beginning of period..................... 900,000 --
Issued as part of unit sale............................ -- 1,340,000
New warrants issued.................................... 25,000 --
Exercised during the period............................ -- (440,000)
------- ---------
Outstanding and eligible for exercise.................. 925,000 900,000
======= =========
</TABLE>
Note 12-- GOING CONCERN MATTERS
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business. As
shown in the financial statements for the years ended December 31,
1999 and 1998, the Company incurred losses of $248,803 and $443,158,
respectively, and has not made a profit in any year since its
inception. These factors among others may indicate that the Company
will be unable to continue as a going concern for a reasonable
period of time.
The financial statements do not include any adjustments relating to
the recoverability and classification of liabilities that might be
necessary should the Company be unable to continue as a going
concern. The Company's continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis and to obtain additional financing or
refinancing as may be required to ultimately attain profitability.
The Company is also actively pursuing additional equity financing
through stock sales (Note 11) and the exercise of its outstanding
warrants.
F16
<PAGE>
EXPERTS
The audited balance sheets of the Company as at December 31, 1999 and 1998
and the audited Statements of Operations, Statements of Stockholders' Equity and
Statements of Cash Flows for the years ended December 31, 1999 and 1998 have
been included herein and in the Registration Statement in reliance upon the
report, appearing elsewhere herein, of Kempisty & Company Certified Public
Accountants, P.C., independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.
<PAGE>
Exhibit 3.1
CERTIFICATE OF INCORPORATION
OF
WORLDWIDE DATA, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purpose. hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to as the "General Corporation Law of the State of Delaware), hereby
certifies that:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is Worldwide Data, Inc.
SECOND: The address, including street, number, city and county of the
registered office of the corporation in the State of Delaware is 32 Loockerman
Square, Suite 1L-100, City of Dover, County of Kent, 19904; and the name of the
registered agent of the Corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purpose to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General Corporation Law of the
State of Delaware.
FOURTH: The aggregate number of shares of stock which the corporation
shall have the authority to issue is ten million ten thousand (10,010,000)
shares, which are divided into ten million (l0,000,000) shares of Common Stock,
$.0001 par value per share (the "Common Stock"), and ten thousand (10,000)
shares of Preferred Stock, $O.01 par value per share (the "Preferred Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the distinctive
designations thereof;
<PAGE>
2. The rate and preference or dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption.
4. The amount payable upon shares in the event of Voluntary and
involuntary liquidation;
5. sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights, and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
FIFTH: The name and the mailing address of the incorporator is as follows:
Debra L. Plaskett
Werbel NcMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors, and or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in
-2-
<PAGE>
value of the creditors or class of creditors, and/or of the stockholders or
class of stockholders or this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this Corporation as a
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which said application has been made, be binding on all the creditors or class
of creditors, and/or on all of the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
EIGHT: No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. If the General Corporation Law of the State of Delaware is amended
after February 27, 1995 to authorize corporate action further eliminating or
limiting the personal liability of directors, the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of the State of Delaware.
NINTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities, judgments, fines, amounts paid in settlement, liabilities, or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those seeking indemnification of expenses may be entitled under any by-laws,
agreements, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
-3-
<PAGE>
ELEVENTH: in furtherance and not in limitation of the powers conferred by
statute, the by-laws of the Corporation may be made, altered, amended or
repealed by the stockholders of the Corporation or by a majority of the entire
Board of Directors of the Corporation.
Signed: February 27, 1995
/s/ Debra L. Plaskett
-------------------------
Debra L. Plaskett
Sole lncorporator
711 Fifth Avenue
New York, New York 10022
--4--
<PAGE>
CERTIFICATE OF AMENDMENT
TO THE
CERTIFICATE OF INCORPORATION
OF
WORLDWIDE DATA, INC.
(pursuant to Section 242 of the General Corporation Law
of the State of Delaware)
It is hereby certified that:
1. The name of the corporation (hereinafter referred to as the
"Corporation") is Worldwide Data, Inc.
2. The certificate of incorporation of the Corporation is hereby amended
by striking out Article "FOURTH" thereof and substituting in lieu of said
Article the following new Article FOURTH:
FOURTH: The aggregate number of shares of stock which the
Corporation shall have the authority to issue is ten million ten thousand
(10,010,000) shares, which are divided into ten million (10,000,000) shares of
Common Stock, $.00l par value per share (the "Common Stock"), and ten thousand
(10,000) shares of Preferred Stock, $.0l par value per share (the "Preferred
Stock").
Preferred Stock. The Corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board of
Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following:
1. The number of shares to constitute such series, and the
distinctive designations thereof;
2. The rate and preference or dividends, if any, the time of payment
of dividends, whether dividends are cumulative and the data from
which any dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price
and the terms and conditions of redemption;
<PAGE>
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an
increase in the number of shares of any series theretofore
authorized, any rights of Preferred stock shareholders to receive
dividends in the form of Common Stock or Preferred Stock, and any
limitation or restriction of rights or powers to which shares of any
future series shall be subject.
On the effective date of this Certificate of Amendment, the
outstanding shares of common stock of the Corporation shall be reverse split
one-for-ten, so that each share of common stock, par value $.000l per share,
outstanding at the close of business on the effective date shall be converted
into 1/10th of a share of common stock, par value $.00l per share with
fractional shares being rounded up to the nearest whole share.
3. The amendment of the certificate of incorporation herein
certified has been duly adopted in accordance with the provisions of Section 242
of the General Corporation Law of the State of Delaware by the unanimous consent
of the Board of Directors.
<PAGE>
IN WITNESS WHEREOF, we have hereunto executed this document this 4 day
of Februay 1998.
WORLDWIDE DATA
/s/Brandon Conrad
----------------------
Name: Bronson Conrad
Title: President
[Corporate Seal]
Attest:
By:
----------------------
Name:
Title:
<PAGE>
Exhibit 3.2
BY-LAWS
OF
WORLDWIDE DATA, INC.
(a Delaware corporation)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office shall be
established and maintained at The Prentice-Hall Corporation System, Inc., 32
Loockerman Square, Dover, Delaware. The Prentice-Hall Corporation System Inc.
shall be the registered agent of this corporation in charge thereof.
Section 2. Other Offices. The corporation may have other offices,
either within or without the State of Delaware, at such place or places as the
Board of Directors may from time to time determine or the business of the
corporation may require.
ARTICLE II
MEETING OF STOCKHOLDERS
Section 1. Annual Meetings. Annual meetings of stockholders for the
election of directors and for such other business as may be stated in the notice
of the meeting shall be held at such place, either within or without the State
of Delaware, and at such time and date as the Board of Directors, by resolution,
shall determine and as set forth in the notice of the meeting.
Section 2. Other Meetings. Meetings of stockholders for any purpose
other than the election of directors may be held at such time and place, within
or without the State of Delaware, as shall be stated in the notice of the
meeting.
Section 3. Voting. Each stockholder entitled to vote in accordance
with the terms of the Certificate of Incorporation and in accordance with the
provisions of 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, but
not proxy shall be voted after three years from its date unless such proxy
provides for a longer period. Upon the demand of any stockholder, the vote for
directors and the vote upon any question before the meeting, shall be by ballot.
All elections for directors shall be decided by plurality vote; all other
questions shall be decided by majority vote except as otherwise
<PAGE>
provided by the Certificate of Incorporation or the laws of the State of
Delaware.
A complete list of the stockholders entitled to vote at the ensuing
election, arranged in alphabetical order, with the address of each, and the
number of shares held by each, shall be opened to the examination of any
stockholder for any purpose germane to the meeting, during ordinary business
hours, for a period of at least ten days prior to the meeting, either at a place
within the city where the meeting is to be held, which place shall be specified
in the notice of the meeting, or, if not so specified, at the place where the
meeting is to be held. The list shall also be produced and kept at the time and
place of the meeting during the whole time thereof, and may be inspected by any
stockholder who is present.
Section 4. Quorum. Except as otherwise required by law, by the
Certificate of Incorporation or by these By-Laws, the presence, in person or by
proxy, of stockholders holding a majority of the stock of the corporation
entitled to vote shall constitute a quorum at all meetings of the stockholders.
In case a quorum shall not be present at any meeting, a majority in interest of
the stockholders entitled to vote thereat, present in person or by proxy, shall
have the power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until the requisite amount of stock entitled
to vote shall be present. At such adjourned meeting at which the requisite
amount of stock entitled to vote shall be represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed; but only those stockholders entitled to vote at the meeting as
originally notice shall be entitled to vote at any adjournment or adjournments
thereof.
Section 5. Special Meetings. Special meetings of the stockholders
for any purpose or purposes may be called by the President or Secretary, or by
resolution of the directors.
Section 6. Notice of Meetings. Written notice, stating the place,
date and time of the meeting, and the general nature of the business to be
considered, shall be given to each stockholder entitled to vote thereat at his
address as it appears on the records of the corporation, not less than ten nor
more than sixty days before the date of the meeting. No business other than that
stated in the notice shall be transacted at any meeting without the unanimous
consent of all the stockholders entitled to vote thereat.
Section 7. Action Without Meeting. Unless otherwise provided by the
Certificate of Incorporation, any action required to be taken at any annual or
special meeting of stockholders, or any action which may be taken at any annual
or special meeting, may be taken without a meeting, without prior notice and
without
<PAGE>
a vote, if a consent in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares entitled to vote thereon were present and voted.
Prompt notice of the taking of the corporate action without a meeting by less
than unanimous written consent shall be given to those stockholders who have not
consented in writing.
ARTICLE III
DIRECTORS
Section 1. Number and Term. The number of directors of the
Corporation initially shall be one, but in no event shall the number of
directors be less than one nor more than fifteen. The directors shall be elected
at the annual meeting of the stockholders and each director shall be elected to
serve until his successor shall be elected and qualified. Directors need not be
stockholders.
Section 2. Removal. Any director or directors may be removed either
for or without cause at any time by the affirmative vote of the holders of a
majority of all the shares of stock outstanding and entitled to vote, at a
special meeting of the stockholders called for the purpose, and the vacancies
thus created may be filled, at the meeting held for the purpose of removal, by
the affirmative vote of a majority in interest of the stockholders entitled to
vote.
Section 3. Increase of Number. The number of directors may be
increased by amendment of these by-laws by the affirmative vote of a majority of
the directors, though less than a quorum, or, by the affirmative vote of a
majority in interest of the stockholders, at the annual meeting or at a special
meeting called for that purpose, and by like vote the additional directors may
be chosen at such meeting to hold office until the next annual election and
until their successors shall have been elected and qualified.
Section 4. Powers. The Board of Directors shall exercise all of the
powers of the corporation except such as are by law or by the Certificate of
Incorporation of the corporation or by these By-Laws conferred upon or reserved
to the stockholders.
Section 5. Committees. The Board of Directors may, by resolution or
resolutions passed by a majority of the whole Board, designate one or more
committees, each committee to consist of two or more of the directors of the
corporation. The Board may designate one or more directors as alternate members
of any committee, who may replace any absent or disqualified member
<PAGE>
at any meeting of such committee or committees. The member or members thereof
present at any meeting and not disqualified from voting, whether or not he or
they constitute a quorum, may unanimously appoint another member of the Board of
Directors to act at the meeting in the place of any such absent or disqualified
member.
Any such committee, to the extent provided in the resolution of the
Board of Directors, or in these By-Laws, shall have and may exercise all the
powers and authority of the Board of Directors in the management of the business
and affairs of the corporation, and may authorize the seal of the corporation to
be affixed to all papers which may require it; but no such committee shall have
the power or authority to amend the Certificate of Incorporation, to adopt an
agreement of merger or consolidation, to recommend to the stockholders the sale,
lease or exchange of all or substantially all of the corporation's property and
assets, to recommend to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or to amend the By-Laws of the corporation; and,
unless the resolution, these By-Laws, or the Certificate of Incorporation
expressly so provides, no such committee shall have the power or authority to
declare a dividend or to authorize the issuance of stock.
Section 6. Meetings. The newly elected directors shall hold their
first meeting for the purpose of organization and the transaction of business,
if a quorum be present, immediately after the annual meeting of the
stockholders; or the time and place of such meeting may be fixed by consent in
writing of all the directors.
Regular meetings of the directors may be held without notice at such
places and times as shall be determined from time to time by resolution of the
directors.
Special meetings of the Board may be called by the President or the
Secretary on the written request of any two directors on at least two days'
notice to each director and shall be held at such place or places as may be
determined by the directors, or as shall be stated in the call of the meeting.
Section 7. Quorum. A majority of the total number of directors shall
constitute a quorum for the transaction of business. If at any meeting of the
Board of Directors there shall be less than a quorum present, a majority of
those present may adjourn the meeting from time to time until a quorum is
obtained, and no further notice thereof need be given other than by announcement
at the meeting which shall be so adjourned.
Section 8. Compensation. Directors shall not receive any stated
salary for their services as directors or as members of committees, but by
resolution of the Board of Directors a
<PAGE>
fixed fee and expenses of attendance may be allowed for attendance at each
meeting. Nothing herein contained shall be construed to preclude any director
from serving the corporation in any other capacity as an officer, agent or
otherwise, and receiving compensation therefor.
Section 9. Action Without Meeting. Any action required or permitted
to be taken at any meeting of the Board of Directors or of any committee
thereof, may be taken without a meeting, if a written consent thereto is signed
by all members of the Board of Directors, or of such committee as the case may
be, and such written consent is filed with the minutes of proceedings of the
Board of Directors or committee.
Section 10. Participation by Conference Telephone. Members of the
Board of Directors of the corporation, or any committee designated by such Board
may participate in a meeting of such Board or committee by means of conference
telephone or similar communications equipment by means of which all persons
participating in the meeting can hear each other, and participation in a meeting
shall constitute presence in person at such meeting.
ARTICLE IV
OFFICERS
Section 1. Officers. The officers of the corporation shall be a
President, a Treasurer and a Secretary, all of whom shall be elected by the
Board of Directors and who shall hold office until their successors are elected
and qualified. In addition, the Board of Directors may elect a Chairman, one or
more Vice Presidents and such Assistant Secretaries and Assistant Treasurers as
they may deem proper. None of the officers of the corporation need be directors.
The officers shall be elected at the first meeting of the Board of Directors
after each annual meeting. More than two offices may be held by the same person.
Section 2. Other Officers and Agents. The Board of Directors may
appoint such other officers and agents as it may deem advisable, who shall hold
their offices for such terms and shall exercise such powers and perform such
duties as shall be determined from time to time by the Board of Directors.
Section 3. Chairman. The Chairman of the Board of Directors, if one
be elected, shall preside at all meetings of the Board of Directors and he shall
have and perform such other duties as from time to time may be assigned to him
by the Board of Directors.
Section 4. President. The President shall be the chief executive
officer of the corporation and shall have the
<PAGE>
general powers and duties of supervision and management usually vested in the
office of president of a corporation. He shall preside at all meetings of the
stockholders if present thereat, and, in the absence or non-election of the
Chairman of the Board of Directors, at all meetings of the Board of Directors,
and shall have general supervision, direction and control of the business of the
corporation. Except as the Board of Directors shall authorize the execution
thereof in some other manner, he shall execute bonds, mortgages and other
contracts on behalf of the corporation, and shall cause the seal to be affixed
to any instrument requiring it and when so affixed the seal shall be attested by
the signature of the Secretary or the Treasurer or an Assistant Secretary or an
Assistant Treasurer.
Section 5. Vice-President. Each Vice-President shall have such
powers and shall perform such duties as shall be assigned to him by the
directors.
Section 6. Treasurer. The Treasurer shall have the custody of the
corporate funds and securities and shall keep full and accurate account of
receipts and disbursements in books belonging to the corporation. He shall
deposit all monies and other valuables in the name and to the credit of the
corporation in such depositaries as may be designated by the Board of Directors.
The Treasurer shall disburse the funds of the corporation as may be
ordered by the Board of Directors, or the President, taking proper vouchers for
such disbursements. He shall render to the President and Board of Directors at
the regular meetings of the Board of Directors, or whenever they may request it,
an account of all his transactions as Treasurer and of the financial condition
of the corporation. If required by the Board of Directors, he shall give the
corporation a bond for the faithful discharge of his duties in such amount and
with such surety as the Board of Directors shall prescribe.
Section 7. Secretary. The Secretary shall give, or cause to be
given, notice of all meetings of stockholders and directors, and all other
notices required by law or by these By-Laws, and in case of his absence or
refusal or neglect so to do, any such notice may be given by any person
thereunto directed by the President, or by the directors, or stockholders, upon
whose requisition the meeting is called as provided in these By-Laws. He shall
record all the proceedings of the meetings of the corporation and of the
directors in a book to be kept for that purpose, and shall perform such other
duties as may be assigned to him by the directors or the President. He shall
have the custody of the seal of the corporation and shall affix the same to all
instruments requiring it, when authorized by the directors or the President, and
attest the same.
<PAGE>
Section 8. Assistant Treasurers and Assistant Secretaries. Assistant
Treasurers and Assistant Secretaries, if any, shall be elected and shall have
such powers and shall perform such duties as shall be assigned to them,
respectively, by the directors.
ARTICLE V
MISCELLANEOUS
Section 1. Resignations. Any director, member of a committee or
corporate officer may, provided the same would not result in a breach of any
contract to which said person is a party, resign at any time. Such resignation
shall be made in writing, and shall take effect at the time specified therein,
and if no time be specified, at the time of its receipt by the President or
Secretary. The acceptance of a resignation shall not be necessary to make it
effective.
Section 2. Vacancies. If the office of any director, member of a
committee or corporate officer becomes vacant, by reason of death, disability or
otherwise, the remaining directors in office, though less than a quorum, by a
majority vote may appoint any qualified person to fill such vacancy, who shall
hold office for the unexpired term and until his successor shall be duly chosen.
Section 3. Certificates of Stock. Certificates of stock, signed by
the Chairman of the Board of Directors, or the President or any Vice President,
and the Treasurer or an Assistant Treasurer, or Secretary or an Assistant
Secretary, shall be issued to each stockholder certifying the number of shares
owned by him in the corporation. When such certificates are countersigned (1) by
a transfer agent other than the corporation or its employee, or (2) by a
registrar other than the corporation or its employee, the signatures of such
officers may be facsimiles.
Section 4. Lost Certificates. A new certificate of stock may be
issued in the place of any certificate theretofore issued by the corporation,
alleged to have been lost or destroyed, and the directors may, in their
discretion, require the owner of the lost or destroyed certificate, or his legal
representatives, to give the corporation a bond, in such sum as they may direct,
not exceeding double the value of the stock represented by such certificate, to
indemnify the corporation against any claim that may be made against it on
account of the alleged loss of any such certificate, or the issuance of any such
new certificate.
<PAGE>
Section 5. Transfer of Shares. The shares of stock of the
corporation shall be transferable only upon its books by the holders thereof in
person or by their duly authorized attorneys or legal representatives, and upon
such transfer the old certificates shall be surrendered to the corporation by
the delivery thereof to the person in charge of the stock transfer books and
ledgers, or to such other person as the directors may designate, by whom they
shall be canceled, and new certificates shall thereupon be issued. A record
shall be made of each transfer and whenever a transfer shall be made for
collateral security, and not absolutely, it shall be so expressed in the entry
of the transfer.
Section 6. Stockholders Record Date. In order that the corporation
may determine the stockholders entitled to notice of or to vote at any meeting
of stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty nor less than ten
days before the date of such meeting, nor more than sixty days prior to any
other action. A determination of stockholders of record entitled to notice of or
to vote at a meeting of stockholders shall apply to any adjournment of the
meeting; provided, however, that the Board of Directors may fix a new record
date for the adjourned meeting.
Section 7. Dividends. Subject to the provisions of the Certificate
of Incorporation, the Board of Directors may, out of funds legally available
therefor at any regular or special meeting, declare dividends upon the capital
stock of the corporation as and when they deem expedient. Before declaring any
dividend there may be set apart out of any funds of the corporation available
for dividends, such sum or sums as the directors from time to time in their
discretion deem proper for working capital or as a reserve fund to meet
contingencies or for equalizing dividends or for such other purposes as the
directors shall deem conducive to the interests of the corporation.
Section 8. Seal. The corporate seal shall be circular in form and
shall contain the name of the corporation, the year of its creation and the
words "CORPORATE SEAL DELAWARE." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or otherwise reproduced.
Section 9. Fiscal Year. The fiscal year of the corporation shall be
determined by resolution of the Board of Directors. In the absence of such
determination, the fiscal year shall be the calendar year.
<PAGE>
Section 10. Checks. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the corporation shall be signed by such officer or officers, agent or agents of
the corporation, and in such manner as shall be determined from time to time by
resolution of the Board of Directors.
Section 11. Notice and Waiver of Notice. Whenever any notice is
required by these By-Laws to be given, personal notice is not meant unless
expressly so stated, and any notice so required shall be deemed to be sufficient
if given by depositing the same in the United States mail, postage prepaid,
addressed to the person entitled thereto at his address as it appears on the
records of the corporation, and such notice shall be deemed to have been given
on the day of such mailing. Stockholders not entitled to vote shall not be
entitled to receive notice of any meetings except as otherwise provided by
statute.
Whenever any notice whatever is required to be given under the
provisions of any law, or under the provisions of the Certificate of
Incorporation of the corporation or these By-Laws, a waiver thereof in writing,
signed by the person or persons entitled to said notice, whether before or after
the time stated therein, shall be deemed equivalent thereto.
ARTICLE VI
INDEMNIFICATION
To the full extent permitted by law, the corporation may indemnify
any person or his heirs, distributees, next of kin, successors, appointees,
executors, administrators, legal representatives and assigns who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceedings, whether civil, criminal, administrative
or investigative by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving at the request of the
corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, domestic or foreign,
against expenses, attorneys' fees, court costs, judgments, fines, amounts paid
in settlement and other losses actually and reasonably incurred by him in
connection with such action, suit or proceeding.
<PAGE>
ARTICLE VII
AMENDMENTS
These By-laws may be altered or repealed and By-Laws may be made at
any annual meeting of the stockholders or at any special meeting thereof by the
affirmative vote of a majority of the stock issued and outstanding and entitled
to vote thereat, or by the affirmative vote of a majority of the Board of
Directors, at any regular meeting of the Board of Directors, or at any special
meeting of the Board of Directors.
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of
the By-Laws of Worldwide Data, Inc., a Delaware corporation, as in effect on the
date hereof.
WITNESS my hand and seal of the Corporation.
WORLDWIDE DATA, INC.
/s/ Bronson Conrad
----------------------------------------
Bronson Conrad, Secretary
Dated: February 27, 1995.
<PAGE>
CERTIFICATE OF INCORPORATION
OF
WORLDWIDE DATA, INC.
The undersigned, a natural person, for the purpose of organizing a
corporation for conducting the business and promoting the purposes hereinafter
stated, under the provisions and subject to the requirements of the laws of the
State of Delaware (particularly Chapter 1, Title 8 of the Delaware Code and the
acts amendatory thereof and supplemental thereto, and known, identified, and
referred to am the "General Corporation Law of the State of Delaware"), hereby
certifies that:
FIRST: The name of the corporation (hereinafter referred to as the
"Corporation") is Worldwide Data, Inc.
SECOND: The address, including street, number, city and county of the
registered office of the corporation in the State of Delaware is 32 Loockerman
Square, Suite L-10O, City of Dover, County of Kent, 19904; and the name of the
registered agent of the Corporation in the State of Delaware at such address is
The Prentice-Hall Corporation System, Inc.
THIRD: The nature of the business and the purpose to be conducted and
promoted by the Corporation shall be to engage in any lawful act or activity for
which corporations may be organized under the General corporation Law of the
State of Delaware.
FOURTH: The aggregate number of shares of stock which the corporation
shall have the authority to issue is ten million ten thousand (10,010,000)
shares, which are divided into ten million (1O,000,000) shares of Common Stock,
$.0001 par value per share (the "Common Stock"), and ten thousand (10,000)
shares of preferred Stock, $0.01 par value per share (the "Preferred Stock").
Preferred Stock. The corporation may divide and issue Preferred
Stock in series. Preferred Stock of each series when issued shall be designated
to distinguish them from shares of other series of Preferred Stock. The Board
of Directors of the Corporation is hereby expressly vested with the authority to
divide the class of Preferred Stock into series and fix and determine the
relative rights and preferences of the shares of any such series so established
to the full extent permitted by the laws of the State of Delaware in respect of
the following;
1. The number or shares to constitute such series, and the distinctive
designations thereof;
<PAGE>
2. The rate and preference of dividends, if any, the time of payment of
dividends, whether dividends are cumulative and the date from which any
dividends shall accrue;
3. Whether shares may be redeemed and, if so, the redemption price and the
terms and conditions of redemption;
4. The amount payable upon shares in the event of voluntary and
involuntary liquidation;
5. Sinking fund or other provisions, if any, for the redemption or
purchase of shares;
6. The terms and conditions on which shares may be converted;
7. Voting rights, if any; and
8. Variations in the relative rights and preferences as between the
series, including, without limitation, any restriction on an increase in
the number of shares of any series theretofore authorized, any rights of
Preferred Stock shareholders to receive dividends in the form of Common
Stock or Preferred Stock, and any limitation or restriction of rights or
powers to which shares of any future series shall be subject.
FIFTH: The name and the mailing address of the incorporator is as follow:
Debra L. Plaskett
Werbel McMillin & Carnelutti
711 Fifth Avenue
New York, New York 10022
SIXTH: The Corporation is to have perpetual existence.
SEVENTH: Whenever a compromise or arrangement is proposed between this
Corporation and its creditors or any class of them and/or between this
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of this Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for this Corporation under
the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditor, or class of creditors, and or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court directs. If a majority in
number representing three-fourths in
- 2 -
<PAGE>
value of the creditors or class of creditors, and/or of the stockholders or
class of stockholders or this Corporation, as the case may be, agree to any
compromise or arrangement and to any reorganization of this corporation as a
consequence of such compromise or arrangement, the said compromise or
arrangement and the said reorganization shall, if sanctioned by the court to
which said application has been made, be binding on all the creditors or class
of creditors, and/or on all of the stockholders or class of stockholders, of
this Corporation, as the case may be, and also on this Corporation.
EIGHTH: No director of the Corporation shall be liable to the Corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except for liability (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law, or (iv)
for any transaction from which the director derived an improper personal
benefit. If the General Corporation Law of the State of Delaware is amended
after February 27, 1995 to authorize corporate action further eliminating or
limiting the personal liability of directors, the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent permitted by
the General Corporation Law of the State of Delaware.
NINTH: The Corporation shall, to the fullest extent permitted by Section
145 of the General Corporation Law of the State of Delaware, as the same may be
amended and supplemented, indemnify any and all persons whom it shall have power
to indemnify under said section from and against any and all of the expenses,
liabilities, judgments, fines, amounts paid in settlement, liabilities, or other
matters referred to in or covered by said section, and the indemnification
provided for herein shall not be deemed exclusive of any other rights to which
those seeking indemnification of expenses may be entitled under any by-laws,
agreements, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee, or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
TENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
- 3 -
<PAGE>
ELEVENTH: In furtherance and not in limitation of the powers conferred by
statute, the by-laws of the Corporation may be made, altered, amended or
repealed by the stockholders of the Corporation or by a majority of the entire
Board of Directors of the Corporation.
Signed: February 27, 1995
/s/ Debra L. Plaskett
----------------------------------------
Debra L. Plaskett
Sole Incorporator
711 Fifth Avenue
New York, New York 10022
- 4 -
<PAGE>
EXHIBIT 4.1
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THESE WARRANTS
MAY NOT BE EXERCISED UNLESS THE SHARES UNDERLYING THE WARRANTS ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
225,000 Warrants
WORLDWIDE DATA, INC.
CLASS B
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Gold Coast International Ltd. or registered assigns (the
"Holder") is the owner of the number of Class B warrants ("Warrants") specified
above, each of which entitles the Holder thereof to purchase, at any time after
April 5, 1999 (the "Exercise Commencement Date") on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of Common
Stock, $.001 par value ("Common Stock"), of Worldwide Data, Inc., a Delaware
corporation (the "Company"), at a purchase price of $1.00 per share of Common
Stock in lawful money of the United States of America in cash or by certified or
cashier's check or a combination of cash and certified or cashier's check
(subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $1.00 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each Warrant are subject to adjustment as provided in Article 6. The
shares of Common Stock issuable
<PAGE>
upon exercise of the Warrants (and/or other shares of Common Stock so issuable
by reason of any adjustments pursuant to Article 6) are sometimes referred to
herein as the "Warrant Shares."
2. Exercise; Expiration Date
-------------------------
A. The Warrants are exercisable, at the option of the Holder, in whole
or in part at any time and from time to time after the Exercise Commencement
Date and on or before the Expiration Date, upon surrender of this Warrant
Certificate to the Company together with a duly completed Notice of Exercise, in
the form attached hereto as Exhibit A, and payment of an amount equal to the
---------
Purchase Price times the number of Warrants to be exercised. In the case of
exercise of less than all the Warrants represented by this Warrant Certificate,
the Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate for the balance of such
Warrants.
B. The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 5, 2001, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. Toronto time the next
following day which in Toronto, Canada is not a holiday or a day on which banks
are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
A. The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
B. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
C. The Company shall register upon its books any permitted transfer of
a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of
Shares Deliverable
------------------------------------------
A. The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
1. In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described
<PAGE>
above, had such Warrant been exercised immediately prior to the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective retroactively as of
the record date of such event.
2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6(A)(2) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6(A), the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
<PAGE>
B. No adjustment in the number of Warrant Shares purchasable under the
Warrants, or in the Purchase Price with respect to the Warrant Shares, shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6(B) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
C. Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by an officer of the Company, which sets forth
the number of Warrant Shares purchasable upon the exercise of each Warrant and
the Purchase Price of such Warrant Shares after such adjustment, and a brief
statement of the facts requiring such adjustment.
D. The form of Warrant Certificate need not be changed because of any
change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants; provided that in the event that the Company
reduces the Purchase Price for a specific period of time, it may return the
Purchase Price to the Purchase Price before the reduction.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized as of this ____ day
of ___________, 1998.
WORLDWIDE DATA, INC.
By: ________________________
Name: Bronson B. Conrad
Title: President
114178
<PAGE>
EXHIBIT A TO WARRANT CERTIFICATE
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
114178
<PAGE>
EXHIBIT 4.2
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THESE WARRANTS
MAY NOT BE EXERCISED UNLESS THE SHARES UNDERLYING THE WARRANTS ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
225,000 Warrants
WORLDWIDE DATA, INC.
CLASS B
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, Sunnyview International Ltd. or registered assigns (the
"Holder") is the owner of the number of Class B warrants ("Warrants") specified
above, each of which entitles the Holder thereof to purchase, at any time after
April 5, 1999 (the "Exercise Commencement Date") on or before the Expiration
Date (hereinafter defined) one fully paid and non-assessable share of Common
Stock, $.001 par value ("Common Stock"), of Worldwide Data, Inc., a Delaware
corporation (the "Company"), at a purchase price of $1.00 per share of Common
Stock in lawful money of the United States of America in cash or by certified or
cashier's check or a combination of cash and certified or cashier's check
(subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $1.00 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each Warrant are subject to adjustment as provided in Article 6. The
shares of Common Stock issuable
<PAGE>
upon exercise of the Warrants (and/or other shares of Common Stock so issuable
by reason of any adjustments pursuant to Article 6) are sometimes referred to
herein as the "Warrant Shares."
2. Exercise; Expiration Date
-------------------------
A. The Warrants are exercisable, at the option of the Holder, in whole
or in part at any time and from time to time after the Exercise Commencement
Date and on or before the Expiration Date, upon surrender of this Warrant
Certificate to the Company together with a duly completed Notice of Exercise, in
the form attached hereto as Exhibit A, and payment of an amount equal to the
---------
Purchase Price times the number of Warrants to be exercised. In the case of
exercise of less than all the Warrants represented by this Warrant Certificate,
the Company shall cancel the Warrant Certificate upon the surrender thereof and
shall execute and deliver a new Warrant Certificate for the balance of such
Warrants.
B. The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 5, 2001, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. Toronto time the next
following day which in Toronto, Canada is not a holiday or a day on which banks
are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
A. The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
B. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
C. The Company shall register upon its books any permitted transfer of
a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of
Shares Deliverable
------------------------------------------
A. The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
1. In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described
<PAGE>
above, had such Warrant been exercised immediately prior to the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective retroactively as of
the record date of such event.
2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6(A)(2) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6(A), the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
<PAGE>
B. No adjustment in the number of Warrant Shares purchasable under the
Warrants, or in the Purchase Price with respect to the Warrant Shares, shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6(B) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
C. Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by an officer of the Company, which sets forth
the number of Warrant Shares purchasable upon the exercise of each Warrant and
the Purchase Price of such Warrant Shares after such adjustment, and a brief
statement of the facts requiring such adjustment.
D. The form of Warrant Certificate need not be changed because of any
change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants; provided that in the event that the Company
reduces the Purchase Price for a specific period of time, it may return the
Purchase Price to the Purchase Price before the reduction.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized as of this ____ day
of ___________, 1998.
WORLDWIDE DATA, INC.
By: ________________________
Name: Bronson B. Conrad
Title: President
114177
<PAGE>
EXHIBIT A TO WARRANT CERTIFICATE
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
114177
<PAGE>
EXHIBIT 4.3
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THESE WARRANTS
MAY NOT BE EXERCISED UNLESS THE SHARES UNDERLYING THE WARRANTS ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
225,000 Warrants
WORLDWIDE DATA, INC.
CLASS B
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, KEW International Ltd. or registered assigns (the "Holder") is
the owner of the number of Class B warrants ("Warrants") specified above, each
of which entitles the Holder thereof to purchase, at any time after April 5,
1999 (the "Exercise Commencement Date") on or before the Expiration Date
(hereinafter defined) one fully paid and non-assessable share of Common Stock,
$.001 par value ("Common Stock"), of Worldwide Data, Inc., a Delaware
corporation (the "Company"), at a purchase price of $1.00 per share of Common
Stock in lawful money of the United States of America in cash or by certified or
cashier's check or a combination of cash and certified or cashier's check
(subject to adjustment as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $1.00 per share of Common
Stock. The Purchase Price and number of shares of Common Stock issuable upon
exercise of each Warrant are subject to adjustment as provided in Article 6. The
shares of Common Stock issuable
<PAGE>
upon exercise of the Warrants (and/or other shares of Common Stock so issuable
by reason of any adjustments pursuant to Article 6) are sometimes referred to
herein as the "Warrant Shares."
2. Exercise; Expiration Date
-------------------------
A. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after the Exercise
Commencement Date and on or before the Expiration Date, upon surrender of this
Warrant Certificate to the Company together with a duly completed Notice of
Exercise, in the form attached hereto as Exhibit A, and payment of an amount
---------
equal to the Purchase Price times the number of Warrants to be exercised. In the
case of exercise of less than all the Warrants represented by this Warrant
Certificate, the Company shall cancel the Warrant Certificate upon the surrender
thereof and shall execute and deliver a new Warrant Certificate for the balance
of such Warrants.
B. The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 5, 2001, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. Toronto time the next
following day which in Toronto, Canada is not a holiday or a day on which banks
are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
A. The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
B. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
C. The Company shall register upon its books any permitted transfer of
a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations representing in the aggregate the number of Warrants
evidenced by the Warrant Certificate surrendered.
<PAGE>
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of
Shares Deliverable
------------------------------------------
A. The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
1. In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the Company
which he would have owned or have been entitled to receive after the
happening of any of the events described
<PAGE>
above, had such Warrant been exercised immediately prior to the happening
of such event or any record date with respect thereto. An adjustment made
pursuant to this paragraph (a) shall become effective retroactively as of
the record date of such event.
2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6(A)(2) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6(A), the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
<PAGE>
B. No adjustment in the number of Warrant Shares purchasable under the
Warrants, or in the Purchase Price with respect to the Warrant Shares, shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6(B) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
C. Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by an officer of the Company, which sets forth
the number of Warrant Shares purchasable upon the exercise of each Warrant and
the Purchase Price of such Warrant Shares after such adjustment, and a brief
statement of the facts requiring such adjustment.
D. The form of Warrant Certificate need not be changed because of any
change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants; provided that in the event that the Company
reduces the Purchase Price for a specific period of time, it may return the
Purchase Price to the Purchase Price before the reduction.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized as of this ____ day
of ___________, 1998.
WORLDWIDE DATA, INC.
By: ________________________
Name: Bronson B. Conrad
Title: President
113718
<PAGE>
EXHIBIT A TO WARRANT CERTIFICATE
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
113718
<PAGE>
EXHIBIT 4.4
NEITHER THESE WARRANTS NOR THE SHARES UNDERLYING THESE WARRANTS HAVE
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE LAWS OF ANY
STATE. THEY MAY NOT BE SOLD OR OTHERWISE TRANSFERRED UNLESS THEY ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE. IN ADDITION, THESE WARRANTS
MAY NOT BE EXERCISED UNLESS THE SHARES UNDERLYING THE WARRANTS ARE
REGISTERED UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN
EXEMPTION FROM REGISTRATION IS AVAILABLE.
225,000 Warrants
WORLDWIDE DATA, INC.
CLASS B
WARRANT CERTIFICATE
This warrant certificate ("Warrant Certificate") certifies that for
value received, JBS Holdings, Ltd. or registered assigns (the "Holder") is the
owner of the number of Class B warrants ("Warrants") specified above, each of
which entitles the Holder thereof to purchase, at any time after April 5, 1999
(the "Exercise Commencement Date") on or before the Expiration Date (hereinafter
defined) one fully paid and non-assessable share of Common Stock, $.001 par
value ("Common Stock"), of Worldwide Data, Inc., a Delaware corporation (the
"Company"), at a purchase price of $1.00 per share of Common Stock in lawful
money of the United States of America in cash or by certified or cashier's check
or a combination of cash and certified or cashier's check (subject to adjustment
as hereinafter provided).
1. Warrant; Purchase Price
-----------------------
Each Warrant shall entitle the Holder initially to purchase one share
of Common Stock of the Company and the purchase price payable upon exercise of
the Warrants (the "Purchase Price") shall initially be $1.00 per share of Common
Stock. The Purchase Price and number of shares of Common Stock
<PAGE>
issuable upon exercise of each Warrant are subject to adjustment as provided in
Article 6. The shares of Common Stock issuable upon exercise of the Warrants
(and/or other shares of Common Stock so issuable by reason of any adjustments
pursuant to Article 6) are sometimes referred to herein as the "Warrant Shares."
2. Exercise; Expiration Date
-------------------------
A. The Warrants are exercisable, at the option of the Holder, in
whole or in part at any time and from time to time after the Exercise
Commencement Date and on or before the Expiration Date, upon surrender of this
Warrant Certificate to the Company together with a duly completed Notice of
Exercise, in the form attached hereto as Exhibit A, and payment of an amount
---------
equal to the Purchase Price times the number of Warrants to be exercised. In the
case of exercise of less than all the Warrants represented by this Warrant
Certificate, the Company shall cancel the Warrant Certificate upon the surrender
thereof and shall execute and deliver a new Warrant Certificate for the balance
of such Warrants.
B. The term "Expiration Date" shall mean 5:00 p.m. New York time on
April 5, 2001, or if such day shall in the State of New York be a holiday or a
day on which banks are authorized to close, then 5:00 p.m. Toronto time the next
following day which in Toronto, Canada is not a holiday or a day on which banks
are authorized to close.
3. Registration and Transfer on Company Books
------------------------------------------
A. The Company shall maintain books for the registration and transfer
of the Warrants and the registration and transfer of the Warrant Shares.
B. Prior to due presentment for registration of transfer of this
Warrant Certificate, or the Warrant Shares, the Company may deem and treat the
registered Holder as the absolute owner thereof.
C. The Company shall register upon its books any permitted transfer of
a Warrant Certificate, upon surrender of same to the Company with a written
instrument of transfer duly executed by the registered Holder or by a duly
authorized attorney. Upon any such registration of transfer, new Warrant
Certificate(s) shall be issued to the transferee(s) and the surrendered Warrant
Certificate shall be canceled by the Company. A Warrant Certificate may also be
exchanged, at the option of the Holder, for new Warrant Certificates of
different denominations
<PAGE>
representing in the aggregate the number of Warrants evidenced by the Warrant
Certificate surrendered.
4. Reservation of Shares
---------------------
The Company covenants that it will at all times reserve and keep
available out of its authorized capital stock, solely for the purpose of issue
upon exercise of the Warrants, such number of shares as shall then be issuable
upon the exercise of all outstanding Warrants. The Company covenants that all
shares of capital stock which shall be issuable upon exercise of the Warrants
shall be duly and validly issued and fully paid and non-assessable and free from
all taxes, liens and charges with respect to the issue thereof, and that upon
issuance such shares shall be listed on each national securities exchange, if
any, on which the other shares of such outstanding capital stock of the Company
are then listed.
5. Loss or Mutilation
------------------
Upon receipt by the Company of reasonable evidence of the ownership of
and the loss, theft, destruction or mutilation of any Warrant Certificate and,
in the case of loss, theft or destruction, of indemnity reasonably satisfactory
to the Company, or, in the case of mutilation, upon surrender and cancellation
of the mutilated Warrant Certificate, the Company shall execute and deliver in
lieu thereof a new Warrant Certificate representing an equal number of Warrants.
