UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
Pursuant to Section 12(b) or (g) of the Securities Exchange Act of 1934
DELTA CAPITAL TECHNOLOGIES, INC.
(Name of Small Business Issuer in its Charter)
Delaware, USA 98-0187705
(State of Other jurisdiction of incorporation or organization) (IRS Employer ID No.)
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SUITE 255, 999 - 8TH STREET, SW
CALGARY, ALBERTA T2R 1J5 CANADA
(Address of Principal Executive Offices)
(403) 244-7300
(Issuer's Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(g) of the Act:
Title of Each Class Name of each exchange on which registered
Common Shares N/A
Securities registered pursuant to Section 12(g) of the Act: Common Shares with a
par value of $0.001
Exhibit index is included on page 27.
FORM 10-SB
For the Fiscal Year Ended December 31, 1998 And Period Ended July 31, 1999
TABLE OF CONTENTS
ITEM 1 - DESCRIPTION OF BUSINESS
Summary..............................................................................4
Software.............................................................................4
Shareholdings........................................................................5
Research and Development.............................................................6
Delta Capital's Products.............................................................6
Delta Capital's Marketing Program....................................................6
Delta Capital's Competition..........................................................7
Acquisition of Trade Names...........................................................9
Employees............................................................................10
Risk Factors.........................................................................10
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION.............................................................13
Marketing Program....................................................................14
ITEM 3 - DESCRIPTION OF PROPERTY.......................................................16
ITEM4 - SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS
AND MANAGEMENT
Security Ownership of Certain Beneficial Owners......................................17
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS...........................................................18
ITEM 6 - EXECUTIVE COMPENSATION........................................................19
Pension Plans........................................................................19
Compensation of Directors............................................................19
Executive Compensation...............................................................19
Option Grants in Last Fiscal Year....................................................20
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................20
ITEM 8 - DESCRIPTION OF SECURITIES
Common Stock.........................................................................22
Transfer Agent and Registrar.........................................................22
PART II
ITEM 1 - MARKET PLACE AND DIVIDENDS OF DELTA CAPITAL'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
Market Information...................................................................22
Dividend Policy......................................................................23
Options Exercised....................................................................23
Warrants Exercised...................................................................23
ITEM 2 - LEGAL PROCEEDINGS.............................................................23
ITEM 3 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE...........................................23
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ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES.......................................23 ITEM 5 - INDEMNIFICATION OF DIRECTORS AND OFFICERS.....................................24 FINANCIAL STATEMENTS...................................................................25 EXHIBITS...............................................................................25 SIGNATURES.............................................................................26 |
PART I
ITEM 1 - DESCRIPTION OF BUSINESS
SUMMARY
DELTA CAPITAL TECHNOLOGIES, INC. ("Delta Capital") was incorporated under the laws of Delaware on March 4, 1998. Delta Capital originally had authorized share capital of 1,500 common shares with a par value of $0.001. On April 27, 1998 Delta Capital filed an amendment to its Certificate of Incorporation increasing its share capital to 25,000,000 common shares with a par value of $0.001 per share. On March 15, 1999 Delta Capital underwent a one for four stock split bringing the total number of shares issued and outstanding from 2,200,000 to 8,800,000 shares issued and outstanding. As at December 13, 1999 there were 13,800,000 common shares of Delta Capital issued and outstanding. Delta Capital's principal business office and registered and records office is at Suite 255, 999 - 8th St. SW Calgary, AB T2R 1J5 Canada.
Delta Capital is in the business of providing e-Business software and support services.
Between March 4, 1998 and June 1, 1999 Delta Capital's focus was directed towards assessing various potential acquisition targets in the Internet and related fields. During that period Delta Capital spent minimal funds conducting its assessment of various businesses. Funds required for administration of Delta Capital during fiscal years ended December 31, 1998 and subsequent months came from monies raised from initial investors.
SOFTWARE
On June 1, 1999 Delta Capital acquired the rights to an exclusive worldwide license to the relBuilder Enterprise Suite of business intelligent e-Commerce and e-Business software (the "Software") from 827109 Alberta Ltd. ("AltaCo"), an Alberta, Canada based private company. AltaCo was incorporated on April 16, 1999 and changed its name to Delta Enterprise Technologies (Canada) Inc. effective September 29, 1999. The rights were acquired pursuant to a License Agreement dated June 1, 1999 between Delta Capital and AltaCo, as amended by a Letter Agreement dated September 2, 1999 (the "License Agreement"). The Software application includes modules for e-Commerce, e-Project Management, e-Customer Services, e-Document Assembly, e-Contact Management, e-Business Intelligence and e-Back office and a Core Technology which models business rules and relationships. The License Agreement allows Delta Capital to distribute licenses for the Software through sub-licenses.
The License Agreement requires Delta Capital to pay to AltaCo a non-refundable lump sum license fee of $50,000 by November 1, 1999, $45,800 of which has already been paid by Delta Capital. Under the License Agreement, Delta Capital is required to pay a royalty payment of 15% of net sales with minimum amounts of C$50,000 in the first year, C$200,000 in the second year, and C$300,000 in the third year (the "Royalty Payments"). The term of the License Agreement is for three years commencing June 1, 1999 and upon expiration of the term, Delta Capital may renew the License Agreement for an unlimited term for the sum of one ($1.00) dollar. AltaCo acquired its rights to the Software from SiCom Solutions Inc., an Alberta, Canada based private company ("SiCom") on identical terms to the License
Agreement.
SHAREHOLDINGS
Pursuant to an agreement dated June 1, 1999 between Delta Capital and AltaCo (the "Share Exchange Agreement") Delta Capital agreed to issue to AltaCo 5,000,000 shares of Delta Capital in exchange for 5,000,000 shares of AltaCo. Delta Capital has attributed a value of $0.50 per share for the 5,000,000 shares issued to AltaCo based on the attributed value of $0.50 per share for each of the 5,000,000 AltaCo shares acquired. Management is of the view that the proper way to value the 5,000,000 Delta Capital shares is to equate such shares to the value of the 5,000,000 AltaCo shares received in exchange. However, the value of the 5,000,000 AltaCo shares cannot be determined at this stage and therefore the value of the 5,000,000 Delta Capital shares cannot be presently determined. The exchange of the shares was completed on September 9, 1999. As a result of the shares of AltaCo issued to Delta Capital pursuant to the Share Exchange Agreement, Delta Capital became the second largest single shareholder of AltaCo holding 35.71% of the issued and outstanding shares of AltaCo. Delta Capital's significant shareholdings in AltaCo provide it with the ability to have a significant influence on the operations of AltaCo.
Paul Davis, the President, CEO and Director of Delta Capital, AltaCo and SiCom does not directly own any shares of Delta Capital but personally owns 48.21% of the issued and outstanding shares of AltaCo and 62.82% of SiCom. Kevin Wong, a Director of Delta Capital and Vice President Technology and Director of AltaCo does not directly own any shares of Delta Capital but personally owns 16.07% of the issued and outstanding shares of AltaCo and 8.8% of SiCom. Rajesh Taneja a Director of Delta Capital and Vice President Marketing of AltaCo owns no shares of Delta Capital.
Delta Capital has adopted a policy whereby directors are required to disclose any interest they have in proposed transactions or in entities with which Delta Capital is proposing to do business. These directors must abstain from voting on any directors' resolutions approving the proposed transactions. In addition, the general principals of corporate law require a director to act in the best interests of the shareholders of the company on whose board the director sits.
