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Strategies & Market Trends : Scamthony Cataldo

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To: scion who wrote (79)1/16/2004 9:25:24 AM
From: scion  Read Replies (2) of 137
 
The Company obtained an interest in DBE when it entered into a Definitive Investment and Option to Merge Agreement with DBE in May 1996 (the "DBE Agreement") whereby the Company advanced $1,100,000 to DBE. The DBE Agreement was amended by a subsequent letter on January 16, 1997 whereby the Company was to receive 145,745 shares of DBE common stock representing a 14.594% equity stake in DBE in return for the $1,100,000 previously advanced by the Company to DBE.

TRANS CONTINENTAL ENTERTAINMENT GROUP INC filed this 8-K on 03/05/1997.

ITEM 2. DISPOSITION OF ASSETS

(a) On February 28/th/, 1997, Sector Communications, Inc., a Nevada
Corporation, (the "Company") entered into an agreement (the "Agreement") with
Peacetime Communications, Ltd., a British Virgin Islands corporation
("Peacetime"), Emerald Capital, Inc., a British Virgin Islands corporation
("Emerald") and Wallington Investment, Ltd. a British Virgin Island corporation
("Wallington"), whereby the Company canceled obligations to Peacetime, Emerald
and Wallington in the aggregate amount of $4,780,000 and obtained additional
financing in the amount of $1,000,000 through the sale of 25% of the Company's
equity holdings in HIS Technologies AG ("Histech"), a Swiss Corporation, all of
the Company's interests in DBE Software, Inc., a Delaware corporation, ("DBE"),
and 1,000,000 shares of the Company's common stock (collectively the
"Securities").

The $4,080,000 debt due to Peacetime arose when Global Communications
Group, Inc. aka Global Communications, Ltd. a British Virgin Islands corporation
("Global BVI"), and Global Communications Group, Inc., a Texas corporation
("Global Texas") on one side and Peacetime entered into a Financing Agreement
dated January 31, 1994 and a Line of Credit Promissory Note Secured by a Pledge
Agreement on February 1, 1994 and Amended on August 15, 1994 (collectively the
"Global Financing Debt"). The Company agreed to assume the Global Financing debt
on April 19, 1996 when the Company entered into a Stock Purchase and Exchange
Agreement with the Shareholders of Global Communications Group, Inc. A Debt
Repayment Agreement among the Company, Global Texas and Peacetime was entered
into on June 14, 1996 (the "Debt Repayment Agreement") whereby the Company
memorialized its agreement to assume and pay in full the Global Financing Debt
within three years from the closing date of the Stock Purchase and Exchange
Agreement.

The remaining debt that was discharged arose on January 21, 1997 when
the Company signed Promissory Notes with Emerald Capital, Inc. and Wallington
Investment, Ltd. in the amounts of $350,000 each.

The Company obtained 80% of the outstanding shares of Histech in
August 1996. The Company, through its wholly owned subsidiary, Sector
Communications AG, a Swiss Corporation, entered into a Definitive Agreement
dated August 12, 1996 among Histech, and certain of HIS shareholders (the
"Selling Shareholders") whereby Sector acquired a 25.55% equity interest in
Histech from Histech and an additional 54.45% equity interest in Histech from
the Selling Shareholders.

The Company obtained an interest in DBE when it entered into a
Definitive Investment and Option to Merge Agreement with DBE in May 1996 (the
"DBE Agreement") whereby the Company advanced $1,100,000 to DBE. The DBE
Agreement was amended by a subsequent letter on January 16, 1997 whereby the
Company was to receive 145,745 shares of DBE common stock representing a 14.594%
equity stake in DBE in return for the $1,100,000 previously advanced by the
Company to DBE. In October 1993, the Chairman and CEO of the Company personally
purchased 38,700 shares of DBE common stock.

The Securities are apportioned among Peacetime, Emerald and Wallington
as follows.



Peacetime purchased 2,417 shares of common stock of Histech, which represents
18% of the total outstanding shares of Histech, and has agreed to immediately
make available one million dollars ($1,000,000)(the "Additional Funding") to the
Company to draw upon on an as needed basis for a period of six months in return
for the assignment to Peacetime of the Company's entire claim to 145,745 shares,
representing 14.594% of the outstanding common stock, of DBE. The DBE common
stock has been placed into escrow pursuant to an escrow agreement (the "Escrow
Agreement") executed simultaneously with the Agreement. The Escrow Agreement
provides that Sector shall transfer its entire claim to 145,745 shares,
representing 14.594% of the outstanding common stock, of DBE to an Escrow Agent.
Upon Sector's receipt of one million dollars, the Escrow Agent shall transfer
Sector's interest in DBE to Peacetime. In the event that less than one million
dollars is made available to Sector, a percentage of Sector's interest in DBE
which is proportionate to the amount of capital provided to Sector shall be
delivered to Peacetime with the remainder of the DBE interest returned to
Sector.

Emerald and Wallington each received 500,000 shares of Sector
Communications, Inc. common stock and 134 shares of HIS common stock, which
represents 1% of the total number of outstanding shares of HIS. Wallington
previously held 945,000 shares of the Company's common stock.

ITEM 5. OTHER EVENTS

Sector Communications, Inc. has completed negotiations on a new Joint
Activity Agreement with the Bulgarian Telecommunications Company. The new 10
year agreement, replaces a 5 year contract (between the BTC and Sector's wholly
owned subsidiary Global Communications Group, Inc.) that had been unilaterally
terminated by the BTC, as previously reported. Along with extending the term of
Sector's engagement, the new deal, which went into effect February 21/st/, also
expands greatly the type of services that Sector can provide to its customers.

Sector has installed a private, high-speed fiber-optic network in
Bulgaria's capital city of Sofia and now provides international long-distance
services to customers in Sofia, Plovdiv, and other areas. Phase I of the network
is already providing switched voice traffic to a select group of luxury hotels
and resorts. Phase II will add additional fiber-optic cable to the network and
will expand Sector's service area to the Black Sea coast.

Sector will continue to handle the daily operations for the new joint
venture from their offices in Bulgaria's capital city of Sofia. Dr. Kalcho
Kalchev, Sector's General Manager in Sofia, said that all of Sector's circuits
have been reconnected by the BTC and that all connections to existing Sector
customers were being reestablished.

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