6. Adjustment of Purchase Price and Number of
Shares Deliverable
------------------------------------------
A. The number of Warrant Shares purchasable upon the exercise of each
Warrant and the Purchase Price with respect to the Warrant Shares shall be
subject to adjustment as follows:
1. In case the Company shall (i) declare a dividend or make a
distribution on its Common Stock payable in shares of its capital stock,
(ii) subdivide its outstanding shares of Common Stock through stock split
or otherwise, (iii) combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, or (iv) issue by reclassification
of its Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing
corporation) other securities of the Company, the number and/or nature of
Warrant Shares purchasable upon exercise of each Warrant immediately prior
thereto shall be adjusted so that the Holder shall be entitled to receive
the kind and number of Warrant Shares or other securities of the
<PAGE>
Company which he would have owned or have been entitled to receive after
the happening of any of the events described above, had such Warrant been
exercised immediately prior to the happening of such event or any record
date with respect thereto. An adjustment made pursuant to this paragraph
(a) shall become effective retroactively as of the record date of such
event.
2. In the event of any capital reorganization or any
reclassification of the capital stock of the Company or in case of the
consolidation or merger of the Company with another corporation (other than
a consolidation or merger in which the outstanding shares of the Company's
Common Stock are not converted into or exchanged for other rights or
interests), or in the case of any sale, transfer or other disposition to
another corporation of all or substantially all the properties and assets
of the Company, the Holder of each Warrant shall thereafter be entitled to
purchase (and it shall be a condition to the consummation of any such
reorganization, reclassification, consolidation, merger, sale, transfer or
other disposition that appropriate provisions shall be made so that such
Holder shall thereafter be entitled to purchase) the kind and amount of
shares of stock and other securities and property (including cash) which
the Holder would have been entitled to receive had such Warrants been
exercised immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, sale, transfer or other
disposition; and in any such case appropriate adjustments shall be made in
the application of the provisions of this Article 6 with respect to rights
and interest thereafter of the Holder of the Warrants to the end that the
provisions of this Article 6 shall thereafter be applicable, as near as
reasonably may be, in relation to any shares or other property thereafter
purchasable upon the exercise of the Warrants. The provisions of this
Section 6(A)(2) shall similarly apply to successive reorganizations,
reclassifications, consolidations, mergers, sales, transfers or other
dispositions.
3. Whenever the number of Warrant Shares purchasable upon the
exercise of each Warrant is adjusted, as provided in this Section 6(A), the
Purchase Price with respect to the Warrant Shares shall be adjusted by
multiplying such Purchase Price immediately prior to such adjustment by a
fraction, of which the numerator shall be the number of Warrant Shares
purchasable upon the exercise of each Warrant immediately prior to such
adjustment, and of which the denominator shall be the number of Warrant
Shares so purchasable immediately thereafter.
<PAGE>
B. No adjustment in the number of Warrant Shares purchasable under the
Warrants, or in the Purchase Price with respect to the Warrant Shares, shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the number of Warrant Shares issuable upon the exercise of such
Warrant, or in the Purchase Price thereof; provided, however, that any
adjustments which by reason of this Section 6(B) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
C. Whenever the number of Warrant Shares purchasable upon the exercise
of each Warrant or the Purchase Price of such Warrant Shares is adjusted, as
herein provided, the Company shall mail to the Holder, at the address of the
Holder shown on the books of the Company, a notice of such adjustment or
adjustments, prepared and signed by an officer of the Company, which sets forth
the number of Warrant Shares purchasable upon the exercise of each Warrant and
the Purchase Price of such Warrant Shares after such adjustment, and a brief
statement of the facts requiring such adjustment.
D. The form of Warrant Certificate need not be changed because of any
change in the Purchase Price, the number of Warrant Shares issuable upon the
exercise of a Warrant or the number of Warrants outstanding pursuant to this
Section 6, and Warrant Certificates issued before or after such change may state
the same Purchase Price, the same number of Warrants, and the same number of
Warrant Shares issuable upon exercise of Warrants as are stated in the Warrant
Certificates theretofore issued pursuant to this Agreement. The Company may,
however, at any time, in its sole discretion, make any change in the form of
Warrant Certificate that it may deem appropriate and that does not affect the
substance thereof, and any Warrant Certificates thereafter issued or
countersigned, whether in exchange or substitution for an outstanding Warrant
Certificate or otherwise, may be in the form as so changed.
7. Voluntary Adjustment by the Company
-----------------------------------
The Company may, at its option, at any time during the term of the
Warrants, reduce the then current Purchase Price to any amount deemed
appropriate by the Board of Directors of the Company and/or extend the date of
the expiration of the Warrants; provided that in the event that the Company
reduces the Purchase Price for a specific period of time, it may return the
Purchase Price to the Purchase Price before the reduction.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Warrant Certificate to
be duly executed by its officers thereunto duly authorized as of this ____ day
of ___________, 1998.
WORLDWIDE DATA, INC.
By: ________________________
Name: Bronson B. Conrad
Title: President
114193
<PAGE>
EXHIBIT A TO WARRANT CERTIFICATE
NOTICE OF EXERCISE
The undersigned hereby irrevocably elects to exercise, pursuant to
Section 2 of the Warrant Certificate accompanying this Notice of Exercise,
_______ Warrants of the total number of Warrants owned by the undersigned
pursuant to the accompanying Warrant Certificate, and herewith makes payment of
the Purchase Price of such shares in full.
Name of Holder
Signature
Address:
114193
<PAGE>
Exhibit 4.5
THIS WARRANT AND THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF THIS
WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AND MAY NOT
BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF
REGISTRATION UNDER, OR THE AVAILABILITY OF AN EXEMPTION FROM REGISTRATION UNDER
THE SECURITIES ACT OF 1933.
WORLDWIDE DATA, INC.
Warrant for the Purchase of Shares of common Stock
September 27, 1999 25,000
------------------ ------
Date No. of warrants
FOR VALUE RECEIVED, Worldwide Data, Inc. (Company), hereby certifies that
Generation Capital Associates, or an assign thereof, is entitled to purchase
from the Company, at any time or from time to time commencing on the date hereof
and prior to 5:00 P.M., Eastern Time, on the fifth anniversary of the date
hereof 25,000 fully paid and nonassessable shares of the common stock, of the
Company for an aggregate purchase price of $62,500 (computed on the basis of
$2.50 per share subject to adjustment). (Hereinafter, (i) said common stock,
together with any other equity securities which may be issued by the Company
with respect thereto or in substitution therefor, is referred to as the "Common
Stock," (ii) the shares of the Common Stock purchasable hereunder are referred
to as the "GCA Warrants Shares," (iii) the aggregate purchase price payable
hereunder for the GCA Warrants Shares is referred to as the "Aggregate Warrant
Price," (iv) the price payable hereunder for each of the GCA Warrants Shares is
referred to as the "Per Share Warrant Price," (v) this Warrant and all warrants
hereafter issued in exchange or substitution for this Warrant are referred to as
the "GCA Warrants" and (vi) the holder of this Warrant is referred to as the
"Holder" or "Holder(s)." The Aggregate Warrant Price, number of GCA Warrants and
the Per Share Warrant Price are subject to adjustment as hereinafter provided.
The GCA Warrants are issued pursuant to the September 20, 1999 Worldwide Data,
Inc. Financing Terms Agreement (Financing Agreement). THE TERMS OF THE FINANCING
AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.
1. Exercise of Warrant.
a) Exercise for Cash
This Warrant may be exercised, in whole at any time or in part from time
to time, commencing on the date hereof and prior to 5:00 P.M., New York
City time, on the fifth anniversary of the date hereof, by the Holder by
the surrender of this Warrant (with the
<PAGE>
subscription form at the end hereof duly executed) at the address of the
Escrow Agent set forth in Subsection 9(a) hereof, together with proper
payment of the Aggregate Warrant Price, or the proportionate part thereof
if this Warrant is exercised in part. Payment for GCA Warrants Shares
shall be made by FedWire, certified or official bank check payable to the
order of the Company and delivered to the Escrow Agent. If this Warrant is
exercised in part, this Warrant must be exercised for a number of whole
shares of the Common Stock, and the Holder is entitled to receive a new
Warrant covering the GCA Warrants Shares which have not been exercised and
setting forth the proportionate part of the Aggregate Warrant Price
applicable to such GCA Warrants Shares. Upon such surrender of this
Warrant the Company will (a) issue a certificate or certificates in the
name of the Holder for the largest number of whole shares of the Common
Stock to which the Holder shall be entitled and, if this Warrant is
exercised in whole, in lieu of any fractional share of the Common Stock to
which the Holder shall be entitled, pay to the Holder cash in an amount
equal to the fair value of such fractional share (determined in such
reasonable manner as the Board of Directors of the Company shall
determine), and (b) deliver the other securities and properties receivable
upon the exercise of this Warrant, or the proportionate part thereof if
this Warrant is exercised in part. pursuant to the provisions of this
Warrant.
b) Cashless Exercise
In lieu of exercising this Warrant in the manner set forth in paragraph
1(a) above, the Warrant may be fully or partially exercised by surrender
of the Warrant to the Escrow Agent without payment of any other
consideration, commission or remuneration, by execution of the cashless
exercise subscription form (at the end hereof, duly executed). The number
of shares to be issued in exchange for the Warrant will be computed by
subtracting the Warrant Exercise Price from the closing bid price of the
common stock on the date of receipt of the cashless exercise subscription
form, multiplying that amount by the number of shares being exercised
pursuant to the Warrant, and dividing by the closing bid price as of the
same date.
2. Reservation of GCA Warrants Shares.
The Company agrees that, prior to the expiration of this Warrant, the
Company will at all times have authorized and in reserve, or held in
escrow, and will keep available, solely for issuance or delivery upon the
exercise of this Warrant, the shares of the Common Stock and other
securities and properties as from time to time shall be receivable upon
the exercise of this Warrant, free and clear of all restrictions on sale
or transfer (except for applicable state or federal securities law
restrictions) and free and clear of all pre-emptive rights.
3. Protection Against Dilution.
a) If, at any time or from time to time after the date of this Warrant,
the Company shall issue or distribute (for no consideration) to the
holders of shares of Common Stock evidences of its indebtedness, any
other securities of the Company or any cash,
2
<PAGE>
property or other assets (excluding a subdivision, combination or
reclassification, or dividend or distribution payable in shares of
Common Stock, referred to in Subsections 3(b) and 3(c), and also
excluding cash dividends or cash distributions paid out of net
profits legally available therefor if the full amount thereof,
together with the value of other dividends and distributions made
substantially concurrently therewith or pursuant to a plan which
includes payment thereof, is equivalent to not more than 5% of the
Company's net worth) (any such nonexcluded event being herein called
a "Special Dividend"), the Per Share Warrant Price shall be adjusted
by multiplying the Per Share Warrant Price then in effect by a
fraction, the numerator of which shall be the then current market
price of the Common Stock (defined as the average for the twenty
consecutive trading days immediately prior to the record date of the
daily closing bid price of the Common Stock as reported by the
NASDAQ level III less the fair market value (as determined
reasonably determined in good faith by the Company's Board of
Directors) of the evidences of indebtedness, securities or property,
or other assets issued or distributed in such Special Dividend
applicable to one share of Common Stock and the denominator of which
shall be such then current market price per share of Common Stock.
An adjustment made pursuant to this Subsection 3(a) shall become
effective immediately after the record date of any such Special
Dividend.
b) In case the Company shall hereafter (i) pay a dividend or make a
distribution on its capital stock in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into a greater
number of shares, or (iii) issue by reclassification of its Common
Stock any shares of capital stock of the Company, the Per Share
Warrant Price shall be adjusted so that the Holder of any Warrant
upon the exercise hereof shall be entitled to receive the number of
shares of Common Stock or other capital stock of the Company which
he would have owned immediately prior thereto. An adjustment made
pursuant to this Subsection 3(b) shall become effective immediately
after the record date in the case of a dividend or distribution and
shall become effective immediately after the effective date in the
case of a subdivision, combination or reclassification. If, as a
result of an adjustment made pursuant to this Subsection 3(b), the
Holder of any Warrant thereafter surrendered for exercise shall
become entitled to receive shares of two or more classes of capital
stock or shares of Common Stock and other capital stock of the
Company, the Board of Directors (whose determination shall be
conclusive and shall be described in a written notice to the Holder
of any Warrant promptly after such adjustment) shall determine the
allocation of the adjusted Per Share Warrant Price between or among
shares of such classes or capital stock or shares of Common Stock
and other capital stock.
c) In case the Company shall hereafter combine its shares of Common
Stock into a lesser number of shares (Reverse Split) the number of
Warrants shall be proportionately adjusted. The Per Share Warrant
Price shall be adjusted to the lower of (i) the average closing bid
price of the Company's Common Stock as quoted by
3
<PAGE>
NASDAQ level III for the five-day trading period (Average Price)
ending on the twentieth (20th) day subsequent to the effective date
of such Reverse Split, or (ii) the proportionate per share price
based on the Reverse Split, i.e. $1.25 per share in the event of a
two for one split.
d) Except as provided in Subsection 3(f), in case the Company shall
hereafter issue or sell any shares of Common Stock for a
consideration per share less than the Per Share Warrant Price on the
date of such issuance or sale, the Per Share Warrant Price shall be
adjusted as of the date of such issuance or sale so that the same
shall equal the consideration per share received by the Company upon
such issuance or sale; provided, however, that no adjustment of the
Per Share Warrant Price shall be required in connection with the
issuance of shares upon the exercise of presently outstanding
warrants or options.
e) Except as provided in Subsection 3(a) and 3(f), in case the Company
shall hereafter issue or sell any rights, options, warrants or
securities convertible into Common Stock entitling the holders
thereof to purchase Common Stock or to convert such securities into
Common Stock at a price per share (determined by dividing (i) the
total amount, if any, received or receivable by the Company in
consideration of the issuance or sale of such rights, options,
warrants or convertible securities plus the total consideration, if
any, payable to the Company upon exercise or conversion thereof
(Total Consideration) by (ii) the number of additional shares of
common stock issuable upon exercise or conversion of such
securities) less than the then current Per Share Warrant Price in
effect on the date of such issuance or sale, the Per Share Warrant
Price shall be adjusted as of the date of such issuance or sale so
that the same shall equal the price determined by dividing (i) the
sum of (a) the number of shares of Common Stock outstanding on the
date of such issuance or sale multiplied by the Per Share Warrant
Price plus (b) the Total Consideration by (ii) the number of shares
of Common Stock outstanding on the date of such issuance or sale
plus (iii) the maximum number of additional shares of Common Stock
issuable upon exercise or conversion of such securities.
f) In case of any capital reorganization or reclassification, or any
consolidation or merger to which the Company is a party other than a
merger or consolidation in which the Company is the continuing
corporation, or in case of any sale or conveyance to another entity
of the property of the Company as an entirety or substantially as
an entirety, or in the case of any statutory exchange of securities
with another corporation (including any exchange effected in
connection with a merger of a third corporation into the
Company), the Holder of this Warrant shall have the right
thereafter to convert such Warrant into the kind and amount of
securities, cash or other property which he would have owned or have
been entitled to receive immediately after such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance had this Warrant been converted
4
<PAGE>
immediately prior to the effective date of such reorganization,
reclassification, consolidation, merger, statutory exchange, sale or
conveyance and in any such case, if necessary, appropriate
adjustment shall be made in the application of the provisions set
forth in this Section 3 with respect to the rights and interests
thereafter of the Holder of this Warrant to the end that the
provisions set forth in this Section 3 shall thereafter
correspondingly be made applicable, as nearly as may reasonably be,
in relation to any shares of stock or other securities or be. in
relation to any shares of stock or other securities or property
thereafter deliverable on the conversion of this Warrant. The above
provisions of this Subsection 3(f) shall similarly apply to
successive reorganizations, reclassifications, consolidations,
mergers, statutory exchanges, sales or conveyances. The issuer of
any shares of stock or other securities or property thereafter
deliverable on the conversion of this Warrant shall be responsible
for all of the agreements and obligations of the Company hereunder.
Notice of any such reorganization, reclassification, consolidation,
merger, statutory exchange, sale or conveyance and of said
provisions so proposed to be made, shall be mailed to the Holders of
the Warrants not less than 20 business days prior to such event. A
sale of all or substantially all of the assets of the Company for a
consideration consisting primarily of securities shall be deemed a
consolidation or merger for the foregoing purposes.
g) No adjustment in the Per Share Warrant Price shall be required
unless such adjustment would require an increase or decrease of at
least $0.01 per share of Common Stock; provided, however, that any
adjustments which by reason of this Subsection 3(g) are not required
to be made shall be carried forward and taken into account in any
subsequent adjustment; provided further, however, that adjustments
shall be required and made in accordance with the provisions of this
Section 3 (other than this Subsection 3(g) not later than such time
as may be required in order to preserve the tax-free nature of a
distribution to the Holder of this Warrant or Common Stock issuable
upon exercise hereof All calculations under this Section 3 shall be
made to the nearest cent. Anything in this Section 3 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Per Share Warrant Price, in addition to those
required by this Section 3, as it in its discretion shall deem to be
advisable in order that any stock dividend, subdivision of shares or
distribution of rights to purchase stock or securities convertible
or exchangeable for stock hereafter made by the Company to its
shareholders shall not be taxable.
h) Whenever the Per Share Warrant Price is adjusted as provided in this
Section 3 and upon any modification of the rights of a Holder of
Warrants in accordance with this Section 3, the Company shall
promptly obtain, at its expense, a certificate of a firm of
independent public accountants of recognized standing selected by
the Board of Directors (who may be the regular auditors of the
Company) setting forth the Per Share Warrant Price and the number
of GCA Warrants Shares after such adjustment or the effect of such
modification, a brief statement of the facts requiring such
5
<PAGE>
adjustment or modification and the manner of computing the same and
cause copies of such certificate to be mailed to the Holders of the
Warrants.
i) If the Board of Directors of the Company shall declare any dividend
or other distribution with respect to the Common Stock, other than a
cash distribution out of earned surplus, the Company shall mail
notice thereof to the Holders of the Warrants not less than 10
business days prior to the record date fixed for determining
shareholders entitled to participate in such dividend or other
distribution.
4. Fully Paid Stock, Taxes.
The Company agrees that the shares of the Common Stock represented by each
and every certificate for GCA Warrants Shares delivered on the exercise of
this Warrant shall, at the time of such delivery, be validly issued and
outstanding, fully paid and nonassessable, and not subject to pre-emptive
rights, and the Company will take all such actions as may be necessary to
assure that the par value or stated value, if any, per share of the Common
Stock is at all times equal to or less than the then Per Share Warrant
Price. The Company further covenants and agrees that it will pay, when due
and payable, any and all Federal and state stamp, original issue or
similar taxes which may be payable in respect of the issue of any Warrant
Share or certificate therefor.
5. Registration Under Securities Act of 1933.
a) The Company agrees to register the Warrants Shares in accordance
with the terms of the Financing Agreement.
b) The Company shall (i) furnish each Holder of any GCA Warrants Shares
and each underwriter (Underwriter) of such GCA Warrants Shares with
such copies of the prospectus, including the preliminary prospectus,
conforming to the Securities Act of 1933 (Act), (and such other
documents as each such Holder or each such Underwriter may
reasonably request) in order to facilitate the sale or distribution
of the GCA Warrants Shares, (ii) use its best efforts to register or
qualify such GCA Warrants Shares under the blue sky laws (to the
extent applicable) of such jurisdiction or jurisdictions as the
Holders of any such GCA Warrants Shares and each Underwriter of
GCA Warrants Shares being sold by such Holders shall reasonably
request and (iii) take such other actions as may be reasonably
necessary or advisable to enable such Holders and such Underwriters
to consummate the sale or distribution in such jurisdiction or
jurisdictions in which such Holders shall havc reasonably
requested that the GCA Warrants Shares be sold.
c) The Company shall pay all expenses incurred in connection with any
registration or other action pursuant to the provisions of this
Section 5, other than underwriting
6
<PAGE>
discounts and applicable transfer taxes relating to the GCA Warrants
Shares.
d) The Company will indemnify the Holders of GCA Warrants Shares which
are included in any Registration Statement substantially to the same
extent as the Company may indemnify any Underwriters of a public
offering of Common Stock pursuant to the Underwriting Agreement and
such Holders will indemnify the Company (and the Underwriters, if
applicable) with respect to information furnished by them in writing
to the Company for inclusion therein substantially to the same
extent as the Underwriters have indemnified the Company.
6. Limitation on Exercise.
No Holder(s) of GCA Warrants shall be permitted to exercise any GCA
Warrants to the extent that such exercise would cause any Holder to be the
beneficial owner of more than 5% of the then outstanding WWDI Common Stock, at
that given time. This limitation shall not be deemed to prevent any Holder from
acquiring more than an aggregate of 5% of the Common Stock, so long as such
Holder does not beneficially own more than 5% of WWDI Common Stock, at any given
time.
7. Transferability.
The Company may treat the registered Holder of this Warrant as he or it
appears on the Company's books at any time as the Holder for all purposes.
The Company shall permit any Holder of a Warrant or his duly authorized
attorney, upon written request during ordinary business hours, to inspect
and copy or make extracts from its books showing the registered holders of
Warrants. All warrants issued upon the transfer or assignment of this
Warrant will be dated the same date as this Warrant, and all rights of the
Holder thereof shall be identical to those of the Holder. The holder shall
have the right to assign all or any part of this Warrant, subject to
compliance with applicable federal and/or state securities laws.
8. Loss, etc., of Warrant.
Upon receipt of evidence satisfactory to the Company of the loss, theft,
destruction or mutilation of this Warrant, and of indemnity reasonably
satisfactory to the Company, if lost, stolen or destroyed, and upon
surrender and cancellation of this Warrant, if mutilated, the Company
shall execute and deliver to the Holder a new Warrant of like date, tenor.
and denomination.
9. Warrant Holder Not Shareholders.
Except as otherwise provided herein, this Warrant does not confer upon the
Holder any right to vote or to consent to or receive notice as a
shareholder of the Company, as such, in
7
<PAGE>
respect of any matters whatsoever, or any other rights or liabilities as a
shareholder, prior to the exercise hereof.
10. Communication.
No notice or other communication under this Warrant shall be effective
unless, but any notice or other communication shall be effective and shall
be deemed to have been given if the same is in writing and is mailed by
first-class mail, postage prepaid, or sent by overnight courier or
facsimile, addressed to:
a) If to the Company:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
Fax: 416/214-6299
Tel: 416/214-6296
Attn: Bronson Conrad, Chief Executive Officer
with copy to:
Steven Davis, Esq.
Heller, Ehrman, White & McAuliffe
711 Fifth Avenue
New York, NY 10022-3194
Fax: 212/832-3353
Tel: 212/832-8300
or such other address as the Company has designated in writing to the Holder; or
b) If to GCA:
Generation Capital Associates
1085 Riverside Trace
Atlanta, GA 30328
Fax: 404/255-2218
Tel: 404/303-8450
Attn: Frank E. Hart, General Partner
or such other address as the GCA has designated in writing to the Company; and
c) If to Escrow Agent:
8
<PAGE>
David A. Rapaport. Esq.
333 Sandy Springs Circle, Suite 230
Atlanta, GA 30328
Fax: 404/257-9125
Tel: 404/257-9150
or such other address as the Escrow Agent has designated in writing to the
Company and Holder(s).
11. Headings.
The headings of this Warrant have been inserted as a matter of
convenience and shall not affect the construction hereof.
12. Applicable Law.
This Warrant shall be governed by and construed in accordance with the
law of the State of Georgia without giving effect to the principles of
conflicts of law thereof.
IN WITNESS WHEREOF, Worldwide Data, Inc. has caused this Warrant to be signed by
its Chief Executive Officer and its corporate seal to be hereunto affixed by its
Secretary this 27th day of September, 1999
/s/Bronson Conrad
- --------------------------
Bronson Conrad
President
ATTEST:
9
<PAGE>
Secretary
Corporate Seal
10
<PAGE>
SUBSCRIPTION
The undersigned, _____________________, pursuant to the provisions of the
foregoing Warrant, hereby agrees to subscribe for and purchase
______________shares of the Common Stock of Worldwide Data, Inc. covered by said
Warrant, and makes payment therefor in full at the price per share provided by
said Warrant.
Dated: __________________________ Signature: ________________________________
Name: _____________________________________
Address: __________________________________
__________________________________
Tax I.D. No. _______________________________
- --------------------------------------------------------------------------------
CASHLESS EXERCISE SUBSCRIPTION
The undersigned ________________________ pursuant to the provisions of
the foregoing Warrant, hereby agrees to subscribe to that number of shares of
stock of Worldwide Data, Inc. as are issuable in accordance with the formula set
forth in paragraph 1(b) of the Warrant, and makes payment therefore in full by
cancellation of _________________ Warrants. (If this is a partial exercise of
the Warrant a new Warrant for the remaining number of unexercised Warrants shall
be issued by the Company.)
Dated: __________________________ Signature: ________________________________
Name: _____________________________________
Address: __________________________________
__________________________________
Tax I.D. No. _______________________________
11
<PAGE>
ASSIGNMENT
FOR VALUE RECEIVED ______________________ hereby sells, assigns and transfers
unto ______________ the foregoing Warrant and all rights evidenced thereby, and
does irrevocably constitute and appoint ______________ attorney, to transfer
said Warrant to the books of ______________________
Dated: __________________________ Signature: ________________________________
Name: _____________________________________
Address: __________________________________
__________________________________
Tax I.D. No. _______________________________
- --------------------------------------------------------------------------------
PARTIAL ASSIGNMENT
FOR VALUE RECEIVED ___________________hereby assigns and transfers unto
_____________________ the right to purchase ______________ shares of the Common
Stock of Worldwide Data, Inc. by the foregoing Warrant, and a proportionate part
of said Warrant and the rights evidenced hereby, and does irrevocably constitute
and appoint _____________________ , attorney, to transfer that part of said
Warrant on the books of
Dated: __________________________ Signature: ________________________________
Name: _____________________________________
Address: __________________________________
__________________________________
Tax I.D. No. _______________________________
12
<PAGE>
Exhibit 10.1
WORLDWIDE DATA, INC.
CONVERTIBLE DEBENTURE
$ 50,000 Sept 30, 1999
- -------------- -------------
(amount) (date)
FOR VALUE RECEIVED, the undersigned, Worldwide Data, Inc., a Delaware
corporation (Company), hereby promises to pay to the order of Generation Capital
Associates, or its lawful assigns (Purchaser), in lawful money of the United
States of America, and in immediately available funds, the principal sum of
$50,000. The principal hereof and any unpaid accrued interest thereon shall be
due and payable on or before 5:00 p.m., Eastern Standard Time, on September 30,
2000 (unless the payment date is accelerated as provided in Section 4 hereof,
extended as provided in Section 2 hereof, or unless this Debenture is converted
as set forth in Section 1 hereof). Payment of all amounts due hereunder shall be
made at the address of the Purchaser provided for in Section 5 hereof. The
Company further promises to pay interest at the rate of ten percent per annum
payable monthly on the outstanding principal balance hereof, such interest to be
payable in arrears commencing on November 1, 1999 and on the maturity date. The
interest rate shall be increased retroactively to 15% from the date of this
Debenture if the Conversion Shares have not been registered by the one hundred
twentieth day following the date of this Debenture and 1% for each month or part
thereof that such Registration Statement has not been declared effective to a
maximum rate of interest which is the lesser of (a) the maximum rate allowed by
law, or (b) 25%. Interest shall be payable in cash (or Common Stock (Interest
Shares) at the option of the Company, only if such Interest Shares have been
registered for resale and are freely tradable. If interest is payable in
Interest Shares the shares shall be valued at the Multiplier times the Average
Price for the five trading days immediately preceding the interest payment date.
This Debenture is one of a series of debentures issued by the Company pursuant
to a Financing Terms Agreement between the Company and Generation Capital
Associates dated as of September 20, 1999 (Financing Terms Agreement).
Capitalized terms herein shall have the same meaning as in the Financing Terms
Agreement. THE PROVISIONS OF THE FINANCING TERMS AGREEMENT ARE INCORPORATED
HEREIN BY REFERENCE.
In connection with any conversion of the Debenture into any Conversion Shares,
the Company has placed into escrow with David A. Rapaport, Esq (the Escrow
Agent) an aggregate of 400,000 shares of Common Stock (Escrow Shares) pursuant
to the terms of an Escrow Agreement dated as of September 20, 1999. THE
PROVISIONS OF THE ESCROW AGREEMENT ARE INCORPORATED HEREIN BY REFERENCE.
1
WWDI99 Convertible Debenture
<PAGE>
1. CONVERSION. The Purchaser or any subsequent holder or holders (Holder(s) of
this Debenture is entitled, at its option, at any time and in whole or in part,
until maturity hereof (as extended by Holder(s)) to convert the principal amount
of this Debenture or any portion of the principal amount hereof into Shares of
Common Stock at the average closing bid price (Closing Bid Price) of the
Company's Common Stock for the five-day trading period (the Average Price)
ending on the day prior to the Effective Date times (x) 60% (Multiplier). In the
event a Registration Statement covering the Conversion Shares is not effective
by January the Multiplier shall be decreased from 60% to 55% and shall be
further decreased 1% for each month or part thereof until the Registration
Statement is effective or the Conversion Shares may be resold by Holder(s)'
compliance with Rule 144; provided the Multiplier shall not be reduced to less
than 35%. For purposes of this Debenture, the Closing Bid Price shall be the
closing bid price of the Common Stock as reported by the National Association of
Securities Dealers Automated Quotation System Level III (Nasdaq), or the closing
bid price in the over-the-counter market or, in the event the Common Stock is
listed on a stock exchange, the closing bid price value per share shall be the
closing price on the exchange, as reported in the Wall Street Journal. The
shares of Common Stock issued upon conversion of the Debenture are herein
referred to as Conversion Shares. Such conversion shall be effectuated by
surrendering the Debenture to be converted to the Escrow Agent, with the form of
Conversion Notice attached hereto as Exhibit 1, executed by the Holder(s) of
this Debenture evidencing such Holder(s)' intention to convert this Debenture or
a specified portion hereof (as above provided). The Effective Date shall be the
date set forth on the Conversion Notice, provided such Conversion Notice is
received by the Escrow Agent and the Company, via facsimile or otherwise, no
later than the fifth business day after such date.
Upon recording the amount converted and amount of indebtedness remaining under
the Debenture, set forth in the Conversion Notice on the grid comprising the
last page of the Debenture (Principal Reduction Grid), the Escrow Agent will
send a copy of the revised Principal Reduction Grid to the Company and will send
a copy of the revised Principal Reduction Grid to the Holder(s). Escrow Agent
shall also deliver the Conversion Shares to Holder(s)
The Company has authorized and has reserved and covenants to continue to
reserve, free of preemptive rights and other similar contractual rights of
stockholders, a sufficient number of its authorized but unissued shares of
Common Stock to satisfy the rights of conversion of the holder or holders
(Holder(s)) of this Debenture.
2. EXTENSION OF MATURITY DATE. The maturity date shall be automatically extended
for up to eighteen (18) one-month periods, unless the Holder(s) notifies the
Company in writing no less than 10 days prior to any expiration that the
Debentures will not be extended.
3. PREPAYMENT. This Debenture shall not be prepaid, in whole or in part, without
the prior written consent of the Holder(s).
2
WWDI99 Convertible Debenture
<PAGE>
4. DEFAULT. The occurrence of any one of the following events shall constitute
an Event of Default:
(a) The non-payment, when due, of any principal or interest pursuant to this
Debenture;
(b) The material breach of any representation or warranty in this Debenture, the
Financing Terms Agreement or in the Escrow Agreement. In the event the Holder(s)
becomes aware of a breach of this Section 5(b), the Holder(s) shall notify the
Company in writing of such breach and the Company shall have five business days
after notice to cure such breach;
(c) The breach of any covenant or undertaking in this Debenture, the Financing
Terms Agreement or in the Escrow Agreement, not otherwise provided for in this
Section 5;
(d) A default shall occur in the payment when due (subject to any applicable
grace period),whether by acceleration or otherwise, of any indebtedness of the
Company or an event of default or similar event shall occur with respect to such
indebtedness, if the effect of such default or event (subject to any required
notice and any applicable grace period) would be to accelerate the maturity of
any such indebtedness or to permit the holder or holders of such indebtedness to
cause such indebtedness to become due and payable prior to its express maturity;
(e) The commencement by the Company of any voluntary proceeding under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
receivership, dissolution, or liquidation law or statute of any jurisdiction,
whether now or hereafter in effect; or the adjudication of the Company as
insolvent or bankrupt by a decree of a court of competent jurisdiction; or the
petition or application by the Company for, acquiescence in, or consent by the
Company to, the appointment of any receiver or trustee for the Company or for
all or a substantial part of the property of the Company; or the assignment by
the Company for the benefit of creditors; or the written admission of the
Company of its inability to pay its debts as they mature; or
(f) The commencement against the Company of any proceeding relating to the
Company under any bankruptcy, reorganization, arrangement, insolvency,
adjustment of debt, receivership, dissolution or liquidation law or statute of
any jurisdiction, whether now or hereafter in effect, provided, however, that
the commencement of such a proceeding shall not constitute an Event of Default
unless the Company consents to the same or admits in writing the material
allegations of same, or said proceeding shall remain undismissed for 20 days; or
the issuance of any order, judgment or decree for the appointment of a receiver
or trustee for the Company or for all or a substantial part of the property of
the Company, which order, judgment or decree remains undismissed for 20 days; or
a warrant of attachment,
3
WWDI99 Convertible Debenture
<PAGE>
execution, or similar process shall be issued against any substantial part of
the property of the Company.
Upon the occurrence of any Default or Event of Default, the Holder(s) may, by
written notice to the Company, declare all or any portion of the unpaid
principal amount due to Holder(s), together with all accrued interest thereon,
immediately due and payable, in which event it shall immediately be and become
due and payable, provided that upon the occurrence of an Event of Default as set
forth in paragraph (e) or paragraph (f) hereof, all or any portion of the unpaid
principal amount due to Holder(s), together with all accrued interest thereon,
shall immediately become due and payable without any such notice.
5. NOTICES. Notices to be given hereunder shall be in writing and shall be
deemed to have been sufficiently given if sent by first class or certified mail,
overnight courier, delivered personally or sent by facsimile transmission.
Notice shall be deemed to have been received on the date and time of personal
delivery, delivery by overnight courier, certified mail or facsimile
transmission.
Notices shall be given to the following addresses:
If to the Company:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario
Canada M5C 2C5
Fax: 416/214-6299
Tel: 416/214-6296
Attn: Bronson Conrad, Chief Executive Officer
with copy to:
Steven M. Davis, Esq.
Heller, Ehrman, White & McAuliffe
711 Fifth Avenue
New York, NY 10022-3194
Fax: 212/832-3353
Tel: 212832-8300
If to the Purchaser:
Generation Capital Associates
1085 Riverside Trace
Atlanta, GA 30328
4
WWDI99 Convertible Debenture
<PAGE>
Attn: Frank E. Hart, General Partner
Fax: 404/255-2218
Tel: 404/303-8450
If to the Escrow Agent:
David A. Rapaport, Esq.
333 Sandy Springs Circle, Suite 230
Atlanta, GA 30328
Fax: 404/ 257-9125
Tel: 404/257-9150
6. LIMITATION. Notwithstanding any other provision of this Debenture (including,
without limitation, all Exhibits hereto) to the contrary, no individual
Holder(s) of this Debenture or any portion of this Debenture shall be required
to accept (through the issuance to such person of Interest Shares or otherwise),
or be permitted to exercise any of the conversion rights to receive securities
of the Company, if such action would result in the Holder(s) becoming at any
particular time the beneficial owner of an aggregate of more than 5% of the then
outstanding Common Stock of the Company, as calculated pursuant to Section 13 of
the Securities Exchange Act of 1934 (the Exchange Act) and Regulation 13D-G
promulgated thereunder. The foregoing shall not prohibit the Holder(s) from
receiving any remaining amounts owed under this Debenture to such Purchaser or
Holder(s) from the Company, or to receive in the aggregate securities exceeding
such amount, so long as Holder(s) does not have beneficial ownership of an
aggregate of more than 5% of the outstanding Common Stock at any given time.
7. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. The Company consents to the
jurisdiction of any court of the State of Georgia and of any federal court
located in Georgia. The Company waives personal service of any summons,
complaint or other process in connection with any such action or proceeding and
agrees that service thereof may be made, as the Purchaser or Holder(s) may
elect, by certified mail directed to the Company at the location provided for in
Section 6 hereof, or, in the alternative, in any other form or manner permitted
by law.
8. GOVERNING LAW. THIS DEBENTURE HAS BEEN PURCHASED IN THE STATE OF GEORGIA AND
SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF GEORGIA APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED
ENTIRELY THEREIN, WITHOUT GIVING EFFECT TO THE RULES OR PRINCIPLES OF CONFLICTS
OF LAW.
5
WWDI99 Convertible Debenture
<PAGE>
9. ATTORNEYS FEES. In the event the Holder(s) hereof shall refer this Debenture
to an attorney for collection, the Company agrees to pay all the costs and
expenses incurred in attempting or effecting collection hereunder or enforcement
of the terms of this Debenture, including reasonable attorney's fees, whether or
not suit is instituted.
10. CONFORMITY WITH LAW. It is the intention of the Company and of the Holder(s)
to conform strictly to applicable usury and similar laws. Accordingly,
notwithstanding anything to the contrary in this Debenture, it is agreed that
the aggregate of all charges which constitute interest under applicable usury
and similar laws that are contracted for, chargeable or receivable under or in
respect of this Debenture, shall under no circumstances exceed the maximum
amount of interest permitted by such laws, and any excess, whether occasioned by
acceleration or maturity of this Debenture or otherwise, shall be canceled
automatically, and if theretofore paid, shall be either refunded to the Company
or credited on the principal amount of this Debenture.
IN WITNESS WHEREOF, the Company has signed and sealed this Debenture as of
Sept 30, 1999.
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
------------------
B. Conrad Pres
- ----------------------
Name and Title
6
WWDI99 Convertible Debenture
<PAGE>
PRINCIPAL REDUCTION GRID
- --------------------------------------------------------------------------------
Adjusted Conversion Shares
Date Principal Principal Converted Principal Delivered
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
7
WWDI99 Convertible Debenture
<PAGE>
Exhibit 1
CONVERSION NOTICE
(To be executed upon Conversion of Debenture)
To: David A. Rapaport ("Escrow Agent")
(Fax - 404\ 257-9125)
Worldwide Data, Inc.
(Fax - 416/214-6299)
The Undersigned hereby irrevocably elects to exercise the right set forth
in that certain Debenture dated as of September 30, 1999
(Debenture), to which this Notice is attached, to convert such amount of
outstanding principal of the Debenture (Conversion Principal) through the
Effective Date hereof into such number of shares (Conversion Shares) of Common
Stock of the Company set forth below; such Conversion Principal shall be
converted at the lesser of (i) the average closing bid price of the Company's
Common Stock for the five-day trading period (Average Price) ending on the day
prior to the Effective Date times (x) the lower of (a) 60%, or (b) such lower
Multiplier (as defined in the Debenture) as computed in accordance with the
Debenture.
Accordingly, Purchaser herewith authorizes and requests the Escrow Agent
to record the following amounts on the Principal Reduction Grid so as to reflect
the reduction of the indebtedness outstanding under the Debenture:
(SEE NEXT PAGE)
WWDI 99 Conversion Notice
<PAGE>
CONVERSION NOTICE
(Page 2)
<TABLE>
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(i) Conversion Principal to be converted hereby: $
- --------------------------------------------------------------------------------------------
(ii) Remaining, unconverted outstanding
principal amount: $
- --------------------------------------------------------------------------------------------
(iii) Conversion Percentage 60% or lower Multiplier
- --------------------------------------------------------------------------------------------
Last trading day prior
(iv) Average Price ending on _____________ to Effective Date
- --------------------------------------------------------------------------------------------
(v) Conversion Price {(iii) X (iv)}
- --------------------------------------------------------------------------------------------
(v) Number of Principal Conversion Shares {(i) divided by (v)}
to be delivered by Escrow Agent
- --------------------------------------------------------------------------------------------
</TABLE>
If the Conversion Principal converted pursuant to this Conversion Notice
is less than 100% of the outstanding principal balance, and the Escrow Agent in
turn has revised the Principal Reduction Grid as provided for herein and in the
Debenture, the undersigned requests that a copy of the revised Principal
Reduction Grid be sent to Holder(s) and the Company. Unless otherwise
specifically defined herein, all capitalized terms used herein shall have the
meaning set forth in the Debenture.
- --------------------------
Signature of Holder
By:
- --------------------------
Name & Title of Holder
Date of Notice: _____________________
(The Effective Date of the Notice is the earlier of the date stated above,
provided the Escrow Agent and the Company receives the Notice within 5 business
days after such date, or the date the Escrow Agent and the Company receives the
Notice.)
WWDI 99 Conversion Notice
<PAGE>
Exhibit 10.2
Worldwide Data, Inc.
Financing Terms Agreement
Dated as of September 20, 1999
Issuer: Worldwide Data, Inc. ("WWDI" or "Company")
Purchaser: Generation Capital Associates ("GCA") and other purchasers
(collectively "Purchaser(s)"). All Purchaser(s) shall be
"accredited investors" as defined by Rule 501 of Regulation
D.
Securities: (a) Convertible Debentures (the "Debenture(s)") convertible
into shares of the common stock of WWDI ("Common Stock").
The Debenture(s) shall have a maturity date of twelve
months; the unconverted principal balance and any accrued
and unpaid interest shall be due and payable in cash on such
date. The maturity date of the Debenture(s) shall be
automatically extended for up to eighteen (18) one-month
periods, unless the Purchaser(s) or any subsequent holder,
(the "Holder(s)") notifies the Company in writing not less
than 10 days prior to any expiration that the Debenture(s)
will not be extended.