As a result of the overlap of the directorship and the shareholdings of Management in Delta Capital, AltaCo and SiCom, certain conflicts may develop amongst Management of those companies. It is anticipated that in the future AltaCo will be engaged by Delta Capital to further develop the Software based on industry competitive rates. To the extent that certain members of Management of Delta Capital do not own shares in Delta Capital but do own shares in AltaCo and SiCom potential conflicts could develop. A transaction between Delta Capital and AltaCo could have the effect of Management having a bias in favour of AltaCo in the transaction as a result of Management's shareholdings in AltaCo. Similarly, as a result of Management's shareholdings in SiCom, Management could potentially have a bias towards SiCom in any transaction between AltaCo and SiCom.
As President and CEO, and Director of Delta Capital, AltaCo and SiCom, Paul Davis has an obligation to act in the best interests of the shareholders of each of those companies. As a result of owning shares in AltaCo but not owning shares of Delta Capital, his shareholding interest in AltaCo may conflict with his obligation to act in the best interests of Delta Capital and AltaCo.
The potential conflicts of Management referred to above is, however, mitigated to some extent as a result of the 5,000,000 shares of Delta Capital held by AltaCo. To the extent that Delta Capital is successful, the 5,000,000 shares of Delta Capital held by AltaCo will increase in value. In such event the value of the AltaCo shares held by Messrs. Davis and Wong will also increase since the 5,000,000 Delta Capital shares represents a major asset of AltaCo. On that basis the interests of Messrs. Davis and Wong in AltaCo is consistent with their interests in Delta Capital. In any event, any decision made by any of the directors of Delta Capital or AltaCo must be made in accordance with their duties and obligations to deal fairly and in good faith with those companies.
RESEARCH AND DEVELOPMENT
To date, Delta Capital has relied on research and development of the Software previously funded by SiCom. Delta Capital has not, to date, provided AltaCo with additional funding over and above Delta Capital's royalty payment obligations provided for in the License Agreement. Accordingly, none of the costs associated with research and development of the Software have, to date, been borne by Delta Capital's customers. As the licensee of the Software, it will be Delta Capital's responsibility to fund and direct future development of the Software. It is anticipated that Delta Capital will engage AltaCo to continue to develop the Software on a fair market, fee for services basis, under direction from Delta Capital. Similarly, it is anticipated that AltaCo will provide support services to Delta Capital to ensure effective implementation of the Software at Delta Capital's client sites. Delta Capital will pay AltaCo fees based on industry average rates for the services it is provided.
DELTA CAPITAL'S PRODUCTS
The Software consists of a software engine called the "relBuilder" which is the Core Technology for a suite of six enterprise-class applications which permit companies and organizations to engage in e-Business. These applications are fully developed and are currently marketed as product release number 1.5.
The Software applications are as follows:
1. ENTERPRISE COMMERCE APPLICATION: Delta Capital's Enterprise e-Commerce Application provides merchants with the ability to conduct online sales and merchandizing activities over the Internet. The Enterprise e-Commerce Application has features which permit merchants to implement cross-selling, up-selling, comparative shopping and other merchandizing techniques designed to enhance their business. This technology can operate on a standalone basis or can enhance other e-Commerce solutions.
2. BACK OFFICE APPLICATION: The Back Office Application integrates existing general ledger, accounts receivable and payable, inventory, warehouse and other related back office functions with the Core Technology utilizing IBM's new "San Francisco" software architecture.
3. ENTERPRISE DOCUMENT ASSEMBLY APPLICATION: The Document Assembly Application is a content manager and document assembly tool that maximizes re-use of corporate
information by bringing together data that is usually scattered across company-wide systems.
4. ENTERPRISE PROJECT MANAGEMENT APPLICATION: The Project Management Application is equipped to handle cross-project resource analysis, cross-project roll-ups of complex costing and estimating functions. This technology integrates with such leading software asMicrosoft Exchange or Lotus Notes to provide project-based calendaring and scheduling. The Project Management Application provides a real-time graphical presentation of underlying data
5. ENTERPRISE CUSTOMER SERVICE APPLICATION: The Customer Service Application has the ability to map complex call requirements, implement sophisticated operational logic and can integrate with a web server. This allows web-based customer self-service or call center operations from within the office environment to across the globe.
6. ENTERPRISE CONTACT MANAGEMENT APPLICATION: The Contact Management Application integrates with leading directory servers such as Microsoft Exchange and Lotus Notes to enable highly complex mapping of names, addresses, companies, contact information, corporate hierarchies, active and non-active projects, and histories.
DELTA CAPITAL'S MARKETING PROGRAM
PARTNER PROGRAM
Delta Capital has commenced building a network of e-Commerce and e-Business knowledgeable consultants and solutions providers throughout North America. Delta Capital plans to provide a products and services package directed toward established consultants - known as Partners - who agree to utilize Delta Capital's software in providing e-Commerce and e-Business solutions for their clients Delta Capital plans to penetrate the top 23 American and Canadian markets through its Partner Program over the course of the next 18 months with its first target markets being Seattle and Vancouver. Delta Capital is currently pursuing vertical markets in Education, Oil and Gas, and Manufacturing.
Delta Capital has currently developed two partners in the consulting field for its Partnership Program. The partners are Khyber Pass Distributing, an entertainment consulting company and Matradyne Corporation, a marketing business consultancy. Both of these partners have entered into agreements with Delta Capital to re-market Delta Capital's Software and implement it for e-Commerce or e-Business purposes with their clients. Based partly on experience gained from these relationships and partly from norms established by standard industry remarketing practices, Delta Capital is planning its first quarter Year 2000 rollout of software and services.
The Partner Program also includes development of relationships with internet service providers ("ISP") to provide them with the tools and capabilities to enable their clients to do business over the Internet. To that effect, Delta Capital recently entered into its first such sub-licensing agreement with Imaginet Communication Group Inc., a company which offers
Internet access and web hosting services in Canada and the USA through its rapidly growing Imaginet ISP Franchise Network.
DIRECT CLIENTS
In anticipation of Delta Capital fully launching its Partner Program, it has developed direct relationships with six client/customer companies: Shaw Communications Inc., a cable company; Fairplay Network, a retail organization; Chevron Canada Resources, an oil company; Oil & Gas Trading Partners Network, an oil and gas industry information initiative; Rand Worldwide Inc., an integrated manufacturing company and the I-School Network, an interactive education network system based in Calgary, Alberta. The direct sale of the software and service package is designed to develop examples of Delta Capital's technology at work. These examples will then be used as proof of performance when Delta Capital rolls out its product and service offering in the year 2000. Delta Capital is not dependent upon any single customer or client for its future success.
STRATEGIC ALLIANCES
In addition to its Partner Program, Delta Capital has developed and will continue to develop strategic alliances with various entities. Typically the strategic alliances result in Delta Capital marketing another company's products or Delta Capital utilizing other companies' software products within the company's product line. Not only does this establish a business relationship, but it also facilitates a sharing of information and an exchange of ideas between the parties.
Delta Capital has a strategic alliance with BCE-Emergis of Montreal, to remarket various credit card clearing services. In accordance with its arrangement with BCE-Emergis, Delta Capital includes BCE-Emergis' credit card clearing services technology as part of Delta Capital's product. Detla Capital pays BCE-Emergis a fee for use of BCE-Emergis' technology and includes such costs in the cost of Delta Capital's products.
