LEGAL PROCEEDINGS From 10-12G SEC filing on 11/17/99:
The following is a summary of material legal proceedings involving the Company,
which the Company believes were incurred in the normal course of business:
Christopher Sampson Foundation for the Catastrophically Injured v. Only
Multimedia Network, Inc. & The
Entertainment Internet,
Burbank Superior Court
Filed: July 29, 1999, No. EC 027688
The Company is presently engaged in one action involving a creditor over a
$200,000.00 promissory note that was not paid when due; the company has stated
its willingness to continue the obligation, a note bearing 10% simple interest
on unpaid principal, for one year. As of November 4, 1999, the creditor agreed
to the one-year extension. The Company is currently reviewing extension and
settlement papers, and expects the action to be dismissed shortly.
Breakdown Services, Ltd., v. Only Multimedia Network, Inc./Castnet.com
Federal District Court for the Central District of California
Filed: May 6, 1998, No. CV 98-3500-GHK (BQRx)
The Company is presently engaged in one action involving a third-party claim for
copyright infringement and violation of an earlier settlement agreement that
included a stipulated injunction. The Company is vigorously defending the action
and earlier prevailed against claimant's request for an Order to Show Cause. The
Company believes the claimant is not entitled to relief, and asserts misuse of
copyright as a defense in the action. While the company doubts the merits of
claimant's action, the outcome of the action is uncertain and may materially and
adversely affect the financial condition and viability of the Company if such
outcome proves unfavorable to the Company.
Wendy Pachter v. Only Multimedia Network, Inc.
Los Angeles Superior Court, Central District
Filed July 21, 1999, No. BC 213855
The Company is presently engaged in one action involving a creditor for two
promissory notes (each for $100,000.00 or more) which were not paid when claimed
to be due; the Company is investigating the history behind the promissory notes
and presently believes there was as failure of consideration, more specifically,
that the consideration alleged was never received by the Company. Discovery is
continuing on this matter, along with other aspects of the claim. The Company
takes a contrary position to that of claimant, asserting that payments were not
and are not presently due. In an effort to resolve this claim, the Company made
a settlement offer contingent upon the successful close of the proposed merger
with First Miracle Group. At present, litigation is continuing. While the
Company doubts the merits of claimant's action, the outcome of the action is
uncertain and may materially and adversely affect the financial condition and
viability of the Company if such outcome proves unfavorable to the Company.
Bragman, Nyman & Cafarelli v. The Entertainment Internet, Inc.
Los Angeles Municipal Court, West Los Angeles District
Filed June 11, 1999, Case No. 99T01400
The Company is presently engaged in one action involving a creditor for services
allegedly rendered and unpaid. The Company is investigating the history behind
the alleged obligation, and presently believes there was a failure of
consideration, more specifically, that the claimant did not provide services or
perform in accordance with the alleged contract. Discovery is continuing on this
matter, along with other aspects of the claim. The Company takes a contrary
position to that of claimant, asserting that payments were not and are not
presently due. At present, litigation is continuing. While the Company doubts
the merits of claimant's action, the outcome of the action is uncertain and may
materially and adversely affect the financial condition and viability of the
Company if such outcome proves unfavorable to the Company.
Capital York, Inc. v. The Entertainment Internet, Inc., Scott MacCaughern, and
MacCaughern Trade Development
Superior Court of New Jersey, Monmouth County
Filed August 15, 1999, No. L406199
The Company is presently engaged in one action involving a creditor for services
allegedly rendered and unpaid in connection with management and advisory
services. The Company is investigating the history behind the alleged
obligation, and presently believes there was no contract between the parties.
Discovery is continuing on this matter, along with other aspects of the claim.
At present, the Company is informed the litigation is "on hold" pending a
settlement of the entire matter by one of the named Defendants. While the
Company doubts the merits of claimant's action, the outcome of the action is
uncertain and may materially and adversely affect the financial condition and
viability of the Company if such outcome proves unfavorable to the Company.
Additional Claims
The Company is presently evaluating its accounts payable and claims of myriad
alleged creditors. The company faces significant financial obligations which may
result in the insolvency of the corporation; for this reason, the Company is
investigating extension and payment agreements and settlements to reduce or
eliminate the strain caused by these claims and debts.
The Company is presently evaluating and attempting to resolve a claim from its
telecommunications services provider. Investigation of the claim revealed that
prior management of the company ordered services to be installed off-site which
were used personally by said management; the Company also learned the
telecommunications provider billed for charges it earlier represented would not
be incurred by the Company. The Company is negotiating an agreement for account
credits and a resolution with the services provider which will allow criminal
prosecution of prior management for any activities which are proved to be
unauthorized and/or unlawful.
The Company received notice of a creditor claim relating to a $95,000.00
promissory note which was not paid when due; the Company stated its willingness
to discuss settlement. The Company received notice that attorneys for the
creditor would be preparing a complaint for filing. The company earlier
successfully defended an action filed by the same creditor out-of-state (Bakkiam
S. Subbiah v. Only Multimedia Network, Inc., U.S. District Court for the Central
District of Illinois, Rock Island Division, Filed December 7, 1998); the action
was dismissed for lack of jurisdiction. While the Company doubts the merits of
claimant's action, the outcome of the action is uncertain and may materially and
adversely affect the financial condition and viability of the Company if such
outcome proves unfavorable to the Company.
Settlements
1. The Company settled a claim stemming from an account payable for consulting
services rendered. There was no dispute that services were rendered to the
company but the Company was unable to pay the fees required pursuant to
contract. The Company sought and obtained a settlement agreement beneficial to
it.
2. The Company settled a series of claims stemming from its guarantee of certain
leases obtained by third parties; the third parties earlier obtained a default
judgment against the Company relating to one lease. The claims made in July 1999
exceeded $100,000.00 and were disputed by the Company. Through a vigorous
defense effort, the Company obtained a favorable settlement wherein it agreed to
pay $6,000.00 and to lower the exercise price of options previously issued in
exchange for a release of all liens and claims and removal of the
earlier-obtained judgment. 3. The Company settled a claim stemming from an
account payable for consulting services rendered. There was no dispute that the
services were rendered to the Company but the Company was unable to pay the fees
required pursuant to contract. The Company sought and obtained a settlement
agreement beneficial to it; a minimal amount was paid in settlement.
4. The Company settled a claim made by an individual who held a promissory note
with a principal amount of $47,500. The promissory note matured on December 31,
1997 and was not paid by the Company. There was no dispute that the principal
amount was due but the Company was unable to pay as required. The Company sought
and obtained a settlement agreement beneficial to it. |