(b) In lieu of WWDI paying a document preparation fee to
GCA, WWDI shall issue to GCA 25,000 cashless exercise
warrants ("GCA Warrants") to purchase 25,000 shares of
Common Stock exercisable at $2.50 for five years from the
Closing Date (as defined herein). The GCA Warrants shall
have a value of $250.00 ($0.01 per warrant). The shares of
Common Stock issuable upon exercise of GCA Warrants are
defined as the "GCA Warrants Shares."
Investment Size: $250,000 of Debenture(s) shall be purchased on the Closing
Date.
Conversion The Debenture(s) are convertible into shares of Common Stock
Terms: ("Conversion Shares") at any time after the "Closing Date"
which is the date upon which the $250,000 purchase price of
the Debenture(s) is wired to the Company). The "Effective
Date" of each conversion shall be the date set forth on the
conversion notice ("Conversion Notice"), provided such
Conversion Notice is received by David A. Rapaport, Esq. as
escrow agent ("Escrow Agent") and the Company, via U.S.
mail, facsimile, overnight courier, or hand delivery no
later than the fifth business day after such date. The price
at which the Debenture(s) shall be converted (the
"Conversion Price") shall be the average closing bid prices
of Company's Common Stock as quoted by NASDAQ level III for
the five-day trading period (the "Average Price") ending on
the day prior to the Effective Date times (x) 60 %
("Multiplier"). The Multiplier is subject to being decreased
in the event WWDI does not register the shares underlying
the Debenture(s) as provided in "Registration Rights" below.
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Interest: 10 % annual rate, payable monthly in arrears in cash (or
WWDI common stock ("Interest Shares") at the option of WWDI,
only if such Interest Shares have been registered and are
freely tradable by Holder(s)). Interest shall be payable on
the first business day of each month commencing November 1,
1999. If interest is paid in WWDI common stock the stock
shall be valued at the Multiplier times the Average Price
for the five trading days immediately preceding the date the
interest payment is due; provided the interest rate shall be
increased retroactively to 15% per annum from the date of
issue if the Conversion Shares have not been registered by
the one hundred twentieth day following the Closing Date (as
defined herein) and 1% for each month or part thereof that
such registration statement has not been declared effective
to a maximum rate of interest which is the lesser of (a) the
maximum rate of interest allowable by law, or (b) 25%.
Securities Act WWDI shall file a registration statement including the
Registration: Conversion Shares, the Interest Shares and the GCA Warrants
Shares ("Registration Statement") as soon as reasonably
practicable after the Closing Date and shall use its best
efforts to cause such Registration Statement to be declared
effective not later than one hundred twenty days from the
Closing Date. In the event the Registration Statement is not
effective by the one hundred twentieth day following the
Closing Date, the Multiplier shall be decreased to 55% and
shall be further decreased 1 % for each month or part
thereof until the Conversion Shares have been registered or
may be resold in compliance with Rule 144; provided the
Multiplier shall not be reduced to less than 35%.
Limitations: No Purchaser or subsequent holder, ("Holder" or "Holder(s)")
of Debenture(s) and/or GCA Warrants shall be permitted to
convert any Debenture(s) to the extent that such conversion
or exercise would cause any Holder to be the beneficial
owner of more than 5% of the then outstanding WWDI Common
Stock, at that given time. This limitation shall not be
deemed to prevent any Holder from acquiring more than an
aggregate of 5% of the Common Stock, so long as such Holder
does not beneficially own more than 5% of WWDI Common Stock,
at any given time.
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Prepayment: The Debenture(s) may not be prepaid or redeemed, in whole or
in part, without the written consent of the Holder(s).
Transferability: The Debenture(s) shall be freely transferable by the
Purchasers or any Holder(s) provided such transfer is in
compliance with applicable United States and state
securities laws.
Escrow of To facilitate the delivery of the Conversion Shares upon any
Common Stock: conversion of the Debenture(s) in whole or in part or the
fall or partial exercise of the GCA Warrants, WWDI will
issue 400,000 shares WWDI Common Stock ("Escrow Shares") in
the name of Escrow Agent and will deliver the certificates
for such shares with legend to the Escrow Agent within three
(3) business days of the mutual execution of this Financing
Terms Agreement.
If at any time, or from time to time, the Escrow Agent is
holding less than 200% of the number of Escrow Shares
required to convert the remaining principal balance of the
Debenture(s) based on the then Average Price plus up to
25,000 shares of WWDI Common Stock issuable upon exercise of
the GCA Warrants, the Escrow Agent and/or Holder(s) may
request in writing that the Company deposit enough
additional shares of Common Stock with the Escrow Agent
("Additional Escrow Shares")) so that the Escrow Agent is
holding 200 % of the number of Escrow Shares required to
convert such remaining principal balance of the Debenture(s)
plus up to 25,000 shares of WWDI Common Stock issuable upon
exercise of the GCA Warrants. The failure of the Company to
deliver such Additional Escrow Shares within ten business
days of such demand shall be a material default of the
Debenture(s) and in addition to any other remedies,
including without limitation specific performance (to which
Holder(s) are hereby entitled), shall entitle the Holder(s)
to an immediate distribution of Escrow Shares in an amount
equal to 25,000 Escrow Shares, plus an additional 2,500
Escrow Shares for each day after the tenth business day such
failure to deliver the Additional Escrow Shares of Common
Stock continues. (Such distribution shall be made by the
Escrow Agent to the Holder(s) pro-rata to the principal
amount of Debenture(s) held by each Holder.)
As soon as reasonably practicable after the Escrow Shares
have been registered for resale or may be sold without
restriction pursuant to SEC Rule 144 the Escrow Agent will
deposit the Escrow Shares and any Additional Escrow Shares
into a securities brokerage account. The Company will take
all necessary actions to cause the Escrow Shares and any
Additional Escrow Shares to be transferred into "street
name" at the request of the Escrow Agent's securities
brokerage firm. Upon the earlier
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Escrow of of (i) thirty (30) days after the date upon which the last
Common Stock remaining Debenture(s) has been fully converted into
(cont'd.): Conversion Shares with interest paid in full; or (ii) the
full payment of the remaining principal and interest balance
of the Debenture(s), the Escrow Agent shall return any
remaining Escrow Shares to WWDI.
If at any time the Escrow Agent is required to deliver
Conversion Shares that have not been registered for resale
or may not be sold under Rule 144 the Escrow Agent shall
cause the transfer agent place a standard restrictive legend
on such shares prior to transfer and delivery.
Escrow of To facilitate the delivery of the Debenture(s) upon receipt
Debenture(s): of payment from Purchaser(s) the Company shall deliver to
the Escrow Agent within three (3) business days of the
mutual execution of this Financing Terms Agreement five (5)
Debentures which have been duly executed by the Company but
which are blank as to name and address of the Purchaser,
principal amount and date of issuance ("Issue Date").
The Escrow Agent shall upon receipt of good funds for the
purchase of a Debenture fill in the name and address of the
Purchaser, principal amount and Issue Date. The Escrow Agent
shall deliver the completed Debenture to the Purchaser and
the escrowed funds together with a copy of the completed
Debenture to the Company. Upon issuance of the entire
$250,000 of Debentures the Escrow Agent shall return any
remaining unissued blank Debentures to the Company.
Representations WWDI makes the following representations and warranties to
and Warranties of the Purchasers:
WWDI:
(a) Organization, Good Standing and Power. The Company is a
corporation duly incorporated, validly existing and in good
standing under the laws of the State of Delaware and has the
requisite corporate power to own, lease and operate its
properties and assets and to conduct its business as it is
now being conducted.
(b) Authorizations Enforcement. The Company has the
requisite corporate power and authority to enter into and
perform this Financing Terms Agreement and the Escrow
Agreement and to issue and sell the Debenture(s) and the
Conversion Shares in accordance with the terms hereof. The
execution, delivery and performance of this Financing Terms
Agreement and the Escrow Agreement by the Company and the
consummation by it of the transactions contemplated hereby
and thereby have been duly and
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Representations validly authorized by all necessary corporate action, and no
and Warranties of further consent or authorization of the Company or its
WWDI (cont'd.): Board of Directors or stockholders is required. This
Financing Terms Agreement has been duly executed and
delivered by the Company. Each of this Financing Terms
Agreement and the Escrow Agreement constitutes, or shall
constitute when executed and delivered, a valid and binding
obligation of the Company enforceable against the Company in
accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies
or by other equitable principles of general application.
(c) Capitalization. WWDI represents and warrants that it has
10,010,000 shares of Common Stock authorized; and no more
than 3,0835,500 shares have been issued and are outstanding;
and that it has 10,000 shares of preferred stock authorized
and that none of such shares are issued and outstanding; and
that no more than 1,340,000 shares of Common Stock are
reserved for warrants.
(d) Issuance of Debenture(s) and Conversion Shares. The
Debenture(s) and the Conversion Shares to be delivered to
the Escrow Agent have been duly authorized by all necessary
corporate action. The Conversion Shares when delivered to
the Holder(s) upon conversion of the Debenture(s) in
accordance with the terms thereof, will be validly issued
and outstanding, fully paid and non-assessable.
Representations GCA hereby makes the following representations and
and Warranties of warranties to the Company:
GCA:
(a) Accredited Purchaser. GCA is an "accredited investor" as
defined in Regulation D promulgated under the Securities
Act.
(b) Organization, Good Standing and Power. GCA is a limited
partnership organized, validly existing and in good standing
under the laws of the State of New York and has the
requisite power to own, lease and operate its properties and
assets and to conduct its business as it is now being
conducted.
(c) Authorization; Enforcement. GCA has the requisite power
and authority to enter into and perform this Financing Terms
Agreement and the Escrow Agreement and to purchase the
Debenture(s) in accordance with the terms hereof. The
execution, delivery and performance of this Financing Terms
Agreement and the Escrow Agreement by GCA and the
consummation by it of
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<PAGE>
Representation the transactions contemplated hereby and thereby have been
and Warranties of duly and validly authorized by all necessary action, and
GCA (cont'd.): no further consent or authorization of GCA, its general
partner or its limited partner is required. This Financing
Terms Agreement has been duly executed and delivered by GCA.
Each of this Financing Terms Agreement and the Escrow
Agreement constitutes, or shall constitute when duly
executed and delivered by all parties thereto, a valid and
binding obligation of GCA enforceable against GCA in
accordance with its terms, except as such enforceability may
be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation, conservatorship,
receivership or similar laws relating to, or affecting
generally the enforcement of, creditor's rights and remedies
or by other equitable principles of general application.
(d) GCA has had full access to all the information which GCA
considers necessary or appropriate to make an informed
decision with respect to GCA's investment. GCA acknowledges
that GCA has had the opportunity to ask questions of, and
receive answers from, or obtain additional information from,
the executive officers of the Company concerning the
financial and other affairs of the Company, and, to the
extent deemed necessary, GCA has asked such questions and
received satisfactory answers and desires to invest in the
Company. In evaluating the suitability of any vestment in
the Company, GCA has not relied upon any representations or
other information (whether oral or written) other than as
set forth in this Agreement or as contained in any documents
delivered or answers given in writing by the Company to
questions furnished to the Company. To the extent GCA has
not sought information regarding any particular matter, GCA
represents that it had no interest in doing so and that such
matters are not material to GCA in connection with this
investment.
(e) GCA has been advised and acknowledges that no federal or
state agency has made any finding or determination as to the
fairness or merits of an investment in the Company and that
no such agency has made any recommendation or endorsement
whatsoever with respect to such an investment. GCA
acknowledges that it is aware of an NASD inquiry into the
trading of WWDI common stock.
(f) GCA considers itself to be a sophisticated investor in
companies similarly situated to the Company, and GCA has
substantial knowledge and experience in financial and
business matters (including knowledge of finance, securities
and investments, generally, and experience and skill in
investments based on actual participation) such that GCA is
capable of evaluating the merits and risks of the
prospective investment in the Company.
6
<PAGE>
Representation (g) GCA is acquiring the securities hereunder, as principal,
and Warranties of for GCA's own account for investment purposes only, and not
GCA (cont'd.): with a present intention toward or for the resale,
distribution or fractionalization thereof, and no other
person has a beneficial interest in such securities.
Events of Default: Normal and customary events of default: non-payment of
interest, bankruptcy, breach of representations and
warranties, etc. The failure of the Company to have an
effective registration statement by one hundred twenty days
following the Closing Date.
Purchase of (a) Purchaser(s) shall deposit with the Escrow Agent
Debenture(s): $250,000 for the purchase of the Debenture(s) within three
(3) business days of the receipt by the Escrow Agent of the
certificate(s) for the 400,000 Escrow Shares registered in
the name of David A. Rapaport, Esq., the GCA Warrants and
the five (5) executed blank Debentures.
(b) The Escrow Agent shall wire to the Company the $250,000
purchase price for the Debenture(s) within two (2) business
days of the later of (i) receipt by the Escrow Agent of the
certificates for the 400,000 Escrow Shares, the five (5)
executed blank Debentures and the GCA Warrants, and (ii)
receipt of the $250,000 from Purchaser(s).
Additional If WWDI shall issue any shares of common stock or securities
Securities exercisable or convertible into common stock (except for (a)
Issuance: the issuance of common stock upon the exercise of employee
stock options and outstanding warrants; (b) the issuance of
Common Stock or securities convertible or exercisable into
Common Stock for services rendered to WWDI; (c) shares of
Common Stock issued in an underwritten public offering; or
(d) shares of Common Stock which are restricted for resale
for at least one year from the issue date) from the date of
this Financing Terms Agreement until ninety days following
the earlier of (a) conversion into Common Stock of all
principal and accrued interest under the Debenture(s), or
(b) payment in full of all principal and accrued interest
under the Debenture(s), GCA shall have the right of first
refusal to purchase such securities, and in this connection,
WWDI, prior to the issuance of such securities, shall
provide a written term sheet setting forth the terms and
conditions of such offering, and GCA shall respond within
twenty (20) business days of receipt of such term sheet as
to whether GCA shall exercise its right of first refusal
granted hereunder. In the event that GCA does not elect to
exercise its right of first refusal within such twenty (20)
business days, WWDI shall have the right to sell such
securities to a third party on terms no more
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<PAGE>
Additional favorable to the third party than those set forth in the
Securities term sheet for a period of sixty (60) days following the end
Issuance of said twenty (20) business day period.
(Cont'd.):
Jurisdiction and This Financing Terms Agreement, the Debenture(s) and the
Choice of Law Escrow Agreement shall be governed by the laws of the state
of Georgia and all of the parties to such agreements and
Debenture(s) agree to submit to the personal jurisdiction of
the state and Federal courts located in Fulton County,
Georgia.
Binding The parties shall be legally bound by the above terms and
Agreement: shall execute such further documents as may be required to
implement the intentions and provisions of this Financing
Terms Agreement, including without limitation the Escrow
Agreement ,the Debenture(s) and the GCA Warrants
Agreed to and Accepted by:
Worldwide Data, Inc.
By: /s/ Bronson Conrad 9/24/99
- ------------------------------ --------------
Bronson Conrad Date
President
Generation Capital Associates
By: /s/ Frank E. Hart 9/30/99 (Closing Date)
- ------------------------------ --------------
Frank E. Hart Date
General Partner
/s/ David A. Rapaport, Esq. 9/27/99
- ------------------------------ --------------
David A. Rapaport, Esq. Date
Escrow Agent
8
<PAGE>
Exhibit 10.3
ESCROW AGREEMENT
THIS ESCROW AGREEMENT (the "Escrow Agreement") is entered into as of
this 20h day of September 1999 between Worldwide Data, Inc. a Delaware
corporation (the "COMPANY"), Generation Capital Associates, a New York limited
partnership ("GCA") and one or more other parties who are the purchasers of
Debenture(s) and who become signatories to this Escrow Agreement (GCA and such
other signatories are herein referred to as ("PURCHASER(S)") and David A.
Rapaport, Esq. as ESCROW AGENT (the "ESCROW AGENT"). The COMPANY, PURCHASER(S),
and the ESCROW AGENT shall from time to time be referred to herein as the
"PARTIES." This Escrow Agreement is being entered into in accordance with the
terms of the "Worldwide Data, Inc. Financing Terms Agreement Dated as of
September 20, 1999 ("Financing Agreement") executed by the COMPANY and GCA on
September 21 , 1999. (Capitalized terms not otherwise defined in this Escrow
Agreement shall have the meanings as defined in the Financing Agreement, the
Debenture(s) anchor the GCA Warrants, and, in turn, the form of Conversion
Notice and Principal Reduction Grid attached to the Debenture(s), the terms and
provisions of which are incorporated herein by reference.)
RECITALS
A. The COMPANY has agreed to sell, and PURCHASER(S) to purchase,
Debenture(s) which are convertible into the common stock of the COMPANY ("Common
Stock") at the average closing bid prices of Company's Common Stock as quoted by
NASDAQ level III for the five-day trading period (the "Average Price") ending on
the day prior to the Effective Date times (x) 60 % ("Multiplier). The Multiplier
shall be decreased to a minimum of 35% at the rate of one percentage point per
month commencing one hundred twenty days from the Closing Date for each month or
part thereof that the Conversion Shares and/or Warrants Shares have not been
registered for resale under the Securities Act of 1933 ("Securities Act") and
may not be sold under SEC Rule 144.
B. To facilitate the delivery of the Debenture(s) upon receipt of payment
from PURCHASER(S) to the ESCROW AGENT the Company has delivered to the ESCROW
AGENT five (5) Debentures which have been duly executed by the Company but which
are blank as to name and address of the PURCHASER(S), principal amount and date
of issuance.
C. To facilitate delivery to PURCHASER(S) of the Conversion Shares for the
two hundred fifty thousand dollars ($250,000) of Debenture(s) and the exercise
of the GCA Warrants, the COMPANY has deposited with the ESCROW AGENT four
hundred thousand (400,000) shares of legended Common Stock, for delivery to
PURCHASER(S) upon any partial or total conversion of the Debenture(s) and/or
partial or total exercise of the GCA Warrants. From time to time the Company may
be required to deposit with the ESCROW AGENT additional shares of Common Stock
The initial deposit of four hundred thousand (400,000) shares of Common Stock
and subsequent deposits of Common Stock shall be called "Escrow Shares." The
ESCROW AGENT shall deposit the Escrow Shares in a brokerage account standing in
the name of the ESCROW AGENT and shall not cause the release of any of such
Escrow Shares to
<PAGE>
PURCHASER(S) prior to the receipt by the ESCROW AGENT and the COMPANY, via
facsimile, of a duly executed Conversion Notice and/or GCA Warrants exercise
notice.
D. To facilitate the issuance and delivery of Debenture(s) and the
exercise of the GCA Warrants the ESCROW AGENT has agreed to receive funds from
prospective purchasers of Debenture(s) and /or holders of GCA Warrants (the
"Escrow Funds"). The ESCROW AGENT reserves the right in his sole discretion to
return any Escrow Funds to the person from whom such Escrow Funds were received
for any reason whatsoever.
E. ESCROW AGENT has agreed to act as the ESCROW AGENT hereunder, in
accordance with the terms and conditions set forth in this Escrow Agreement.
NOW THEREFORE, for and in consideration of the foregoing and of the mutual
covenants and agreements hereinafter set forth, the PARTIES hereto hereby agree
as follows:
1. Recitals. The Recitals set forth above are true and correct and incorporated
herein by this reference.
2. Appointment of ESCROW AGENT. The PARTIES hereby mutually appoint and
designate the ESCROW AGENT to receive, hold, complete (as to the Debenture(s))
and release, as ESCROW AGENT the Escrow Shares, the five (5) Debentures, and
Escrow Funds, and the ESCROW AGENT hereby accepts such appointment, subject to
the terms of this ESCROW AGREEMENT.
3. Escrow Delivery. Within three business days from the date of execution of
this Escrow Agreement, the COMPANY shall deliver or cause to be delivered the
five (5) executed Debenture(s) and the certificates representing the Escrow
Shares to the ESCROW AGENT.
3.1. The Debenture(s). ESCROW AGENT SHALL hold, complete and release the
five (5) executed Debenture(s) as follows:
3.1(a). To PURCHASER(S) or COMPANY, as the case may be, pursuant to, and
upon receipt by ESCROW AGENT of, joint written instructions executed by a
PURCHASER(S) and the COMPANY; or
3.1(b). To PURCHASER(S). As soon as reasonably practical after the receipt
of immediately available funds for the purchase of a Debenture(s) with written
instructions setting forth the name and address of PURCHASER(S) the ESCROW AGENT
shall complete a blank Debenture with the name and address of the PURCHASER,
principal amount and date of issuance. The date of issuance shall be the date
the ESCROW AGENT receives immediately available funds. The ESCROW AGENT shall
deliver the completed Debenture(s) to the PURCHASER(S) and the escrowed funds by
wire transfer to the COMPANY, together with a copy of the completed
Debenture(s); or
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<PAGE>
3.1(c). To the COMPANY upon the earlier of (i) the date upon which
Debenture(s) for the entire two hundred fifty thousand dollars ($250,000) have
been issued, or (ii) September 30, 1999.
3.2. The Escrow Shares. ESCROW AGENT shall hold and release the Escrow
Shares as follows:
3.2(a). To PURCHASER(S) or COMPANY, as the case may be, pursuant to, and
upon receipt by ESCROW AGENT of, joint written instructions executed by
PURCHASER(S) and the COMPANY; or
3.2 (b). To PURCHASER(S) or HOLDER(S), as soon as reasonably practical
after receipt from PURCHASER(S) or HOLDER(S) of a Conversion Notice such number
of Escrow Shares equal to such amount of the outstanding principal of the
Debenture(s), in whole or in part, as specifically provided by PURCHASER(S) or
HOLDER(S) in a Conversion Notice which complies with the terms of, and the form
of which is attached to, the Debenture(s), which Conversion Notice is delivered
to the ESCROW AGENT and the COMPANY at the time and as further set forth in the
Debenture(s), at a conversion price set forth in the Debenture(s). PURCHASER(S)
and/or HOLDER(S) may continue to convert such amounts outstanding under the
Debenture(s) until the maturity thereof (as may be extended by PURCHASER(S)
and/or HOLDER(S) in accordance with the terms of the Debenture(s)); ESCROW AGENT
agrees to insert on the Principal Reduction Grid such outstanding amounts
converted and the outstanding amount remaining under the Debenture(s) in
accordance with the amounts so provided to ESCROW AGENT by PURCHASER(S) and/or
HOLDER(S) as reflected in each Conversion Notice, as further set forth in the
Debenture(s) and deliver to PURCHASER(S) and/or HOLDER(S) a copy of such revised
Principal Reduction Grid; ESCROW AGENT also agrees as soon as reasonably
practicable after receipt of the Conversion Notice to transmit by facsimile to
the Company a copy of such Principal Reduction Grid; or
3.2 (c) To GCA or subsequent holders ("HOLDER(S)") of GCA Warrants, as
soon as reasonably practical after receipt of a completed notice of exercise
together with the original GCA Warrants and payment for the exercise price (if
applicable) such number of Escrow Shares equal to the number of shares being
exercised under the GCA Warrants. As soon as reasonably practical after receipt
from PURCHASER(S) and/or HOLDER(S) the ESCROW AGENT shall send to the Company
copies of the notice of exercise together with the original GCA Warrants; and
the exercise payment, if the GCA Warrants have been exercised for cash.
3.2(d). To the COMPANY, the balance of any remaining Escrow Shares (except
for up to 25,000 Escrow Shares held for the exercise of the GCA Warrants) upon
the earlier of presentation of evidence satisfactory to the ESCROW AGENT that
(i) the Debenture(s) has been fully converted into Escrow Shares with interest
paid in full or (ii) the Debenture(s) has been repaid by the COMPANY to
PURCHASER(S) and/or HOLDER(S) pursuant to the terms thereof. The balance of any
remaining Escrow Shares held for the exercise of the GCA Warrants
3
<PAGE>
shall be returned to the Company upon the earlier of (i) five (5) days following
the expiration date of the GCA Warrants, or (ii) the exercise in full of the GCA
Warrants.
3.2(e). If the ESCROW AGENT is required to deliver Escrow Shares at a time
when such shares have not been registered for resale under the securities laws
or eligible for sale under Rule 144, the ESCROW AGENT shall cause the transfer
agent of the WWDI common stock to place a standard Rule 144 restrictive legend
on the certificates for such shares prior to delivery to Holder(s) and to enter
a stop transfer order for such certificates.
3.3 Recomputation of Escrow Shares.
3.3(a) If at any time, or from time to time, the ESCROW AGENT is holding
less than 200% of the number of Escrow Shares required to convert the remaining
principal balance of the Debenture(s) based on the then Average Price, plus the
number of Escrow Shares (up to 25,000) required to permit the exercise of the
GCA Warrants, the ESCROW AGENT and/or Holder(s) may request in writing that the
Company deposit enough additional shares of Common Stock with the ESCROW AGENT
so that the ESCROW AGENT is holding 200% of the number of Escrow Shares required
to convert such remaining principal balance of the Debenture(s), plus the number
of Escrow Shares (up to 25,000) required to permit the exercise of the GCA
Warrants. The failure of the Company to deliver such additional Escrow Shares
within five business days of such demand shall be a material default of the
Debenture(s) and in addition to any other remedies, including without limitation
specific performance shall entitle the Holder(s) to an immediate distribution of
Escrow Shares in an amount equal to 25,000 Escrow Shares, plus an additional
2,500 Escrow Shares for each day after the tenth business day such failure to
deliver the additional shares of Common Stock continues. (Such distribution
shall be made by the ESCROW AGENT to the Holder(s) pro-rata to the principal
amount of Debenture(s) held by each Holder.)
3.3(b) Any alleged breach of the above Section 3.3(a) shall entitle
PURCHASER(S), HOLDER(S) and/or ESCROW AGENT to immediate pre-trial injunctive
relief and COMPANY acknowledges that PURCHASER(S), HOLDER(S) and/or ESCROW AGENT
have no adequate remedy at law for an alleged breach of Section 3.3(a).
3.4. Conflicting Instructions.
3.4(a) If a controversy arises between the PARTIES concerning the Escrow
Funds, the Escrow Shares, or the Debenture(s) hereunder, they shall notify the
ESCROW AGENT. In that event (or, in the absence of such notification, if in the
sole and exclusive judgment of the ESCROW AGENT such controversy exists,
including, without limitation, a controversy concerning the Financing Agreement,
the Escrow Funds, the Debenture(s), or the GCA Warrants or this Escrow Agreement
or the rights and obligations or the propriety of any action contemplated by the
ESCROW AGENT hereunder), the ESCROW AGENT shall not be required to resolve such
controversy or take an action but may, in his sole discretion, be entitled to
await
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resolution of the controversy by written instructions from the PARTIES or by
receipt of an order, decree, writ, judgment or other paper from a court of
competent jurisdiction directing disposition of the Escrow Funds, the Escrow
Shares, or the Debenture(s).
3.4(b) Upon receipt of written instructions from PURCHASER(S), HOLDER(S)
or the COMPANY, or a determination by the ESCROW AGENT that there is a
controversy concerning the Escrow Funds, the Debenture(s), or this Escrow
Agreement, the ESCROW AGENT may, in his sole discretion, also institute an
interpleader action in the Superior Court of the State of Georgia, Fulton County
(the "Court") or in a federal court in the State of Georgia. If a suit is
commenced against the ESCROW AGENT, it may answer by way of interpleader and
name. PURCHASER(S), HOLDER(S) and COMPANY, as additional parties to such action,
and the ESCROW AGENT may tender the Escrow Funds, the Debenture(s) or the Escrow
Shares, into such court for determination of the respective rights, titles and
interests of the PURCHASER(S), HOLDER(S) and the COMPANY. Upon such tender, the
ESCROW AGENT shall be entitled to receive from the Company his reasonable
attorneys' fees and expenses incurred in connection with said interpleader
action or in any related action or suit (including appeal). As between
PURCHASER(S), HOLDER(S) and COMPANY, such fees, expenses and other sums shall be
paid by the party which fails to prevail in the proceedings brought to determine
the appropriate distribution of the Escrow Funds, the Escrow Shares or the
Debenture(s). If and when the ESCROW AGENT shall so interplead such parties, or
any of them, and deliver the Escrow Funds, the Escrow Shares and the
Debenture(s) to the clerk of such court, all of his duties hereunder shall
cease, and he shall have no further obligation in this regard. Nothing herein
shall prejudice any right or remedy of the ESCROW AGENT. The exclusive venue for
all actions under this Escrow Agreement shall be Fulton County, Georgia.
4. Concerning ESCROW AGENT.
4.1. ESCROW AGENT's Duties.
4.1(a). ESCROW AGENT's Right to Rely; Duties. The ESCROW AGENT may act in
reliance upon any writing or instrument or signature which he, in his sole
discretion, believes to be genuine, including facsimile signatures; may assume
the validity and accuracy of any statements or assertions contained in such
writing or instrument; and may assume that any person purporting to give any
writing, notice, advice or instruction in connection with the provisions hereof,
has been duly authorized to do so.
4.1(b). The ESCROW AGENT shall not be liable in any manner or otherwise be
responsible to any party to this Escrow Agreement, or to any other individual or
entity, including, without limitation, the COMPANY, PURCHASER(S) or HOLDER(S)
(i) for the sufficiency or correctness as to form, manner of execution, or
validity of any written instructions delivered to him, including without
limitation, the number of Conversion Shares specified by
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PURCHASER(S) or HOLDER(S) in any Conversion Notice to be issued pursuant to such
request (for which the PARTIES expressly agree ESCROW AGENT shall have no
liability to such Parties), nor (ii) as to the identity, authority, or rights of
any person executing the same, nor (iii) for the period of time, to send and/or
transfer Escrow Shares to PURCHASER(S) or HOLDER(S).
4.1(c). Waiver of Potential Conflict. COMPANY and PURCHASER(S) acknowledge
that the ESCROW AGENT is the General Counsel of GCA, and its affiliates and by
signing this Escrow Agreement below hereby acknowledges and consents to the
continued representation by the ESCROW AGENT of GCA and its affiliates,
including, if necessary and without limitation, the ESCROW AGENT's
representation of GCA and its affiliates in connection with the Financing
Agreement, the Escrow Funds, the Debenture(s) and this Escrow Agreement.
4.1(d) Indemnification. The ESCROW AGENT may consult with counsel of his
own choice and shall have full and complete authorization and protection for any
action taken or suffered by it hereunder in good faith and in accordance with
the opinion of such counsel. The ESCROW AGENT shall otherwise not be liable for
any mistakes of fact or error of judgment, or for any acts or omissions of any
kind unless caused by his willful misconduct or gross negligence and each of the
COMPANY and PURCHASER(S) jointly and severally agrees to indemnify and hold
harmless the ESCROW AGENT from any claims, demands, causes of action,
liabilities, damages or judgments, including the cost of defending any action
against it, together with any reasonable attorneys' fees of any nature
(including appeal) incurred therewith in connection with ESCROW AGENT's
undertakings pursuant to the terms and conditions of this Escrow Agreement,
unless such act or omission is a result of the willful misconduct or gross
negligence of the ESCROW AGENT.
4.1(e). No Implied Duties. ESCROW AGENT shall have no implied obligations
or responsibilities hereunder, nor shall he have any obligation or
responsibility to collect funds or seek the deposit of money or property, nor is
the ESCROW AGENT a party to any other agreement entered into among PURCHASER(S)
and/or the COMPANY.
4.2. Other Matters. ESCROW AGENT (and any successor ESCROW AGENT or
agents) reserves the right to resign as the ESCROW AGENT at any time, provided
thirty (30) days' prior written notice is given to the other parties hereto. If
a notice of appointment of a successor ESCROW AGENT is not delivered to the
ESCROW AGENT within thirty (30) days after notice of resignation, the ESCROW
AGENT may petition any court of competent jurisdiction to name a successor
ESCROW AGENT, and the ESCROW AGENT herein shall be fully relieved of all
liability to any and all parties upon the transfer of all cash or property in
his possession under the Escrow Agreement to the successor ESCROW AGENT either
designated or appointed by such court. The Parties reserve the right to jointly
remove the ESCROW AGENT at any time, provided fifteen (15) days' prior written
notice is given to the ESCROW AGENT. In the event of litigation or dispute by
the Parties in which the performance of the duties of the ESCROW AGENT is at
issue, the ESCROW AGENT shall take no action until such action is
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agreed to in writing by the Parties or directed by receipt of an order, decree,
writ, judgment or other paper from a court of competent jurisdiction.
5. Termination. This Escrow Agreement shall be terminated upon the release of
the Escrow Funds, the Debenture(s) and the Escrow Shares in accordance with the
terms and conditions of Section 3 hereof, or otherwise by written mutual consent
signed by all PARTIES hereto.
6. Notice. Notices to be given hereunder shall be in writing and shall be deemed
to have been sufficiently given if delivered personally or sent by overnight
courier or messenger or sent by registered or certified mail (air mail if
overseas), return receipt requested, or by telex, facsimile transmission,
telegram or similar means of communication. Notice shall be deemed to have been
received on the date and time of personal delivery, telex, facsimile
transmission, telegram or similar means of communication, or if sent by
overnight courier or messenger, shall be deemed to have been received on the
next delivery day after deposit with the courier or messenger, of if sent by
certified or registered mail, return receipt requested, shall be deemed to have
been received on the third business day after the date of mailing. Notices shall
be given to the following addresses:
If to the Company:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario
Canada, M5C 2C5
Fax: 416/214-6299
Tel: 416/214-6296
Attn: Bronson Conrad, President
With copy to:
Stephen Davis, Esq.
Heller, Ehrman, White & McCauliffe
711 Fifth Avenue
New York, NY 10022-3194
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Fax: 212/832-3353
Tel: 212/832-3194
If to the PURCHASER(S):
Generation Capital Associates
Suite 4900
20 Exchange Place, 49th Floor
New York, NY 10005
Fax: 212/514-7679
Tel: 212/514-7650
Attn: Frank E. Hart, General Partner
If to the ESCROW AGENT:
David A. Rapaport, Esq.
333 Sandy Springs Circle, Suite 230
Atlanta, GA 30328
Facsimile No.: (404) 257-9125
Tel No.: (404) 257-9150
7. Benefit and Assignment. This Escrow Agreement shall be binding upon and shall
inure to the benefit of the PARTIES hereto and their respective successors and
assigns as permitted hereunder. No person or entity other than the PARTIES
hereto is or shall be entitled to bring any action to enforce any provision in
this Escrow Agreement. Such Escrow Agreement shall be solely for the benefit of,
and shall be enforceable only by, the PARTIES hereto or their respective
successors and assigns.
8. Entire Agreement, Amendment. This Escrow Agreement contains the entire
agreement among the PARTIES with respect to the subject matter hereof and
supersedes all prior oral or written agreements, commitments or understandings
with respect to such matters. This Escrow
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Agreement may not be changed orally, but only by an instrument in writing signed
by the party against whom enforcement of any waiver, change modification,
extension or discharge is sought.
9. Governing Law; Venue. This Escrow Agreement shall be governed and construed
under and in accordance with the laws of the State of Georgia. Each of COMPANY
and PURCHASER(S) hereby irrevocably and unconditionally: (a) submits for itself
and its property in any legal action or proceeding relating to this Escrow
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive jurisdiction of any Federal or State courts
located in Fulton County, Georgia and appellate courts from any thereof; (b)
consents that any such action or proceeding may be brought in such courts and
waives any objection that it may now or hereafter have to the venue of any such
action or proceeding in any such court or that such action or proceeding was
brought in an inconvenient court and agrees not to plead or claim the same; (c)
agrees that service of process in any such action or proceeding may be effected
by mailing a copy thereof by registered or certified mail (or any substantially
similar form of mail), postage prepaid, to it at his address set forth herein or
at such other address of which ESCROW AGENT shall have been notified in writing
pursuant thereto; and (d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to sue in any other jurisdiction.
10. WAIVERS OF JURY TRIAL. THE PARTIES HERETO HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS ESCROW AGREEMENT OR FOR ANY COUNTERCLAIM THEREIN.
11. Signature in Counterparts. This Escrow Agreement may be executed in separate
counterparts, none of which need contain the signature of all PARTIES, each of
which shall be deemed to be an original and all of which taken together
constitute one and the same instrument. It shall not be necessary in making
proof of this Escrow Agreement to produce or account for more than the number of
counterparts containing the respective signatures of, or on behalf of, all of
the PARTIES hereto. Facsimile signatures shall be considered as original
signatures for purposes hereof.
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12. Attorney's Fees. Should any action be commenced between the PARTIES to this
Escrow Agreement concerning the matters set forth in this Escrow Agreement or
the right and duties of either in relation thereto, the prevailing party in such
action shall be entitled, in addition to such other relief as may be granted, to
a reasonable sum as and for its attorneys fees and costs.
IN WITNESS WHEREOF, each of the PARTIES has caused this Escrow Agreement
to be duly executed and delivered in its name and on its behalf, all as of the
date and year first above written.
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
------------------------------------
Bronson Conrad, President
GENERATION CAPITAL ASSOCIATES
By:
------------------------------------
Frank E. Hart, General Partner
ESCROW AGENT:
- ------------------------------------
David A. Rapaport, Esq.
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[FORM OF SIGNATURE PAGE FOR ADDITIONAL PURCHASERS:]
The undersiged has purchased a Debenture(s) from Worldwide Data, Inc. and
accordingly agrees to be bound by all of the terms of the attached Escrow
Agreement.
- ------------------------------------
- ------------------------------------
Name
- ------------------------------------
Address
- ------------------------------------
City, State, Zip
- ------------------------------------
Telephone
- ------------------------------------
Fax
- ------------------------------------
Fed Tax I.D. # or S.S. #
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Exhibit 10.4
WORLDWIDE DATA, INC.
STOCK PURCHASE AGREEMENT
PURCHASE AGREEMENT made as of this 6th day of April, 1999, between
Worldwide Data, Inc. (the "Company"), a Delaware corporation, and Montaque
Securities International, a corporation with its principal place of business in
Nassau, the Bahamas (the "Purchaser").
WHEREAS, the Company, through its wholly-owned subsidiary, Worldwide
Online Corp, ("Worldwide Canada"), is engaged in the business of providing
Internet-based services, including Internet-access services and the creation of
intranets and web-sites for corporations (the "Offered Services") and the
Company is presently developing an on-line trading service, an on-line auction
service, a service which enables users to send faxes via the Internet and a
service which allows users to make voice calls via the Internet (the "Developing
Services," together with the Offered Services, the "Services");
WHEREAS, in order to finance the marketing and further development
of the Company's Services, the Company wishes to issue and sell to the
Purchaser, and the Purchaser wishes to purchase from the Company, on the Closing
Date (as herein defined), 65,000 shares of the Company's common stock (the
"Shares") on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
I. ISSUANCE AND SALE OF THE SHARES; REPRESENTATIONS, WARRANTIES AND COVENANTS
OF PURCHASER
a. Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and sell and the Purchaser hereby agrees to
purchase from the Company, the Shares at a purchase price of one dollar ($1.00)
per Share and the Company agrees to issue and sell such Shares to the Purchaser
for said price.
Subject to the terms and conditions set forth herein, within five
(5) days after the Closing Date, the Company shall issue and deliver to
Purchaser a certificate in definitive form, registered in the name of the
Purchaser or such Purchaser's nominee, evidencing the Shares so issued and sold
to such Purchaser hereunder. The Purchaser further agrees that payment for the
Shares shall be made to the Company, in accordance with any instructions from
the Company regarding such payment, in good funds on or before April 6, 1999,
unless such date is extended by the Company (the "Closing Date").
<PAGE>
b. The Purchaser acknowledges that it (a) is acquiring the Shares for its
own account for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act of
1933, as amended (the "Act"); (b) either alone or together with its advisors,
has sufficient knowledge and experience in business, investment and financial
matters to evaluate the merits and risks of this investment; and (c) is able to
bear the substantial economic risks of this investment and, at the present time,
could afford a complete loss of such investment.
c. The Purchaser represents that it has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which it had requested or desired to know; that all
documents which could be reasonably provided have been made available for the
Purchaser's inspection and review; and that the Purchaser has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers and/or other representatives of the Company concerning the terms and
conditions of the sale of Shares, along with any additional information which it
had requested.
d. The Purchaser acknowledges that it is aware that this sale of Shares
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of Regulation
D thereunder, or otherwise exempt from registration under the Act.
e. The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
f. The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act, with respect to the Shares.
g. The Purchaser understands that the Shares are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein and in the Investor Questionnaire attached
hereto as Schedule I in order to determine the applicability of such exemptions
and the suitability of the Purchaser to acquire the Shares.
h. The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and
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equitable principles limiting or affecting the rights of creditors generally
and/or (b) general principles of equity, regardless of whether considered in a
proceeding in equity or at law.
i. The Purchaser maintains a domicile or business at the address shown on
the signature page of this Agreement, at which address the Purchaser has
subscribed for the Shares hereunder in compliance with the local laws thereof.
j. The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that it may lose its entire investment and has
full cognizance of and understands the risk factors related to an investment in
the Company, which include, but are not limited to:
(i) Losses; Uncertainty of Profitability. Since its inception in
1995 through the date hereof, the Company, through Worldwide Canada, has
incurred accumulated losses of $1.2 million. The Company continues to
incur net losses on a monthly basis and there can be no assurance that the
Company will achieve profitable operations or that Worldwide Canada will
generate meaningful revenues in the future.