Smart Technologies Inc.of Calgary, has an agreement with AltaCo to include that company's "Smart Ideas" concept mapping tools as a part of the standard user interface options of the relBuilder software engine as marketed by Delta Capital. Smart Technologies Inc.'s technology is included or "imbedded" as part of Delta Capital's technology. Delta Capital pays Smart Technology Inc. a fee for use of Smart Technology Inc.'s technology and includes such costs in the cost of Delta Capital's product.
As Delta Capital's business develops, it is anticipated that it will utilize the services and product offerings of industry leaders in enhancing Delta Capital's product/service offering while at the same time encouraging use of the relBuilder core technology and software suite. These future alliances will be contract-based agreements aimed at enhancing Delta Capital's position in the marketplace by leveraging the knowledge, expertise and sales networks of the parties with whom it forms alliances to the mutual benefit of both.
CORE TECHNOLOGY PROGRAM
Delta Capital will seek affiliations with major e-Commerce and e-Business organizations to market its relBuilder core technology. Exposure of Delta Capital's core technology began
with Delta Capital's IBM "San Francisco" technology Fast Start award and participation in the June 1999 Java One conference. It has continued with Delta Capital's technical team, assisted by IBM Rochester, Maryland based San Francisco and porting centre teams, successfully completing certain tests of the relBuilder software suite. The tests conducted were those types of tests typically conducted by IBM in assessing software capabilities. Delta Capital Technologies has no formal relationship with IBM at the time of this filing. It has entered into discussions with IBM to establish co-marketing and co-development opportunities within IBM's umbrella of e-Business initiatives. While management is confident about the development of this relationship, there is no assurance that any agreement will result from these discussions.
DELTA CAPITAL'S COMPETITION
Delta Capital's software and services offering crosses over many business boundaries and encounters a variety of competitors which serve various segments of the marketplace. There is no known direct competitor with both an intelligent e-Business engine technology and a suite of fully integrated e-business applications. Delta Capital's management believes that its proprietary relBuilder software engine combined with its six enterprise-class applications provide it with the capability and flexibility to effectively exploit selected target markets as discussed in the marketing section. Alternatively, Delta Capital can work with established marketplace players to enhance their software and services offerings through sub-licensing its relBuilder core technology, also as discussed in the marketing section.
The Software named "Knowledge Broker" from Black Pearl Software uses relationship modeling and classic analytical business intelligence to indicate trends and opportunities in a manner similar to those functions as found in Delta Capital's relBuilder software suite. While Knowledge Broker has much in common with Delta Capital's products.Knowledge Broker does not have e-business modules which match Delta Capital's six enterprise-class applications.
There are many large companies and organizations which provide competition in the provision of software competitive to Delta Capital's six enterprise-class applications. IBM is a major and active e-Business force under its WebSphere e-Business Solutions banner. Microforum Inc. Scient Corporation, Razorfish Inc., Proxicom Inc., and a variety of middle market companies provide software solutions combined with consulting services and, as such, are competitors in various segments of the market. Specialist companies, led by Blue Martini Software, have developed e-Commerce and e-Catalogue implementations to produce sophisticated Internet-based merchandizing and sales programs.
ACQUISITION OF TRADE NAMES
Pursuant to an agreement dated July, 1999, as amended December 3, 1999, between Delta Capital and Rajesh Taneja, Delta Capital agreed to pay Mr. Taneja $3,000 for his rights and ownership to the British Columbia sole proprietorship company names "Clear Choice Media" and "Clear Choice Technologies". Delta Capital acquired the rights to the names from Mr. Taneja who is a director of Delta Capital because management felt that the names would be valuable for future marketing of software.
EMPLOYEES
Delta Capital currently has two full time employees who are each paid $3,000 per month plus expenses pursuant to verbal agreements entered into with Delta Capital that commenced on June 15, 1999. Delta Capital also currently has two part time individuals under contracts pursuant to which one individual receives Cdn $2,500 per month pursuant to a contract which commenced June 15, 1999 and the other individual receives Cdn $7,500 a month pursuant to a contract which commenced July 15, 1999. The Cdn $2,500 part time employee spends 50% of her time on Delta Capital administration and the balance of her time providing administrative services to non-competitive clients through her wholly owned company called J.A.M. Corporate Consultants Inc. The Cdn $7,500 individual spends 75% of his time on Delta Capital business and the balance consulting to non-competitive companies.
RISK FACTORS
Delta Capital's business is subject to numerous risks, including the following:
LIMITED OPERATING HISTORY AND MINIMAL REVENUE AND ASSETS MAY RESULT IN LOSSES AND DIFFICULTY IN OBTAINING FINANCING: Delta Capital has had limited operating history, has received minimal revenue from operations and has minimal assets. Delta Capital will, in all likelihood, sustain operating expenses in excess of revenues until it is better established and will therefore require additional funding to continue operations and to have sufficient working capital to sustain operations. Because Delta Capital has minimal assets it may be difficult or even impossible for Delta Capital to obtain debt financing at this stage in Delta Capital's development. No assurances can be given that Delta Capital will operate profitably in the future or that it will be able to obtain further financing.
WITHOUT FURTHER FINANCING DELTA CAPITAL MAY CEASE TO BE A GOING CONCERN. Delta Capital will need additional working capital to be successful in its planned activity and continuation of Delta Capital as a going concern is dependent upon obtaining the working capital necessary. Management of Delta Capital has developed a strategy which it believes will accomplish the objective of obtaining further funding through additional equity funding and long term financing, which will enable Delta Capital to operate in the future. Although Management believes it will be able to obtain such funding for Delta Capital there is no assurance they will be successful in order to keep Delta Capital operating as a going concern.
NEW AND DEVELOPING TECHNOLOGIES/MARKET CONDITIONS MAY RESULT IN PROJECTIONS NOT BEING ACHIEVED: The e-Commerce/e-Business marketplaces, along with vertical applications, have been identified by Management as significant emerging market segments with substantial projected growth potential. Should these market segments not develop in the manner expected, or should they fail to develop as quickly as anticipated, Delta Capital's business, sales, finances and operating results could be materially and adversely affected resulting in Delta Capital being less profitable than anticipated.
STRATEGIC PARTNERS MAY NOT PRODUCE ANTICIPATED SALES: The revenues of Delta Capital pertaining to product sales, are dependent to a large degree on the ability of its strategic partners to generate transaction volumes and provide new markets for products of Delta Capital. Delta Capital generates sales by supplying strategic partners with products and services that the partners market to their customers. If Delta Capital's strategic partners are unsuccessful in their businesses or if a substantial number of Delta Capital's strategic partners
cease doing business with Delta Capital, Delta Capital will sell fewer products and services to strategic partners and Delta Capital's revenue will be impacted negatively.
DEPENDENCE UPON KEY PERSONNEL: Success of Delta Capital depends to a significant degree upon the continued contribution of its Management. Current Management have been involved in the development of the Software from the first stages of its development. Management's intimate knowledge of the Software, together with its vision of how the Software should be developed in the future, makes Delta Capital's future success highly dependant on current Management. Because the computer software industry exists in a rapidly changing environment, it is important for key personnel to have a historic appreciation of the evolution of a given piece of software in the context of a provider's corporate strategy. Management believes that customers of Delta Capital's products make their purchase decisions based on existing capabilities of the software and also because they believe Delta Capital has personnel that is capable of upgrading and causing the Software to be further developed in the future. Loss of current personnel may result in customers losing confidence in Delta Capital's future capability to deliver competitive Software in the future.