(ii) Uncertainty of Business Plan. The Company's plan of operation
and future prospects are largely dependant upon the Company's continuing
ability to offer its Intranet-access services, to create intranets and web
sites for corporations and to offer and develop and market its Internet
fax and voice call services, WorldFAX and WorldVOICE, as well as its
on-line trading and auction services, on a timely and cost effective
basis. There can be no assurance of continued market acceptance of the
Company's Offered Services or that unanticipated problems, expenses or
technical difficulties will not occur which would result in
discontinuation or material delays in the Offered Services. In addition,
there can be no assurance that the Company's Developing Services will be
successfully developed and implemented or that the Company will be able to
continue to develop and market WorldFAX and WorldVOICE successfully. The
likelihood of achievement of the Company's business plan must be
considered in light of the fact that the Company operates in a rapidly
evolving industry characterized by intense competition and an increasing
and substantial number of new market entrants and new Internet products
and services. See "Risk Factors - Increasing Competition; Minimal Barriers
to Entry." No assurance can be given that the Company will achieve its
business plan or generate sufficient revenues to sustain its operations or
become profitable.
(iii) Uncertainty of Future Capital Needs. The capital requirements
required to fund the Company's losses, as well as to continue developing
WorldFAX and WorldVOICE, and to develop the Developing Services and any
other new services are significant. The Company may need to raise
additional funds through public or private offerings or equity financings
in order to fund its
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losses, continue to develop WorldFAX and WorldVOICE and develop the
Developing Services and any other new services. If additional funds are
raised through the issuance of equity securities, the percentage ownership
of the then current stockholders will be reduced and such equity
securities may possess rights senior to the holders of the Company's
common stock. There can be no assurance that additional financing will be
available on terms favorable to the Company, or that the Company will be
successful in raising such financing.
(iv) Increasing Competition; Minimal Barriers to Entry. The
market for Internet-based services is extremely competitive and can be
significantly influenced by the marketing and pricing decisions of the
larger industry participants. The barriers to entry are minimal and the
Company expects that competition will intensify in the near future. The
Company believes that success will depend upon a number of factors,
including market presence, capacity, reliability and security of its
network infrastructure. Furthermore, the Company will have to compete with
the pricing policies of competitors and suppliers, the timing and
introduction of new products and general economic trends.
The Company's current and prospective competitors in the
Internet industry include many large companies that have substantially greater
market presence and financial, technical, operational, marketing and other
resources and experience than the Company. The Company's Services compete or
expect to compete directly or indirectly with the following categories of
companies: (i) other national and regional commercial Internet service providers
("IPSs"); (ii) established on-line service companies that currently offer
Internet access, such as America Online, Inc., CompuServe Corp. and Prodigy
Services Company; (iii) computer hardware and software and other technology
companies, such as Microsoft Corporation ("Microsoft"); (iv) national long
distance telecommunications carriers, such as AT&T (with AT&T WorldNet), MCI
(MCI Internet), and Sprint (SprintNet); (v) regional telephone operating
companies; (vi) cable television system operators, such as Comcast Corporation,
Tele-Communications, Inc. ("TCI"), and Time Warner Inc.; (vii) nonprofit or
educational ISPs; (viii) newly-licensed providers of spectrum-based wireless
data services; (ix) national and regional web site and intranet developers; (x)
national and regional on-line trading companies and (xi) on-line auction
companies. In addition, TCI recently announced it had reached separate
agreements with Sun Microsystems, Inc. and Microsoft to produce the software
necessary to permit persons to access the Internet through television set-top
boxes beginning in 1999.
The Company anticipates that it will encounter significant
pricing pressure, which in turn could result in reductions in the average
selling price of the Company's services. Large telecommunications corporations
may be able to reduce the communications costs involved in providing
Internet-based services. There can be no assurance that the Company will be able
to offset the effects of any such price reductions.
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(v) Dependence on the Internet; New Industry; Uncertain Adoption of
Internet as a Medium of Commerce and Communications. The Company's
existing and proposed products and services are targeted at users of the
Internet, which has experienced rapid growth. As is typical in the case of
a new and rapidly evolving industry characterized by rapidly changing
technology, evolving industry standards and frequent new product and
service introductions, demand and market acceptance for recently
introduced products and services are subject to a high level of
uncertainty. The Internet services industry is characterized by a limited
operating history and a high rate of business failures. Because the market
is relatively new and current and future competitors are likely to
introduce competing Internet-based services, it is difficult to predict
the rate at which the market will grow or at which new or increased
competition will result in market saturation. See "Risk Factors -
Increasing Competition; Minimal Barriers to Entry." In addition, critical
issues concerning the commercial use of the Internet remain unresolved and
may impact the growth of Internet use, especially in the business market
targeted by the Company. Despite growing interest in the many commercial
uses of the Internet, many businesses have been deterred from purchasing
Internet access services for a number of reasons, including, among others,
inconsistent quality of service, lack of availability of cost-effective,
high-speed options, a limited number of local access points for corporate
users, inability to integrate business applications on the Internet, the
need to deal with multiple and frequently incompatible vendors, inadequate
protection of the confidentiality of stored data and information moving
across the Internet and a lack of tools to simplify Internet access and
use.
(vi) Possible Service Interruptions. The Company's operations
require that its telecommunications networks operate on a continuous
basis. It is possible that the Company's telecommunications networks may
from time to time experience service interruptions or equipment failures.
Service interruptions or equipment failures resulting in material delays
would adversely effect the confidence of users of the Services as well as
the Company's business operations and reputation.
(vii) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The
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Company's network infrastructure will be vulnerable to computer viruses,
break-ins and similar disruptions from unauthorized tampering with the
Company's computer systems. Computer viruses or problems caused by third
parties could lead to material interruptions, delays or cessation in
services. Inappropriate use of the Internet by third parties could also
potentially jeopardize the security of confidential information stored in
the computer systems of users. Security and privacy concerns of users may
limit the Company's ability to successfully market its Services.
(viii) Limited Sales Force. The Company has a limited sales force
and does not have established distribution channels for its Services. No
assurance can be given as to the ability of the Company to establish or
generate sufficient demand for its Services, and the inability of the
Company to do so would have a material adverse effect on the Company's
business, financial condition and operating results.
(ix) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
tele-communications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do so would have a material adverse effect on the Company's
ability to furnish its Services, financial condition and results of
operations.
(x) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr. Conrad's services would be detrimental
to the Company's prospects. The Company does not contemplate obtaining
"key-man" life insurance with respect to Mr. Conrad and the Company does
not have an employment agreement with Mr. Conrad.
(xi) Limited Intellectual Property Protection. The Company relies on
a combination of copyright and trademark laws, trade secrets and software
security measures to protect its proprietary information. The Company
currently has no registered copyrights, trademarks or patents or patent
applications pending. It may be possible for unauthorized third parties to
copy aspects of, or otherwise obtain and use, the Company's proprietary
information without authorization.
(xii) NASDAQ's OTC Bulletin Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ's OTC
Bulletin Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of
the Company's Common Stock. In addition, the Market Regulation Division of
the National
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Association of Securities Dealers Inc. has commenced an inquiry with
respect to trading of the Company's Common Stock. The Company has
cooperated fully with such inquiry.
(xiii) Control By Bronson Conrad. Following completion of the
offering, Bronson Conrad will beneficially own approximately 10.5% of the
voting stock of the Company. As a result, Mr. Conrad has the ability to
influence or control the election of a majority of directors and other
actions by stockholders with respect to the business and affairs of the
Company.
(xiv) Year 2000 Compliance. The Company is aware of the issues
associated with the programming code in existing computer systems as the
year 2000 approaches. The "Year 2000 Problem" is pervasive and complex as
virtually every computer operation will be affected in some way by the
rollover of the two digit year value to 00. The issue is whether computer
systems will properly recognize date-sensitive information when the year
changes to 2000. Systems that do not properly recognize such information
could generate erroneous data or fail. The Company is in the process of
working with its software that the Company has licensed from third parties
will operate properly in the year 2000 and beyond. In addition, the
Company is working with its external suppliers and service providers to
ensure that they and their systems will be able to support the Company's
needs and, where necessary, interoperate with the Company's server and
networking hardware and software infrastructure in preparation for the
year 2000. Management does not anticipate that the Company will incur
significant operating expenses or be required to invest heavily in
computer systems improvements to be year 2000 compliant. However,
significant uncertainty exists concerning the potential costs and effects
associated with any year 2000 compliance. Any year 2000 compliance
problems of either the Company, its customers or vendors could have a
material adverse effect on the Company's business, results of operations
and financial condition.
k. The Purchaser represents that the foregoing representations, warranties
and covenants are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
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(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment. fully paid
and non-assessable.
III. MISCELLANEOUS
a. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario, Canada M5C2C5
Attn: President
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
b. This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged.
c. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
d. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
e. This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
f. This Agreement may be executed in counterparts. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement shall become a
biding obligation of the Purchaser with respect to the purchase of Shares as
herein provided.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
MONTAQUE SECURITIES
INTERNATIONAL LTD.
/s/ [Illegible]
--------------------------
Address of Purchaser
Saffrey Square, Bay Street
at Bank Lane, N-8303,
Nassau, N.P., the Bahamas
/s/ [Illegible]
--------------------------
Signature of Purchaser
/s/ Owen S.M. Bethel
--------------------------
OWEN S.M. BETHEL
(for) MONTAQUE SECURITIES INTERNATIONAL
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson B. Conrad
----------------------------
Bronson Conrad, President
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<PAGE>
Exhibit 10.5
WORLDWIDE DATA, INC.
STOCK PURCHASE AGREEMENT
PURCHASE AGREEMENT made as of this 19th day of March, 1999, between
Worldwide Data, Inc. (the "Company"), a Delaware corporation, and Montaque
Securities International, a corporation with its principal place of business in
Nassau, the Bahamas (the "Purchaser").
WHEREAS, the Company, through its wholly-owned subsidiary, Worldwide
Online Corp. ("Worldwide Canada"), is engaged in the business of providing
Internet-based services, including Internet-access services and the creation of
intranets and web-sites for corporations (the "Offered Services") and the
Company is presently developing an on-line trading service, an on-line auction
service, a service which enables users to send faxes via the Internet and a
service which allows users to make voice calls via the Internet (the "Developing
Services," together with the Offered Services, the "Services");
WHEREAS, in order to complete the purchase of the common stock of
761395 Alberta Ltd. ("Alberta Ltd."), an Alberta Corporation which is
wholly-owned by Bronson Conrad, the President of the Company, and which has as
its sole asset an aircraft, the Company wishes to issue and sell to the
Purchaser, and the Purchaser wishes to purchase from the Company, on the Closing
Date (as herein defined), 200,000 shares of the Company's common stock (the
"Shares") on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
I. ISSUANCE AND SALE OF THE SHARES; REPRESENTATIONS, WARRANTIES AND COVENANTS
OF PURCHASER
a. Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and sell and the Purchaser hereby agrees to
purchase from the Company, the Shares at a purchase price of one dollar ($1.00)
per Share and the Company agrees to issue and sell such Shares to the Purchaser
for said price.
Subject to the terms and conditions set forth herein, within
thirty-one (31) days after the Closing Date, the Company shall issue and deliver
to Purchaser a certificate in definitive form, registered in the name of the
Purchaser or such Purchaser's nominee, evidencing the Shares so issued and sold
to such Purchaser hereunder. The Purchaser further agrees that payment for the
Shares shall be made to the Company, in accordance with any instructions from
the Company regarding such payment, in good funds on or before March 21, 1999,
unless such date is extended by the Company (the "Closing Date").
<PAGE>
b. The Purchaser acknowledges that it (a) is acquiring the Shares for its
own account for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act of
1933, as amended (the "Act"); (b) either alone or together with its advisors,
has sufficient knowledge and experience in business, investment and financial
matters to evaluate the merits and risks of this investment; and (c) is able to
bear the substantial economic risks of this investment and, at the present time,
could afford a complete loss of such investment.
c. The Purchaser represents that it has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which it had requested or desired to know; that all
documents which could be reasonably provided have been made available for the
Purchaser's inspection and review; and that the Purchaser has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers and/or other representatives of the Company concerning the terms and
conditions of the sale of Shares, along with any additional information which it
had requested.
d. The Purchaser acknowledges that it is aware that this sale of Shares
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of Regulation
D thereunder, or otherwise exempt from registration under the Act.
e. The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
f. The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act, with respect to the Shares.
g. The Purchaser understands that the Shares are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein and in the Investor Questionnaire attached
hereto as Schedule I in order to determine the applicability of such exemptions
and the suitability of the Purchaser to acquire the Shares.
h. The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
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<PAGE>
i. The Purchaser maintains a domicile or business at the address shown on
the signature page of this Agreement, at which address the Purchaser has
subscribed for the Shares hereunder in compliance with the local laws thereof.
j. The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that it may lose its entire investment and has
full cognizance of and understands the risk factors related to an investment in
the Company, which include, but are not limited to:
(i) Losses; Uncertainty of Profitability. Since its inception in
1995 through the date hereof, the Company, through Worldwide Canada, has
incurred accumulated losses of $1.2 million. The Company continues to
incur net losses on a monthly basis and there can be no assurance that the
Company will achieve profitable operations or that Worldwide Canada will
generate meaningful revenues in the future.
(ii) Uncertainty of Business Plan. The Company's plan of operation
and future prospects are largely dependant upon the Company's continuing
ability to offer its Intranet-access services, to create intranets and web
sites for corporations and to offer and develop and market its Internet
fax and voice call services, WorldFAX and WorldVOICE, as well as its
on-line trading and auction services, on a timely and cost effective
basis. There can be no assurance of continued market acceptance of the
Company's Offered Services or that unanticipated problems, expenses or
technical difficulties will not occur which would result in
discontinuation or material delays in the Offered Services. In addition,
there can be no assurance that the Company's Developing Services will be
successfully developed and implemented or that the Company will be able to
continue to develop and market WorldFAX and WorldVOICE successfully. The
likelihood of achievement of the Company's business plan must be
considered in light of the fact that the Company operates in a rapidly
evolving industry characterized by intense competition and an increasing
and substantial number of new market entrants and new Internet products
and services. See "Risk Factors - Increasing Competition; Minimal Barriers
to Entry." No assurance can be given that the Company will achieve its
business plan or generate sufficient revenues to sustain its operations or
become profitable.
(iii) Uncertainty of Future Capital Needs. The capital requirements
required to fund the Company's losses, as well as to continue developing
WorldFAX and WorldVOICE, and to develop the Developing Services and any
other new services are significant. The Company may need to raise
additional funds through public or private offerings or equity financings
in order to fund its losses, continue to develop WorldFAX and WorldVOICE
and develop the Developing Services and any other new services. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the then current stockholders will be reduced and
such equity securities may possess rights
3
<PAGE>
senior to the holders of the Company's common stock. There can be no
assurance that additional financing will be available on terms favorable
to the Company, or that the Company will be successful in raising such
financing.
(iv) Proceeds to be Used for Payment to Affiliate of Bronson Conrad.
Substantially all of the net proceeds of the offering will be used to
complete the acquisition of the common stock of Alberta Ltd., which is
wholly-owned by Bronson Conrad, the President of the Company, and which
has an aircraft as its only asset. The price to be paid by the Company for
the shares of Alberta Ltd. has been determined by Mr. Conrad based on an
appraisal of the value of the airplane owned by Alberta Ltd. Because of
Mr. Conrad's involvement with both parties to the transaction, the price
to be paid by the Company and the other terms of such purchase are not the
result of an arms-length negotiation and no independent party determined
the Company's need for the aircraft. The Company will not obtain a
fairness opinion regarding the value of Alberta Ltd.'s common stock. As
the sole shareholder of Alberta Ltd., Mr. Conrad will be the direct
beneficiary of the proceeds of the sale of the Albert Ltd. shares.
(v) Increasing Competition; Minimal Bafflers to Entry. The market
for Internet-based services is extremely competitive and can be
significantly influenced by the marketing and pricing decisions of the
larger industry participants. The bafflers to entry are minimal and the
Company expects that competition will intensify in the near future. The
Company believes that success will depend upon a number of factors,
including market presence, capacity, reliability and security of its
network infrastructure. Furthermore, the Company will have to compete with
the pricing policies of competitors and suppliers, the timing and
introduction of new products and general economic trends.
The Company's current and prospective competitors in the
Internet industry include many large companies that have substantially
greater market presence and financial, technical, operational, marketing
and other resources and experience than the Company. The Company's
Services compete or expect to compete directly or indirectly with the
following categories of companies: (i) other national and regional
commercial Internet service providers ("IPSs"); (ii) established on-line
service companies that currently offer Internet access, such as America
Online, Inc., CompuServe Corp. and Prodigy Services Company; (iii)
computer hardware and software and other technology companies, such as
Microsoft Corporation ("Microsoft"); (iv) national long distance
telecommunications caters, such as AT&T (with AT&T WorldNet), MCI (MCI
Internet), and Sprint (SprintNet); (v) regional telephone operating
companies; (vi) cable television system operators, such as Comcast
Corporation, Tele-Communications, Inc. ("TCI"), and Time Warner Inc.;
(vii) nonprofit or educational ISPs; (viii) newly-licensed providers of
spectrum-based wireless data services; (ix) national and regional web site
and intranet developers; (x) national
4
<PAGE>
and regional on-line trading companies and (xi) on-line auction companies.
In addition, TCI recently announced it had reached separate agreements
with Sun Microsystems, Inc. and Microsoft to produce the software
necessary to permit persons to access the Internet through television
set-top boxes beginning in 1999.
The Company anticipates that it will encounter significant pricing
pressure, which in turn could result in reductions in the average selling
price of the Company's services. Large telecommunications corporations may
be able to reduce the communications costs involved in providing
Internet-based services. There can be no assurance that the Company will
be able to offset the effects of any such price reductions.
(vi) Dependence on the Internet; New Industry; Uncertain Adoption of
Internet as a Medium of Commerce and Communications. The Company's
existing and proposed products and services are targeted at users of the
Internet, which has experienced rapid growth. As is typical in the case of
a new and rapidly evolving industry characterized by rapidly changing
technology, evolving industry standards and frequent new product and
service introductions, demand and market acceptance for recently
introduced products and services are subject to a high level of
uncertainty. The Internet services industry is characterized by a limited
operating history and a high rate of business failures. Because the market
is relatively new and current and future competitors are likely to
introduce competing Internet-based services, it is difficult to predict
the rate at which the market will grow or at which new or increased
competition will result in market saturation. See "Risk Factors -
Increasing Competition; Minimal Barriers to Entry." In addition, critical
issues concerning the commercial use of the Internet remain unresolved and
may impact the growth of Internet use, especially in the business market
targeted by the Company. Despite growing interest in the many commercial
uses of the Internet, many businesses have been deterred from purchasing
Internet access services for a number of reasons, including, among others,
inconsistent quality of service, lack of availability of cost-effective,
high-speed options, a limited number of local access points for corporate
users, inability to integrate business applications on the Internet, the
need to deal with multiple and frequently incompatible vendors, inadequate
protection of the confidentiality of stored data and information moving
across the Internet and a lack of tools to simplify Internet access and
use.
(vii) Possible Service Interruptions. The Company's operations
require that its telecommunications networks operate on a continuous
basis. It is possible that the Company's telecommunications networks may
from time to time experience service interruptions or equipment failures.
Service interruptions or equipment failures resulting in material delays
would adversely effect the confidence of users of the Services as well as
the Company's business operations and reputation.
5
<PAGE>
(viii) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The Company's network
infrastructure will be vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering with the Company's
computer systems. Computer viruses or problems caused by third parties
could lead to material interruptions, delays or cessation in services.
Inappropriate use of the Internet by third parties could also potentially
jeopardize the security of confidential information stored in the computer
systems of users. Security and privacy concerns of users may limit the
Company's ability to successfully market its Services.
(ix) Limited Sales Force. The Company has a limited sales force and
does not have established distribution channels for its Services. No
assurance can be given as to the ability of the Company to establish or
generate sufficient demand for its Services, and the inability of the
Company to do so would have a material adverse effect on the Company's
business, financial condition and operating results.
(x) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
tele-communications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do so would have a material adverse effect on the Company's
ability to furnish its Services, financial condition and results of
operations.
(xi) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr. Conrad's services would be detrimental
to the Company's prospects. The Company does not contemplate obtaining
"key-man" life insurance with respect to Mr. Conrad and the Company does
not have an employment agreement with Mr. Conrad.
(xii) Limited Intellectual Property Protection. The Company relies
on a combination of copyright and trademark laws, trade secrets and
software security measures to protect its proprietary information. The
Company currently has no registered copyrights, trademarks or patents or
patent applications pending. It
6
<PAGE>
may be possible for unauthorized third parties to copy aspects of, or
otherwise obtain and use, the Company's proprietary information without
authorization.
(xiii) NASDAQ's OTC Bulletin Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ's OTC
Bulletin Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of,
the Company's Common Stock. In addition, the Market Regulation Division of
the National Association of Securities Dealers Inc. has commenced an
inquiry with respect to trading of the Company's Common Stock. The Company
has cooperated fully with such inquiry.
(xiv) Control By Bronson Conrad. Following completion of the
offering, Bronson Conrad will beneficially own approximately 10.5% of the
voting stock of the Company. As a result, Mr. Conrad has the ability to
influence or control the election of a majority of directors and other
actions by stockholders with respect to the business and affairs of the
Company.
(xv) Year 2000 Compliance. The Company is aware of the issues
associated with the programming code in existing computer systems as the
year 2000 approaches. The "Year 2000 Problem" is pervasive and complex as
virtually every computer operation will be affected in some way by the
rollover of the two digit year value to 00. The issue is whether computer
systems will properly recognize date-sensitive information when the year
changes to 2000. Systems that do not properly recognize such information
could generate erroneous data or fail. The Company is in the process of
working with its software that the Company has licensed from third parties
will operate properly in the year 2000 and beyond. In addition, the
Company is working with its external suppliers and service providers to
ensure that they and their systems will be able to support the Company's
needs and, where necessary, interoperate with the Company's server and
networking hardware and software infrastructure in preparation for the
year 2000. Management does not anticipate that the Company will incur
significant operating expenses or be required to invest heavily in
computer systems improvements to be year 2000 compliant. However,
significant uncertainty exists concerning the potential costs and effects
associated with any year 2000 compliance. Any year 2000 compliance
problems of either the Company, its customers or vendors could have a
material adverse effect on the Company's business, results of operations
and financial condition.
k. The Purchaser represents that the foregoing representations, warranties
and covenants are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
7
<PAGE>
The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
(d) Financial Statements - The Company has furnished to the
Purchaser the balance sheet of the Company as of June 30, 1998 and the
related Statement of Income dated as of June 30, 1998 which were prepared
by management of the Company and are unaudited, copies of which are
attached hereto as Exhibit A. Such financial statements have been prepared
from and are in accordance with the books and records of the Company, have
been prepared in accordance with generally accepted accounting principles
consistently applied, are true and correct and fairly present in all
material respects the financial position of the Company as of such date
and the results of its operations for the six-month period then ended in
accordance with generally accepted accounting principles, except for the
absence of notes and subject to year-end adjustments. Except as reflected
in such balance sheet and for obligations and liabilities incurred in the
ordinary course of business, the Company has no material (individually or
in the aggregate) obligations or liabilities, absolute, accrued or
contingent, as of the date of such balance sheet. There has been no
material adverse change in the business, assets, properties, operations,
condition (financial or other) or prospects of the Company since June 30,
1998.
III. MISCELLANEOUS
a. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto street, Suite 250
Toronto, Ontario, Canada M5C2C5
Attn: President
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
8
<PAGE>
Exhibit 10.6
WORLDWIDE DATA, INC.
STOCK PURCHASE AGREEMENT
PURCHASE AGREEMENT made as of this 17th day of November, 1998,
between Worldwide Data, Inc. (the "Company"), a Delaware corporation, and CBC
Holdings, Inc. a corporation with its principal place of business in Nassau, the
Bahamas (the "Purchaser").
WHEREAS, the Company, through its wholly-owned subsidiary, Worldwide
Online Corp. ("Worldwide Canada"), is engaged in the business of providing
Internet-based services, including Internet-access services and the creation of
intranets and web-sites for corporations (the "Offered Services") and the
Company is presently developing an on-line trading service, an on-line auction
service, a service which enables users to send faxes via the Internet and a
service which allows users to make voice calls via the Internet (the "Developing
Services," together with the Offered Services, the "Services");
WHEREAS, in order to partially finance the purchase of the common
stock of 761395 Alberta Ltd. ("Alberta Ltd."), an Alberta Corporation which is
wholly-owned by Bronson Conrad, the President of the Company, and which has as
its sole asset an aircraft, the Company wishes to issue and sell to the
Purchaser, and the Purchaser wishes to purchase from the Company, on the Closing
Date (as herein defined), 240,000 shares of the Company's common stock (the
"Shares") on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
I. ISSUANCE AND SALE OF THE SHARES; REPRESENTATIONS, WARRANTIES AND COVENANTS
OF PURCHASER
a. Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and sell and the Purchaser hereby agrees to
purchase from the Company, the Shares at a purchase price of one dollar ($1.00)
per Share and the Company agrees to issue and sell such Shares to the Purchaser
for said price.
<PAGE>
Subject to the terms and conditions set forth herein, within
thirty-one (31) days after the Closing Date, the Company shall issue and deliver
to Purchaser a certificate in definitive form, registered in the name of the
Purchaser or such Purchaser's nominee, evidencing the Shares so issued and sold
to such Purchaser hereunder. The Purchaser further agrees that payment for the
Shares shall be made to the Company, in accordance with any instructions from
the Company regarding such payment, in good funds on or before November 18,
1998, unless such date is extended by the Company (the "Closing Date").
b. The Purchaser acknowledges that it (a) is acquiring the Shares for its
own account for the purpose of investment and not with a view to or for sale in
connection with any distribution thereof in violation of the Securities Act of
1933, as amended (the "Act"); (b) either alone or together with its advisors,
has sufficient knowledge and experience in business, investment and financial
matters to evaluate the merits and risks of this investment; and (c) is able to
bear the substantial economic risks of this investment and, at the present time,
could afford a complete loss of such investment.
c. The Purchaser represents that it has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which it had requested or desired to know; that all
documents which could be reasonably provided have been made available for the
Purchaser's inspection and review; and that the Purchaser has been afforded the
opportunity to ask questions of and receive answers from duly authorized
officers and/or other representatives of the Company concerning the terms and
conditions of the sale of Shares, along with any additional information which it
had requested.
d. The Purchaser acknowledges that it is aware that this sale of Shares
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of Regulation
D thereunder, or otherwise exempt from registration under the Act.
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<PAGE>
e. The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
f. The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act, with respect to the Shares.
g. The Purchaser understands that the Shares are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein and in the Investor Questionnaire attached
hereto as Schedule I in order to determine the applicability of such exemptions
and the suitability of the Purchaser to acquire the Shares.
h. The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
i. The Purchaser maintains a domicile or business at the address shown on
the signature page of this Agreement, at which address the Purchaser has
subscribed for the Shares hereunder in compliance with the local laws thereof.
j. The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that it may lose its entire investment and has
full cognizance of and understands the risk factors related to an investment in
the Company, which include, but are not limited to:
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<PAGE>
(i) Losses; Uncertainty of Profitability. Since its inception in 1995
through the date hereof, the Company, through Worldwide Canada, has incurred
accumulated losses of $1.2 million. The Company continues to incur net losses on
a monthly basis and there can be no assurance that the Company will achieve
profitable operations or that Worldwide Canada will generate meaningful revenues
in the future.
(ii) Uncertainty of Business Plan. The Company's plan of operation and
future prospects are largely dependant upon the Company's continuing ability to
offer its Intranet-access services, to create intranets and web sites for
corporations and to offer and develop and market its Internet fax and voice call
services, WorldFAX and WorldVOICE, as well as its on-line trading and auction
services, on a timely and cost effective basis. There can be no assurance of
continued market acceptance of the Company's Offered Services or that
unanticipated problems, expenses or technical difficulties will not occur which
would result in discontinuation or material delays in the Offered Services. In
addition, there can be no assurance that the Company's Developing Services will
be successfully developed and implemented or that the Company will be able to
continue to develop and market WorldFAX and WorldVOICE successfully. The
likelihood of achievement of the Company's business plan must be considered in
light of the fact that the Company operates in a rapidly evolving industry
characterized by intense competition and an increasing and substantial number of
new market entrants and new Internet products and services. See "Risk Factors -
Increasing Competition; Minimal Barriers to Entry." No assurance can be given
that the Company will achieve its business plan or generate sufficient revenues
to sustain its operations or become profitable.
(iii) Uncertainty of Future Capital Needs. The capital requirements
required to fund the Company's losses, as well as to continue developing
WorldFAX and WorldVOICE, and to develop the Developing Services and any other
new services are significant. The Company may need to raise additional funds
through public or private offerings or equity financings in order to fund its
losses, continue to develop WorldFAX and WorldVOICE and develop the Developing
Services and
4
<PAGE>
any other new services. If additional funds are raised through the issuance of
equity securities, the percentage ownership of the then current stockholders
will be reduced and such equity securities may possess rights senior to the
holders of the Company's common stock. There can be no assurance that additional
financing will be available on terms favorable to the Company, or that the
Company will be successful in raising such financing.
(iv) Proceeds to be Used for Payment to Affiliate of Bronson Conrad. The
net proceeds of the offering will be used to partially finance the acquisition
of the common stock of Alberta Ltd., which is wholly-owned by Bronson Conrad,
the President of the Company, and which has an aircraft as its only asset. The
price to be paid by the Company for the shares of Alberta Ltd. will be
determined by Mr. Conrad based on an appraisal of the value of the airplane
owned by Alberta Ltd. Because of Mr. Conrad's involvement with both parties to
the transaction, the price to be paid by the Company and the other terms of such
purchase will not be the result of an arms-length negotiation and no independent
party determined the Company's need for the aircraft. The Company will not
obtain a fairness opinion regarding the value of Alberta Ltd.'s common stock. As
the sole shareholder of Alberta Ltd., Mr. Conrad will be the direct beneficiary
of the proceeds of the sale of the Albert Ltd. shares.
(v) Increasing Competition; Minimal Barriers to Entry. The market for
Internet-based services is extremely competitive and can be significantly
influenced by the marketing and pricing decisions of the larger industry
participants. The barriers to entry are minimal and the Company expects that
competition will intensify in the near future. The Company believes that success
will depend upon a number of factors, including market presence, capacity,
reliability and security of its network infrastructure. Furthermore, the Company
will have to compete with the pricing policies of competitors and suppliers, the
timing and introduction of new products and general economic trends.
5
<PAGE>
The Company's current and prospective competitors in the Internet
industry include many large companies that have substantially greater market
presence and financial, technical, operational, marketing and other resources
and experience than the Company. The Company's Services compete or expect to
compete directly or indirectly with the following categories of companies: (i)
other national and regional commercial Internet service providers ("IPSs"); (ii)
established on-line service companies that currently offer Internet access, such
as America Online, Inc., CompuServe Corp. and Prodigy Services Company; (iii)
computer hardware and software and other technology companies, such as Microsoft
Corporation ("Microsoft"); (iv) national long distance telecommunications
carriers, such as AT&T (with AT&T WorldNet), MCI (MCI Internet), and Sprint
(SprintNet); (v) regional telephone operating companies; (vi) cable television
system operators, such as Comcast Corporation, Tele-Communications, Inc. ("TCI")
, and Time Warner Inc.; (vii) nonprofit or educational ISPs; (viii)
newly-licensed providers of spectrum-based wireless data services; (ix) national
and regional web site and intranet developers; (x) national and regional on-line
trading companies and (xi) on-line auction companies. In addition, TCI recently
announced it had reached separate agreements with Sun Microsystems, Inc. and
Microsoft to produce the software necessary to permit persons to access the
Internet through television set-top boxes beginning in 1999.
The Company anticipates that it will encounter significant pricing pressure,
which in turn could result in reductions in the average selling price of the
Company's services. Large telecommunications corporations may be able to reduce
the communications costs involved in providing Internet-based services. There
can be no assurance that the Company will be able to offset the effects of any
such price reductions.
(vi) Dependence on the Internet; New Industry; Uncertain Adoption of
Internet as a Medium of Commerce and Communications. The Company's existing and
proposed products and services are targeted at users of the Internet, which has
experienced rapid growth.
6
<PAGE>
As is typical in the case of a new and rapidly evolving industry characterized
by rapidly changing technology, evolving industry standards and frequent new
product and service introductions, demand and market acceptance for recently
introduced products and services are subject to a high level of uncertainty. The
Internet services industry is characterized by a limited operating history and a
high rate of business failures. Because the market is relatively new and current
and future competitors are likely to introduce competing Internet-based
services, it is difficult to predict the rate at which the market will grow or
at which new or increased competition will result in market saturation. See
"Risk Factors - Increasing Competition; Minimal Barriers to Entry." In addition,
critical issues concerning the commercial use of the Internet remain unresolved
and may impact the growth of Internet use, especially in the business market
targeted by the Company. Despite growing interest in the many commercial uses of
the Internet, many businesses have been deterred from purchasing Internet access
services for a number of reasons, including, among others, inconsistent quality
of service, lack of availability of cost-effective, high-speed options, a
limited number of local access points for corporate users, inability to
integrate business applications on the Internet, the need to deal with multiple
and frequently incompatible vendors, inadequate protection of the
confidentiality of stored data and information moving across the Internet and a
lack of tools to simplify Internet access and use.
(vii) Possible Service Interruptions. The Company's operations require
that its telecommunications networks operate on a continuous basis. It is
possible that the Company's telecommunications networks may from time to time
experience service interruptions or equipment failures. Service interruptions or
equipment failures resulting in material delays would adversely effect the
confidence of users of the Services as well as the Company's business operations
and reputation.
(viii) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and security of
its network infrastructure. The Company currently has
7
<PAGE>
limited network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be no
assurance that the Company will be able to expand its infrastructure on a timely
basis, at a commercially reasonable price, or at all. The Company's operations
will also be dependent on the Company's ability to protect its computer
equipment against damage from fire, power loss, telecommunications failures and
similar events. The Company's network infrastructure will be vulnerable to
computer viruses, break-ins and similar disruptions from unauthorized tampering
with the Company's computer systems. Computer viruses or problems caused by
third parties could lead to material interruptions, delays or cessation in
services. Inappropriate use of the Internet by third parties could also
potentially jeopardize the security of confidential information stored in the
computer systems of users. Security and privacy concerns of users may limit the
Company's ability to successfully market its Services.
(ix) Limited Sales Force. The Company has a limited sales force and does
not have established distribution channels for its Services. No assurance can be
given as to the ability of the Company to establish or generate sufficient
demand for its Services, and the inability of the Company to do so would have a
material adverse effect on the Company's business, financial condition and
operating results.
(x) Dependence on Suppliers. The Company relies on other companies to
supply certain key components of its network infrastructure, including
telecommunications and networking equipment. There can be no assurance that the
Company will be able to obtain such services on the scale and within the time
frame required at a reasonable cost, or at all. The inability to do so would
have a material adverse effect on the Company's ability to furnish its Services,
financial condition and results of operations.
(xi) Dependence Upon Key Personnel; Bronson Conrad. The Company depends
upon the services of Bronson Conrad, its President and Chief Executive
8
<PAGE>
Officer. The loss of Mr. Conrad's services would be detrimental to the Company's
prospects. The Company does not contemplate obtaining "key-man" life insurance
with respect to Mr. Conrad and the Company does not have an employment agreement
with Mr. Conrad.
(xii) Limited Intellectual Property Protection. The Company relies on a
combination of copyright and trademark laws, trade secrets and software security
measures to protect its proprietary information. The Company currently has no
registered copyrights, trademarks or patents or patent applications pending. It
may be possible for unauthorized third parties to copy aspects of, or otherwise
obtain and use, the Company's proprietary information without authorization.
(xiii) NASDAO's OTC Bulletin Board Service; Risks Relating to Low Priced
Stocks. The Company's Common Stock currently trades on NASDAQ's OTC Bulletin
Board Service. Such market is characterized by limited and episodic trading and
limited liquidity. Investors could find it difficult to dispose of, or to obtain
accurate quotations as to the market value of, the Company's Common Stock.
(xiv) Control By Bronson Conrad. Following completion of the offering,
Bronson Conrad will beneficially own approximately 10.5% of the voting stock of
the Company. As a result, Mr. Conrad has the ability to influence or control the
election of a majority of directors and other actions by stockholders with
respect to the business and affairs of the Company.
(xv) Year 2000 Compliance. The Company is aware of the issues associated
with the programming code in existing computer systems as the year 2000
approaches. The "Year 2000 Problem" is pervasive and complex as virtually every
computer operation will be affected in some way by the rollover of the two digit
year value to 00. The issue is whether computer systems will properly recognize
date-sensitive information when the year changes to 2000. Systems that do not
properly recognize such information could generate erroneous data or fail. The
Company is in the process of working with its software that the Company has
licensed from
9
<PAGE>
third parties will operate properly in the year 2000 and beyond. In
addition, the Company is working with its external suppliers and service
providers to ensure that they and their systems will be able to support
the Company's needs and, where necessary, interoperate with the Company's
server and networking hardware and software infrastructure in preparation
for the year 2000. Management does not anticipate that the Company will
incur significant operating expenses or be required to invest heavily in
computer systems improvements to be year 2000 compliant. However,
significant uncertainty exists concerning the potential costs and effects
associated with any year 2000 compliance. Any year 2000 compliance
problems of either the Company, its customers or vendors could have a
material adverse effect on the Company's business, results of operations
and financial condition.
k. The Purchaser represents that the foregoing representations, warranties
and covenants are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
II. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
(d) Financial Statements - The Company has furnished to the
Purchaser the balance sheet of the Company as of June 30, 1998 and the
related Statement
10
<PAGE>
of Income dated as of June 30, 1998 which were prepared by management of
the Company and are unaudited, copies of which are attached hereto as
Exhibit A. Such financial statements have been prepared from and are in
accordance with the books and records of the Company, have been prepared
in accordance with generally accepted accounting principles consistently
applied, are true and correct and fairly present in all material respects
the financial position of the Company as of such date and the results of
its operations for the six-month period then ended in accordance with
generally accepted accounting principles, except for the absence of notes
and subject to year-end adjustments. Except as reflected in such balance
sheet and for obligations and liabilities incurred in the ordinary course
of business, the Company has no material (individually or in the
aggregate) obligations or liabilities, absolute, accrued or contingent, as
of the date of such balance sheet. There has been no material adverse
change in the business, assets, properties, operations, condition
(financial or other) or prospects of the Company since June 30, 1998.
III. MISCELLANEOUS
a. Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario, Canada M5C2C5
Attn: President
With a Copy to:
Werbel & Carnelutti
711 Fifth Avenue
New York, New York 10023
Attn: Stephen M. Davis, Esq.
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change
11
<PAGE>
of address, which shall be deemed to have been given when received.
b. This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged.
c. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
d. This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
e. This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
f. This Agreement may be executed in counterparts. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement shall become a
biding obligation of the Purchaser with respect to the purchase of Shares as
herein provided.
12
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
[FOR] CBC Holdings, Inc.
/s/ Steven L. Miller
---------------------------
Authorized Signature
Address of Purchaser
Nassau, Bahamas
---------------------------
Social Security or Taxpayer
Identification No. of
Purchaser
N/A
---------------------------
Signature of Purchaser
/s/ [ILLEGIBLE]
---------------------------
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
-------------------------
Bronson Conrad, President
13
<PAGE>
Exhibit A
Balance Sheet and Statement of Income
<PAGE>
WORLD WIDE DATA, INC.
CONSOLIDATED BALANCE SHEET
STATED IN CANADIAN DOLLARS
AS AT JUNE 30, 1998
(UNAUDITED - AS PREPARED BY MANAGEMENT)
ASSETS
CURRENT ASSETS
Cash and Bank 431,442
Accounts Receivable 54,563
Deposits and Prepaid Expenses 26,929
Loan Receivable 52,458
----------
565,392
----------
CAPITAL ASSETS
Computer 237,042
Office Furniture and Equipment 40,403
Leasehold Improvements 10,381
Less Accumulated Depreciation (129,614)
----------
158,212
----------
723,604
==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Bank Loan 50,004
Accounts Payable and Accrued Liabilities 75,509
Loans & Debenture Payable 320,656
----------
446,169
----------
LONG TERM LIABILITIES
Bank Loan 75,006
----------
75,006
----------
SHAREHOLDERS' EQUITY
Capital Stock - Issued - 2,442,800 shares 1,412,686
Deficit (1,210,259)
----------
202,429
----------
723,604
==========
Page 1
<PAGE>
WORLDWIDE DATA. INC
CONSOLIDATED STATEMENT OF INCOME
STATED IN CANADIAN DOLLARS
FOR THE 5 MONTHS ENDED JUNE 30, 1998
(UNAUDITED - AS PREPARED BY MANAGEMENT)
SALES 244,064
COST OF SALES 69,777
----------
GROSS PROFIT 174,287
----------
EXPENSES
Advertsing and Promotion 2,436
Bad Debts 718
Bank Charges and Interest 24,615
Consulting 52,039
Depreciation 24,343
Insurance 1,426
Office and General 3,070
Printing and Postage 5,393
Professional Fees 4,580
Rent 26,984
Repairs and Maintenance 1,648
Software Licence Fees 1,000
Salaries and Benefits 148,834
Telephone 3,888
Travel 33,891
----------
NET LOSS FOR THE PERIOD 334,870
----------
(160,583)
DEFICIT, beginning (1,049,676)
----------
DEFICIT, ending (1,210,259)
==========
Page 2
<PAGE>
Exhibit 10.7
STOCK PURCHASE AGREEMENT
STOCK PURCHASE AGREEMENT, dated as of November 17, 1998, by and
between Bronson Conrad ("Seller"), 761395 Alberta, Ltd., a company incorporated
under the laws of Alberta, having its head office at 1400, 350-7th Avenue, S.W.,
Calgary, in the Province of Alberta ("Alberta") and Worldwide Data, Inc., a
Delaware Corporation with its principal place of business in Toronto, Canada
("Buyer").