At present Delta Capital has no key-man life insurance on its key personnel. Further, at present, Delta Capital does not have written employment contracts with its key personnel and accordingly Delta Capital would not be able to contractually prevent key personnel from leaving Delta Capital. Although Delta Capital does not believe that any of its key personnel are considering retirement or planning on leaving Delta Capital for other reasons, there is no assurance that one or more of the key personnel won't leave Delta Capital in the future.
LACK OF EXPERIENCE OF MANAGEMENT COULD LESSEN PROFITABILITY: Management of Delta Capital has only limited business experience in running an operating company and Management has no experience in operating a public company. In implementing a successful marketing plan for Delta Capital's services, management lacks experience which could result in Delta Capital being less efficient with its use of funds than if Management had more experience. Additional management skills and knowledge will be required to operate Delta Capital's business profitably if sales volumes and revenues increase, and the number of employees increase. Although Management intends to acquire more experienced personnel in the future as Delta Capital grows, until that occurs Delta Capital may be less profitable.
RISK OF OBSOLESCENCE: Unless Delta Capital can continue to successfully develop and upgrade the Software,, the Software may become obsolete compared with other software which is introduced to the market place, Because software evolves rapidly it is important for producers to be constantly refining and upgrading their software products to remain competitive. Although Management believes that Delta Capital's personnel have the required talent to cause the Software to remain competitive, there is no assurance that the Software will not become obsolete.
POTENTIAL CONFLICTS OF INTEREST MAY ARISE: Paul Davis, the President , CEO and Director of Delta Capital, AltaCo and SiCom does not directly own any shares of Delta Capital but personally owns 48.21% of the issued and outstanding shares of AltaCo and 62.82% of SiCom. Kevin Wong, a Director of Delta Capital and Vice President Technology and Director of AltaCo does not directly own any shares of Delta Capital but personally owns 16.07% of the issued and outstanding shares of AltaCo and 8.8% of SiCom. Rajesh Taneja is a Director of Delta Capital and is Vice President Marketing of AltaCo but owns no shares of
either of those companies.
As a result of the overlap of the directorship and the shareholdings of Management in Delta Capital, AltaCo and SiCom, certain conflicts may develop amongst Management of those companies. It is anticipated that in the future AltaCo will be engaged by Delta Capital to further develop the Software based on industry competitive rates. To the extent that certain members of Management of Delta Capital do not own shares in Delta Capital but do own shares in AltaCo and SiCom potential conflicts could develop. A transaction between Delta Capital and AltaCo could have the effect on Management, as a result of its shareholdings in AltaCo, having a bias in favour of AltaCo in the transaction. Similarly, as a result of Management's shareholdings in SiCom, Management could potentially have a bias towards SiCom in any transaction between AltaCo and SiCom.
As President and CEO, and Director of Delta Capital, AltaCo and SiCom, Paul Davis has an obligation to act in the best interests of the shareholders of each of those companies. As a result of owning shares in AltaCo but not owing shares of Delta Capital, his shareholding interest in AltaCo may conflict with his obligation to act in the best interests of Delta Capital and AltaCo.
COMPETITION MAY RESULT IN LOWER MARKET SHARE AND LOWER PROFITABILITY: The market for e-commerce is intensely competitive, evolving and subject to rapid technological change. Intensity of competition is likely to increase in the future. Increased competition from new competitors is likely to result in loss of market share, which could negatively impact Delta Capital's business. Competitors vary in size, and in scope and breadth of the products and services offered and Delta Capital may receive competition from several major enterprise software developers. In addition, because there are relatively low barriers to entry in this market, additional competition from other established and emerging companies may develop.
Many current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources than Delta Capital. As well, many other companies have significantly greater name recognition and a larger base of customers. Many competitors have well-established relationships with clients and potential clients, and have extensive knowledge of the industry. Current and potential competitors have established or may establish cooperative relationships among themselves or with third parties to increase the ability of their products to address customer needs. Accordingly, it is possible that new competitors, or alliances among competitors, may emerge and rapidly acquire significant market share which may result in lower sales of the Software resulting in Delta Capital being less profitable.
GROWTH AND EXPANSION MAY TAX DELTA CAPITAL'S RESOURCES RESULTING IN CUSTOMER DISSATISFACTION: Delta Capital's anticipated growth may place a significant strain on Delta Capital's administrative, operational and financial resources and increase demands on its systems and controls. As Delta Capital increases its service offerings and expands its targeted markets, there will be additional demands on Delta Capital's customer support, sales and marketing and administrative resources and network infrastructure. There can be no assurance that Delta Capital's operating and financial control systems and infrastructure will be adequate to maintain and effectively monitor future growth. The failure to continue to upgrade the administrative, operating and financial control systems or the emergence of unexpected expansion difficulties could result in customer dissatisfaction with attendant loss of sales.
DELTA CAPITAL'S STOCK DEEMED TO BE A PENNY STOCK WHICH MAY RESULT IN DECREASED LIQUIDITY: The Securities and Exchange Commission adopted Rule 15g-9 which established the definition of a "penny stock", for purposes relevant to Delta Capital, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions.
For any transaction involving a penny stock, unless exempt the rules require:
(i) that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must: (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transaction in penny stocks are
suitable for that person and that person had sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the Commission relating to
the penny stock market, which, in highlight form, (i) sets forth the basis on
which the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction.
Disclosure also has to be made about the risks of investing in penny stock in both public offering and in secondary trading, and about commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. As a result of the penny stock trading restrictions, brokers or potential investors may be reluctant to trade in Delta Capital's securities which may result in less liquidity for Delta Capital's stock.
YEAR 2000 RISK: Delta Capital's internally used computers and products produced or licensed by Delta Capital are "Y2K" compliant and do not represent a risk for users. To the extent that Delta Capital may be exposed to possible year 2000 failures of its trading partners, Delta Capital's staff and the staff of AltaCo have been educated on the Year 2000 problem and an inquiry program as to the readiness of trading partners has been initiated. Although Delta Capital has used its best efforts to ensure that any contracted technology deliverables to Delta Capital are "Y2K" compliant, Delta Capital cannot be sure that all outside organizations beyond its control which impact or may impact Delta Capital's business, will be Y2K compliant by December 31, 1999.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management discussion and analysis of financial condition and results of operations for the period ended July 31, 1998 compared to the period ended July 31, 1999.
Delta Capital is at an early stage. It has successfully achieved its first objective: the acquisition of Internet technologies and is now developing plans to take these technologies to
market. It plans to commence significant marketing activities in the first quarter of 2000. During the period under review, Delta Capital's modest expenditures have been made in support of finding appropriate Internet technologies and, as well, for audit, income tax returns and meeting various regulatory requirements. Substantially all cash required for operations has come from investors.
On June 1, 1999, Delta Capital acquired the exclusive worldwide license to the relBuilder Enterprise Suite of intelligent e-Commerce and e-Business software from 827109 Alberta Ltd. (AltaCo), an Alberta, Canada-based private company. Under the agreement, Delta Capital will pay AltaCo fifteen percent (15%) royalty payments in the minimum amount of C$50,000 in the first year, C$200,000 in the second year and C$300,000 in the third year. The software may be sub-licensed under terms of the agreement.
MARKETING PROGRAM
Delta Capital's marketing program involves the development of a variety of different types of relationships with the entities with which Delta Capital does business as follows:
1. PARTNER PROGRAM, an initiative progran which involves Delta Capital providing products and services to established customers (ie. "partners") who in turn integrate Delta Capital's Software with other software and provide their clients with various forms of Internet-related business, technical or marketing assistance. Delta Capital currently has three partners who perform this function: Khyber Pass Distributing, an entertainment consulting company; Metradyne Corporation, a marketing business consultancy; and Imaginet Communications Group Inc., an Internet services provider;
2. STRATEGIC ALLIANCES exist which involve Delta Capital marketing another company's products or Delta Capital utilizing other companies' software products within Delta Capital's product. Delta Capital currently has strategic alliances with BCE Emergis of Montreal and through AltaCo with Smart Technologies Inc. of Calgary., The services/software of BCE Emergis and Smart Technologies Inc. are embedded in the relBuilder software and services offered by Delta Capital and passed on to its customers.
3. CORE TECHNOLOGY AFFILIATIONS are included in Delta Capital's plans. Delta Capital will seek to establish relationships with major e-Commerce and e-Business organizations to market its core Software technology. Delta Capital is currently working towards establishing a core technology affiliation with IBM, as described previously, but as of the date of this filing has not established a formal relationship. It has entered into discussions with IBM to establish co-marketing and co-development opportunities within IBM's umbrella of e-Business initiatives. While management is confident about the development of this relationship, there is no assurance that any agreement will result from these discussions.
4. DIRECT RELATIONSHIPS Delta Capital currently works directly with six companies which use Delta Capital's Software and services: Shaw Communications Inc., a cable company; Fairplay Network, a retail organization; Chevron Canada Resources, an oil company; Oil and Gas Trading Partners Network, an oil and gas industry information initiative; Rand Worldwide Inc., an integrated manufacturing company; and I-School
Network, an interactive education network system based in Calgary, Alberta. The direct sale of the software and service package is designed to develop examples of Delta Capital's technology at work. These examples will then be used as proof of performance when Delta Capital rolls out its product and service offering in the year 2000.
A) Plan of Operation:
a) Delta Capital anticipates modest revenues over the next 12 months and anticipates continuing losses from operations as it introduces its relBuilder software and services offering to the marketplace. Based on the current costs associated with operating Delta Capital, Delta Capital will require US$240,000 financing through the end of 1999. Delta Capital plans to raise additional funds during the next 12 months in the amount of approximately US$2.5 million through equity financing, participation in a major industry software/hardware company's support program and debt financing to finance its operations.
b) It is management's view that virtually all businesses in future will have e-Commerce/e-Business requirements and that the nature and conduct of business in general will be fundamentally changed. In a marketplace where the demand for Internet software and services is growing rapidly, a trend which is expected to continue for the foreseeable future, Delta Capital's goal is to spend the next 12 months establishing its distribution and sales channels, negotiating its partnership arrangements and working to gain strategic partners to utilize Delta Capital's core technology relBuilder software. Delta Capital management anticipates positive cash flow in the fourth quarter of its upcoming fiscal year.
c) Delta Capital will perform market research in the next 12 months to help gauge marketplace acceptance of its software and services. Delta Capital will not directly undertake any product development in the coming 12 months. However, it is anticipated that AltaCo will continue development of the relBuilder software suite under direction from Delta Capital.
d) It is planned that in future Delta Capital will purchase from AtlaCo, services at fair market rates to ensure continued development of the Software and provision of support services. Delta Capital will re-license back to AltaCo certain of its rights under Delta Capital's worldwide license to permit AltaCo to undertake marketing initiatives in certain Canadian markets and market segments as seems appropriate to Delta Capital. Specifically, Delta Capital will encourage AltaCo to market the relBuilder software in the Alberta, Canada, marketplace where AltaCo is based. Delta Capital will encourage AltaCo to work with certain industries and organizations, as yet undefined, where it is felt that AltaCo is better positioned to service marketplace needs and requirements.
e) Delta Capital management does not anticipate any material plant or equipment purchases in the next 12 months.
f) Delta Capital management anticipates that it will add approximately 10 employees in the coming year, including personnel with specialized technology, financial experience andspecific industry sales experience.
g) Although management does not anticipate Y2K problems, management does recognize that there are risks associated with dealing with other parties who may not be Y2K compliant. Management has assessed Delta Capital's state of readiness for year 2000 issues and has determined that, to the extent possible,
Delta Capital is prepared. Management believes that it has already increased the necessary costs associated with being Y2K compliant in that Delta Capital utilizes equipment and software that has been developed after the Y2K problem became apparent. Delta Capital will continue to reduce the risk of Y2K problems as much as possible by continuing to deal with suppliers who Delta Capital believes is also Y2K compliant.
B) Results from Operations:
a) Revenue
There was no revenue for fiscal year ended December 31, 1998 or for the period ended July 31, 1999.
b) General and Administration Expense
Expenses in the fiscal year ended December 31, 1998 were $39,281.00, largely due to operating and regulatory filing expenses associated with coming to trade on the OTC:BB in March, 1999. Delta, from time to time, issues shares of its common stock for services. 200,000 shares were issued for the fiscal year ended December 31, 1998 at an expense of $207.00 to Delta Capital. Expenses for the period ended July 31, 1999 were $48,639.00, primarily due to the acquisition of the exclusive worldwide license from AltaCo.
c) Net Loss from Operations
Net loss from operations in fiscal 1998 was $39,281.00 and $48,629.00 for the period ended July 31, 1999. Delta Capital is currently selling software and services to a limited and restricted market as it continues to develop its product line in advance of major marketing efforts.
ITEM 3 - DESCRIPTION OF PROPERTY
Delta Capital does not own any properties but utilizes, without charge and under a verbal agreement, premises leased by AltaCo which consist of approximately 2,537 square feet on the second floor of an office building situated at 999 - 8th Street, S.W., Calgary, Alberta. Delta Capital will give consideration to acquiring its own leased premises in the future if warranted but as of this date Delta Capital has not acquired leased premises and there are no specific plans to do so.
Delta Capital maintains a United States mailing address at Suite 806 - 1904 - 3rd Avenue, Seattle, Washington 98101. Delta Capital also maintains a mailing address in British Columbia, Canada at Suite B201 - 1331 Homer Street, Vancouver, British Columbia, Canada. There are no office premises of Delta Capital associated with either the Seattle mailing address or the Vancouver mailing address.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of December 13, 1999 information with respect to the beneficial ownership by each person who is known to Delta Capital to be the beneficial owner of more than 5% of Delta Capital's common shares, by each director and executive officer and by all executive officers and directors as a group. All persons named below have sole voting and investment power over their shares except as otherwise noted. Delta Capital's common stock is the only class of voting securities outstanding.
------------------------------------------------------------------------------------------------------------
NAME, MUNICIPALITY OF RESIDENCE AND OFFICE COMMON SHARES PERCENTAGE OF
HELD BENEFICIALLY OWNED COMMON SHARES
DIRECTLY OR INDIRECTLY
------------------------------------------------------------------------------------------------------------
Paul Davis(1) 5,000,000 36.23%
8 Stratton Place SW
Calgary, Alberta T3H 1T6
President and Director
------------------------------------------------------------------------------------------------------------
Kevin Wong(2) 803,571 5.82%
341 - 33rd Avenue NE
Calgary, Alberta T2E 2H9
Director
------------------------------------------------------------------------------------------------------------
Rajesh Taneja Nil Nil
#104, 10668 - 138th Street
Surrey, BC V3T 4K5
Director
------------------------------------------------------------------------------------------------------------
Judith Miller(3) 296,000 2.14%
B201 - 1331 Homer Street
Vancouver, BC V6B 5M5
Secretary/Treasurer and Director
------------------------------------------------------------------------------------------------------------
T. Davis Capital Corp. 800,000 5.80%
5167 Galway Drive
Delta, BC V4M 2R4
------------------------------------------------------------------------------------------------------------
All Officers and Directors as a Group 6,899,571 49.99%
============================================================================================================
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(1) Mr. Davis owns 6,750,000 shares of the 14,000,000 issued shares of AltaCo and the shares identified represent his beneficial ownership of the 5,000,000 Delta Capital shares issued to AltaCo. Mr. Davis does not directly own any shares in Delta Capital.