WITNESSETH:
WHEREAS, Buyer, through its wholly-owned subsidiary, Worldwide
Online Corp. ("Worldwide Canada"), is engaged in the business of providing
Internet-based services;
WHEREAS, the Seller is the owner of 100% of the issued and
outstanding capital stock of Alberta, consisting of one (1) share of common
stock, (the "Stock");
WHEREAS, Alberta has as its sole asset an aircraft which has an
appraised retail value of US$ 627,000;
WHEREAS, the Buyer desires to buy and the Seller desires to sell the
Stock upon the terms and subject to the conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein contained, Seller and Buyer agree as follows:
ARTICLE 1
SALE OF SHARES AND PURCHASE PRICE
1.1 Sale and Purchase of Stock. On the basis of the representations,
warranties, covenants and agreements contained in this Agreement and subject to
the terms and conditions set forth in this Agreement, on the Closing Date (as
defined in Section 1.2 hereof), Seller shall sell, and Buyer shall purchase from
Seller, the Stock for the consideration described and payable as set forth in
Section 1.3 hereof.
1.2 Closing Date. The purchase and sale of the Stock (the "Closing") shall
take place as of the date hereof (such date and time being hereinafter called
the "Closing Date").
1.3 Purchase Price. As consideration for the Stock and subject to the
terms and provisions of this Agreement, the purchase price is US$627,000 (the
"Purchase Price") to be paid as follows: Buyer shall deliver to Seller
US$240,000 in immediately available funds and a promissory note of Buyer in the
principal amount of US$189,631.58 substantially in the form
<PAGE>
attached hereto as Exhibit A (the "Note") and assume the note payable to Textron
Financial (Canada) with a principal amount outstanding of a __________________
$300,000 (Canadian) (the "Textron Note").
1.4 Additional Closing Date Deliveries and Actions.
(a) As of the Closing Date, Seller hereby delivers to Buyer (w) the
certificate representing the Stock, together with an executed stock power, (x)
all evidences of consents, waivers or approvals obtained by Seller in respect of
the consummation of the transactions contemplated by this Agreement, (y) all of
the documents and instruments contemplated to be delivered by Seller to Buyer on
the Closing Date pursuant to Article 5 hereof and (z) all such other documents
or instruments as Buyer may reasonably request or as may otherwise be necessary
to evidence and effect the transactions contemplated hereby.
(b) As of the Closing Date, Buyer hereby (i) delivers, or executes
and delivers, to Seller (x) US$ 240,000 in immediately available funds by wire
transfer, (y) the Note and (z) all of the documents and instruments contemplated
to be delivered by Buyer to Seller on the Closing Date pursuant to Article 6
hereof, and (ii) take all steps and actions as may be reasonably necessary to
effectuate the transactions contemplated hereby.
1.5 Consents, Waivers and Further Assurances. From time to time following
the Closing, Seller shall execute and deliver, or cause to be executed and
delivered, to Buyer such other instruments of assignment, conveyance and
transfer as Buyer may reasonably request or as may be otherwise necessary to
effect the transactions contemplated hereby.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF SELLER
All representations and warranties made by Seller in this Agreement are
true and accurate as of the execution hereof. Seller represents and warrants to
Buyer as follows:
2.1 Ownership of the Stock. Seller is the sole owner, beneficially and of
record, of all of the outstanding Stock of Alberta, free and clear of any
pledge, lien, security interest, encumbrance, claim or equity of any kind other
than those listed on Schedule 2.1 hereto. Upon delivery of the Stock to Buyer
pursuant to this Agreement, Buyer will receive good and marketable title
thereto, free and clear of any pledge, lien, security interest, encumbrance,
claim or equity of any kind other than those listed on Schedule 2.1 hereto.
2.2 Organization and Qualification. Alberta is a corporation duly
organized, validly existing and in good standing under the laws of the Province
of Alberta, and is duly qualified as a foreign corporation in all jurisdictions
where the ownership of its property or conduct of its business require it to so
qualify. Alberta has all requisite corporate power and authority to own or lease
its properties and assets and to conduct its business as presently conducted.
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<PAGE>
2.3 Authority to Effect Transactions.
(a) Seller has all requisite power and authority to execute, deliver
and perform this Agreement and all of Seller's closing documents ("Seller's
Closing Documents"). All necessary corporate action on the part of Seller has
been or will be prior to the Closing Date duly taken to authorize the execution,
delivery and performance by Seller of this Agreement and all of Seller's Closing
Documents. This Agreement and each of Seller's Closing Documents has been duly
authorized, executed and delivered by Seller and is the legal, valid and binding
obligation of Seller, enforceable against Seller in accordance with its terms
except (x) as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally, and (y) to the extent that such enforceability
is subject to general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
(b) Except as set forth in Schedule 2.3(b) hereto, (i) no consent,
authorization, approval, order, license, certificate, permit or act of or from,
or declaration or filing with, any foreign, federal, state, local or other
governmental authority or regulatory body or any court or other tribunal or any
party to any contract, agreement, instrument, lease or License (as defined in
Section 2.10) to which Seller or Alberta is a party or by which Seller or
Alberta is bound or to which any of the assets of Alberta is subject, is
required for the execution, delivery or performance by Seller of this Agreement
or any of Seller's Closing Documents or the consummation of the transactions
contemplated hereby or thereby and (ii) neither the execution, delivery or
performance of this Agreement nor any of Seller's Closing Documents nor the
consummation of the transactions contemplated hereby or thereby (v) conflicts
with or will conflict with, or (with or without the giving of notice or the
passage of time or both) results or will result in a breach of the terms,
conditions or provisions of, (w) constitutes or will constitute a default under,
(x) results or will result in the creation of any Lien upon any of the assets of
Alberta pursuant to, (y) constitutes or will constitute an event creating rights
of acceleration, termination or cancellation, or loss of rights under, or (z)
results or will result in a violation of, (A) Alberta's organizational documents
and agreements, each as amended to date, (B) any law, statute, rule, regulation,
order, award, judgment or decree to which Alberta, Seller or any of the assets
of Alberta is subject or (C) any contract, agreement, instrument, lease or
License to which Alberta or Seller is a party or by which it is bound.
2.4 Capitalization. The Stock being purchased hereunder represents all of
the authorized, issued and outstanding capital stock of Alberta. All shares of
the Stock are validly issued, fully paid and non-assessable, with no personal
liability attached to the ownership thereof. There are no agreements or
understandings with respect to the voting of the Stock. There are no existing
rights (including, without limitation, conversion rights), options, warrants,
calls or similar commitments of any character granted or issued by Alberta
relating to the Stock or any other security of Alberta, or whereby any person
would have a right to acquire any security of Alberta and there are no shares of
Stock held in the treasury of Alberta.
2.5 Subsidiaries. Alberta has no subsidiaries.
-3-
<PAGE>
2.6 Sole Shareholder. As of the Closing Date and prior to the sale of
Stock to Buyer, Seller will be the sole shareholder of Alberta.
2.7 No other Assets or Liabilities.
(a) Alberta has not, any time since its formation, held any other
assets. Alberta has at all times since its formation existed solely as a holding
company and has not engaged in any form of business or other operations.
(b) Alberta is not subject to any liability (including, without
limitation, unasserted claims, whether known or unknown, and liabilities for
foreign, Federal, provisional or local income tax), whether absolute,
contingent, accrued or otherwise. Alberta has no accounts payable or other
accrued liabilities, other than the Textron Note.
2.8 Contracts and Other Instruments;
Except as expressly otherwise set forth on Schedule 2.8, there are
no contracts, agreements, instruments and leases to which Alberta or Seller, on
behalf or for the benefit of Alberta, is a party or by which either of them is
bound or to which any of the assets of Alberta are subject (collectively,
"Contracts")
2.9 Employees. The Company has no employees and is not liable to pay any
employment or other form of compensation to any Person.
2.10 Compliance with Laws, Litigation. The assets of Alberta and their
uses comply with, and Alberta with respect to its assets and business is in
compliance with, all applicable material laws, regulations, rules, or ordinances
of, and all applicable judgments, writs, decrees, injunctions and orders of, any
foreign, Federal, provisional, local or other governments or court or
governmental departments, commissions, bureaus, agencies or instrumentalities,
including but not limited to, all healthcare and environmental laws, except
where noncompliance would not have a material adverse effect on the continuing
operation of Alberta. The Company is not, with respect to its assets, subject to
any judgments, writs, decrees, injunctions or orders of any foreign, Federal,
provisional or local government or court or governmental department, commission,
bureau, agency or instrumentality. There is no suit, action, administrative
proceeding, arbitration or other proceeding or governmental investigation
involving Alberta or Seller pending or, to the best knowledge of Alberta and
Seller, threatened against Alberta or Seller with respect to Alberta or the
assets of Alberta nor, to the best knowledge of Seller or Alberta, is there any
reasonable basis for any of the same, nor has there been any at any time during
the last five years. There is no suit, action, administrative proceeding,
arbitration or governmental investigation involving Alberta or Seller, pending
or, to the best knowledge of Alberta and Seller, threatened, which questions the
legality, validity or propriety of the transactions contemplated by this
Agreement.
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<PAGE>
ARTICLE 3
REPRESENTATIONS AND WARRANTIES OF BUYER
As an inducement to Alberta and Seller to enter into this Agreement
and to consummate the transactions contemplated hereby, Buyer represents and
warrants to Alberta and Seller and agrees as follows:
3.1 Authority to Effect Transactions.
(a) Buyer has all requisite power and authority to execute, deliver
and perform this Agreement and Buyer's closing documents ("Buyer's Closing
Documents"). This Agreement has been duly authorized, executed and delivered by
Buyer and is the legal, valid and binding obligation of Buyer enforceable
against Buyer in accordance with its terms. Buyer's Closing Documents have been
duly authorized by Buyer and, upon execution and delivery by Buyer as
contemplated hereby, will be the legal, valid and binding obligations of Buyer,
enforceable against Buyer in accordance with its terms.
ARTICLE 4
CONFIDENTIALITY
4.1 Confidentiality. Except as otherwise agreed in writing by Buyer and
Seller, no party to this Agreement shall directly or indirectly make or cause to
be made any public announcement or disclosure, or issue any notice with respect
to this Agreement or the transactions contemplated hereby without the prior
consent of the other parties hereto.
ARTICLE 5
INDEMNIFICATION
5.1 Indemnity by Seller. Without prejudice to any other rights and/or
remedies that Buyer may have under the law or under specific provisions of this
Agreement, Seller agrees to indemnify and hold harmless Buyer and their
successors and assigns and its and their respective officers, directors,
controlling Persons (if any), employees, attorneys, agents, Affiliates, partners
and stockholders, in each case past, present, or as they may exist at any time
after the date of this Agreement (including Buyer, the "Buyer Indemnitees")
against and in respect of any and all, whether directly or indirectly:
(a) claims, suits, actions, proceedings (formal and informal),
investigations, judgments, deficiencies, damages, settlements, liabilities,
losses, costs and legal and other expenses arising out of or based upon any
breach of any representation, warranty, covenant or agreement of Seller or
Alberta contained in this Agreement or in any other agreement executed and
delivered by any Seller or Alberta hereunder or in connection herewith, and (ii)
any legal proceedings involving Alberta and Seller; and
-5-
<PAGE>
(b) claims, suits, actions and proceedings, including, but not
limited to, professional liability claims of Persons not a party to this
Agreement and related investigations, judgments, deficiencies, damages,
settlements, liabilities, losses, costs and legal and other expenses arising
therefrom and from events occurring on or prior to the Closing Date relating to
Alberta.
5.2 Defense of Claims. Any Buyer Indemnitee (the "Indemnified Party")
seeking indemnification under this Agreement shall give to the party obligated
to provide indemnification to such Indemnified Party (the "Indemnitor") a notice
(a "Claim Notice") describing in reasonable detail the facts giving rise to any
claim for indemnification hereunder promptly upon learning of the existence of
such claim. Upon receipt by the Indemnitor of a Claim Notice from an Indemnified
Party with respect to any claim of a third party, such Indemnitor may assume the
defense thereof with counsel reasonably satisfactory to the Indemnified Party
and, in such event, shall agree to pay and otherwise discharge with the
Indemnitor's own assets all judgments, deficiencies, damages, settlements,
liabilities, losses, costs and legal and other expenses related thereto; and the
Indemnified Party shall cooperate in the defense or prosecution thereof and
shall furnish such records, information and testimony and attend all such
conferences, discovery proceedings, hearings, trials and appeals as may be
reasonably requested in connection therewith. If the Indemnitor does not assume
the defense thereof, the Indemnitor shall similarly cooperate with the
Indemnified Party in such defense or prosecution. The Indemnified Party shall
have the right to participate in the defense or prosecution of any lawsuit with
respect to which the Indemnitor has assumed the defense and to employ its own
counsel therein, but the fees and expenses of such counsel shall be at the
expense of the Indemnified Party unless (i) the Indemnitor shall not have
promptly employed counsel reasonably satisfactory to such Indemnified Party to
take charge of the defense of such action or (ii) such Indemnified Party shall
have reasonably concluded that there exists a significant conflict of interest
with respect to the conduct of such Indemnified Party's defense by the
Indemnitor, in either of which events such fees and expenses shall be borne by
the Indemnitor and the Indemnitor shall not have the right to direct the defense
of any such action on behalf of the Indemnified Party. The Indemnitor shall have
the right, in its sole discretion, to settle any claim solely for monetary
damages for which indemnification has been sought and is available hereunder,
provided that the Indemnitor shall not agree to the settlement of any claim
which constitutes the subject of a Claim Notice which settlement in the
reasonable opinion of the Indemnified Party would have an adverse continuing
effect on the business of the Indemnified Party without the prior written
consent of the Indemnified Party. The Indemnified Party shall give written
notice to the Indemnitor of any proposed settlement of any suit, which
settlement the Indemnitor may, if it shall have assumed the defense of the suit,
reject in its reasonable judgment within 10 days of receipt of such notice.
Notwithstanding the foregoing the Indemnified Party shall have the right to pay
or settle any suit for which indemnification has been sought and is available
hereunder, provided that, if the defense of such claim shall have been assumed
by the Indemnitor, the Indemnified Party shall automatically be deemed to have
waived any right to indemnification hereunder.
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<PAGE>
ARTICLE 6
MISCELLANEOUS
6.1 Expenses. Each party hereto shall pay its own expenses incident to the
negotiation, preparation and consummation of this Agreement and all other
agreements, instruments and documents executed and delivered by it hereunder or
in connection herewith, including all fees and expenses of its or their
respective counsel and accountants, whether or not the transactions contemplated
hereby or thereby are consummated.
6.2 Further Actions. At any time and from time to time after the Closing,
each party hereto agrees, at its own expense (except as otherwise provided
herein), to take such actions and to execute and deliver such documents as may
be reasonably necessary to effectuate the purposes of this Agreement.
6.3 Survival. The representations, warranties, covenants and agreements
contained in or made pursuant to this Agreement shall survive the Closing.
6.4 Entire Agreement, Modification. This Agreement (including the
Schedules and Exhibits hereto) sets forth the entire understanding of the
parties with respect to the subject matter hereof, supersedes all existing
agreements among them concerning such subject matter and may be modified only by
a written instrument duly executed by each party hereto.
6.5 Notices. Any notice given pursuant to this Agreement to any party
hereto shall be deemed to have been duly given when mailed by registered or
certified mail, return receipt requested, or when hand delivered as follows:
If to Seller:
Bronson Conrad
c/o Worldwide Online Corporation
36 Toronto Street, Suite 250
Toronto, Canada
M5C 2C5
If to Buyer:
Worldwide Data, Inc.
c/o Worldwide Online Corporation
36 Toronto Street, Suite 250
Toronto, Canada
M5C 2C5
or at such other address as either such party shall from time to time designate
by written notice, in the manner provided herein, to the other party hereto. All
references to days in this Agreement shall be deemed to refer to calendar days,
unless otherwise specified.
-7-
<PAGE>
6.6 Waiver. Any waiver must be in writing, and any waiver by any party of
a breach of any provision of this Agreement shall not operate as or be construed
to be a waiver of any other breach of that provision or of any breach of any
other provision of this Agreement. The failure of a party to insist upon strict
adherence to any term of this Agreement on one or more occasions will not be
considered a waiver or deprive that party of the right thereafter to insist upon
strict adherence to that term or any other term of this Agreement.
6.7 Separability. If any provision of this Agreement is invalid, illegal
or unenforceable, such provision shall be ineffective to the extent, but only to
the extent of, such invalidity, illegality or unenforceability, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement, unless such a construction would be unreasonable.
6.8 Headings. The headings in this Agreement are solely for convenience of
reference and shall be given no effect in the construction and interpretation of
this Agreement.
6.9 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
6.10 Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York, without giving effect to its
conflict of laws provisions.
6.11 Arbitration. Any dispute, controversy or claim arising out of or
relating to this Agreement or the breach, termination or invalidity hereof which
cannot be resolved amicably by discussions between the parties shall be settled
by arbitration in New York, New York, under the Rules of the American
Arbitration Association ("AAA") and in accordance with the internal laws of the
State of New York.
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<PAGE>
Incorporation by Reference. The Schedules and Exhibits attached hereto and
the letters referred to herein as having been executed or delivered concurrently
with the execution of this Agreement are an integral part of this Agreement and
are incorporated herein by reference.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
------------------------------------
Name:
Title:
/s/ Bronson Conrad
----------------------------------------
BRONSON CONRAD
761395 ALBERTA, LTD.
By: /s/ Bronson Conrad
------------------------------------
Name:
Title:
-9-
<PAGE>
SCHEDULE 2.1
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<PAGE>
SCHEDULE 2.3(B)
SELLER CONSENTS
[NONE]
-11-
<PAGE>
EXHIBIT A
FORM OF NOTE
-12-
<PAGE>
Exhibit 10.8
AIRCRAFT SECURITY AGREEMENT
Date: March 10,1998 $350,000.00 CDN
FOR VALUABLE CONSIDERATION, 761395 ALBERTA LTD., ("Debtor"), an Alberta
Corporation, with its chief executive office at 1400-350 7th Avenue South West,
Calgary Alberta, T2P 3N9, and BRONSON CONRAD, ("Co-Debtor"), residing at 1755
Birchwood Dr., Mississauga, Ontario, L5J 1TS hereby grants, assigns, transfers,
mortgages and charges to TEXTRON FINANCIAL CORPORATION (CANADA), an Ontario
corporation ("Secured Party"), with its chief executive office at One University
Avenue, Suite 500, Toronto, Ontario, M5J 2P1, a continuing security interest in
all of its rights, title and interest, whether now owned or hereafter acquired,
in the aircraft as described on Schedule A hereto, and all parts, engines,
equipment, interior furnishings and accessories thereto including all
substitutions and replacements thereof (together, the "Aircraft"), and the
proceeds thereof, in whatever form, of any sale, lease or disposition thereof or
that indemnifies or compensates for any or all of such equipment that is
destroyed, damaged, stolen or lost (together with the Aircraft, the
"Collateral"), to secure payment and performance of all of Debtors liabilities,
indebtedness and obligations, actual or contingent, now or hereafter owing,
arising, due or payable from Debtor to Secured Party, whether incurred prior to,
at the time of or subsequent to the execution hereof, including but not limited
to, the Promissory Note between Debtor and Secured Party, dated the date hereof
(the "Note") and the Commitment Letter, dated January 23, 1998, (together the
"Loan Agreement") between Debtor and Secured Party, (together, the
"Obligations") (the Note and Loan Agreement shall be collectively referred to
herein as the "Security").
1. Debtor's Representations, Warranties and Covenants
1.01 Authority. The execution, delivery and performance of this Agreement and
any instrument or other agreement or writing relating to this Agreement have
been duly and validly authorized by Debtor and do not and will not conflict with
any provision of any agreement, instrument or writing to which Debtor is a party
or by which Debtor is bound, and Debtor has full power and authority to enter
into this Agreement and all other instruments or other writings contemplated
hereby and to consummate the transactions contemplated hereby.
1.02 Financial Information. All financial statements, net worth statements and
other written information heretofore or hereafter delivered or furnished
directly or indirectly by Debtor or Co-Debtor to Secured Party are and will be
true and correct as of the date furnished and, as to any such financial
statements, do and will fairly present the financial condition and results of
Debtor's operations at the times and for the periods stated in such financial
statements.
1.03 Ownership and Absence of Liens. Debtor is, or with respect to Collateral
acquired after the date hereof shall be, the beneficial owner of the Collateral
and there are no liens, security interests, chattel mortgages, tax liens or
other encumbrances of any kind on the Collateral other than the security
interest created hereby and general security interests created in favour of
Debtor's banker which have been subordinated to the security interests created
hereby, and Debtor shall not create or permit any such liens, securities
interests, chattel mortgages, tax liens or other encumbrances of any kind on the
Collateral to exist hereafter.
<PAGE>
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1.04 Place of Business; Use of Collateral. Debtors place of business is located
at 1400-350 7th Avenue South West, Calgary, Alberta, T2P 3N9, and Debtor shall
not change address without providing Secured Party with at least 45 days' prior
written notice. Debtor shall not allow the Collateral to be removed from or
flown outside Canada, the continental United States or the Caribbean without the
prior written consent of Secured Party, and then only on the terms and
conditions contained in such consent, which consent shall not be unreasonably
withheld.
1.05 Sale or Lease; Registration. Debtor shall not sell, pledge, give away or
otherwise dispose of, alienate or encumber its title to the Collateral without
Secured Party's prior written consent. In addition, Debtor shall not lease the
Collateral to any party. Debtor shall at all times maintain registration of the
Aircraft in its name with Transport Canada Aviation ("TCA"), which registration
shall appropriately reflect (if possible) Secured Party's interest in the
Aircraft.
1.06 Books and Records. Debtor shall at all times keep accurate and complete
records and books of account with respect to all of Debtor's business and
financial activities, in accordance with sound accounting practices and
generally accepted accounting principles, such records and accounts to be
maintained at Debtor's business address set forth in section 1.04 (Place of
Business; Use of Collateral) and Debtor agrees that Secured Party may from time
to time, upon reasonable notice and during normal business hours, inspect and
make copies thereof, at Debtor's expense.
1.07 Continuing Information. Debtor shall furnish to Secured Party such
information relevant to the Collateral, Debtor's financial condition, and
Debtor's business as Secured Party may from time to time request.
1.08 Maintenance of Collateral. Debtor shall, at its own expense, maintain and
keep the Aircraft in an airworthy and good flying condition and all components
thereof and equipment installed thereon in good order and repair particularly in
accordance with the maintenance requirements of: (i) TCA; (ii) the manufacturer
of the Aircraft as approved by TCA; and (iii) the manufacturer of any component
or equipment installed on the Aircraft as approved by TCA, so as to ensure that
the Aircraft is in such operation condition as may be necessary to enable the
Certificate of Airworthiness for the Aircraft to be maintained as valid at all
times under all applicable laws. Debtor shall, within a reasonable time, at its
own cost and expense, replace in or on the Aircraft and its components and
equipment any and all such parts, equipment, appliances, instruments and
accessories which may be worn, used, lost, destroyed, confiscated, damaged or
otherwise rendered unfit for use so that each of such items shall always be in
good operating condition and shall have at least the original value and utility
of the property replaced. All inspections, repairs, modifications, installments
and overhaul work to be performed on the Aircraft shall be performed at Debtor's
expense by personnel duly licensed to perform such work and shall be in
accordance with the standards required by TCA. Debtor shall promptly notify
Secured Party of any scheduled or unscheduled overhaul or servicing of engines
or other major components of the Collateral which notice shall specify the
nature of the work to be done, the name and address of the shop providing such
services, and a reasonable estimate of the completion date of such work. Debtor
shall also comply with all TCA airworthiness directives and service bulletins,
on a terminating action basis.
<PAGE>
-3-
1.09 Base Locations. The home airport and base at which the Aircraft will be
located is Toronto Island Airport, Toronto, Ontairo, which home airport location
will not be changed without the prior written consent of Secured Party and, in
particular, the Aircraft shall not be used in or over the territorial limits of
any country other than Canada, the continental United States and the Caribbean
without the prior written consent of Secured Party, which consent shall not be
unreasonably withheld.
1.10 Legal Purpose. Debtor shall not use or permit the Collateral to be used:
(i) contrary to any laws or regulations, including but not limited to those
relating to intoxicating liquors, narcotics, drugs or similar products; or (ii)
in any manner which invalidates or restricts the insurance coverage required to
be carried or maintained by this Agreement.
1.11 Insurance. Debtor shall have and maintain at all times with respect to the
Collateral aircraft liability insurance and all risk ground and flight insurance
covering all forms of loss or damage to the Collateral in such amounts,
containing such terms and in such form as is satisfactory in the sole reasonable
discretion of Secured Party and shall deliver to Secured Party evidence of such
insurance. All such policies of insurance shall provide that any proceeds
thereof shall be payable to Secured Party and Debtor as their interests may
appear. All such policies of insurance shall provide for not less than thirty
days' prior notice of cancellation or change in form to Secured Party. In the
event of Debtor's failure to secure and maintain insurance as herein provided,
Secured Party may, at its option, secure such insurance on behalf of Debtor and
Debtor hereby promises to pay to Secured Party on demand any amounts expended by
Secured Party in securing such insurance as part of the Obligations, payment of
which is secured by the Collateral pursuant to this Agreement. Debtor hereby
agrees that Secured Party may act as Debto's attorney-in-fact in making,
adjusting and settling claims under any such insurance policies covering the
Collateral. Debtor shall provide a certificate from its insurance brokers to
Secured Party as evidence of such insurance prior to Secured Party making any
advances to Debtor in respect of the Collateral.
1.12 Liens and Encumbrances. In its discretion, Secured Party may at any time
discharge taxes and other encumbrances levied or placed on the Collateral, make
repairs thereto and pay any necessary filing fees with respect to the Collateral
or its interest therein. Debtor agrees to reimburse Secured Party on demand for
any and all expenditures so made, and until paid, the amount thereof shall be
deemed to be part of the Obligations, payment of which is secured by the
Collateral pursuant to this Agreement. Secured Party shall have no obligation to
Debtor to make any such expenditures nor shall the making thereof cure any
default by Debtor under this Agreement or any agreement or instrument,
performance of the terms of which is secured hereby.
1.13 Execution and Filing. Debtor shall perform, make, execute and deliver all
such additional and further acts, things, deeds, assurances and instruments as
Secured Party may request to more completely vest in and assure to Secured Party
its rights hereunder or in the Collateral including, without limitation,
execution and delivery of any documents or instruments which Secured Party
deems appropriate to perfect and continue the security interest hereby
granted, in the Province of Ontario or any other province of Canada or other
country in which Secured Party determines such action to be advisable. Debtor
hereby irrevocably authorizes Secured Party, or its designee, at Debtor's
expense, to file such documents or instruments with
<PAGE>
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respect thereto, with or without Debtor's signature, as Secured Party may deem
appropriate,and appoints Secured Party as Debtor's attorney-in-fact to execute
such documents and instruments and to do each and every other act or thing which
Secured Party is authorized to do or perform on behalf of Debtor by this
Agreement.
1.14 Inspection. Secured Party shall have the right to inspect the Collateral or
any specific part thereof at its discretion provided that any such inspection
shall not unreasonably interfere with the use of the Collateral by Debtor.
Debtor agrees to facilitate such inspections upon request by Secured Party.
1.15 ConsolidatIon, Merger, Sale of Assets, Etc. Neither Borrower nor Co-
Borrower shall consolidate with, or merge into, any other corporation or convey,
sell, transfer or lease substantially all of its assets as an entirety to any
Person without the prior written consent of Lender, which shall not be
withheld without reason.
2. Default
2.01 Events of Default. Each of the following events, if not consented to in
writing by Secured Party, shall constitute an "Event of Default" and material
breach of this Agreement (whether any such event shall be voluntary or
involuntary or come about or be effected by operation of Applicable Law) and
each such Event of Default shall be deemed to exist and continue so long as, but
only as long as, it shall not have been remedied:
(i) Payments: Debtor shall fail to make a payment when due of any
principal amount under the Note or shall fail to pay any
interest when due, or shall fail to make a payment when due of
any increased costs pursuant to this Agreement or other
Obligations; or
(ii) Insurance: Debtor shall fail to carry and maintain insurance
on or with respect to the Airframe and/or the engines in
accordance with the provisions of Section 1.11 (Insurance); or
(iii) Liens: Debtor shall create, incur or assume or permit to exist
any lien other than liens permitted pursuant to Section 1.03
(Ownership and Absence of Liens) on or with respect to any
part of or all of the Collateral; or
(iv) License; Registration: Debtor shall fail to maintain the
registration of the Aircraft under the Aeronautics Act (the
"Act") or shall fail to keep the Aircraft in possession of and
entitled to a valid TCA Certificate of Airworthiness; or
(v) Disposition of Aircraft: Debtor shall sell, assign, lease or
otherwise dispose of or relinquish possession of the Aircraft;
or
<PAGE>
-5-
(vi) Failure to Perform: Debtor shall fail to perform or observe
any material covenant or agreement other than those contained
in Sections 2.01 (i) to (v) above to be performed or observed
by it hereunder or under the Security and such failure shall
continue unremedied for a period of 30 days after notice of
such failure has been given; or
(vii) Misrepresentation: any representation or warranty made by
Debtor or Co-Debtor or in any document or certificate
furnished by Debtor to Secured Party in connection with this
Agreement or the Security shall at any time prove to have been
incorrect in any material respect when made; or
(viii) Obligations to Secured Party: Debtor, or any company of which
it has voting control, shall default in the payment of any
indebtedness for borrowed money (other than the Obligations)
or any obligation payable in respect of any lease or mortgage
owing by such party to Secured Party, or any interest or
premium thereon, when such indebtedness or such obligation
shall become due (or, if permitted by the terms of the
relevant document, within any applicable grace period),
whether such indebtedness or such obligation shall become due
by scheduled maturity, by required prepayment, by
acceleration, by demand, or otherwise; or
(ix) Obligations to Third Parties: Debtor shall default in the
payment of any indebtedness for borrowed money or any
obligation payable in respect of any lease or mortgage owing
by such party to any person (other than Secured Party), or any
interest or premium thereon, when such indebtedness or such
obligation shall become due (or, if permitted by the terms of
the relevant document, within any applicable grace period),
whether such indebtedness or such obligation shall become due
by scheduled maturity, by required prepayment, by
acceleration, by demand, or otherwise, and the amount of the
payment then in default shall be in excess of $100,000 and
such default shall continue unremedied for 30 days; or Debtor
shall fail to perform any term, covenant or agreement on its
part to be performed under any agreement or instrument (other
than this Agreement or the Security) evidencing or securing or
relating to any indebtedness for borrowed money or any
obligation payable in respect of any lease or mortgage owing
by such party when required to be performed, if as the result
thereof and of any such prior failure the maturity of any such
indebtedness or any payment of such obligation is accelerated
or any such lease is terminated or canceled, with the
aggregate for all such indebtedness or obligations being in
excess of $100,000 and such default shall continue unremedied
for 30 days; or
(x) Invalidity: this Agreement or the Security shall at any time
for any reason cease to be in full force and effect or shall
be declared to be null and void; or
<PAGE>
-6-
(xi) Suspension of Business: if Debtor shall Voluntarily suspend
all or substantially all of its business operations other
than: (i) suspensions of a temporary nature resulting from a
strike or similar event not within the control of Debtor or
Co-Debtor or from a lock-out; or (ii) for the purposes of a
reorganization or amalgamation, the terms of which have been
previously approved in writing by Secured Party to the extent
required hereunder; or
(xii) Voluntary Insolvency Proceedings: if Debtor or Co-Debtor files
a petition or answer or consent seeking reorganization,
readjustment, arrangement, composition or similar relief Under
any applicable law or consents to the filing of any such
petition or to the appointment of a receiver, liquidator,
trustee or similar officer of itself or any part of its
property or makes an assignment for the benefit of creditors
or is unable, or admits in writing its inability, to pay its
debts as they become due or otherwise acknowledges its
insolvency or is deemed for the purposes of any applicable law
to be insolvent or voluntarily suspends the transaction of its
usual business or any action is taken by it in furtherance of
any of the foregoing purposes; or
(xiii) Involuntary Insolvency Proceedings: if any application is
made with respect to Debtor or Co-Debtor under the Companies'
Creditors Arrangement Act (Canada), the Bankruptcy and
Insolvency Act (Canada), or similar legislation seeking
reorganization, readjustment, arrangement, composition or
similar relief for Debtor or Guarantor under any Applicable
Law, or if a proceeding is instituted for the winding up,
liquidation or dissolution of Debtor or Guarantor or seeking
an order adjudging Debtor or Guarantor insolvent or the
appointment of any receiver, liquidator, trustee or similar
officer of Debtor or Guarantor or over all or any part of
their property or a petition in bankruptcy is presented
against Debtor or Guarantor under any bankruptcy or similar
statute.
2.02 Prepayment. If an Event of Default described in Sections 2.01 (xii) or
(xiii) shall occur and be continuing, then the Termination Value shall be
immediately due, without presentment, demand, protest or other notice of any
kind (all of which Debtor hereby waives). "Termination Value" means the
aggregate of: (a) the present-value of the remaining payments and any residual
value of the Collateral, discounted at a rate equal to the lesser of: (i) the
Government of Canada bond rate for a term most closely matching the remaining
term, less 2%; or (ii) 3%; plus (b) all legal fees, disbursements, costs and
expenses incurred by the Secured Party in connection with the enforcement of the
Security and the Note.
2.03 Prepayment at Secured Party's Option. If any Event of Default, other than
one described in Sections 2.01 (xii) or (xiii), shall occur and be continuing,
then Secured Party may declare the Termination Value to be due. Upon such
declaration in writing to Debtor, the entire Termination Value shall be due,
without presentment, demand, protest or other notice of any kind (all of which
Debtor hereby waives).
<PAGE>
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Section 3. Remedies
3.01 Obtaining the Collateral Upon Default. Debtor agrees that, if any Event of
Default shall have occurred and be continuing, then and in every such case,
subject to any mandatory requirements, including applicable notice periods, of
applicable law, Secured Party, in addition to any rights now or hereafter
existing under Applicable law, shall have all rights as a secured creditor under
the PPSA to the extent that such are applicable and, in its sole discretion, may
then elect to exercise the following rights, remedies and powers:
(i) exercise all the rights and remedies upon default, in foreclosure
and otherwise, available to mortgages or secured parties under the
provisions of applicable law;
(ii) institute legal proceedings to foreclose upon and against the lien
and security interest granted by this Agreement, to recover judgment
for all Obligations then due and owing and secured hereby, and to
collect same out of any of or all of the Collateral or the
proceeds of any sale thereof;
(iii) without regard to the adequacy of the security for the Obligations
by virtue of this Agreement or any other Collateral or to the
solvency of Debtor, institute legal proceedings for the appointment
of a receiver or receivers with respect to any or all of the
Collateral pending foreclosure hereunder or for the sale of any or
all of the Collateral under the order of a court of competent
jurisdiction or under other legal process;
(iv) personally, or by agents or attorneys, immediately take possession
of the Collateral or any part thereof, from Debtor or any other
person who then has possession of any part thereof with or without
notice or process of law, and for that purpose may peaceably enter
upon Debtors or Guarantor's premises where all or any part of the
Collateral is located and remove same and use in connection with
such removal all services, supplies, aids and other facilities of
Debtor or that Secured Party, in its opinion, considers necessary;
(v) instruct the obligor or obligors on any agreement, instrument or
other obligation relating to the Collateral to make any payment
required by the terms of such instrument or agreement directly to
Secured Party;
(vi) sell, assign or otherwise liquidate, or direct Debtor to sell,
assign or otherwise liquidate, the Collateral or any part thereof,
and take possession of the proceeds of any such sale or
liquidation;
(iv) take possession of the Collateral or any part thereof, by directing
Debtor in writing to deliver same to the Secured Party at any place
or places designated by Secured Party, in which event Debtor shall,
at its own expense comply therewith, including, in the case of
Aircraft:
(1) forthwith fly or cause to be flown all or any part of the Aircraft
to such airport or airports in Ontario so designated by Secured
Party and there deliver the Aircraft to Secured Party;
<PAGE>
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(2) store and keep all or any part of the Aircraft so delivered to
Secured Party at such place or places pending further action by the
Secured Party as provided in Section 3.02 (Disposition of
Collateral); and
(3) while all or any part of the Aircraft shall be so stored and kept,
provide such security and maintenance services as shall be
necessary to protect same and to preserve and maintain them in the
condition required by this Agreement.
3.02 Disposition of Collateral. The Collateral, or any part thereof repossessed
by Secured Party pursuant to Section 3.01 (Obtaining the Collateral Upon
Default), whether or not physically so repossessed by Secured Party, may be
sold, assigned, leased or otherwise disposed of under one or more contracts or
as an entirety, and without the necessity of gathering at the place of sale the
property to be sold, and in general in such manner, at such time or times, at
such place or places and on such terms as Secured Party may, in compliance with
any mandatory requirements of applicable law, determine to be commercially
reasonable. The Collateral or any part thereof may be sold, leased or otherwise
disposed of, in the condition in which same existed when taken by Secured Party
or after any overhaul or repair which Secured Party shall determine to be
commercially reasonable.
3.03 Assignment of Insurance. Debtor hereby assigns to Secured Party all of the
rights of Debtor under the insurance policies maintained pursuant to Section
1.11 (Insurance), such assignment to be effective without further act of Debtor
upon the occurrence of an Event of Default; provided, however, that such
assignment shall not subject Secured Party to any liability for premiums or
otherwise, and Debtor hereby agrees to fully indemnify Secured Party for any
cost or liabilities arising pursuant to the exercise of the assignment made
under this Section 3.03.
3.04 Waiver of Claims. Any sale of, or the grant of options to purchase, or any
other realization upon, the Collateral or any part thereof, all in accordance
with the provisions hereof, shall operate to divest all right, title, interest,
claim and demand, either at law or in equity, of Debtor therein and thereto, and
shall be a perpetual bar both at law and in equity against Debtor and against
any and all persons claiming or attempting to claim the Collateral so sold,
optioned or realized upon, or any part thereof, from, through and under Debtor.
3.05 Preservation of Collateral. Secured Party may enter into and upon and take
possession of all or any part of the Collateral, with full power to borrow money
or advance its own money for the maintenance and preservation of the Collateral
or any part thereof, the payment of taxes, wages and other charges ranking in
priority to the Obligations and operating expenses incurred (and the money so
borrowed or advanced shall be repaid by Debtor on demand and until repaid shall,
with interest, form a charge upon the Collateral in priority of the Obligations
and shall be secured hereby) and to receive the revenues, incomes, issues and
profits of the Collateral and to pay therefrom all its expenses, charges and
advances in preserving the Collateral or otherwise, and all taxes, assessments
and other charges against the Collateral ranking in priority to the Obligations,
or payment of which may be necessary to preserve the Collateral, and to apply
the remainder of the moneys so received in accordance with the provisions
hereof.
<PAGE>
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3.06 Remedies Not Prejudiced by Delay. No delay or omission of Secured Party to
exercise any remedy shall impair any such remedy or shall be construed to be a
waiver of any Event of Default hereunder or acquiescence therein.
3.07 Remedies Cumulative; Fees and Expenses. Each and every right, power and
remedy hereby specifically given to Secured Party shall be in addition to every
other right, power and remedy specifically given under this Agreement or the
Security or now or hereafter existing at Applicable law and each and every
right, power and remedy whether specifically given herein or otherwise existing
may by exercised form time to time or simultaneously and as often and in such
order as may be deemed expedient by Secured Party. All such rights, powers and
remedies shall be cumulative and the exercise or the beginning of exercise of
one shall not be deemed a waiver of the right to exercise of any other or
others; provided, however, that nothing in this Agreement or the Security shall
be construed to allow Secured Party a double recovery. In the event that Secured
Party shall bring any suit to enforce any of its rights hereunder and shall be
entitled to judgment, then in such suit Secured Party may recover (without
duplication) reasonable expenses, including reasonable legal fees, and the
amounts thereof shall be included in such judgment.
3.08 Discontinuance of Proceedings. In case Secured Party shall have instituted
any proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to Secured Party, then and in every such case Debtor and Secured Party shall be
restored to their former positions and rights hereunder with respect to the
Collateral subject to the Security Interest created under this Agreement, and
all rights, remedies and powers of Secured Party shall continue as if no such
proceeding had been instituted.
3.09 Debtor to Yield Possession. Debtor shall yield up possession of the
Collateral to Secured Party upon demand whenever Secured Party shall have a
right of entry under the provisions hereof and agrees to put no obstacles in the
way of but to facilitate by all legal means the actions of Secured Party
hereunder, and not to interfere with the carrying out of the powers hereby
granted to it, and Debtor shall forthwith, execute such documents and transfers
as may be necessary to place Secured Party in legal possession of the Collateral
and thereupon all of its powers and functions, rights and privileges shall cease
with respect to the Collateral, unless specifically continued in writing by
Secured Party or unless the property shall have been restored to Debtor.
3.10 Indulgences. Secured Party may grant renewals, extensions of time and other
indulgences, take and give up securities, accept settlements, grant full,
partial and conditional releases and discharges, perfect or fail to perfect any
securities, release any Collateral to third parties and otherwise deal or fail
to deal with Debtor, debtors of Debtor, guarantors, sureties and others and with
the Collateral and other securities as Secured Party may see fit, all without
prejudice to any liability of Debtor to Secured Party or Secured Party's rights
and remedies under this Agreement or applicable law.