(2) Mr. Wong owns 2,250,000 shares of the 14,000,000 issued shares of AltaCo and the shares identified represent his beneficial ownership of the 5,000,000 Delta Capital shares issued to AltaCo. Mr. Wong does not directly own any shares in Delta Capital.
(3) Included in this figure are stock options entitling Ms. Miller to purchase 200,000 shares of Delta Capital exercisable at US$0.0075 per share. The option expires December 31, 1999.
The 5,000,000 shares issued to AltaCo and the 800,000 shares issued to T. Davis Capital Corp. are subject to Federal Securities Laws Rule 144, and thus have restrictions on their resale for a minimum of one year from the date of issuance. After holding the Delta Capital shares for one year the aforesaid shareholders, including those that are affiliates of Delta Capital may, provided Delta Capital is up to date in its filing and reporting requirements, sell, in a three month period, the greater of (a) 1% of the Delta Capital shares outstanding as shown by the most recent report or statement published by Delta Capital, or (b) the average weekly reported trading volume in Delta
Capital shares on all securities exchanges or automated quotation systems during the four calendar weeks preceding such sale.
After holding their shares for two years non-affiliates can sell their shares without adherence to the volume limitations, but affiliates must still adhere to the volume limitations.
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table identifies Delta Capital's directors and executive officers as of October 13, 1999:
-------------------------------------------------------------------------------------------------------------
NAME AGE POSITION
-------------------------------------------------------------------------------------------------------------
Paul Davis 48 President, CEO and Director since June 4, 1999
-------------------------------------------------------------------------------------------------------------
Kevin Wong 26 Director since June 4, 1999
-------------------------------------------------------------------------------------------------------------
Rajesh Taneja 29 Director since June 4, 1999
-------------------------------------------------------------------------------------------------------------
Judith Miller 59 Corporate Secretary and Director since April 28, 1998
-------------------------------------------------------------------------------------------------------------
|
Directors are elected at Delta Capital's annual general meeting of shareholders or may be appointed by existing directors between annual general meetings of shareholders and hold office until they resign or their successors are elected. Delta Capital's officers are appointed by the board of directors and serve at the pleasure of the board. Following is a summary of the occupation of the Directors and Executive Officers of Delta Capital over the last five years:
PAUL DAVIS, President, CEO and Director of Delta Capital founded, in October, 1996, SiCom Solutions Inc. which developed the Software. Since SiCom's inception Mr. Davis has been responsible for developing SiCom's business model, integration strategy, partnership and financing. In the period 1994 to October, 1996 Mr. Davis was President and CEO of HPCC High Performance Computing Centre ("HPCC"), a Calgary, Alberta based private company. During this employment with HPCC Mr. Davis' responsibility was to develop high performance computing and advanced applications associated with high-speed networking. In 1994 Mr. Davis received his Bachelor of Applied Science, Electrical Engineering with a specialty in computing technology and power engineering.
RAJESH TANEJA, Director of Delta Capital, has, over the last five years, provided technical and sales support to a variety of companies involved in the computer software industry or to companies utilizing products provided by the computer software industry. Mr. Taneja founded Clear Choice Media in 1998 and has served as its Chief Executive Officer since its inception. He has served as President and senior web designer for Clear Choice Technologies since 1997 and served as senior inter/intranet engineer for Metasoft Systems Inc. from 1997 to 1999. Mr. Taneja provided technical support to Raptor Capital Corporation from 1997 to 1999; served as technical manager of Cross Systems Inc. from 1996 to 1997 and was technical and sales manager of the Trumpet Tech Group of Companies Inc. in 1996. Mr. Taneja was President of Tin Webdesigner and New Media from 1995 to 1999 and from 1994 to 1995 he held the position of Senior Network Implementation and Support Staff with Combit Net/FX, a company which provided networking and software implementation to a variety of clients including the Government of India.
KEVIN WONG, Director of Delta Capital, has been Vice President and Director of SiCom Solutions Inc. since 1997 where he developed the technical information and inception model for the Software. In the 4 years prior to April, 1997, Mr. Wong attended University during which time he obtained a law degree from the University of Windsor, Ontario.
JUDY MILLER, Secretary and Director of Delta Capital, has been President and Director of J.A.M. Corporate Consultants Inc. ("JAM") since March 1994. JAM, which is wholly owned by Ms. Miller, is a private company incorporated pursuant to the laws of British Columbia, provides a variety of services including office management and administration, meeting and special event planning, office redesign/relocation, and fund raising. Ms. Miller is the sole employee of JAM and accordingly is responsible for providing JAM's services.
The above individuals are the only key personnel presently associated with Delta Capital.
ITEM 6 - EXECUTIVE COMPENSATION
The following compensation information relates to amounts paid to the Chief Executive Officer for the preceding three (3) years. No director or executive officer received compensation in excess of $100,000 in 1998.
--------------------------------------------------------------------------------------------------------------------
ANNUAL COMPENSATION LONG TERM COMPENSATION
--------------------------------------------------
AWARDS PAYOUTS
--------------------------------------------------------------------------------------------------------------------
OTHER SECURITIES RESTRICTED
ANNUAL UNDER SHARES OR LTIP ALL OTHER
NAME AND PRINCIPAL YEAR COMPEN- OPTIONS RESTRICTED PAYOUTS COMPEN-
POSITION ENDING SALARY BONUS SATION GRANTED SHARE UNITS SATION
--------------------------------------------------------------------------------------------------------------------
Paul Davis 1998 Nil Nil Nil Nil Nil Nil Nil
President (1)
--------------------------------------------------------------------------------------------------------------------
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Note: There were no compensation payments to Chief Executive Officer for preceding 3 yrs.
(1) Delta Capital does not have a Chief Executive Officer but for the purposes of disclosure hereunder Mr. Davis, as President, is deemed to be the Chief Executive Officer.
PENSION PLANS
Delta Capital does not have a defined benefit pension plan that provides annual benefits to any Executive Officers.
COMPENSATION OF DIRECTORS
None of the Directors receive Director's fees.
EXECUTIVE COMPENSATION
The Vice President Marketing and Corporate Secretary received US$3,000.00 and US$2,000.00, respectively, during 1998. No other Executive Officers of Delta Capital received any reportable salary or bonus during 1998.
The following table sets forth as to each named Executive Officer certain information concerning the grant of options during the year ended January 31, 1999:
OPTION GRANTS IN LAST FISCAL YEAR
----------------------------------------------------------------------------------------------------------------
NAME NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE OR EXPIRATION DATE
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE
GRANTED IN FISCAL YEAR
----------------------------------------------------------------------------------------------------------------
Judith Miller 200,000 200,000 US$0.0075 Dec. 31, 1999
----------------------------------------------------------------------------------------------------------------
|
On August 26, 1999, by verbal agreement among the board of directors of Delta Capital, Judith Miller was granted a stock option to purchase 50,000 common shares of Delta Capital at an exercise price of $0.03 per share exercisable for one year. The options were granted prior to the shares of Delta Capital having been approved for trading. In March 1999 Delta Capital completed a forward stock split of 4 to 1 which increased the options granted to 200,000 shares at an exercise price of US$0.0075 per share. On August 11, 1999 the board of directors of Delta Capital extended the expiration date of the stock options to December 31, 1999 and on September 15, 1999 the verbal agreement was reduced to writing. The options were given as compensation for prior services and were considered to have no value on the date of grant because the stock of Delta Capital had no established market value at that time.