3.11 Secured Party's Agent. Secured Party may appoint any agent or
representative, including a receiver or receiver and manager, to exercise any of
its rights hereunder.
<PAGE>
-11-
4.02 Whenever possible each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under any
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity but the remainder of such provision or the remaining
provisions of this Agreement shall remain in full force and effect.
4.03 This Agreement may be executed in one or more counterparts, each of which
when so executed shall be and be deemed to be an original and such counterparts
together shall constitute one and the same instrument.
4.04 This Agreement is delivered in and shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
5. Execution
The parties hereto have duly executed this Agreement as of the date
written above.
) Debtor: 761395 ALBERTA LTD.
)
)
)
/s/ L. ALLAN MCCAFFREY ) /S/ [Illegible]
- ------------------------ --------------------------------
Witness 761395 ALBERTA LTD.
Name (Print):
L. ALLAN MCCAFFREY
Co-Debtor: BRONSON CONRAD
/s/BRONSON CONRAD
-----------------
BRONSON CONRAD
Secured Party:
TEXTRON FINANCIAL CORPORATION
(CANADA)
By:/s/JUDY SMILEY
-----------------------------
Name: JUDY SMILEY
Title: AVP Funding
By:
-----------------------------
Name:
Title:
<PAGE>
SCHEDULE A
AIRCRAFT SPECIFICATIONS
AIRFRAME MAKE AND MODEL: 1977 Fairchild Merlin
MANUFACTURER'S SERIAL NUMBER: T-274
NATIONALITY AND REGISTRATION MARKS: C-FAMF
ENGINE MAKE AND MODEL: Garrett TPE 331 34-304G
ENGINE SERIAL NUMBERS: NO. 1: P03200
NO. 2: P03272
PROPELLER MAKE AND MODEL: Hartzell HC B3TN-SG
PROPELLER SERIAL NUMBERS: NO. 1: BVA 6131
NO. 2: BVA 6132
APU MAKE AND MODEL:
APU SERIAL NUMBER:
INTERIOR CONFIGURATION: 9 Seat Passenger
AVIONICS SYSTEMS: COLLINS
Secured Party: Debtor: 761395 Alberta Ltd.
TEXTRON FINANCIAL CORPORATION
(CANADA)
By: /s/JUDY SMILEY By: /s/BRONSON CONRAD
-------------------------- -----------------------
Name: JUDY SMILEY Name:
Title: AVP Funding Title:
Co-Debtor: Bronson Conrad
By:
-------------------------- By: /s/BRONSON CONRAD
Name: -----------------------
Title: Name:
Title:
<PAGE>
-11-
4.02 Whenever possible each provision of this Agreement shall be interpreted in
such a manner as to be effective and valid under applicable law, but if any
provision of this Agreement shall be prohibited by or invalid under any
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity but the remainder of such provision or the remaining
provisions of this Agreement shall remain in full force and effect.
4.03 This Agreement may be executed in one or more counterparts, each of which
when so executed shall be and be deemed to be an original and such counterparts
together shall constitute one and the same instrument.
4.04 This Agreement is delivered in and shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
5. Execution
The parties hereto have duly executed this Agreement as of the date
written above.
) Debtor: 761395 ALBERTA LTD.
)
)
)
/s/ PETER GIDDENS ) /s/ BRONSON CONRAD
- ------------------------ --------------------------------
Witness 761395 ALBERTA LTD.
Name (Print):
PETER GIDDENS
Co-Debtor: BRONSON CONRAD
/s/BRONSON CONRAD
--------------------------------
BRONSON CONRAD
Secured Party:
TEXTRON FINANCIAL CORPORATION
(CANADA)
By:
-----------------------------
Name:
Title:
By:
-----------------------------
Name:
Title:
<PAGE>
SCHEDULE A
AIRCRAFT SPECIFICATIONS
AIRFRAME MAKE AND MODEL: 1977 Fairchild Merlin
MANUFACTURER'S SERIAL NUMBER: T-274
NATIONALITY AND REGISTRATION MARKS: C-FAMF
ENGINE MAKE AND MODEL: Garrett TPE 331-34-304G
ENGINE SERIAL NUMBERS: NO. 1: P03200
NO. 2: P03272
PROPELLER MAKE AND MODEL: Hartzell HCB3TN-SG
PROPELLER SERIAL NUMBERS: NO. 1: BVA 6131
NO. 2: BVA 6132
APU MAKE AND MODEL:
APU SERIAL NUMBER:
INTERIOR CONFIGURATION: 9 Seat Passenger
AVIONICS SYSTEMS: COLLINS
Secured Party: Debtor: 761395 Alberta Ltd.
TEXTRON FINANCIAL CORPORATION
(CANADA)
By: By: /s/BRONSON CONRAD
-------------------------- -----------------------
Name: Name: BRONSON B CONRAD
Title: Title: PRESIDENT
Co-Debtor: Bronson Conrad
By:
--------------------------
Name: By: /s/BRONSON B CONRAD
Title: -----------------------
Name: BRONSON B CONRAD
Title:
<PAGE>
Exhibit 10.9
STOCK EXCHANGE AGREEMENT
THIS AGREEMENT, dated as of the 27th day of February, 1998, by and among:
WORLDWIDE DATA INC., a corporation incorporated pursuant to
the laws of the State of Delaware,
(the "Purchaser")
OF THE FIRST PART
- and -
BRIDGEWATER CAPITAL CORP., a corporation incorporated
pursuant to the laws of the Bahamas,
("Bridgewater")
OF THE SECOND PART
- and -
BRONSON CONRAD, a resident of Mississauga, Ontario,
("Conrad")
OF THE THIRD PART
WHEREAS Bridgewater and Conrad (collectively, the "Sellers") are the sole
owners and shareholders of record of 1,500,000 out of 1,764,706 shares of
capital stock (the "Sellers' Shares") of Worldwide Online Corp. ("Worldwide") a
company incorporated pursuant to the laws of the Province of Ontario;
AND WHEREAS the Sellers hold the Sellers' Shares in the following amounts
and proportions:
Seller No. of Shares
------ -------------
Bridgewater 1,499,999
Conrad 1
---------
Total Sellers' Shares 1,500,000
---------
AND WHEREAS the Purchaser is the sole owner and shareholder of record of
264,706 out of 1,764,706 shares of capital stock of Worldwide (the "Purchaser's
Shares");
AND WHEREAS the Sellers' Shares and the Purchaser's Shares represent all
of the issued and outstanding shares of the capital stock of Worldwide;
<PAGE>
- 2 -
AND WHEREAS the Purchaser will deliver to the Sellers 1,500,000 common
shares of the Purchaser (the "Worldwide Data Shares"), in exchange for the
Sellers' Shares, all in the proportions and upon the terms and conditions set
out herein;
AND WHEREAS the Sellers and the Purchaser are willing to make
representations, warranties and covenants and to provide the consideration
described in this Agreement;
NOW THEREFORE, in consideration of the premises and of the
representations, warranties and covenants herein contained and intending to be
legally bound hereby, the parties hereto agree as follows:
ARTICLE I
Interpretation
1.01 Definitions
In this Agreement, including the schedules hereto:
(a) "Agreement", "herein", "hereto", "hereof" and similar expressions
means this agreement and includes any agreement amending this
agreement or any agreement or instrument which is supplemental or
ancillary hereto;
(b) "Bridgewater" has the meaning ascribed thereto in the preamble
hereto;
(c) "Business Day" means a day other than a Saturday, Sunday or
statutory or civic holiday in the City of Toronto, Ontario, Canada;
(d) "Closing" means the purchase by the Purchaser and the sale by the
Sellers of the Sellers' Shares and the issuance of the Worldwide
Data Shares to the Sellers (all as more particularly provided in
this Agreement) in exchange therefor,
(e) "Closing Date" means: (i) the date hereof; or (ii) such other date
as Sellers and Purchaser may mutually agree in writing; provided
that if the Closing Date has not occurred on or before May 31, 1998,
for any reason other than the default or failure to perform
hereunder by the Purchaser or by any of the Sellers, this Agreement
shall be null and void and at an end and the obligations of the
parties hereto shall be at an end, save in respect of any default or
failure to perform hereunder by any of such parties;
(f) "Conrad" has the meaning ascribed thereto in the preamble hereto;
(g) "Counsel" means any barrister, solicitor or attorney or firm thereof
retained by the Purchaser or any of the Sellers as the case may be;
(h) "Purchaser" has the meaning ascribed thereto in the preamble hereto;
(i) "Purchaser's Shares" has the meaning ascribed thereto in the
recitals hereto;
(j) "Sellers" means collectively, Bridgewater and Conrad,
(k) "Sellers' Shares" has the meaning ascribed thereto in the recitals
hereto;
<PAGE>
- 3 -
(l) "Share Exchange" means the exchange of the Sellers' Shares by the
Sellers for the Worldwide Data Shares, in accordance with this
Agreement;
(m) "Time of Closing" means 10:00 a.m. on the Closing Date;
(n) "Worldwide" has the meaning ascribed thereto in the recitals hereto;
(o) "Worldwide Data Shares" has the meaning ascribed thereto in the
recitals hereto.
1.02 Time
Time shall be of the essence hereof.
1.03 Governing Law
This Agreement shall in all respects be subject to and interpreted
and construed in accordance with the laws of the Province of Ontario, Canada and
shall be treated in all respects as a contract performed in its entirety in the
Province of Ontario.
1.04 Clause References
The division of this Agreement into Articles, sections, subsections,
clauses, subclauses, and paragraphs and the provision of headings for all or any
thereof is for convenience of reference only and shall not affect the
interpretation of this Agreement.
1.05 Expanded Meanings
In this Agreement, unless there is something in the subject matter
or context inconsistent therewith: (a) words importing the singular shall
include the plural and vice versa; (b) words importing gender shall include the
masculine, feminine and neuter genders; and (c) references to any statute shall
extend to and include any orders-in-council or regulations passed under and
pursuant thereto, or any amendment or re-enactment of such state,
orders-in-council or regulations, or any statute, orders-in-council or
regulations substantially in replacement thereof.
1.06 Currency and Payment
All references to currency are to lawful money of Canada, unless
otherwise expressly indicated herein.
1.07 Amendment
No amendment or modification of this Agreement shall be binding
unless in writing and signed by the parties intended to be bound thereby.
1.08 Entire Agreement
This Agreement constitutes the entire agreement between the parties
relating to the Share Exchange and supersedes and replaces all prior agreements,
understandings, negotiations and discussions, whether oral or written.
<PAGE>
- 4 -
1.09 Invalidity of Provisions
If any of the provisions of this Agreement should be invalid,
illegal or unenforceable in any respect, the validity or legality or
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
1.10 Schedules
The Schedules referred to in this Agreement are incorporated herein
by reference and form a part hereof.
ARTICLE II
Share Exchange
2.01 Subject to the terms and conditions of this Agreement and in consideration
of the agreements herein contained and for other good and valuable
consideration, the Sellers individually and collectively agree to transfer and
deliver to the Purchaser, at the Closing (to be conducted on the Closing Date at
the Time of Closing at the offices of Counsel to the Purchaser in Toronto,
Ontario, Canada), and Purchaser agrees to acquire and accept from Sellers at the
Closing, the Sellers' Shares, free and clear of any security interests, pledges,
mortgages, liens or encumbrances. At the Closing, Sellers shall deliver to
Purchaser properly endorsed certificates representing the Sellers' Shares.
2.02 In exchange for the Sellers' Shares, Purchaser shall issue and deliver to
Sellers, at the Closing, the Worldwide Data Shares, to be represented by
certificates registered in the names of the Sellers as set out in Section 2.03
below.
2.03 The Sellers represent, warrant and acknowledge that they own the Seller's
Shares in the proportions and amounts set out in the recitals hereto and agree
that the Worldwide Data Shares to be issued and delivered to the Sellers
pursuant to this Agreement, shall be issued and delivered as set out below:
Seller No. of Shares
------ -------------
Bridgewater 1,499,999
Conrad 1
---------
Total Worldwide Data Shares 1,500,000
---------
2.04 The Sellers individually and collectively acknowledge and agree that the
Purchaser is not a reporting issuer that the Worldwide Data Shares will not be
qualified for sale to the public pursuant to the securities laws of the United
States or Canada; and that the Worldwide Data Shares will contain a legend
substantially in the following form: "The shares represented by this certificate
have not been registered under the Securities Act of 1933. The shares have been
acquired for investment and may not be sold, transferred or assigned in the
absence of an effective registration statement for the shares under the
Securities Act of 1933 or an opinion of the Company's counsel that registration
is not required under said Act".
<PAGE>
- 5 -
ARTICLE III
Sellers' Closing Conditions
3.01 The obligations of the Sellers to complete the Share Exchange is subject to
the fulfillment and performance on or prior to the Closing of the following
conditions precedent, all of which are for the exclusive benefit of Sellers and
which may be waived in whole or in part by Sellers:
(a) at the Time of Closing on the Closing Date, Purchaser shall deliver
to Sellers certificates registered in the names of Sellers, in the
proportions set out in Section 2.03 hereof, representing the
Worldwide Data Shares (being 1,500,000 common shares of the
Purchaser);
(b) any and all regulatory approvals, notifications or consents,
compliance with regulatory requirements, and any and all third party
consents or waivers required to complete the transactions herein
contemplated, shall have been obtained on terms satisfactory to
Sellers, acting reasonably, and satisfactory evidence of same shall
have been delivered to Sellers for review and approval;
(c) the representations and warranties of Purchaser contained in this
Agreement shall be true and correct in all respects at the Time of
Closing, with the same force and effect as if such representations
and warranties were made at and as of such time, and the delivery by
the Purchaser to the Sellers on Closing of the Worldwide Data
Shares, properly engrossed in the names of the Sellers as specified
in Section 2.03 above, shall be deemed to constitute a certificate
of the Purchaser addressed to each of the Sellers, effective as of
the Time of Closing, that the representations and warranties of the
Purchaser contained in this Agreement remain true and correct as of
the Time of Closing;
(d) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Purchaser at or before the Time of
Closing shall have been complied with or performed in all respects,
and the delivery by the Purchaser to the Sellers on Closing of the
Worldwide Data Shares, properly engrossed in the names of the
Sellers as specified in Section 2.03 above, shall be deemed to
constitute a certificate of the Purchaser addressed to each of the
Sellers, effective as of the Closing Date, that the terms, covenants
and conditions of the Purchaser in this Agreement have been complied
with or performed in all respects by the Purchaser at or before the
Time of Closing;
(e) there shall have been no material adverse changes in the condition
(financial or otherwise), of the assets, liabilities, operations,
earnings, business or prospects of Purchaser since the date hereof;
and
(f) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the
transactions contemplated by this agreement.
If any of the conditions contained in this Article III shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
Sellers, acting reasonably, Sellers may, by notice to Purchaser, terminate this
Agreement and the obligations of Purchaser and Sellers under this Agreement. Any
such condition may be waived in whole or in part by the Sellers without
prejudice to any claims they may have for breach of covenant, representation or
warranty. For the purposes of this Article III and the balance of this Agreement
generally, any certificate or
<PAGE>
- 6 -
document to be approved by the Sellers and any consent to be provided by the
Sellers shall be deemed to be approved or provided if approved or provided by
those of the Sellers who own the majority of the Shares, and any waiver that may
be delivered by the Sellers, shall be deemed to be delivered, binding on all of
the Sellers, if delivered by those of the Sellers who own the majority of the
Shares.
ARTICLE IV
Purchaser's Closing Conditions
4.01 The obligation of Purchaser to complete the Share Exchange is subject to
the fulfillment and performance on or prior to the Closing of the following
conditions precedent, all of which are for the exclusive benefit of Purchaser
and which may be waived in whole or in part by Purchaser:
(a) Sellers shall have tendered all, but not less than all, of the
Sellers' Shares duly endorsed in blank for transfer or accompanied
by duly executed transfer powers;
(b) the board of directors of Worldwide shall have approved the transfer
of the Shares to Purchaser;
(c) any and all regulatory approvals or consents, and any and all third
party consents or waivers required to complete the transactions
herein contemplated, shall have been obtained on terms satisfactory
to Purchaser and satisfactory evidence of same shall have been
delivered to Purchaser for its review and approval;
(d) the representations and warranties of Sellers herein shall be true
and accurate in all respects at the Time of Closing, with the same
force and effect as if such representations were made at and as of
such time, and the delivery by the Sellers to the Purchaser on
Closing of the Sellers' Shares, properly endorsed over to the
Purchaser, shall be deemed to constitute a certificate of each of
the Sellers addressed to the Purchaser, effective as of the Time of
Closing, that the representations and warranties of the Sellers
contained in this Agreement remain true and correct as of the Time
of Closing;
(e) all of the terms, covenants and conditions of this Agreement to be
complied with or performed by Sellers at or before the Time of
Closing shall have been complied with or performed in all respects,
and the delivery by the Sellers to the Purchaser on Closing of the
Sellers' Shares, properly endorsed over to the Purchaser, shall be
deemed to constitute a certificate of each of the Sellers addressed
to the Purchaser, effective as of the Time of Closing, that the
terms, covenants and conditions of the Sellers in this Agreement
have been complied with or performed in all respects as of the Time
of Closing;
(f) there shall have been no material adverse changes in the condition
(financial or otherwise), of the assets, liabilities, operations,
earnings, business or prospects of Worldwide since the date of this
Agreement;
(g) no legal or regulatory action or proceeding shall be pending or
threatened by any person to enjoin, restrict or prohibit the
transactions contemplated by this Agreement; and
<PAGE>
- 7 -
(h) this Agreement and the transactions contemplated herein shall have
been approved by the directors of Purchaser and, if required by the
constating documents of the Purchaser or otherwise, by the
shareholders of Purchaser.
If any of the conditions contained in this Article IV shall not be
performed or fulfilled at or prior to the Time of Closing to the satisfaction of
Purchaser, acting reasonably, the Purchaser may, by notice to Sellers or any of
them, terminate this Agreement and the obligations of Purchaser and Sellers
under this Agreement. Any such condition may be waived in whole or in part by
Purchaser.
4.02 The Purchaser acknowledges that it has conducted a due diligence review of
the operations and affairs, revenues, expenses, assets, liabilities, agreements
and contracts of Worldwide and, as of the date of this Agreement, is satisfied
with the same.
ARTICLE V
Representations, Warranties and Covenants of Purchaser
5.01 Representations and Warranties of Purchaser
Purchaser warrants and represents to Sellers as of the date hereof
that:
(a) Purchaser has been duly incorporated and is validly subsisting under
the laws of the State of Delaware;
(b) Purchaser has conducted and is conducting its business in compliance
in all material respects with all applicable laws, rules and
regulations of each jurisdiction in which it carries on business and
holds all required licenses, registrations and qualifications in all
jurisdictions in which it carries on business in order to carry on
its business as now conducted and all such licenses, registrations
or qualifications are valid and existing and in good standing;
(c) Purchaser is not subject to any judgment, order, writ, injunction or
decree of any court or governmental body which would prevent the
carrying out of this Agreement or consummation of the transactions
herein contemplated;
(d) neither the execution and delivery of this Agreement by Purchaser,
nor the performance of Purchaser's obligations hereunder will be in
conflict with, or result in the breach of, or constitute a default
by Purchaser under its constating documents or any document of any
kind to which Purchaser is a party or by which it is bound, or under
any judgment, decree, order, law, statute, rule or regulation
applicable to Purchaser;
(e) Purchaser has the requisite corporate power and capacity to execute
this Agreement and to create, allot and issue the Worldwide Data
Shares as contemplated herein;
(f) there is no litigation which is material to the business or
financial condition of Purchaser, there is no suit, action,
litigation, arbitration proceeding or governmental proceeding,
including appeals and applications for review, in progress, pending
or threatened in writing, against or relating to Purchaser or its
properties or business, which if determined adversely to Purchaser
might materially and adversely affect the properties, business, or
the financial condition of Purchaser;
<PAGE>
- 8 -
(g) this Agreement has been duly executed and delivered by Purchaser and
all documents required hereunder to be executed and delivered by it
shall be duly executed and delivered by Purchaser and this Agreement
does and such documents and instruments shall, constitute legal,
valid and binding obligations of Purchaser at or prior to the Time
of Closing, enforceable in accordance with their respective terms;
(h) all necessary corporate action has been taken or will be taken by
Purchaser prior to the Closing to duly authorize the allotment and
issue of the Worldwide Data Shares and the same will be validly
issued and outstanding as fully paid and non-assessable shares;
(i) Purchaser has filed all necessary tax returns and notices on a
timely basis and has paid all taxes of whatever nature, including
all assessments, re-assessments, governmental charges, penalties,
interest and fines due and payable by it, to the extent such taxes
have become due or have been alleged to be due and Purchaser is not
aware of any tax deficiencies or interest or penalties accrued or
accruing, or alleged to be accrued or accruing, thereon with respect
to itself;
(j) Purchaser has been and is in compliance with all applicable laws and
regulations and orders and decisions rendered by any regulatory
agency relating to the protection of the environment or the use,
storage, or disposal or transport of toxic or hazardous wastes or
substances. Purchaser has obtained all permits, approvals and other
authorizations under such environmental laws as may be required to
have been obtained by it. There are no orders or directions relating
to environmental matters requiring any work or capital expenditures
with respect to the business or assets of Purchaser nor has
Purchaser received notice of same. Purchaser has not received any
notice that it is potentially responsible for a clean-up or
corrective action under any environmental laws;
(k) all books and records of Purchaser, financial, corporate or
otherwise, have been kept in accordance with good bookkeeping
practices, are true and correct in all respects and are in
Purchaser's possession or under its control;
(l) there are no amounts of any kind whatsoever owing to Purchaser by
any person not acting at arm's length with Purchaser as such term is
defined in the Income Tax Act (Canada); all non-arm's length
transactions involving Purchaser have been disclosed to Seller;
(m) no national, federal, provincial or state, municipal or other
government or governmental department, commission, board, bureau,
agency or instrumentality, has given written notice or has
threatened in writing to modify or remove any license or operating
certificate necessary in order for Purchaser to carry on its
business or to expropriate or otherwise acquire, whether with or
without compensation, any material property or assets of Purchaser
or any interest therein and Purchaser is in compliance with the
terms and conditions of its licenses and operating certificates;
(n) no order ceasing or suspending trading in securities of Purchaser or
prohibiting the sale of the securities of Purchaser has been issued
and no proceedings for this purpose are instituted, or are pending,
contemplated or threatened;
(o) Purchaser has conducted and is conducting its business in compliance
with all applicable laws, rules and regulations of each jurisdiction
in which any material
<PAGE>
- 9 -
portion of its business is carried on and is duly licensed,
registered or qualified in all jurisdictions in which the failure to
be so licensed, registered or qualified would have a material
adverse effect on the business of Purchaser, and all such licenses,
registrations or qualifications are valid and existing and in good
standing and none contain any term, provision, condition or
limitation which has a material adverse effect on the operation of
the business of Purchaser, as now carried on or proposed to be
carried on;
(p) the recitals hereto are true and correct in fact and in substance.
5.02 Covenants of Purchaser
(a) Purchaser will make all filings as may be required of it in
connection with the completion of the transactions herein
contemplated;
(b) Purchaser shall conduct its business, operations and affairs only in
the ordinary and normal course of business in all material respects
consistent with past practice, and Purchaser shall not, without the
prior written consent of Sellers, enter into any transaction or
refrain from doing any action that, if effected before the date of
this Agreement, would constitute a breach of any representation,
warranty, covenant or other obligation of Purchaser contained
herein, and provided further that Purchaser shall not make any
material decisions or enter into any material contracts without the
consent of Sellers, which consent shall not be unreasonably
withheld, if the same would constitute a breach of any
representation or warranty contained herein;
(c) Purchaser shall use reasonable commercial efforts to preserve intact
its business, property, assets, operations and affairs and to carry
on its business and affairs as currently conducted, and to promote
and preserve for the Seller the goodwill of third parties having
business relations with Purchaser;
(d) Purchaser shall pay and discharge its liabilities in the ordinary
course in accordance and consistent with its practice, except those
contested in good faith by Purchaser;
(e) Purchaser shall use reasonable commercial efforts to take all
necessary corporate action, steps and proceedings to approve or
authorize, validly and effectively, the execution and delivery of
this Agreement and the other agreements and documents contemplated
hereby and to cause all necessary meetings of the directors and
shareholders of Purchaser to be held for such purpose.
ARTICLE VI
Representations, Warranties and Covenants of Sellers
6.01 Representations and Warranties of Sellers
Sellers hereby jointly and severally represent and warrant to
Purchaser as of the date hereof that:
(a) Sellers are the sole beneficial owners of the Sellers' Shares, in
the proportionate interests set out in the recitals hereto, free and
clear of all liens, charges, mortgages, security interests, adverse
claims, pledges, encumbrances, demands or rights of
<PAGE>
- 10 -
others whatsoever and have full right, power and authority to sell
the Seller's Shares in accordance with the provisions hereof;
(b) the recitals hereto are true and correct in fact and in substance;
(c) neither the execution and delivery of this Agreement by Sellers, nor
the performance of Sellers' obligations hereunder will be in
conflict with, or result in the breach of, or constitute a default
by any of the Sellers under any document of any kind to which any of
the Sellers is a party, or to the best of the knowledge, information
and belief of each of the Sellers, under any judgment, decree,
order, law, statute, rule or regulation applicable to Sellers;
(d) each of the Sellers is in existence and in good standing (if a
corporation) and has the capacity to execute and deliver this
Agreement;
(e) this Agreement has been duly executed and delivered by each of the
Sellers and all documents required hereunder to be executed and
delivered by the Sellers shall have been duly executed and delivered
by the Sellers and this Agreement does and such documents and
instruments shall, constitute legal, valid and binding obligations
of Sellers enforceable in accordance with their respective terms;
(f) all necessary corporate action has been taken or will be taken prior
to Closing by any corporate Seller to duly authorize the execution
and delivery of this Agreement and all closing and other
documentation and acts contemplated or required herein;
(g) there is no litigation, proceeding or governmental investigation in
progress, pending, threatened or contemplated, relating to the
Shares owned by the Sellers and there is no outstanding execution,
judgment, decree, injunction, rule or order of any court or
governmental body affecting the Shares;
(h) endorsement and delivery of certificates representing the Shares for
exchange pursuant to this Agreement by Sellers shall constitute a
representation and warranty to Purchaser that the representations
and warranties made by Sellers in this Agreement are true and
correct at the Time of Closing as if they had been made at the Time
of Closing;
(i) Worldwide has been duly incorporated and is validly subsisting under
the laws of the Province of Ontario;
(j) Worldwide has conducted and is conducting its business in compliance
in all material respects with all applicable laws, rules and
regulations of each jurisdiction in which it carries on business and
holds all material licenses, registrations and qualifications in all
jurisdictions in which it carries on business in order to carry on
its business as now conducted and all such licenses, registrations
or qualifications are valid and existing and in good standing;
(k) no person, firm or corporation has any agreement, option, warrant or
any right capable of becoming an agreement for the purchase,
subscription or issuance of any of the unissued shares in the
capital of Worldwide;
(l) Worldwide is not subject to any judgment, order, writ, injunction or
decree of any court or governmental body which would prevent the
carrying out of this Agreement or consummation of the transactions
herein contemplated;
<PAGE>
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(m) neither the execution and delivery of this Agreement by Sellers, nor
the performance of Sellers' obligations hereunder, will be in
conflict with, or result in the breach of, or constitute a default
by Worldwide under its constating documents or any document of any
kind to which Worldwide is a party or by which it is bound, or under
any judgment, decree, order, law, statute, rule or regulation
applicable to Worldwide;
(n) there is no litigation which is material to the business or
financial condition of Worldwide, (for the purposes of this
Agreement, "material" means any claim or item amounting to or valued
at $5,000 or more), there is no suit, action, litigation,
arbitration proceeding or governmental proceeding, including appeals
and applications for review, in progress, pending or threatened in
writing, against or relating to Worldwide or its properties or
business which if determined adversely to Worldwide might materially
and adversely affect the properties, business, or the financial
condition of Worldwide;
(o) Worldwide has no direct or indirect subsidiaries and does not own
any securities of any other person;
(p) Worldwide has been and is in compliance with all applicable laws and
regulations and orders and decisions rendered by any regulatory
agency relating to the protection of the environment or the use,
storage, or disposal or transport of toxic or hazardous wastes or
substances. There are no orders or directions relating to
environmental matters requiring any work or capital expenditures
with respect to the business or assets of Worldwide nor has
Worldwide received notice of same. Worldwide has not received any
notice that it is potentially responsible for a cleanup or
corrective action under any environmental laws;
(q) all books and records of Worldwide, financial, corporate or
otherwise, have been kept in accordance with good bookkeeping
practices, are true and correct in all respects and are in
Worldwide's possession or under its control;
(r) Worldwide has conducted and is conducting its business in compliance
with all applicable laws, rules and regulations of each jurisdiction
in which any material portion of its business is carried on and is
duly licensed, registered or qualified in all jurisdictions in which
the failure to be so licensed, registered or qualified would have a
material adverse effect on the business of Worldwide, and all such
licenses, registrations or qualifications are valid and existing and
in good standing and none contain any term, provision, condition or
limitation which has a material adverse effect on the operation of
the business of Worldwide, as now carried on or proposed to be
carried on;
(s) Worldwide is not a party to or bound by any collective bargaining
agreement with any labour union or association. There are no
discussions, negotiations, demands or proposals that are pending or
have been conducted or made with or by any labour union or
association, Worldwide is not presently the subject of any
organization efforts on the part of any labour organization seeking
to represent any employees of Worldwide and there are not pending or
threatened any labour disputes, strikes or work stoppages that may
have a material adverse effect upon the continued business or
operation of Worldwide;
(t) Worldwide has not declared or paid any dividends or made any
distribution on its shares to the date hereof;
<PAGE>
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(u) all material national, state, provincial, local and other taxes,
including without limitation, income taxes, corporate franchise
taxes, and sales and ad valorem taxes. due and payable by Worldwide
on or before the date of this Agreement have been paid, and
Worldwide has filed all tax returns and reports required to be filed
by it with all such taxing authorities. No assessments of
deficiencies have been made against Worldwide and no extensions of
time are in effect for the assessment of deficiencies;
(v) all licenses, franchises, permits, easements, certificates,
consents, rights and privileges material to the conduct of the
business of Worldwide or, to the knowledge of any of the Sellers,
necessary for the lawful conduct of such business, pursuant to
applicable statutes, laws, ordinances, rules and regulations of
governmental bodies, agencies and other authorities having
jurisdiction over Worldwide, or any part of its operations, are in
full force and effect, there are no violations or claimed violations
thereof and copies thereof have heretofore been furnished to the
Purchaser or will be finished to the Purchaser.
6.02 Covenants of Sellers
The Sellers jointly and severally covenant and agree with the
Purchaser as follows:
(a) With the full cooperation and assistance of the Purchaser, Sellers
will personally, and will cause Worldwide to, make all filings as
may be required of it in connection with the completion of the Share
Exchange;
(b) Sellers will cause Worldwide to conduct its business, operations and
affairs only in the ordinary and normal course of business and in
all material respects consistent with past practice and Sellers
shall ensure that Worldwide will not, without the prior written
consent of Purchaser, enter into any transaction or refrain from
doing any action that, if effective before the date of this
Agreement, would constitute a breach of any representation,
warranty, covenant or other obligation of Sellers or any of them
contained herein, and provided further that Sellers shall ensure
that Worldwide shall not make any material decisions or enter into
any material contracts without the consent of Purchaser, which
consent shall not be unreasonably withheld, if the same would
constitute a breach of any representation or warranty contained
herein;
(c) Sellers shall ensure that Worldwide shall use reasonable commercial
efforts to preserve intact its business, property, assets,
operations and affairs and to carry on its business and affairs as
currently conducted, and to promote and preserve for the Purchaser
the goodwill of third parties having business relations with
Worldwide;
(d) Sellers shall cause Worldwide to pay and discharge its liabilities
in the ordinary course and consistent with its practice, except
those contested in good faith by Worldwide;
(e) Sellers shall cause Worldwide to use reasonable commercial efforts
to take all necessary corporate action, steps and proceedings to
approve or authorize, validly and effectively, the execution and
delivery of this Agreement and the other agreements and documents
contemplated hereby and to cause all necessary meetings of the
directors and shareholders of Worldwide to be held for such purpose;
<PAGE>
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(f) Sellers shall ensure that Worldwide does not issue any further
shares of its capital stock (other than the Shares) or incur any
liabilities from the date hereof to and including the Closing Date.
ARTICLE VII
Survival of Representations and Warranties
The representations and warranties of the parties hereto and
contained in this Agreement or any document or certificate given pursuant hereto
shall survive and shall not merge with the Closing.
ARTICLE VIII
General
8.01 Notice
Any notice required or permitted hereunder to be given shall be
given by personal delivery, prepaid registered mail or facsimile communication,
to the respective parties at the addresses set forth below or at such other
addresses as the parties may designate in writing from time to time:
Purchaser: Worldwide Data Inc.
c/o 36 Toronto Street
Suite 201
Toronto, Ontario
M5C 2C5
Attention: Mr. Bronson Conrad
Facsimile: (416) 214-6299
Sellers: c/o 36 Toronto Street
Suite 201
Toronto, Ontario
M5C 2CS
Facsimile: (416) 214-6299
Any notice, direction or other instrument aforesaid if delivered
shall be deemed to have been given or made on the date on which it was
delivered, if mailed, shall be deemed to have been given or made on the tenth
Business Day following the date on which it was mailed, and if sent by
facsimile, shall be deemed to have been given or made on the next Business Day
following the date on which it was sent, Saturdays, Sundays and statutory
holidays excepted. Any of the parties hereto may change its address for service
from time to time by written notice given in accordance with the foregoing.
Notice by mail shall not be effective during any postal strike or slowdown in
any area through which the notice must pass.
8.02 Assignment
(a) This Agreement shall not be assigned by the parties hereto without the
prior written consent of all other parties hereto;
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(b) Any assignment of this Agreement or any obligation under this
Agreement shall not release a party hereto from its full obligations hereunder,
without the prior written consent of the other parties hereto.
8.03 Enurement
This Agreement shall enure to the benefit of and be binding upon the
parties and their respective heirs, executors, legal personal representatives,
successors and permitted assigns.
8.04 Further Assurances
The parties agree that they each will execute or cause to be
executed and delivered all such further and other documents and assurances, and
do and cause to be done all such further acts and things as may be necessary or
desirable to carry out this Agreement according to its true intent.
8.05 Counterparts
This Agreement may be executed by the parties hereto in separate
counterparts each of which when so executed and delivered shall be an original
but all such counterparts shall together constitute one and the same instrument.
8.06 Facsimile
This Agreement may be delivered by facsimile transmission and each
signed counterpart delivered by such means shall be deemed to be an original.
IN WITNESS WHEREOF the parties hereto have hereunder executed this
Agreement as of the date first above written.
WORLD WIDE DATA INC.
Per: /s/ [ILLEGIBLE]
-----------------------------------
BRIDGEWATER CAPITAL CORP.
Per: /s/ [ILLEGIBLE]
-----------------------------------
[ILLEGIBLE] /s/ Bronson Conrad
- ----------------------------------- ----------------------------------------
WITNESS BRONSON CONRAD
<PAGE>
Exhibit 10.10
WORLDWIDE DATA, INC.
36 Toronto Street
Suite 250
Toronto, Ontario, Canada M5C2C5
PURCHASE AGREEMENT made as of this 27th day of February, 1998,
between Woldwide Data, Inc. (the "Company"), a Delaware corporation, and the
purchaser named on the signature page hereto (the "Purchaser").
WHEREAS, the Company is engaged in the business of providing
Internet-based services, including internet access services and the creation of
intranets for corporations, and the Company is currently developing an on line
trading service, a service which will enables users to send faxes via the
Internet, and a service which will allow users to make voice calls via the
Internet (the "Business");
WHEREAS, in order to finance the marketing and further development
of the Business, the Company wishes to issue and sell to the Purchasers, and the
Purchasers wish to purchase from the Company, on the Closing Date (as herein
defined), (i) an aggregate of up to 20,000 shares of the Company's common stock
(the "Shares"), up to 440,000 Class A stock purchase warrants (the "Class A
Warrants") and up to 900,000 Class B stock purchase warrants (the "Class B
Warrants", together with the Class A Warrants, the "Warrants"), all on the
terms and subject to the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. ISSUANCE AND SALE OF THE SHARES AND WARRANTS; REPRESENTATIONS BY PURCHASER
1.1 Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and the Purchaser hereby agrees to purchase from
the Company, such number of the Company's Units as is set forth upon the
signature page hereof (the "Units") at a purchase price of five dollars ($5.00)
per Unit and the Company agrees to sell such Units to the Purchaser for said
price. Each Unit will consist of one share of the Company's common stock, par
value $.001 (the "Common Stock"), twenty-two (22) Class A Warrants,
substantially in the form attached hereto as Exhibit A, each to purchase a share
of the Company's Common Stock on or before thirty-one (31) days after the
Closing Date, at an exercise price of $1.50 per share (the "Class A Purchase
Price") and forty-five (45) Class B Warrants, substantially in the form attached
hereto as Exhibit B, each to purchase a share of the Company's Common Stock at
any time after April 5, 1999 and expiring on April 5, 2001, at
<PAGE>
an exercise price of $1.00 per share (the "Class B Purchase Price").
Subject to the terms and conditions set forth herein, within
thirty-one (31) days of the Closing Date, the Company shall issue and deliver to
each purchaser certificates in definitive form, registered in the name of such
Purchaser or such Purchaser's nominee, evidencing the Shares and the Warrants so
issued and sold to such Purchaser hereunder. The Purchaser further agrees that
payment for the Units shall be made to the Company, in accordance with any
instructions from the Company regarding such payment, in good funds on or before
March 2, l998 (the "Closing Date"). To exercise the Warrants, the Purchaser
shall deliver to the Company a duly completed Notice of Exercise (in the form
attached to the Class A Warrant or the Class B Warrant) and payment of the Class
A Purchase Price or Class B Purchase Price, as applicable. This offering is not
conditioned on any minimum number of Units being sold.
On or before the Closing Date, the Company shall exchange its
capital stock for the capital stock of Worldwide Online Corp. a Canadian Company
("Worldwide Canada") and as a result, Worldwide Canada will become a
wholly-owned subsidiary of the Company which will continue to operate as a
Canadian company.
1.2 The Purchaser acknowledges that it (a) is acquiring the Units for its
own account, for investment only; (b) either alone or together with its
advisors, has significant knowledge and experience in business, investment and
financial matters to evaluate the merits and risks of this investment; and (c)
is able to bear the substantial economic risks of this investment and, at the
present time, could afford a complete loss of such investment.
1.3 The Purchaser represents that is has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which he or she had requested or desired to know;
that all documents which could be reasonably provided have been made available
for the Purchaser's inspection and review; and that the Purchaser has been
afforded the opportunity to ask questions of and receive answers from duly
authorized officers and/or other representatives of the Company concerning the
terms and conditions of the sale of Units, along with any additional
information which it had requested.
1.4 The purchaser acknowledges that it is aware that this sale of Units
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act")
and the provisions of Rule 504 of Regulation D thereunder, or otherwise exempt
from registration under the Act and that, in the event that the Company becomes
a reporting company under the Securities Exchange Act of 1934, the exemption
from registration under Rule 504 shall no longer be available and the shares
underlying the Class B Warrants would not be exempt from registration.
<PAGE>
1.5 The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
1.6 The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that he or she may lose his or her entire
investment and has full cognizance of and understands the risk factors related
to an investment in the Company, which include, but are not limited to:
(a) Acquisition of Worldwide Online Corp.. The Company was
incorporated in 1995. On or before the Closing Date the Company will
effect a share exchange with Worldwide Canada, as a result of which
Worldwide Canada will become a wholly-owned subsidiary of the Company.
Prior to the purchase of the capital stock of Worldwide Canada, the
Company has had no significant business activities. The Company's
only present asset is ownership of 264,706 shares of common stock of
Worldwide Canada, which is equal to approximately 15% of the outstanding
Common Stock of Worldwide Canada. Consequently, the Company will be
subject to all the risks inherent in the business of Worldwide Canada.
(b) Acquisition of Worldwide Canada Not an Arms-Length Transaction.
Bronson Conrad, together with entities with which be is affiliated,
beneficially owns a controlling interest in Worldwide Canada and the
Company and, as a result, the share exchange between Worldwide Data and
the Company was not an arms-length transaction.
(c) Development-Stage Company. The Company, through Worldwide
Online, provides an internet-access service, creates intranets for
corporations, is in the process of establishing an on-line service which
will allow users to buy and sell securities from their personal computers
and is presently commercializing a service which enables users to send
faxes via the Internet on a cost effective basis. In addition, Worldwide
Canada is in the process of developing a service which will allow users to
make voice calls via the Internet. The likelihood of success of the
Company must be considered in light of the problems, costs and delays
encountered in connection with the development of new businesses in a
rapidly evolving industry characterized by intense competition and an
increasing and substantial number of new market entrants and new Internet
products and services. No assurance can be given that the Company will
generate sufficient revenues to sustain its operations or become
profitable.