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Delta Capital is subject to various conflicts of interest arising out of its relationships with its Executive Officers, Directors and shareholders, including conflicts related to the arrangements by which Delta Capital acquired certain of is assets, as described below are conducted as arm's-length transactions and were in the best interest of Delta Capital. Delta Capital intends to continue to exercise its best business judgement and discretion in involving any such conflicts between Delta Capital and others with respect to these and all other matters, and Delta Capital believes that it will generally be able to resolve such conflicts on an equitable basis.
Paul Davis, President and Director of Delta Capital and President and Director of AltaCo, holds 6,750,000 shares of AltaCo and 3,140,857 shares of SiCom. Mr. Davis receives $6,000.00 per month as an employee of AltaCo.
Kevin Wong, Director of Delta Capital and is Director and Vice-President Technology of AltaCo. Mr. Wong owns 2,250,000 shares of AltaCo and 440,000 shares of SiCom and he receives C$4,000 per month as an employee of the AltaCo.
Rajesh Taneja, Director of Delta Capital and is Vice-President Marketing of AltaCo. Mr. Taneja receives C$3,000 per month as an employee of Delta Capital.
Judy Miller, Director and Secretary of Delta Capital owns 96,000 shares of Delta Capital and has an option to purchase 200,000 shares of Delta Capital for $0.0075 per share exercisable until December 31, 1999. Ms. Miller originally participated in a private placement for 24,000 shares of Delta Capital at $.001 per share prior to the consolidation of Delta Capital's shares on a 4:1 basis. Delta Capital paid Ms. Miller US$2,000 in November, 1998 for administrative services and pursuant to a verbal consulting contract effective June 15, 1999 receives C$2,500 per month from Delta Capital.
During the last two years Delta Capital has not been a party to and it is not proposed that Delta Capital will be a party to any transactions in which any director, nominee for election as a director, executive officer, beneficial owner of greater than 5% of Delta Capital's common shares or any member of the immediate family of such persons had or is to have a direct or indirect material interest except the following:
(a) Share Exchange Agreement:
Pursuant to the Share Exchange Agreement dated June 1, 1999 Delta
Capital issued 5,000,000 common shares to AltaCo in exchange for
5,000,000 common shares of AltaCo. Paul Davis, President and Director
of Delta Capital is President and Director of AltaCo and owns
approximately 48.21% of the issued capital of AltaCo. Mr. Davis
receives $6,000 per month as an employee of AltaCo. Kevin Wong, a
Director of Delta Capital and a Director and officer of AltaCo owns
approximately 16.07% of the issued capital of AltaCo and receives
C$4,000 per month as an employee of AltaCo. Rajesh Taneja, a Director
of Delta Capital and an officer of AltaCo receives C$3,000 per month
as an employee of Delta Capital.
(b) License Agreement:
Pursuant to the License Agreement dated June 1, 1999 Delta Capital
acquired the worldwide marketing rights to the Software from AltaCo.
In accordance with the terms of the License Agreement Delta Capital is
required to make certain royalty payments to AltaCo. Paul Davis, Kevin
Wong and Rajesh Taneja hold the positions and shareholdings in Delta
Capital and AltaCo referred to in paragraph (a) above.
(c) Purchase of Trade Names:
By agreement dated July, 1999, as amended December 3, 1999, Delta
Capital purchased the trade names "Clear Choice Media" and "Clear
Choice Technologies" from Rajesh Taneja for $3,000. Mr. Taneja is a
Director and employee of Delta Capital.
(d) Verbal Lease Agreement:
Pursuant to a verbal agreement between Delta Capital and AltaCo, Delta
Capital utilizes, without charge, premises leased by AltaCo in
Calgary, Alberta.
(e) Stock Option Agreement:
Judith Miller, a Director and officer of Delta Capital, entered into a
verbal agreement with Delta Capital on August 26, 1998 pursuant to
which Ms. Miller received a stock option to purchase 50,000 shares of
Delta Capital exercisable at US$0.03 per share for a period of one
year. In March, 1999 Delta Capital completed a forward stock split of
4 to 1 which increased the options granted to 200,000 shares at an
exercise price of US$0.0075 per share. On August 11, 1999 the board of
directors of Delta Capital extended the expiration date of the stock
options to December 31, 1999 and on September 15, 1999 the verbal
stock option agreement was reduced to writing.
ITEM 8 - DESCRIPTION OF SECURITIES
COMMON STOCK
Delta Capital originally had authorized share capital of 1,500 common shares with a par value of $0.001 but subsequently increased its share capital to 25,000,000 common shares with a par value of $0.001 per share. On March 15, 1999 Delta Capital underwent a one for four stock split increasing its issued and outstanding to 8,800,000 common shares. As at December 13, 1999 there were 13,800,000 common shares of Delta Capital issued and outstanding.
TRANSFER AGENT AND REGISTRAR
Delta Capital's Transfer Agent is Signature Stock Transfer in Dallas, Texas.
PART II
ITEM 1 - MARKET PLACE AND DIVIDENDS ON DELTA CAPITAL'S COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
MARKET INFORMATION
Delta Capital's common stock is currently traded on the National Association of Securities Dealers Inc. Automated Quotation System's Bulletin Board, using the stock symbol "DCTG." Only a limited public trading market exists for Delta Capital's outstanding stock, and there can be no assurance that an active public market will develop. Delta Capital's common stock commenced trading in March 1999 and the highest and lowest prices for Delta Capital's common stock during the calendar quarter ended June 30, 1999, September 15, 1999 and subsequent months, and the closing bid price on such dates are as follows:
Delta Capital Technologies Inc. (Monthly Summary of Trades):
----------------------------------------------------------------------------------------------------------------
DATE HIGH LOW CLOSE VOLUME TRADES
----------------------------------------------------------------------------------------------------------------
Dec/99 2.30 2.00 2.08 155,700 18
----------------------------------------------------------------------------------------------------------------
Nov/99 2.40 2.00 2.00 351,700 51
----------------------------------------------------------------------------------------------------------------
Oct/99 2.40 2.00 2.15 580,400 86
----------------------------------------------------------------------------------------------------------------
Sept/99 2.60 2.00 2.10 209,000 43
----------------------------------------------------------------------------------------------------------------
Aug/99 3.00 2.20 2.42 98,400 19
----------------------------------------------------------------------------------------------------------------
July/99 3.10 2.40 2.98 58,500 27
----------------------------------------------------------------------------------------------------------------
June/99 3.00 2.07 3.00 55,500 36
----------------------------------------------------------------------------------------------------------------
May/99 - - - - -
----------------------------------------------------------------------------------------------------------------
April/99 - - - - -
----------------------------------------------------------------------------------------------------------------
Mar/99 3.00 2.15 3.00 8,000 10
----------------------------------------------------------------------------------------------------------------
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These quotations reflect inter-dealer prices without retail work-up, mark-down or commission and may not represent actual transactions.
As of the date of this Registration Statement, Delta Capital has 33 registered shareholders which included Cede & Co. holding 1,959,000 shares. Because Cede & Co. is an
intermediary, Delta Capital does not know how many beneficial shareholders are included in the shares held in the name of Cede & Co.