(d) Limited Revenues; Losses. Neither the Company nor Worldwide
Canada has generated any meaningful revenues. For the fiscal year ended
December 31, 1997, Worldwide Canada had revenues of approximately
$500,000. For the period from
3
<PAGE>
inception to the date hereof, both the Company and Worldwide Canada have
incurred losses and its is anticipated that the Company and Worldwide
Canada will continue to incur significant losses until, at the earliest,
the Company and/or worldwide Canada generate significant revenue from
Worldwide Canada's Intranet-based services. There can be no assurance that
the Company and/or Worldwide Canada will generate meaningful revenues or
achieve profitable operation.
(e) Business Plan. The Company's purposed plan of operation and
prospects will be largely dependant upon the Company's continuing ability
to create intranets for corporations and to provide real-time on-line
stock trading services to subscribers, as well as its ability to market
its on-line fax service, WorldFAX, and its ability to develop and market
is on-line voice calling service, WorldVOICE, on a timely and cost
effective basis. The Company has limited experience in commercializing
new Intranet products and services and there is limited information
available concerning the potential performance or market acceptance of
the services. There can be no assurance that the Company will be able to
successfully implement its business plan or that unanticipated problems,
expenses or technical difficulties will not occur which would result in
discontinuation of services the Company is providing or material delays
in the implementation of services under development.
(f) Dependence on Offering Proceeds; Uncertainty of Capital Needs.
The capital requirements relating to implementation of the Company's
business plan will be significant. The Company is dependant on the
proceeds of this offering in order to fully implement its proposed plan of
operation. The Company may need to raise additional funds through public
or private offerings or equity financings in order to take advantage of
unanticipated opportunities. including rapid expansion. If additional
funds are raised through the issuance of equity securities, the percentage
ownership of the then current stockholders may be reduced or such equity
securities may possess rights senior to the holders of the Common Stock.
There can be no assurance that additional financing will be available on
terms favorable to the Company, or at all. In addition, the consummation
of this offering is not contingent upon a minimum number of Units being
sold. Consequently, if a limited number of Units are sold, the company my
not have sufficient resources to meet its business plan or capital needs
in the short term, which would materially and adversely affect the
Company's operations.
(g) New Industry; Uncertainty or Market Acceptance. The Internet
services industry is characterized by a limited operating history and a
high rate of business failures. Because the market is relatively new and
current and future
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<PAGE>
competitors are likely to introduce competing Internet-based services, it
is difficult to predict the rate at which the market will grow or at which
new or increased competition will result in market saturation.
(h) Possible Service Interruptions. The Company's operations require
that its telecommunications networks operate on a continuous basis. It is
possible that the company's telecommunications networks may from time to
time experience service interruptions or equipment failures. Service
interruptions or equipment failures resulting in material delays would
adversely effect the confidence of users of the services as well as the
Company's business operations and reputation.
(i) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The Company's network
infrastructure will be vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering with the Company's
computer systems. Computer viruses or problems caused by third parties
could lead to material interruptions, delays or cessation in services.
Inappropriate use of the Internet by third parties could also potentially
jeopardize the security of confidential information stored in the computer
systems of users. Security and privacy concerned of users may limit the
Company's ability to successfully market its services.
(j) Technological Change. The market for Internet-based Services is
characterized by rapidly changing technology, evolving industry standards,
emerging competition and frequent new software and service introductions.
There can be no assurance that the Company can successfully identify new
product and service opportunities as they develop and bring new products
and services to market in a timely manner or that software, services or
technologies developed by others will not render the Company's services or
technologies noncompetitive, obsolete or less marketable. The Company
presently does not have any proprietary applications software. The
Company's business is also subject to fundamental changes in the way
Internet-based services are delivered.
5
<PAGE>
(k) Competition; Minimal Barriers to Entry. The market for Internet
based services is extremely competitive. There are no substantial barriers
to entry, and the Company expects that competition will intensify in the
near future. The Company believes that success will depend upon a number
of factors, including market presence, capacity, reliability and security
of its network infrastructure. Furthermore, the Company will have to
compete with the pricing policies of competitors and suppliers, the timing
and introduction of new products and industry and general economic trends.
The Company expects that all of the major on-line services and
telecommunications companies will compete fully in the Internet-based
services market. The Company believes that new competitors, including
large computer hardware, software, media and other technology and
telecommunications companies will enter the Internet-based services
market, resulting in even greater competition. Such companies are larger
and substantially more established, with far greater resources and
financial capabilities than the Company.
The Company anticipates that it will encounter significant pricing
pressure, which in turn could result in reductions in the average selling
price of the Company's services. Large telecommunications corporations may
be able to reduce the communications costs involved in providing
internet-based services. There can be no assurance that the Company will
be able to offset the effects of any such price reductions.
(l) Limited Sales Force. The Company has a limited sales force and
does not have established distribution channels for its products or
services. No assurance can be given as to the ability of the Company to
establish or generate sufficient demand for its services, and the
inability of the Company to do so would have a material adverse effect on
the Company's business, financial condition and operating results.
(m) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
telecommunications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
(n) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr.
6
<PAGE>
Conrad's services would be detrimental to the Company's prospects. The
Company does not contemplate obtaining "Keyman" life insurance with
respect to Mr. Conrad.
(o) Limited Intellectual Property Protection. The Company relies on
a combination of copyright and trademark laws, trade secrets and software
security measures to protect its proprietary information. The Company
currently has no registered copyrights or patents or patent applications
pending. It may be possible for unauthorized third parties to copy aspects
of, or otherwise obtain and use, the Company's proprietary information
without authorization.
(p) Broad Discretion in Application of Proceeds. The estimated net
proceeds of this offering have been allocated to working capital and
general corporate purposes. Accordingly, the Company's management will
have broad discretion as to the application of such proceeds.
(q) NASDAQ's OTC Bulletin Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ's OTC
Bulletin Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of,
the Company's Common Stock.
(r) Possible Inapplicability of Rule 504 Exemption to Class B
Warrants. The sale of the Units is intended to be exempt form registration
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of
Regulation D thereunder. In the event that the Company becomes a reporting
company under the Federal securities laws prior to the exercise of the
Class B Warrants, the Class B Warrants will not be eligible for the
exemption from registration under Rule 504 and, unless the Company
registers the Common Stock underlying the Class B Warrants, the Class B
Warrants will not be exercisable.
(s) Control By Bronson Conrad; Disproportionate Voting Rights.
Following completion of the offering, Bronson Conrad, together with
entities with which he is affiliated will beneficially own, in the
aggregate, over approximately 15% of the Company's fully diluted Common
Stock on an as-converted basis. As a result, Mr. Conrad has the ability to
substantially influence or control the election of a majority of directors
and other actions by stockholders with respect to the business and affairs
of the Company.
1.7 The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act with respect to the Units, other than to
the extent the undersigned may be
7
<PAGE>
deemed to be an underwriter in connection with sales by it of Units registered
under the Act.
1.8 The Purchaser understands that the Units are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Units
1.9 The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
1.10 The Purchaser maintains a domicile or business at the address shown
on the signature page of this Agreement, at which address and in compliance with
the local laws of which the Purchaser has subscribed for the Units hereunder.
1.11 The Purchaser represents that the foregoing representations and
warranties are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
2. REPRESENTATIONS AND COVENANTS BY THE COMPANY
2.1 The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
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<PAGE>
(d) The Company shall at all times reserve and keep available out of
its authorized capital stock, solely for the purpose of issue upon
conversion of the Warrants, such number of shares of the Common Stock as
shall be issuable upon the exercise of all outstanding Warrants. All
shares of Common Stock issuable upon exercise of the Warrants shall, upon
issuance in accordance with the terms hereof, be duly and validly issued
and fully paid and non assessable and free from all taxes, liens,
encumbrances and charges with respect to the issue thereof.
3. MISCELLANEOUS
3.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto street, Suite 250
Toronto, Ontario, Canada M5C2C5
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
3.2 This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged.
3.3 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
3.4 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
3.5 This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
3.6 This Agreement may be executed in counterparts. Upon the execution
and delivery of this Agreement by the Purchaser, this Agreement shall become a
biding obligation of the Purchaser with respect to the purchase of Units as
herein provided.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
Number of Units purchased
at $5.00 per Unit: 5,000 Units
Gold Coast International Ltd.
(Name of Purchaser)
TR Kessler
----------------------------------------
PO Box N-8303 Nassau Bahamas
----------------------------------------
Address of Purchaser
N/A
----------------------------------------
Social Security or Taxpayer
Identification No. of Purchaser
TR Kessler
----------------------------------------
Signature of Purchaser
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
--------------------------------
Bronson Conrad, President
<PAGE>
EXHIBIT A
FORM OF CLASS A WARRANT
<PAGE>
EXHIBIT B
FORM OF CLASS B WARRANT
<PAGE>
Exhibit 10.11
WORLDWIDE DATA, INC.
36 Toronto Street
Suite 250
Toronto, Ontario, Canada M5C2C5
PURCHASE AGREEMENT made as of this 27th day of February, 1998,
between Worldwide Data, Inc. (the "Company"), a Delaware corporation, and the
purchaser named on the signature page hereto (the "Purchaser").
WHEREAS, the Company is engaged in the business of providing
Internet-based services, including internet access services and the creation of
intranets for corporations, and the Company is currently developing an on line
trading service, a service which will enables users to send faxes via the
Internet, and a service which will allow users to make voice calls via the
Internet (the "Business");
WHEREAS, in order to finance the marketing and further development
of the Business, the Company wishes to issue and sell to the Purchasers, and the
Purchasers wish to purchase from the Company, on the Closing Date (as herein
defined), (i) an aggregate of up to 20,000 shares of the Company's common stock
(the "Shares"), up to 440,000 Class A stock purchase warrants (the "Class A
Warrants") and up to 900,000 Class B stock purchase warrants (the "Class B
Warrants", together with the Class A Warrants, the "Warrants"), all on the terms
and subject to the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. ISSUANCE AND SALE OF THE SHARES AND WARRANTS; REPRESENTATIONS BY PURCHASER
1.1 Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and the Purchaser hereby agrees to purchase from
the Company, such number of the Company's Units as is set forth upon the
signature page hereof (the "Units") at a purchase price of five dollars ($5.00)
per Unit and the Company agrees to sell such Units to the Purchaser for said
price. Each Unit will consist of one share of the Company's common stock, par
value $.001 (the "Common Stock"), twenty-two (22) Class A Warrants,
substantially in the form attached hereto as Exhibit A, each to purchase a share
of the Company's Common Stock on or before thirty-one (31) days after the
Closing Date, at an exercise price of $1.50 per share (the "Class A Purchase
Price") and forty-five (45) Class B Warrants, substantially in the form attached
hereto as Exhibit B, each to purchase a share of the Company's Common Stock at
any time after April 5, 1999 and expiring on April 5, 2001, at
<PAGE>
an exercise price of $1.00 per share (the "Class B Purchase Price").
Subject to the terms and conditions set forth herein, within
thirty-one (31) days of the Closing Date, the Company shall issue and deliver to
each Purchaser certificates in definitive form, registered in the name of such
Purchaser or such Purchaser's nominee, evidencing the Shares and the Warrants so
issued and sold to such Purchaser hereunder. The Purchaser further agrees that
payment for the Units shall be made to the Company, in accordance with any
instructions from the Company regarding such payment, in good funds on or before
March 2, 1998 (the "Closing Date"). To exercise the Warrants, the Purchaser
shall deliver to the Company a duly completed Notice of Exercise (in the form
attached to the Class A Warrant or the Class B Warrant) and payment of the Class
A Purchase Price or Class B Purchase Price, as applicable. This offering is not
conditioned on any minimum number of Units being sold.
On or before the Closing Date, the Company shall exchange its
capital stock for the capital stock of Worldwide Online Corp. a Canadian company
("Worldwide Canada") and as a result, Worldwide Canada will become a
wholly-owned subsidiary of the Company which will continue to operate as a
Canadian company.
1.2 The Purchaser acknowledges that it (a) is acquiring the Units for its
own account, for investment only; (b) either alone or together with its
advisors, has sufficient knowledge and experience in business, investment and
financial matters to evaluate the merits and risks of this investment; and (c)
is able to bear the substantial economic risks of this investment and, at the
present time, could afford a complete loss of such investment.
1.3 The Purchaser represents that is has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which he or she had requested or desired to know;
that all documents which could be reasonably provided have been made available
for the Purchaser's inspection and review; and that the Purchaser has been
afforded the opportunity to ask questions of and receive answers from duly
authorized officers and/or other representatives of the Company concerning the
terms and conditions of the sale of Units, along with any additional information
which it had requested.
1.4 The Purchaser acknowledges that it is aware that this sale of Units
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act")
and the provisions of Rule 504 of Regulation D thereunder, or otherwise exempt
from registration under the Act and that, in the event that the Company becomes
a reporting company under the Securities Exchange Act of 1934, the exemption
from registration under Rule 504 shall no longer be available and the shares
underlying the Class B Warrants would not be exempt from registration.
<PAGE>
1.5 The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
1.6 The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that he or she may lose his or her entire
investment and has full cognizance of and understands the risk factors related
to an investment in the Company, which include, but are not limited to:
(a) Acquisition of Worldwide Online Corp. The Company was
incorporated in 1995. On or before the Closing Date the Company will
effect a share exchange with Worldwide Canada, as a result of which
Worldwide Canada will become a wholly-owned subsidiary of the Company.
Prior to the purchase of the capital stock of Worldwide Canada, the
Company has had no significant business activities. The Company's only
present asset is ownership of 264,706 shares of common stock of Worldwide
Canada, which is equal to approximately 15% of the outstanding Common
Stock of Worldwide Canada. Consequently, the Company will be subject to
all the risks inherent in the business of Worldwide Canada.
(b) Acquisition of Worldwide Canada Not an Arms-Length Transaction.
Bronson Conrad, together with entities with which he is affiliated,
beneficially owns a controlling interest in Worldwide Canada and the
Company and, as a result, the share exchange between worldwide Data and
the Company was not an arms-length transaction.
(c) Development-Stage Company. The Company, through Worldwide
Online, provides an internet-access service, creates intranets for
corporations, is in the process of establishing an on-line service which
will allow users to buy and sell securities from their personal computers
and is presently commercializing a service which enables users to send
faxes via the Internet on a cost effective basis. In addition, Worldwide
Canada is in the process of developing a service which will allow users to
make voice calls via the Internet. The likelihood of success of the
Company must he considered in light of the problems, costs and delays
encountered in connection with the development of new businesses in a
rapidly evolving industry characterized by intense competition and an
increasing and substantial number of new market entrants and new Internet
products and services. No assurance can be given that the Company will
generate sufficient revenues to sustain its operations or become
profitable.
(d) Limited Revenues; Losses. Neither the Company nor Worldwide
Canada has generated any meaningful revenues. For the fiscal year ended
December 31, 1997, Worldwide Canada had revenues of approximately
$500,000. For the period from
3
<PAGE>
inception to the date hereof, both the Company and Worldwide Canada have
incurred losses and its is anticipated that the Company and Worldwide
Canada will continue to incur significant losses until, at the earliest,
the Company and/or Worldwide Canada generate significant revenue from
Worldwide Canada's Intranet-based services. There can be no assurance that
the Company and/or Worldwide Canada will generate meaningful revenues or
achieve profitable operation.
(e) Business Plan. The Company's proposed plan of operation and
prospects will be largely dependant upon the Company's continuing ability
to create intranets for corporations and to provide real-time on-line
stock trading services to subscribers, as well as its ability to market
its on-line fax service, WorldFAX, and its ability to develop and market
is on-line voice calling service, WorldVOICE, on a timely and cost
effective basis. The Company has limited experience in commercializing new
Intranet products and services and there is limited information available
concerning the potential performance or market acceptance of the services.
There can be no assurance that the Company will be able to successfully
implement its business plan or that unanticipated problems, expenses or
technical difficulties will not occur which would result in
discontinuation of services the Company is providing or material delays in
the implementation of services under development.
(f) Dependence on Offering Proceeds; Uncertainty of Future Capital
Needs. The capital requirements relating to implementation of the
Company's business plan will be significant. The Company is dependant on
the proceeds of this offering in order to fully implement its proposed
plan of operation. The Company may need to raise additional funds through
public or private offerings or equity financings in order to take
advantage of unanticipated opportunities. including rapid expansion. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the then current stockholders may be reduced or
such equity securities may possess rights senior to the holders of the
Common Stock. There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all. In addition, the
consummation of this offering is not contingent upon a minimum number of
Units being sold. Consequently, if a limited number of Units are sold, the
Company my not have sufficient resources to meet its business plan or
capital needs in the short term, which would materially and adversely
affect the Company's operations.
(g) New Industry; Uncertainty or Market Acceptance. The Internet
services industry is characterized by a limited operating history and a
high rate of business failures. Because the market is relatively new and
current and future
4
<PAGE>
competitors are likely to introduce competing Internet-based services, it
is difficult to predict the rate at which the market will grow or at which
new or increased competition will result in market saturation.
(h) Possible Service Interruptions. The Company's operations require
that its telecommunications networks operate on a continuous basis. It is
possible that the Company's telecommunications networks may from time to
time experience service interruptions or equipment failures. Service
interruptions or equipment failures resulting in material delays would
adversely effect the confidence of users of the services as well as the
Company's business operations and reputation.
(i) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The Company's network
infrastructure will be vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering with the Company's
computer systems. Computer viruses or problems caused by third parties
could lead to material interruptions, delays or cessation in services.
Inappropriate use of the Internet by third parties could also potentially
jeopardize the security of confidential information stored in the computer
systems of users. Security and privacy concerns of users may limit the
Company's ability to successfully market its services.
(j) Technological Change. The market for Internet-based services is
characterized by rapidly changing technology, evolving industry standards,
emerging competition and frequent new software and service introductions.
There can be no assurance that the Company can successfully identify new
product and service opportunities as they develop and bring new products
and services to market in a timely manner or that software, services or
technologies developed by others will not render the Company's services or
technologies noncompetitive, obsolete or less marketable. The Company
presently does not have any proprietary applications software. The
Company's business is also subject to fundamental changes in the way
Internet-based services are delivered.
5
<PAGE>
(k) Competition; Minimal Barriers to Entry. The market for Internet
based services is extremely competitive. There are no substantial barriers
to entry, and the Company expects that competition will intensify in the
near future. The Company believes that success will depend upon a number
of factors, including market presence, capacity, reliability and security
of its network infrastructure. Furthermore, the Company will have to
compete with the pricing policies of competitors and suppliers, the timing
and introduction of new products and industry and general economic trends.
The Company expects that all of the major on-line services and
telecommunications companies will compete fully in the Internet-based
services market. The Company believes that new competitors, including
large computer hardware, software, media and other technology and
telecommunications companies will enter the Internet-based services
market, resulting in even greater competition. Such companies are larger
and substantially more established, with far greater resources and
financial capabilities than the Company.
The Company anticipates that it will encounter significant pricing
pressure, which in turn could result in reductions in the average selling
price of the Company's services. Large telecommunications corporations may
be able to reduce the communications costs involved in providing
internet-based services. There can be no assurance that the Company will
be able to offset the effects of any such price reductions.
(l) Limited Sales Force. The Company has a limited sales force and
does not have established distribution channels for its products or
services. No assurance can be given as to the ability of the Company to
establish or generate sufficient demand for its services, and the
inability of the Company to do so would have a material adverse effect on
the Company's business, financial condition and operating results.
(m) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
telecommunications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
(n) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr.
6
<PAGE>
Conrad's services would be detrimental to the Company's prospects. The
Company does not contemplate obtaining "keyman" life insurance with
respect to Mr. Conrad.
(o) Limited Intellectual Property Protection. The Company relies on
a combination of copyright and trademark laws, trade secrets and software
security measures to protect its proprietary information. The Company
currently has no registered copyrights or patents or patent applications
pending. It may be possible for unauthorized third parties to copy aspects
of, or otherwise obtain and use, the Company's proprietary information
without authorization.
(p) Broad Discretion in Application of Proceeds. The estimated net
proceeds of this offering have been allocated to working capital and
general corporate purposes. Accordingly, the Company's management will
have broad discretion as to the application of such proceeds.
(q) NASDAQ's OTC Bulletin Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ's OTC
Bulletin Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of,
the Company's Common Stock.
(r) Possible Inapplicability of Rule 504 Exemption to Class B
Warrants. The sale of the Units is intended to be exempt form registration
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of
Regulation D thereunder. In the event that the Company becomes a reporting
company under the Federal securities laws prior to the exercise of the
Class B Warrants, the Class B Warrants will not be eligible for the
exemption from registration under Rule 504 and, unless the Company
registers the Common stock underlying the Class B Warrants, the Class B
Warrants will not be exercisable.
(s) Control by Bronson Conrad; Disproportionate Voting Rights.
Following completion of the offering, Bronson Conrad, together with
entities with which he is affiliated will beneficially own, in the
aggregate, over approximately 15% of the Company's fully diluted Common
stock on an as-converted basis. As a result, Mr. Conrad has the ability to
substantially influence or control the election of a majority of directors
and other actions by stockholders with respect to the business and affairs
of the Company.
1.7 The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act with respect to the Units, other than to the
extent the undersigned may be
7
<PAGE>
deemed to be an underwriter in connection with sales by it of Units registered
under the Act.
1.8 The Purchaser understands that the Units are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Units.
1.9 The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly end validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
1.10 The Purchaser maintains a domicile or business at the address shown
on the signature page of this Agreement, at which address and in compliance with
the local laws of which the Purchaser has subscribed for the Units hereunder.
1.11 The Purchaser represents that the foregoing representations and
warranties are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
2. REPRESENTATIONS AND COVENANTS BY THE COMPANY
2.1 The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
8
<PAGE>
(d) The Company shall at all times reserve and keep available out of
its authorized capital stock, solely for the purpose of issue upon
conversion of the Warrants, such number of shares of the Common Stock as
shall be issuable upon the exercise of all outstanding Warrants. All
shares of Common Stock issuable upon exercise of the Warrants shall, upon
issuance in accordance with the terms hereof, be duly and validly issued
and fully paid and non assessable and free from all taxes, liens,
encumbrances and charges with respect to the issue thereof.
3. MISCELLANEOUS
3.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario, Canada M5C2C5
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
3.2 This Agreement shall not be changed, modified or ammended except by a
writing signed by the parties to be charged.
3.3 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
3.4 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
3.5 This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
3.6 This Agreement may be executed in counterparts. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement sha11 became a
biding obligation of the Purchaser with respect to the purchase of Units as
herein provided.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
Number of Units purchased
at $5.00 per Unit: 5,000 Units
Sunnyview International Ltd.
(Name of Purchaser)
T.R. Kessler
---------------------------------------
P.O. Box N-8303 Nassau, Bahamas
---------------------------------------
Address of Purchaser
N/A
---------------------------------------
Social Security of Taxpayer
Identification No. of Purchaser
/s/ T.R. Kessler
---------------------------------------
Signature of Purchaser
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
-------------------------
Bronson Conrad, President
<PAGE>
EXHIBIT A
FORM OF CLASS A WARRANT
<PAGE>
EXHIBIT B
FORM OF CLASS B WARRANT
<PAGE>
Exhibit 10.12
WORLDWIDE DATA, INC.
36 Toronto Street
Suite 250
Toronto, Ontario, Canada M5C2C5
PURCHASE AGREEMENT made as of this 27 day of February, 1998, between
Worldwide Data, Inc. (the "Company"), a Delaware corporation, and the purchaser
named on the signature page hereto (the "Purchaser").
WHEREAS, the Company is engaged in the business of providing
Internet-based services, including internet access services and the creation of
intranets for corporations, and the Company is currently developing an on line
trading service, a service which will enable users to send faxes via the
Internet, and a service which will allow users to make voice calls via the
Internet (the "Business");
WHEREAS, in order to finance the marketing and further development
of the Business, the Company wishes to issue and sell to the Purchasers, and the
Purchasers wish to purchase from the Company, on the Closing Date (as herein
defined), (i) an aggregate of up to 20,000 shares of the Company's common stock
(the "Shares"), up to 440,000 Class A stock purchase warrants (the "Class A
Warrants") and up to 900,000 Class B stock purchase warrants (the "Class B
Warrants", together with the Class A Warrants, the "Warrants"), all on the terms
and subject to the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. ISSUANCE AND SALE OP THE SHARES AND WARRANTS; REPRESENTATIONS BY PURCHASER
1.1. Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and the Purchaser hereby agrees to purchase from
the Company, such number of the Company's Units as is set forth upon the
signature page hereof (the "Units") at a purchase price of five dollars ($5.00)
per Unit and the Company agrees to sell such Units to the Purchaser, for said
price. Each Unit will consist of one share of the Company's common stock, par
value $.001 (the "Common Stock"), twenty-two (22) Class A Warrants,
substantially in the form attached hereto as Exhibit A, each to purchase a share
of the Company's Common Stock on or before thirty-one (31) days after the
Closing Date, at an exercise price of $1.50 per share (the "Class A Purchase
Price") and forty-five (45) Class B Warrants, substantially in the form attached
hereto as Exhibit B, each to purchase a share of the Company's Common Stock at
any time after April 5, 1999 and expiring on April 5, 2001, at
<PAGE>
an exercise price of $1.00 per share (the "Class B Purchase Price").
Subject to the terms and conditions set forth herein, within
thirty-one (31) days of the Closing Date, the Company shall issue and deliver to
each Purchaser certificates in definitive form, registered in the name of such
Purchaser or such Purchaser's nominee, evidencing the Shares and the Warrants so
issued and sold to such Purchaser hereunder. The Purchaser further agrees that
payment for the units shall be made to the Company, in accordance with any
instructions from the Company regarding such payment, in good funds on or before
March 2, 1998 (the "Closing Date"). To exercise the Warrants, the Purchaser
shall deliver to the Company a duly completed Notice of Exercise (in the form
attached to the Class A Warrant or the Class B Warrant) and payment of the Class
A Purchase Price or Class B Purchase Price, as applicable. This offering is not
conditioned on any minimum number of Units being sold.
On or before the Closing Date, the Company shall exchange its
capital stock for the capital stock of Worldwide Online Corp. a Canadian company
("Worldwide Canada") and as a result, Worldwide Canada will become a
wholly-owned subsidiary of the Company which will continue to operate as a
Canadian company.
1.2 The Purchaser acknowledges that it (a) is acquiring the Units for its
own account, for investment only, (b) either alone or together with its
advisors, has sufficient knowledge and experience in business, investment and
financial matters to evaluate the merits and risks of this investment; and (c)
is able to bear the substantial economic risks of this investment and, at the
present time, could afford a complete loss of such investment.
1.3 The Purchaser represents that is has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which he or she had requested or desired to know;
that all documents which could be reasonably provided have been made available
for the Purchaser's inspection and review; and that the Purchaser has been
afforded the opportunity to ask questions of and receive answers from duly
authorized officers and/or other representatives of the Company concerning the
terms and conditions of the sale of Units, along with any additional information
which it had requested.
1.4 The Purchaser acknowledges that it is aware that this sale of Units
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended, to be a nonpublic sale
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act")
and the provisions of Rule 504 of Regulation D thereunder, or otherwise exempt
from registration under the Act and that, in the event that the Company becomes
a reporting company under the Securities Exchange Act of 1934, the exemption
from registration under Rule 504 shall no longer be available and the shares
underlying the Class B Warrants would not be exempt from registration.
<PAGE>
1.5 The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
1.6 The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that he or she may lose his or her entire
investment and has full cognizance of and understands the risk factors related
to an investment in the Company, which include, but are not limited to:
(a) Acquisition of Worldwide Online Corp. The Company was
incorporated in 1995. On or before the Closing Date the Company will
effect a share exchange with Worldwide Canada, as a result of which
Worldwide Canada will become a wholly-owned subsidiary of the Company.
Prior to the purchase of the capital stock of Worldwide Canada, the
Company has had no significant business activities. The Company's only
present asset is ownership of 264,706 shares of common stock of Worldwide
Canada, which is equal to approximately 15% of the outstanding common
Stock of Worldwide Canada. Consequently, the Company will be subject to
all the risks inherent in the business of Worldwide Canada.
(b) Acquisition of Worldwide Canada Not an Arms-Length Transaction.
Bronson Conrad, together with entities with which he is affiliated,
beneficially owns a controlling interest in Worldwide Canada and the
Company and, as a result, the share exchange between Worldwide Data and
the Company was not an arms-length transaction.
(c) Development-Stage Company. The Company, through Worldwide
Online, provides an internet-access service, creates intranets for
corporations, is in the process of establishing an on-line service which
will allow users to buy and sell securities from their personal computers
and is presently commercializing a service which enables users to send
faxes via the Internet on a cost effective basis. In addition, Worldwide
Canada is in the process of developing a service which will allow users to
make voice calls via the Internet. The likelihood of success of the
Company must be considered in light of the problems, costs and delays
encountered in connection with the development of new businesses in a
rapidly evolving industry characterized by intense competition and an
increasing and substantial number of new market entrants and new Internet
products and services. No assurance can be given that the Company will
generate sufficient revenues to sustain its operations or become
profitable.
(d) Limited Revenues; Losses. Neither the Company nor Worldwide
Canada has generated any meaningful revenues. For the fiscal year ended
December 31, 1997, Worldwide Canada had revenues of approximately
$500,000. For the period from
3
<PAGE>
inception to the date hereof, both the Company and Worldwide Canada have
incurred losses and its is anticipated that the Company and Worldwide
Canada will continue to incur significant losses until, at the earliest,
the Company and/or Worldwide Canada generate significant revenue from
Worldwide Canada's Intranet-based services. There can be no assurance that
the Company and/or Worldwide Canada will generate meaningful revenues or
achieve profitable operation.
(e) Business Plan. The Company's proposed plan of operation and
prospects will be largely dependant upon the Company's continuing ability
to create intranets for Corporations and to provide real-time on-line
stock trading services to subscribers, as well as its ability to market
its on-line fax service, WorldFAX, and its ability to develop and market
is on-line voice calling service, WorldVOICF, on a timely and cost
effective basis. The Company has limited experience in commercializing new
Intranet products and services and there is limited information available
concerning the potential performance or market acceptance of the services.
There can be no assurance that the Company will be able to successfully
implement its business plan or that unanticipated problems, expenses or
technical difficulties will not occur which would result in discontinu-
ation of services the Company is providing or material delays in the
implementation of services under development.
(f) Dependence on Offering Proceeds; Uncertainty of Future Capital
Needs. The capital requirements relating to implementation of the
Company's business plan will be significant. The Company is dependant on
the proceeds of this offering in order to fully implement its proposed
plan of operation. The Company may need to raise additional funds through
public or private offerings or equity financings in order to take
advantage of unanticipated opportunities, including rapid expansion. If
additional funds are raised through the issuance of equity securities, the
percentage ownership of the then current stockholders may be reduced or
such equity securities may possess rights senior to the holders of the
Common Stock. There can be no assurance that additional financing will be
available on terms favorable to the Company, or at all. In addition, the
consummation of this offering is not contingent upon a minimum number of
Units being sold. Consequently, if a limited number of Units are sold, the
Company my not have sufficient resources to meet its business plan or
capital needs in the short term, which would materially and adversely
affect the Company's operations.
(g) New Industry; Uncertainty or Market Acceptance. The Internet
services industry is characterized by a limited operating history and a
high rate of business failures. Because the market is relatively new and
current and future
4
<PAGE>
competitors are likely to introduce competing Internet-based services, it
is difficult to predict the rate at which the market will grow or at which
new or increased competition will result in market saturation.
(h) Possible Service Interruptions. The Company's operations require
that its telecommunications networks operate on a continuous basis. It is
possible that the Company's telecommunications networks may from time to
time experience service interruptions or equipment failures. Service
interruptions or equipment failures resulting in material delays would
adversely effect the confidence of users of the services as well as the
Company's business operations and reputation.
(i) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The Company's network
infrastructure will be vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering with the Company's
computer systems. Computer viruses or problems caused by third parties
could lead to material interruptions, delays or cessation in services.
Inappropriate use of the Internet by third parties could also potentially
jeopardize the security of confidential information stored in the computer
systems of users. Security and privacy concerns of users may limit the
Company's ability to successfully market its services.
(j) Technological Change. The market for Internet-based services is
characterized by rapidly changing technology, evolving industry standards,
emerging competition and frequent new software and service introductions.
There can be no assurance that the Company can successfully identify new
product and service opportunities as they develop and bring new products
and services to market in a timely manner or that software, services or
technologies developed by others will not render the Company's services or
technologies noncompetitive, obsolete or less marketable. The Company
presently does not have any proprietary applications software. The
Company's business is also subject to fundamental changes in the way
Internet-based services are delivered.
5
<PAGE>
(k) Competition; Minimal Barriers to Entry. The market for Internet
based services is extremely competitive. There are no substantial barriers
to entry, and the Company expects that competition will intensify in the
near future. The Company believes that success will depend upon a number
of factors, including market presence, capacity, reliability and security
of its network infrastructure. Furthermore, the Company will have to
compete with the pricing policies of competitors and suppliers, the timing
and introduction of new products and industry and general economic trends.
The Company expects that all of the major on-line services and
telecommunications companies will compete fully in the Internet-based
services market. The Company believes that new competitors, including
large computer hardware, software, media and other technology and
telecommunications companies will enter the Internet-based services
market, resulting in even greater competition. Such companies are larger
and substantially more established, with far greater resources and
financial capabilities than the Company.
The Company anticipates that it will encounter significant pricing
pressure, which in turn could result in reductions in the average selling
price of the Company' services. Large telecommunications corporations may
be able to reduce the communications costs involved in providing
Internet-based services. There can be no assurance that the Company will
be able to offset the effects of any such price reductions.
(l) Limited Sales Force. The Company has a limited sales force and
does not have established distribution channels for its products or
services. No assurance can be given as to the ability of the Company to
establish or generate sufficient demand for its services, and the
inability of the Company to do so would have a material adverse effect on
the Company's business, financial condition and operating results.
(m) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
telecommunications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do to would have a material adverse effect on the Company's
business, financial condition and results of operations.
(n) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr.
6
<PAGE>
Conrad's services would be detrimental to the Company's prospects. The
Company does not contemplate obtaining "key-man" life insurance with
respect to Mr. Conrad.
(o) Limited Intellectual Property Protection. The Company relies on
a combination of copyright and trademark laws, trade secrets and software
security measures to protect its proprietary information. The Company
currently has no registered copyrights or patents or patent applications
pending. It may be possible for unauthorized third parties to copy aspects
of, or otherwise obtain and use, the Company's proprietary information
without authorization.
(p) Broad Discretion in Application of Proceeds. The estimated net
proceeds of this offering have been allocated to working capital and
general corporate purposes. Accordingly, the Company's management will
have broad discretion as to the application of such proceeds.
(q) NASDAQ's OTC Bulletin Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ'S OTC
Bulletin Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of
the Company's Common Stock.
(r) Possible Inapplicability of Rule 504 Exemption to Class B
Warrants. The sale of the Units is intended to be exempt form registration
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of
Regulation D thereunder. In the event that the Company becomes a reporting
company under the Federal securities laws prior to the exercise of the
Class B Warrants, the Class B Warrants will not be eligible for the
exemption from registration under Rule 534 and, unless the Company
registers the Common Stock underlying the Class B Warrants, the Class B
Warrants will not be exercisable.
(s) Control By Bronson Conrad; Disproportionate Voting Rights.
Following completion of the offering, Bronson Conrad, together with
entities with which he is affiliated will beneficially own, in the
aggregate, over approximately 15% of the Company's fully diluted Common
Stock on an as-converted basis. As a result, Mr. Conrad has the ability to
substantially influence or control the election of a majority of directors
and other actions by stockholders with respect to the business and affairs
of the Company.
1.7 The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act with respect to the Units, other than to the
extent the undersigned may be
7
<PAGE>
deemed to be an underwriter in connection with sales by it of Units
registered under the Act.
1.8 The Purchaser understands that the Units are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Units.
1.9 The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreements by
the Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
1.10 The Purchaser maintains a domicile or business at the address shown
on the signature page of this Agreement, at which address and in compliance with
the local laws of which the Purchaser has subscribed for the Units hereunder.
1.11 The Purchaser represents that the foregoing representations and
warranties are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
2. REPRESENTATIONS AND COVENANTS BY THE COMPANY
2.1 The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the state of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
8
<PAGE>
(d) The Company shall at all times reserve and keep available out of
its authorized capital stock, solely for the purpose of issue upon
conversion of the Warrants, such number of shares of the Common Stock as
shall be issuable upon the exercise of all outstanding Warrants. All
shares of Common Stock issuable upon exercise of the Warrants shall, upon
issuance in accordance with the terms hereof, be duly and validly issued
and fully paid and non assessable and free from all taxes, liens,
encumbrances and charges with respect to the issue thereof.
3. MISCELLANEOUS
3.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Data, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario, Canada M5C2C5
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date or mailing,
except notices of change of address, which shall be deemed to have been given
when received.
3.2 This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged.
3.3 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
3.4 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supercedes
all prior discussions, agreements and understandings of any and every nature
among them.
3.5 This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
3.6 This Agreement may be executed in counterparts. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement shall become a
biding obligation of the Purchaser with respect to the purchase of Units as
herein provided.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the day and year first written above.
Number of units purchased
at $5.00 per Unit: 5,000 Units
KEW Holdings Ltd.
(Name of Purchaser)
/s/ [ILLEGIBLE]
--------------------------------
[ILLEGIBLE], Nassau Bahamas
--------------------------------
Address of Purchaser
N/A
--------------------------------
Social Security or Taxpayer:
Identification No. of Purchaser
/s/ [ILLEGIBLE]
--------------------------------
Signature of Purchaser
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
----------------------------
Bronson Conrad, President
<PAGE>
EXHIBIT A
FORM OF CLASS A WARRANT
<PAGE>
EXHIBIT B
FORM OF CLASS B WARRANT
<PAGE>
Exhibit 10.13
WORLDWIDE DATA, INC.
36 Toronto Street
Suite 250
Toronto, Ontario, Canada M5C2C5
PURCHASE AGREEMENT made as of this 27 day of Feb. 28, 1998, between
Worldwide Data, Inc. (the "Company"), a Delaware corporation, and the purchaser
named on the signature page hereto (the "Purchaser").
WHEREAS, the Company is engaged in the a business of providing
Internet-based services, including internet access services and the creation of
intranets for corporations, and the Company is currently developing an on line
trading service, a service which will enables users to send faxes via the
Internet, and a service which will allow users to make voice calls via the
Internet (the "Business");
WHEREAS in order to finance the marketing and further development of
the Business, the Company wishes to issue and sell to the Purchasers, and the
Purchasers wish to purchase from the Company, on the Closing Date (as herein
defined), (i) an aggregate of up to 20,000 shares of the Company's common stock
(the "Shares"), up to 440,000 Class A stock purchase warrants (the "Class A
Warrants") and up to 900,000 Class B stock purchase warrants (the "Class B
Warrants", together with the Class A Warrants, the "Warrants"), all on the terms
and subject to the conditions hereinafter set forth; and
NOW, THEREFORE, in consideration of the premises and mutual
covenants herein contained, the parties hereby agree as follows:
1. ISSUANCE AND SALE OF THE SHARES AND WARRANTS; REPRESENTATIONS BY PURCHASER
1.1 Subject to the terms and conditions set forth herein, on the Closing
Date, the Company shall issue and the Purchaser hereby agrees to purchase from
the Company, such number of the Company's Units as is set forth upon the
signature page hereof (the "Units") at a purchase price of five dollars ($5.00)
per Unit and the Company agrees to sell such Units to the Purchaser for said
price. Each Unit will consist of one share of the Company's common stock, par
value $.001 (the "Common Stock"), twenty-two (22) Class A Warrants,
substantially in the form attached hereto as Exhibit A, each to purchase a share
of the Company's Common Stock on or before thirty-one (31) days after the
Closing Date, at an exercise price of $1.50 per share (the "Class A Purchase
Price") and forty-five (45) Class B Warrants, substantially in the form attached
hereto as Exhibit B, each to purchase a share of the Company's Common Stock at
any time after April 5, 1999 and expiring on April 5, 2001, at
<PAGE>
an exercise price of $1.00 per share (the "Class B Purchase Price").
Subject to the terms and conditions set forth herein, within
thirty-one (31) days of the Closing Date, the Company shall issue and deliver to
each Purchaser certificates in definitive form, registered in the name of such
Purchaser or such Purchaser's nominee, evidencing the Shares and the Warrants so
issued and sold to such Purchaser hereunder. The Purchaser further agrees that
payment for the Units shall be made to the Company, in accordance with any
instructions from the Company regarding such payment, in good funds on or before
March 2, 1998 (the "Closing Date"). To exercise the Warrants, the Purchaser
shall deliver to the Company a duly completed Notice of Exercise (in the form
attached to the Class A Warrant or the Class B Warrant) and payment of the Class
A Purchase Price or Class B Purchase Price, as applicable. This offering is not
conditioned on any minimum number of Units being sold.
On or before the Closing Date, the Company shall exchange its
capital stock for the capital stock of Worldwide Online Corp. a Canadian company
("Worldwide Canada") and as a result, Worldwide Canada will become a
wholly-owned subsidiary of the Company which will continue to operate as a
Canadian Company.
1.2 The Purchaser acknowledges that it (a) is acquiring the Units for its
own account, for investment only; (b) either alone or together with its
advisors, has sufficient knowledge and experience in business, investment and
financial matters to evaluate the merits and risks of this investment; and (c)
is able to bear the substantial economic risks of this investment and, at the
present time, could afford a complete loss of such investment.
1.3 The Purchaser represents that is has been furnished by the Company,
during the course of this transaction, with all information regarding the
Company and its principals which he or she had requested or desired to know;
that all documents which could be reasonably provided have been made available
for the Purchaser's inspection and review; and that the Purchaser has been
afforded the opportunity to ask questions of and receive answers from duly
authorized officers and/or other representatives of the Company concerning the
terms and conditions of the sale of Units, along with any additional information
which it had requested.
1.4 The Purchaser acknowledges that it is aware that this sale of Units
has not been reviewed by the Securities and Exchange Commission ("SEC") because
of the Company's representations that it is intended to be a nonpublic sale
pursuant to Section 4(2) of the Securities Act of 1933, as amended (the "Act")
and the provisions of Rule 504 of Regulation D thereunder, or otherwise exempt
from registration under the Act and that, in the event that the Company becomes
a reporting company under the Securities Exchange Act of 1934, the exemption
from registration under Rule 504 shall no longer be available and the shares
underlying the Class B Warrants would not be exempt from registration.
<PAGE>
1.5 The Purchaser represents that it is an "Accredited Investor" as that
term is defined in Rule 501 of Regulation D promulgated under the Act.
1.6 The Purchaser recognizes that an investment in the Company involves a
high degree of risk, acknowledges that he or she may lose his or her entire
investment and has full cognizance of and understands the risk factors related
to an investment in the Company, which include, but are not limited to:
(a) Acquisition of Worldwide Online Corp. The Company was
incorporated in 1995. On or before the Closing Date the Company will
effect a share exchange with Worldwide Canada, as a result of which
Worldwide Canada will become a wholly-owned subsidiary of the Company.
Prior to the purchase of the capital stock of Worldwide Canada, the
Company has had no significant business activities. The Company's only
present asset is ownership of 264,706 shares of common stock of Worldwide
Canada, which is equal to approximately 15% of the outstanding Common
Stock of Worldwide Canada. Consequently, the Company will be subject to
all the risks inherent in the business of Worldwide Canada.
(b) Acquisition of Worldwide Canada Not an Arms-Length Transaction.
Bronson Conrad, together with entities with which he is affiliated,
beneficially owns a controlling interest in Worldwide Canada and, as a
result, the share exchange between Worldwide Data and the Company was not
an arms-length transaction.
(c) Development - Stage Company. The Company, through Worldwide
Online, provides an internet-access service, creates internets for
corporations, is in the process of establishing an on-line service which
will allow users to buy and sell securities from their personal computers
and is presently commercializing a service which enables users to send
faxes via the Internet on a cost effective basis. In addition, Worldwide
Canada is in the process of developing a service which will allow users to
make voice calls via the Internet. The likelihood of success of the
Company must be considered in light of the problems, costs and delays
encountered in connection with the development of new businesses in a
rapidly evolving industry characterized by intense competition and an
increasing and substantial number of new market entrants and new Internet
products and services. No assurance can be given that the Company will
generate sufficient revenues to sustain its operations or become
profitable.
(d) Limited Revenues; Losses. Neither the Company nor Worldwide
Canada has generated any meaningful revenues. For the fiscal year ended
December 31, 1997, Worldwide Canada had revenues of approximately
$500,000. For the period from
3
<PAGE>
inception to the date hereof, both the Company and Worldwide Canada have
incurred losses and its is anticipated that the Company and Worldwide
Canada will continue to incur significant losses until, at the earliest,
the Company and/or Worldwide Canada generate significant revenue from
Worldwide Canada's Internet-based services. There can be no assurance that
the Company and/or Worldwide Canada will generate meaningful revenues or
achieve profitable operation.
(e) Business Plan. The Company's proposed plan of operation and
prospects will be largely dependant upon the Company's continuing ability
to create intranets for corporations and to provide real-time on-line
stock trading services to subscribers, as well as its ability to market
its on-line fax service, WorldFAX, and its ability to develop and market
is on-line voice calling services, WorldVOICE, on a timely and cost
effective basis. The Company has limited experience in commercializing new
Internet products and services and there is limited information available
concerning the potential performance or market acceptance of the services.
There can be no assurance that the Company will be able to successfully
implement its business plan or that unanticipated problems, expenses or
technical difficulties will not occur which would result in
discontinuation of services the Company is providing or material delays in
the implementation of services under development.
(f) Dependence on Offering Proceeds; Uncertainly of Future Capital
Needs. The capital requirements relating to implementation of the
Company's business plan will be significant. The Company is dependant on
the proceeds of this offering in order to fully implement its proposed
plan of operation. The Company may need to raise additional funds through
public or private offering or equity financing in order to take advantage
of unanticipated opportunities, including rapid expansion. If additional
funds are raised through the issuance of equity securities, the percentage
ownership of the then current stockholders may be reduced or such equity
securities may possess rights senior to the holders of the Common Stock.
There can be no assurance that additional financing will be available on
terms favorable to the Company, or at all. In addition, the consummation
of this offering is not contingent upon a minimum number of Units being
sold. Consequently, if a limited number of Units are sold, the Company may
not have sufficient resources to meet its business plan or capital needs
in the short term, which would materially and adversely affect the
Company's operations.
(g) New Industry; Uncertainty or Market Acceptance. The Internet
services industry is characterized by a limited operating history and a
high rate of business failures. Because the market is relatively new and
current and future
4
<PAGE>
competitors are likely to introduce competing Internet-based services, it
is difficult to predict the rate at which the market will grow or at which
new or increased competition will result in market saturation.
(h) Possible Service Interruptions. The Company's operations require
that its telecommunications networks operate on a continuous basis. It is
possible that the Company's telecommunications networks may from time to
time experience service interruptions or equipment failures. Service
interruptions or equipment failures resulting in material delays would
adversely effect the confidence of users of the services as well as the
Company's business operations and reputation.
(i) Capacity Constraints; System Failure and Security Risks. The
Company's operations will depend upon the capacity, reliability and
security of its network infrastructure. The Company currently has limited
network capacity and will be required to continually expand its network
infrastructure. Expansion of the Company's infrastructure will require
significant financial, operational and management resources. There can be
no assurance that the Company will be able to expand its infrastructure on
a timely basis, at a commercially reasonable price, or at all. The
Company's operations will also be dependent on the Company's ability to
protect its computer equipment against damage from fire, power loss,
telecommunications failures and similar events. The Company's network
infrastructure will be vulnerable to computer viruses, break-ins and
similar disruptions from unauthorized tampering with the Company's
computer systems. Computer viruses or problems caused by third parties
could lead to material interruptions, delays or cessation in services.
Inappropriate use of the Internet by third parties could also potentially
jeopardize the security of confidential information stored in the computer
systems of users. Security and privacy concerns of users may limit the
Company's ability to successfully market its services.
(j) Technological Change. The market for Internet-based services is
characterized by rapidly changing technology, evolving industry standards,
emerging competition and frequent new software and service introductions.
There can be no assurance that the Company can successfully identify new
product and service opportunities as they develop and bring new products
and services to market in a timely manner or that software, services or
technologies developed by others will not render the Company's services or
technologies noncompetitive, obsolete or less marketable. The Company
presently does not have any proprietary applications software. The
Company's business is also subject to fundamental changes in the way
Internet-based services are delivered.
5
<PAGE>
(k) Competition; Minimal Barriers to Entry. The market for Internet
based services is extremely competitive. There are no substantial barriers
to entry, and the Company expects that competition will intensify in the
near future. The Company believes that success will depend upon a number
of factors, including market presence, capacity, reliability and security
of its network infrastructure. Furthermore, the Company will have to
compete with the pricing policies of competitors and suppliers, the timing
and introduction of new products and industry and general economic trends.
The Company expects that all of the major on-line services and
telecommunications companies will compete fully in the Internet-based
services market. The Company believes that new competitors, including
large computer hardware, software, media and other technology and
telecommunications companies will enter the Internet-based services
market, resulting in even greater competition. Such companies are larger
and substantially more established, with far greater resources and
financial capabilities than the Company.
The Company anticipates that it will encounter significant pricing
pressure, which in turn could result in reductions in the average selling
price of the Company's services. Large telecommunications corporations may
be able to reduce the communications costs involved in providing
internet-based services. There can be no assurance that the Company will
be able to offset the effects of any such price reductions.
(l) Limited Sales Force. The Company has a limited sales force and
does not have established distribution channels for its products or
services. No assurance can be given as to the ability of the Company to
establish or generate sufficient demand for its services, and the
inability of the Company to do so would have a material adverse effect on
the Company's business, financial condition and operating results.
(m) Dependence on Suppliers. The Company relies on other companies
to supply certain key components of its network infrastructure, including
telecommunications and networking equipment. There can be no assurance
that the Company will be able to obtain such services on the scale and
within the time frame required at a reasonable cost, or at all. The
inability to do so would have a material adverse effect on the Company's
business, financial condition and results of operations.
(n) Dependence Upon Key Personnel; Bronson Conrad. The Company
depends upon the services of Bronson Conrad, its President and Chief
Executive Officer. The loss of Mr.
6
<PAGE>
Conrad's services would be detrimental to the Company's prospects. The
Company does not contemplate obtaining "key-man" life insurance with
respect to Mr. Conrad.
(o) Limited Intellectual Property Protection. The Company relies on
a combination of copyright and trademark laws, trade secrets and software
security measures to protect its proprietary information. The Company
currently had no registered copyrights or patents or patent applications
pending. It may be possible for unauthorized third parties to copy aspects
of, or otherwise obtain and use, the Company's proprietary information
without authorization.
(p) Broad Discretion in Application of Proceeds. The estimated net
proceeds of this offering have been allocated to working capital and
general corporate purposes. Accordingly, the Company's management will
have broad discretion as to the application of such proceeds.
(q) NASDAQ's OTC Bulleting Board Service; Risks Relating to Low
Priced Stocks. The Company's Common Stock currently trades on NASDAQ's OTC
Bulleting Board Service. Such market is characterized by limited and
episodic trading and limited liquidity. Investors could find it difficult
to dispose of, or to obtain accurate quotations as to the market value of,
the Company's Common Stock.
(r) Possible Inapplicability of Rule 504 Exemption to Class B
Warrants. The sale of the Units is intended to be exempt form registration
pursuant to Section 4(2) of the Act and the provisions of Rule 504 of
Regulation D thereunder. In the event that the Company becomes a reporting
company under the Federal securities laws prior to the exercise of the
Class B warrants, the Class B warrants will not be eligible for the
exemption from registration under Rule 504 and, unless the Company
registers the Common Stock underlying the Class B warrants, the Class B
Warrants will not be exercisable.
(s) Control By Bronson Conrad; Disproportionate Voting Rights.
Following completion of the offering, Bronson Conrad, together with
entities with which he is affiliated will beneficially own, in the
aggregate, over approximately 15% of the Company's fully diluted Common
Stock on an as-converted basis. As a result, Mr. Conrad has the ability to
substantially influence or control the election of a majority of directors
and other actions by stockholders with respect to the business and affairs
of the Company.
1.7 The Purchaser is not taking, and will not take or cause to be taken,
any action that would cause the Purchaser to be deemed an underwriter, as
defined in Section 2(11) of the Act with respect to the Units, other than to the
extent the undersigned may be
7
<PAGE>
deemed to be an underwriter in connection with sales by it of Units registered
under the Act.
1.8 The Purchaser understands that the Units are being offered and sold in
reliance on specific exemptions from the registration requirements of Federal
and state securities laws and that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements and
understandings set forth herein in order to determine the applicability of such
exemptions and the suitability of the Purchaser to acquire the Units.
1.9 The Purchaser has the full right, power and authority to enter into
this agreement. The execution, delivery and performance of this agreement by the
Purchaser has been duly and validly authorized and approved by all necessary
corporate action, if any. This agreement is a valid and binding agreement of the
Purchaser enforceable in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization or
other similar laws and legal and equitable principles limiting or affecting the
rights of creditors generally and/or (b) general principles of equity,
regardless of whether considered in a proceeding in equity or at law.
1.10 The Purchaser maintains a domicile or business at the address shown
on the signature page of this Agreement, at which address and in compliance with
the local laws of which the Purchaser has subscribed for the Units hereunder.
1.11 The Purchaser represents that the foregoing representations and
warranties are true and correct as of the date hereof. The foregoing
representations, warranties and agreements shall survive the date hereof.
2. REPRESENTATIONS AND COVENANTS BY THE COMPANY
2.1 The Company represents and warrants and, where applicable, covenants
to the Purchaser as follows:
(a) The Company is a corporation duly organized, existing and in
good standing under the laws of the State of Delaware and has the
corporate power to conduct the business which it proposes to conduct.
(b) The execution, delivery and performance of this Agreement by the
Company has been duly approved by the Board of Directors of the Company.
(c) The Shares to be sold and delivered to the Purchaser hereunder
will be duly authorized and validly issued and, upon payment, fully paid
and non-assessable.
8
<PAGE>
(d) The Company shall at all times reserve and keep available out of
its authorized capital stock, solely for the purpose of issue upon
conversion of the Warrants, such number of shares of the Common Stock as
shall be issuable upon the exercise of all outstanding Warrants. All
shares of Common Stock issuable upon exercise of the Warrants shall, upon
issuance in accordance with the terms hereof, be duly and validly issued
and fully paid and non assessable and free from all taxes, liens,
encumbrances and charges with respect to the issue thereof.
3. MISCELLANEOUS
3.1 Any notice or other communication given hereunder shall be deemed
sufficient if in writing and sent by registered or certified mail, return
receipt required, addressed to the Company, at:
Worldwide Date, Inc.
36 Toronto Street, Suite 250
Toronto, Ontario, Canada M5C2C5
and to the Purchaser at his address indicated on the last page of this
Agreement. Notices shall be deemed to have been given on the date of mailing,
except notices of change of address, which shall be deemed to have been given
when received.
3.2 This Agreement shall not be changed, modified or amended except by a
writing signed by the parties to be charged.
3.3 This Agreement shall be binding upon and inure to the benefit of the
parties hereto and to their respective heirs, legal representatives, successors
and assigns.
3.4 This Agreement sets forth the entire agreement and understanding
between the parties as to the subject matter thereof and merges and supersedes
all prior discussions, agreements and understandings of any and every nature
among them.
3.5 This Agreement and its validity, construction and performance shall be
governed in all respects by the laws of the State of New York.
3.6 This Agreement may be executed in counterparts. Upon the execution and
delivery of this Agreement by the Purchaser, this Agreement shall become a
biding obligation of the Purchaser with respect to the purchase of Units as
herein provided.
9
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and
year first written above.
Number of Units purchased
At $5.00 per Unit: 5,000 Units
JBS Holdings, Ltd.
--------------------------------------------
Name of Purchaser
3364 Amboy Rd.
Staten Island, NY 10306
--------------------------------------------
Address of Purchaser
06-1509227
--------------------------------------------
Social Security or Taxpayer
Identification No. of Purchaser
/s/ [ILLEGIBLE]
--------------------------------------------
Signature of Purchaser
Accepted by:
WORLDWIDE DATA, INC.
By: /s/ Bronson Conrad
-------------------------
Bronson Conrad, President
112095
<PAGE>
EXHIBIT A
FORM OF CLASS A WARRANT
<PAGE>
EXHIBIT B
FORM OF CLASS B WARRANT
<PAGE>
EXHIBIT 10.14
GUARANTY
Gentlemen:
In consideration of any and all loans, advances, acceptances, discounts
and extensions of credit made by WorldWide Data, Inc., a Delaware corporation
("WorldWide") to, for the account of, or on behalf of AmCan Minerals Limited, a
British Columbia corporation, (hereinafter called the "Borrower"), pursuant to a
certain Promissory Note dated December 31, 1999 for US$177,685 (the "Note") the
undersigned, hereinafter called the "Guarantor", hereby jointly and severally,
absolutely and unconditionally, guarantee to WorldWide the punctual payment in
full at maturity of the principal, interest and other sums due and to become due
from the Borrower to WorldWide under the Note at any time and from time to time
from the date hereof until the termination of the liability of the Guarantor
hereunder as hereinafter provided, on account of any and all obligations,
indebtedness and liability of the Borrowereinafter referred to as
"indebtedness").
The Guarantor expressly waives the following: notice of the incurring of
indebtedness by the Borrower; the acceptance of this guaranty by WorldWide;
presentment and demand for payment, protest, notice of protest and notice of
dishonor or non-payment of any instrument evidencing indebtedness of the
borrower; any right to require suit against the Borrower or any other party
before enforcing this guaranty; any right to have security applied before
enforcing this guaranty; and any right of subrogation to WorldWide's rights
against the Borrower until the Borrower's indebtedness is paid in full.
The Guarantor hereby consents and agrees that renewals and extensions of
time of payment, surrender, release, exchange, substitution, dealing with or
taking of additional collateral security, taking or release of other guaranties,
abstaining from taking advantage of or realizing upon any collateral security or
other guaranties and any and all other forbearances or indulgences granted by
WorldWide to the Borrower or any other party may be made, granted and effected
by WorldWide without notice to the Guarantor and without in any manner affecting
his liability hereunder.
In the event that a petition in bankruptcy or for an arrangement or
reorganization of the Borrower under the bankruptcy laws or for the appointment
of a receiver for the Borrower or any of its property is filed by or against the
Borrower, or if the Borrower shall make an assignment for the benefit of
creditors or shall become insolvent, all indebtedness of the Borrower shall, for
the purpose of this guaranty, be deemed at WorldWide's election to have become
immediately due and payable.
The Guarantor further agrees to pay WorldWide any and all costs, expenses
and reasonable attorneys' fees paid or incurred by WorldWide in collecting or
endeavoring to collect the indebtedness of the Borrower or in enforcing or
endeavoring to enforce this
<PAGE>
guaranty. All accounts, deposits, and property of the Guarantor with or in the
hands of WorldWide shall be and stand pledged as collateral security for the
indebtedness of the Borrower; and WorldWide shall have the same right of setoff
with respect to deposits and other credits of the Guarantor as it has with
respect to deposits and other credits of the borrower.
This guaranty shall operate as a continuing guaranty and shall expire as
to any Guarantor only upon written notice signed by such Guarantor or his
personal representative and actually received by WorldWide, but such termination
shall be effective only as to indebtedness of the Borrower incurred subsequent
to the receipt of such notice by WorldWide, and this guaranty shall remain in
full force and effect as to all indebtedness of the borrower theretofore
incurred. This guaranty shall be binding upon the Guarantor and his respective
heirs, executors, administrators and assigns, jointly and severally, and shall
ensure to the benefit of WorldWide and its successors and assigns. The terms
"Guarantor" and "Borrower" and any pronouns referring thereto as used herein
shall be construed in the masculine, feminine, neuter, singular or plural as the
context may require.
IN WITNESS WHEREOF, this guaranty has been executed and delivered to
WorldWide Data, Inc. by the undersigned guarantor this 31st day of December,
1999.
Signature: /s/ Bronson B. Conrad
----------------------
Name: Bronson B. Conrad
Address:
----------------------
----------------------
----------------------
2
<PAGE>
Exhibit 10.15
ADVISORY AGREEMENT
THIS ADVISORY AGREEMENT (the "Agreement") is made this __ day of January
2000, by and between A-Z Professional Consultants, Inc. a Utah corporation
("Advisor") and Worldwide Data Inc., a Delaware corporation with its offices
located in Toronto, Ontario, Canada (the "Company").
WHEREAS, Advisor and Advisors's Personnel (as defined below) have
experience in evaluating and effecting mergers, and acquisitions, advising
corporate management, and in performing general administrative duties for
publicly-held companies and development stage investment ventures; and
WHEREAS, the Company desires to retain Advisor to advise and assist the
Company in its development on the terms and conditions set forth below.
missing_text THEREFORE, in consideration of the mutual promises,
covenants and agreements contained missing_text consideration, the receipt and
sufficiency of which is hereby missing_text Company and Advisor agree as
follows:
1. Engagement
The Company hereby retains Advisor, effective as of the date hereof, (the
"Effective Date") and continuing until termination, as provided herein, to
assist the Company in it's effecting the purchase of businesses and assets
relative to its business and growth strategy, disposition of assets,
general business and financial issues consulting, the introduction of the
Company to public relations firms and consultants and others that may assist
the Company in its plans and future (the "Services"). The Services are to be
provided on a "best efforts" basis directly and through Advisor's officers
or others employed or retained and under the direction of Advisor
("Advisor's Personnel"); provided however that the Services shall expressly
-------- -------
exclude all legal advice, accounting services or other services which
require licenses or certifications which Advisor may not have.
2. Term
This Agreement shall have an initial term of six (6) months (the "Primary
Term"), commencing with the Effective Date. At the conclusion of the Primary
Term this Agreement will automatically be extended for the same term (the
"Extension Period") unless Advisor or the company shall serve written notice
on the other party terminating the Agreement. Any notice to terminate given
hereunder shall be in writing and shall be delivered at least thirty (30)
days prior to the end of the Primary Term of any subsequent Extension
Period.
3. Time and Effort of Advisor
Advisor shall allocate time and Advisors Personnel as it deems necessary to
provide the Services. The particular amount of time may vary from day to day
or week to week. Except as otherwise agreed, Advisor's monthly statement
identifying, in general, tasks performed for the Company shall be conclusive
evidence that the Services have been performed. Additionally, in the absence
of willful misfeasance, bad faith, negligence or reckless disregard for the
obligations or duties hereunder by Advisor, neither Advisor nor Advisor's
Personnel shall be liable to the Company or any of its shareholders for any
act or decisions in the course of or connected with rendering the Services,
including but not limited to losses that may be sustained in any corporate
act in any subsequent Business Opportunity (as defined herein) undertaken by
the Company as a result of advice provided by Advisor or Advisors's
Personnel,
<PAGE>
4. Compensation
The Company agrees to pay Advisor a fee for the Services ("Advisory
Fee") by way of the delivery by the company of Three Hundred
Thousand (300,000) restricted shares of the Company's common stock
as an initial fee, these shares shall be delivered within seven (7)
days after the execution hereof. All shares transferred are
considered fully earned and non-assessable as of the date hereof.
5. Other Services
If, the Company enters into a merger or exchanges securities with,
or purchases the assets or enters into a joint venture with, or
makes an investment in a company introduced by Advisor (a "Business
[MISSING TEXT]") the Company agrees to pay Advisor a fee equal to
ten percent (10%) of the value of [MISSING TEXT] Opportunity
introduced by Advisor and acquired or otherwise participated in by
the Company (collectively referred to herein, in each instance, as
the "Transaction Fee"), which shall be payable immediately following
the closing of each such transaction, in restricted shares of the
Company's common stock or in kind if an acquisition is made at the
Company's option, if paid in cash the Transaction Fee shall be
reduced to five percent (5%).
6. Registration of Shares
Company agrees that any shares issued to satisfy a Transaction Fee
may be registered by the Company with the Securities and Exchange
Commission under any subsequent applicable registration statement
filed by the Company at the Company's discretion. Such issuance or
reservation of shares shall be in reliance on representations and
warranties of Advisor set forth herein.
7. Costs and Expenses
All third party and out-of-pocket expenses incurred by Advisor in
the performance of the Services or for the settlement of debts shall
be paid by the Company, or Advisor shall be reimbursed if paid by
Advisor on behalf of the Company, within ten (10) days of receipt of
written notice by Consultant, provided that the Company must approve
in advance all such expenses in excess of $500 per month.
8. Place of Services
The Services provided by Advisor or Advisor's Personnel hereunder
will be performed at Advisor's offices except as otherwise mutually
agreed by Advisor and the Company.
9. Independent Contractor
Advisor and Advisor's Personnel will act as an independent
contractor in the performance of its duties under this Agreement.
Accordingly, Advisor will be responsible for payment of all federal,
state, and local taxes on compensation paid under this Agreement,
including income and social security taxes, unemployment insurance,
and any other taxes due relative to Advisor's Personnel, and any and
all business license fees as may be required. This Agreement neither
expressly nor impliedly creates a relationship of principal and
agent, or employee and employer, between Advisor's Personnel and the
Company. Neither Advisor nor Advisor's Personnel are authorized to
enter into
<PAGE>
any agreements on behalf of the Company. The Company expressly
retains the right to approve, in its sole discretion, each Asset
Opportunity or Business Opportunity introduced by Advisor, and to
make all final decisions with respect to effecting a transaction on
any Business Opportunity.
10. Rejected Asset Opportunity or Business Opportunity
If, during the Primary Term of this Agreement or any Extension
Period, the Company elects not to proceed to acquire, participate or
invest in any Business Opportunity identified and/or selected by
Advisor, notwithstanding the time and expense the Company may have
incurred reviewing such transaction, such Business Opportunity shall
revert back to and become proprietary to Advisor, and Advisor shall
be entitled to acquire or broker the sale or investment in such
rejected Business Opportunity for its own account, or submit such
assets or Business Opportunity elsewhere. In [MISSING TEXT] shall be
entitled to any and all profits or fees resulting from Advisor's
purchase, referral or placement of any such rejected Business
Opportunity, or the Company's subsequent purchase or financing with
such Business Opportunity in circumvention of Advisor.
11. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a
relationship of principal and agent between the Company and Advisor,
or employee and employer as between Advisor's Personnel and the
Company.
12. Termination
The Company and Advisor may terminate this Agreement prior to the
expiration of the Primary Term upon thirty (30) days written notice
with mutual written consent. Failing to have mutual consent, without
prejudice to any other remedy to which the terminating party may be
entitled, if any, either party may terminate this Agreement with
thirty (30) days written notice under the following conditions:
(A) By the Company.
--------------
(i) If during the Primary Term of this Agreement or any Extension
Period, Advisor is unable to provide the Services as set forth
herein for thirty (30) consecutive business days because of
illness, accident, or other incapacity of Advisor's Personnel;
or,
(ii) If Advisor willfully breaches or neglects the duties required
to be performed hereunder; or,
(iii) At Company's option without cause upon 30 days written notice
to Advisor; or
(B) By Advisor.
----------
(i) If the Company breaches this Agreement or fails to make any
payments or provide information required hereunder; or,
(ii) If the Company ceases business or, other than in an Initial
Merger, sells a controlling interest to a third party, or
agrees to a consolidation or merger of itself
<PAGE>
with or into another corporation, or enters into such a transaction
outside of the scope of this Agreement, or sells substantially all
of its assets to another corporation, entity or individual outside
of the scope of this Agreement; or,
(ii) If the Company subsequent to the execution hereof has a receiver
appointed for its business or assets, or otherwise becomes insolvent
or unable to timely satisfy its obligations in the ordinary course
of, including but not limited to the obligation to pay the Initial
Fee, the Transaction fee, or the Advisory Fee; or,
(iv) If the Company subsequent to the execution hereof institutes, makes
a general assignment for the benefit of creditors, has instituted
against it any bankruptcy proceeding for reorganization for
rearrangement of its financial affairs, files a petition in a court
of bankruptcy, or is adjudicated a bankrupt; or,
(v) If any of the disclosures made herein or subsequent hereto by the
Company to Consultant are determined to be materially false or
misleading.
In the event Advisor elects to terminate without cause or this Agreement is
terminated prior to the expiration of the Primary Term or any Extension
Period by mutual written agreement, or by the Company for the reasons set
forth in A(i) and (ii) above, the Company shall only be responsible to pay
Advisor for unreimbursed expenses, Advisory Fee and Transaction Fee accrued
up to and including the effective date of termination. If this Agreement is
terminated by the Company for any other reason, or by Advisor for reasons
set forth in B(i) through (v) above, Advisor shall be entitled to any
outstanding unpaid portion of reimbursable expenses, Transaction Fee, if
any, and for the remainder of the unexpired portion of the applicable term
(Primary Term or Extension Period) of the Agreement.
13. Indemnification
Subject to the provisions herein, the Company and Advisor agree to
indemnify, defend and hold each other harmless from and against all demands,
claims, actions, losses, damages, liabilities, costs and expenses, including
without limitation, interest, penalties and attorney's fees and expenses
asserted against or imposed or incurred by either party by reason of or
resulting from any action or a breach of any representation, warranty,
covenant, condition, or agreement of the other party to this Agreement.
14. Remedies
Advisor and the Company acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the non-
breaching party would have no adequate remedy at law. Accordingly, in the
event of any controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in a court of
equity by a degree of specific performance. Such remedy, however, shall be
cumulative and nonexclusive and shall be in addition to any other remedy to
which the parties may be entitled.
15. Miscellaneous
(A) Subsequent Events. Advisor and the Company each agree to notify the
-----------------
other party if, subsequent to the date of this Agreement, either party
incurs obligations which could
<PAGE>
compromise its efforts and obligations under this Agreement.
(B) Amendment. This Agreement may be amended or modified at any time and
----------
in any manner only by an instrument in writing executed by the parties
hereto.
(C) Further Action and Assurances. At any time and from time to time, each
-----------------------------
party agrees, at its or their expense, to take actions and to execute
and deliver documents as may be reasonably necessary to effectuate the
purposes of this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with any
------
of its obligations, agreements, or conditions hereunder may be waived
in writing by the party to whom such compliance is owned. The failure
of any party to this Agreement to enforce at any time any of the
provisions of this Agreement shall in no way be construed to be a
waiver of any such provision or a waiver of the right of such party
thereafter to enforce each and every such provision. No waiver of any
breach of or noncompliance with this Agreement shall be held to be a
waiver of any other or subsequent breach or noncompliance.
(E) Assignment. Neither this Agreement nor any right created by it shall
----------
be assignable by either party without the prior written consent of the
other.
(F) Notices. Any notice or other communication required or permitted by
-------
this Agreement must be in writing and shall be deemed to be properly
given when delivered in person to an officer of the other party, when
deposited in the United States mails for transmittal by certified or
registered mail, postage prepaid, or when deposited with a public
telegraph company for transmittal, or when sent by facsimile
transmission charges prepared, provided that the communication is
addressed:
(i) In the case of the Company: Worldwide Data Inc.
36 Toronto Street, Suite 250
Telephone: (416) 214-6296
Telefax: (416) 214-6299
Attention: Bronson Conrad
(ii) In case of Advisor: A-Z Professional Consultants, Inc.
268 West 400 South, Suite 300
Salt Lake City, Utah 84101
Telephone: (801) 5758073
Telefax: (801) 575-8092
Attention: BonnieJean C. Tippetts,
President
or to such other person for address designated in writing by the Company or
Advisor to receive notice.
(G) Headings. The Section and subsection headings in this Agreement
--------
are inserted for convenience only and shall not affect in any way
the meaning or interpretation of this Agreement
(H) Governing Law. This Agreement was negotiated and is being
-------------
contracted for in Utah, and shall be governed by the laws of the
State of Utah, and the United States of America notwithstanding
any conflict-of-law provision to the contrary.
<PAGE>
(I) Binding Effect. This Agreement shall be binding upon the parties hereto
--------------
and inure to the benefit of the parties, their respective heirs,
administrators, executors, successors, and assigns.
(J) Entire Agreement. This Agreement contains the entire agreement between
----------------
the parties hereto and supersedes any and all prior agreements,
arrangements, or understandings [Missing Text] the parties relating to
the subject matter of this Agreement. No oral understanding statements,
promises, or inducements contrary to the terms of this Agreement exist.
No representations, warranties, covenants, or conditions, express or
implied, other than as set forth herein, have been made by any party.
(K) Severability. If any part of this Agreement is deemed to be
------------
unenforceable the balance of the Agreement shall remain in full force
and effect.
(L) Counterparts. A facsimile, telecopy, or other reproduction of this
------------
Agreement may be executed simultaneously in two or more counterparts,
each of which shall be deemed an original, but all of which together
shall constitute one and the same instrument, by one or more parties
hereto and such executed copy may be delivered by facsimile or similar
instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen. In this event,
such execution and delivery shall be considered valid, binding and
effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any
facsimile, telecopy or other reproduction hereof.
(M) Time is of the Essence. Time is of this Agreement and of each and every
----------------------
provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
above written.
The "Company" "Advisor"
Worldwide Data Inc. A-Z Professional Consultants, Inc.
A Delaware Corporation A Utah Corporation
By:___________________ By: /s/ BonnieJean C. Tippetts
Name: ---------------------------
Title: Name: Bonnie C. Tippetts
Tite: President
<PAGE>
Exhibit 20.1
PROMISSORY NOTE
US$189,631.58 November 17, 1998
FOR VALUE RECEIVED, the undersigned, WORLDWIDE DATA, INC., together with
its affiliates and assigns (the "Debtor"), by this Promissory Note (this
"Note"), absolutely and unconditionally promises to pay to BRONSON B. CONRAD
(the "Payee"), in lawful money of the United States of America the principal sum
of One Hundred Eighty-Nine Thousand Six Hundred and Thirty-One Dollars and Fifty
Eight Cents (US$189,631.58), together with accrued interest on the unpaid
principal balance of this Note from the date hereof until paid at the rate of
ten percent (10%) per annum. Interest shall be computed on the basis of a 360
day year and shall be payable in cash upon payment of principal. The principal
hereof and the interest thereon shall be due and payable on demand. Payments
shall be made to the Payee at the address to which notices to the Payee are to
be made hereunder, or at such other place as the Payee may from time to time
designate in writing. This Note is the Promissory Note referred to in the Stock
Purchase Agreement by and between Debtor and Payee of even date herewith.
This Note is made and delivered in New York, New York.
The Debtor hereby reserves the right to prepay the indebtedness evidenced
by this Note, in whole or in part, at any time without penalty or premium, upon
the payment of principal and interest.
The delay or failure to exercise any right hereunder shall not waive such
right. The undersigned hereby waives notice of protest, any and all delays or
lack of diligence in collection hereof and assents to each and every extension
or postponement of the time of payment or other indulgence.
This Note shall be governed by and construed and interpreted in accordance
with the laws of the State of New York.
IN WITNESS WHEREOF, the Debtor has caused this Note to be executed and its
seal affixed hereunto by its duly authorized officers the day and year first
above written.
WORLDWIDE DATA, INC
By: /s/ [ILLEGIBLE]
-------------------
Name:
Title:
Attest:
-------------------
Name:
Title:
<PAGE>
Exhibit 20.2
PROMISSORY NOTE
$350,000.00 CDN March 10, 1998
For value received, the undersigned, 761395 ALBERTA LTD., an Alberta
corporation having its chief executive office in Calgary, Alberta, and BRONSON
CONRAD, residing in Mississauga, Ontario, hereby acknowledges themselves
severally and jointly indebted to TEXTRON FINANCIAL CORPORATION (CANADA)
("TFCC"), an Ontario corporation having its chief executive office in Toronto,
Ontario (together with any other holder of this Note, hereinafter referred to as
"Holder") and promise to pay to or to the order of TFCC, the principal sum of
Three Hundred and Fifty Thousand Dollars 00/100 ($350,000.00) together with
interest thereon, as provided herein. The obligations of the undersigned
hereunder are Obligations secured by the Collateral as defined and described in
an Aircraft Security Agreement between the undersigned and Holder dated as of
the date hereof (the "Security Agreement"), and are entitled to all of the
rights and privileges provided therein, including rights of acceleration of this
Note.
The principal amount due under this Note shall be amortized over sixty (60)
months and shall be due and payable in sixty (60) monthly instalments of
principal and interest of $7,785.56 CDN each, due and payable on the 10th day of
each month commencing on March 10, 1998, and continuing on the same date of each
month thereafter through and including February 10, 2003 (the "Maturity Date"),
with a final payment as set out below. Interest is calculated on the unpaid
principal balance of this Note at a fixed rate of 12.00% per annum. The final
instalment of principal and interest in the amount of $7,697.41 is due and
payable on the Maturity Date together with all accrued late charges (if any) and
other amounts then due and owing hereunder and under the Security Agreement.
In the event any amount due hereunder is past due by more than ten (10)
days, the undersigned agrees to pay a late charge equal to the lesser of: (a)
eighteen percent (18%) per annum on and in addition to the amount of the past
due payment; or (b) the maximum charges allowable under then applicable law.
Upon the maturity of this Note (by reason of default and acceleration or
otherwise), the undersigned agrees to pay interest on the unpaid balance and all
accrued and unpaid amounts due hereunder and under the Security Agreement from
the maturity hereof through the day of payment at a rate of interest per annum
equal to the lesser of: (a) Holder's then current default rate of interest per
annum; or (b) the maximum rate of interest per annum allowable under then
applicable law.
Each payment hereunder shall be made in lawful Canadian dollars and shall
be payable to such account or address as Holder shall from time to time direct
the undersigned. All amounts received shall be applied first, to accrued late
charges and any other costs or expenses due and owing hereunder or under the
terms of the Security Agreement; second, to accrued interest; and third, to
unpaid principal. If at any time during the term of this Note the interest rate
applicable hereunder exceeds the maximum rate of interest permitted under then
applicable law, then the interest rate shall thereafter be deemed to be the
maximum rate permitted under such applicable
<PAGE>
law, and amounts of interest received from the undersigned in excess of such
maximum rate shall be considered reductions of principal to the extent of any
such excess.
Failure to pay this Note, or any instalment hereunder promptly when due, or
default or failure in the performance or due observance of any of the terms,
conditions or obligations hereunder or under the Security Agreement or in any
other agreement or instrument between the undersigned (or any endorser,
guarantor, surety or other party liable for the undersigned's obligations
hereunder, or any other entity controlling, controlled by, or under common
control with the undersigned) and Holder (or any other entity controlling,
controlled by or under common control with Holder), shall entitle Holder to
accelerate the maturity of this Note and to declare the entire unpaid principal
balance and all accrued interest and other charges owing hereunder (including
prepayment fees) and under the Security Agreement to be immediately due and
payable, and to proceed at once to exercise each and every one of the remedies
set forth in the Security Agreement or otherwise available at law or in equity.
The undersigned and all other parties who may be liable (whether as
endorsers, guarantors, sureties or otherwise) for payment of any sum or sums due
or to become due under the terms of this Note waive diligence, presentment,
protest, notice of dishonour and notice of protest and agree to pay all costs
incurred by holder in enforcing its rights under this Note or the Security
Agreement, including reasonable legal fees, and they do hereby consent to any
number of renewals or extensions at any time in the payment of this Note. No
extension of time for payment of this Note made by any agreement with any person
now or hereafter liable for payment of this Note shall operate to release,
discharge, modify, change or affect the original liability of the undersigned
under this Note, either in whole or in part. No delay or failure by Holder in
exercising any right, power, privilege or remedy shall be deemed to be a waiver
of same or any part thereof; nor shall any single or partial exercise thereof or
any failure to exercise same in any instance preclude any future exercise
thereof, or exercise of any other right, power, privilege or remedy, and the
rights and remedies provided for hereunder are cumulative and not exclusive of
any other right or remedy available at law or in equity. Holder may proceed
against all or any of the Collateral securing this Note or against any guarantor
hereof, or may proceed contemporaneously or in the first instance against the
undersigned, in such order and at such times following default hereunder as
Holder may determine in its sole discretion. All of the undersigneds'
obligations under this Note are absolute and unconditional, and shall not be
subject to any setoff or deduction whatsoever. The undersigned waive any right
to assert by way of counterclaim or affirmative defense in any action to enforce
the undersigneds' obligations hereunder, any claim whatsoever against Holder.
Annual Interest Rate
Whenever a rate of interest is calculated on the basis of a period (the
"Calculation Period") which is less than the actual number of days in the
calendar year in which the same is to be ascertained, the rate of interest
expressed as an annual rate for the purposes of the Interest Act (Canada) is
equivalent to such rate as so determined multiplied by the actual number of days
in such calendar year and divided by the number of days in the calculation
period.
2
<PAGE>
Withholding Taxes
All payments made by the undersigned under this Note shall be made free and
clear of, and without reduction or withholding or liability for or on account
of, any present or future income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any governmental authority (all such
taxes, levies, imposts, deductions, charges or withholdings being hereinafter
called "Taxes"). If any Taxes are required to be withheld from, or if Holder
shall become liable in respect of, any amounts payable or paid to Holder (other
than income taxes), then the amounts so payable or paid to the Holder shall be
increased to the extent necessary to yield to Holder (after payment of any
Taxes) the instalment amounts set forth above. Whenever any Taxes are payable by
the undersigned, the undersigned shall as promptly as possible pay such Taxes
and shall send to Holder a certified copy of an original receipt received by the
undersigned showing payment thereof within 30 days of each such payment. If the
undersigned fail to pay any Taxes when due to the appropriate taxing authority,
then the undersigned shall indemnify Holder for any incremental taxes, interest
or penalties that may become payable by Holder as a result of any such failure.
The provisions of this Note shall be governed by and construed in
accordance with the laws of the Province of Ontario and the federal laws of
Canada applicable therein.
761395 Alberta Ltd.
By: /s/ Bronson B. Conrad
--------------------------------
Name: Bronson B. Conrad
Title: President
Bronson Conrad
By: /s/ Bronson B. Conrad
--------------------------------
Name: Bronson B. Conrad
Title:
3
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT
We consent to the use in this Registration Statement on Form SB-1 of our report
included herein dated March 2, 2000 relating to the consolidated financial
statements of Worldwide Data, Inc.
Kempisty & Company
Certified Public Accountants PC
New York, NY
March 16, 2000
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<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 216,893
<SECURITIES> 0
<RECEIVABLES> 57,433
<ALLOWANCES> 10,368
<INVENTORY> 0
<CURRENT-ASSETS> 273,470
<PP&E> 212,652
<DEPRECIATION> 130,899
<TOTAL-ASSETS> 1,292,824
<CURRENT-LIABILITIES> 430,324
<BONDS> 0
0
0
<COMMON> 3,088
<OTHER-SE> 804,227
<TOTAL-LIABILITY-AND-EQUITY> 1,292,824
<SALES> 559,307
<TOTAL-REVENUES> 559,307
<CGS> 429,462
<TOTAL-COSTS> 429,462
<OTHER-EXPENSES> 521,478
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (248,803)
<INCOME-TAX> 0
<INCOME-CONTINUING> (248,803)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (248,803)
<EPS-BASIC> (.08)
<EPS-DILUTED> (.08)
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