DIVIDEND POLICY
Delta Capital has not paid any cash dividends on its common stock and does not anticipate paying any cash dividends in the foreseeable future. Delta Capital currently intends to retain future earnings, if any, to fund the development and growth of its business. Any future determination to pay cash dividends will be at the discretion of the board of directors and will be dependent upon Delta Capital's financial condition, operating results, capital requirements, applicable contractual restrictions and other factors as the board of directors deems relevant.
OPTIONS EXERCISED
None of Delta Capital's previously granted stock options have been exercised.
WARRANTS EXERCISED
To date Delta Capital has not issued any share purchase warrants.
ITEM 2 - LEGAL PROCEEDINGS
There are no material legal proceedings to which the Issuer is a party nor to the best of the knowledge of management, are any material legal proceedings contemplated.
ITEM 3 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
There have been no disagreements between Delta Capital and its accountants since Delta Capital's inception in March of 1998.
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES
During April of 1998, Delta Capital issued to T. Davis Capital Corp. 200,000 shares of restricted common stock as repayment of the $206.95 incorporating expenses paid on Delta Capital's behalf by T. Davis Capital Corp. This share issuance was exempt from registration under Section 4(2) of the Securities Exchange Act of 1934 and the appropriate restrictive legend was placed on the share certificate issued.
During April, 1998 Delta Capital sold 2,000,000 shares of unrestricted common stock, and received $60,000. This offering was a private placement and Delta Capital was exempt from registration under the Exchange Act. Further Delta Capital was eligible under Securities and Exchange Commission Rule 504, which allowed the shares sold in this private placement to be issued without restrictive legend. The recipients of these shares, primarily being Delta Capital friends, relatives and business associates of Delta Capital's officers, directors and
investors, represented their intention to acquire the shares for investment purposes only, and not with a view to resale or distribution.
The 2,000,000 shares of Delta Capital were issued to the following in the indicated amounts:
----------------------------------------------------------------------------------------------------------------
NAME NUMBER NAME NUMBER
OF SHARES OF SHARES
----------------------------------------------------------------------------------------------------------------
Bonanza Management Ltd. 100,000 Hutchinson, Janet 100,000
----------------------------------------------------------------------------------------------------------------
Brookes, Heather 14,000 Ivancoe, Joseph 100,000
----------------------------------------------------------------------------------------------------------------
Brookes, Ken 50,000 Ivancoe, Leigh 100,000
----------------------------------------------------------------------------------------------------------------
Butchart, Terry 10,000 Johnson, Edward 14,000
----------------------------------------------------------------------------------------------------------------
Butchart, Jodi 9,000 Johnson, Linda 105,000
----------------------------------------------------------------------------------------------------------------
Charban, Emil 95,000 Miller, Judith 24,000
----------------------------------------------------------------------------------------------------------------
Clemis, Barry 90,000 Mizener, Doreen 20,000
----------------------------------------------------------------------------------------------------------------
Connors, Melissa 105,000 Polymenkas, Nicky 100,000
----------------------------------------------------------------------------------------------------------------
Crawford, Mark 105,000 Smart Communications 105,000
----------------------------------------------------------------------------------------------------------------
Delaney, Gail 19,000 Smeds, Sven 95,000
----------------------------------------------------------------------------------------------------------------
Delaney, Greg 150,000 Smith, Guy 105,000
----------------------------------------------------------------------------------------------------------------
Forgie, Ross 100,000 Smith, Richard 100,000
----------------------------------------------------------------------------------------------------------------
Gallant, Richard 95,000 T. Davis Capital Corp. 200,000
----------------------------------------------------------------------------------------------------------------
Gardiner, Thomas 90,000
----------------------------------------------------------------------------------------------------------------
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During March, 1999 the 2,200,000 shares of Delta Capital, which were issued at that time, were split on a four for one basis resulting in 8,800,000 shares being issued and outstanding.
During September, 1999 Delta Capital issued to AltaCo 5,000,000 shares of restricted common stock to acquire 5,000,000 shares of AltaCo. This share issuance was exempt from registration under Section 4(2) of the Securities Exchange Act of 1934. The appropriate restrictive legend was placed on the share certificate issued.
ITEM 5- INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the General Corporation Law of the State of Delaware (the "DECL") provides, in general, that a corporation incorporated under the laws of the State of Delaware, such as Delta Capital, may indemnify any person who was or is a party or is threatened to be made a party to any threatened, pending or completed action, suit or proceeding (other than a derivative action by or in the right of the Corporation) by reason of the fact that such person 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 enterprise, against expenses (including attorney's fees), judgement, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding if such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such persons conduct unlawful. In the case of a derivative action, a Delaware corporation may indemnify any such person against expenses (including attorney's fees) actually and reasonably incurred by such person in connection with the defense or settlement of such action or suit if such person acted
in good faith and in a manner such person reasonably believed to be in or not opposed to the best interests of the corporation, except that no indemnification shall be made in respect to any claim, issue or matter as to which such person shall have been adjudged to be liable to the corporation unless and only to the extent that the court determines such person is fairly and reasonably entitled to indemnify for such expenses.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling Delta Capital pursuant to the foregoing provisions, Delta Capital understands that in the opinion of the Securities Exchange Commission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
FINANCIAL STATEMENTS:
1. Report of Independent Certified Public Accountants dated September 10, 1999
Audited Consolidated Financial Statements:
2. Balance Sheets as at July 31, 1999 and December 31, 1998
3. Statement of Operations for seven months ended July 31, 1999, the period from March 4, 1998 (date of inception) to December 31, 1998 and the period from March 4, 1998 to July 31, 1999
4. Statement of Changes in Stockholders' Equity for the period from March 4, 1998 to July 31, 1999
5. Statement of Cash Flows for the seven months ended July 31, 1999, the period from March 4, 1998 to December 31, 1998 and the period from March 4, 1998 to July 31, 1999
6. Notes to Financial Statements
7. Balance Sheets as at September 30, 1999 and December 31, 1998
8. Statement of Operations for nine months ended September 30, 1999, the period from March 4, 1998 (date of inception) to December 31, 1998 and the period from March 4, 1998 to September 30, 1999
9. Statement of Changes in Stockholders' Equity for the period from March 4, 1998 to September 30, 1999
10. Statement of Cash Flows for the seven months ended July 31, 1999, the period from March 4, 1998 to December 31, 1998 and the period from March 4, 1998 to July 31, 1999
11. Notes to Financial Statements
ANDERSEN ANDERSEN & STRONG, L.C.
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS
941 EAST 3300 SOUTH, SUITE 202
SALT LAKE CITY, UTAH 84106
TELEPHONE (801) 486-0096
FAX (801) 486-0098
Board of Directors
Delta Capital Technologies, Inc.
Vancouver, BC Canada
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have audited the accompanying balance sheets of Delta Capital Technologies, Inc. (a development stage company) at July 31, 1999 and December 31, 1998 and the statement of operations, stockholders' equity, and cash flows for the seven months ended July 31, 1999 and the period from March 4, 1998 to December 31, 1998 and the period from March 4, 1998 (date of inception) to July 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with 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 audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Delta Capital Technologies, Inc. at July 31, 1999, and December 31, 1998 and the results of operations, and cash flows for the seven months ended July 31, 1999 and the period from March 4, 1998 to December 31, 1998 and period from March 4, 1998 (date of inception) to July 31, 1999, in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. The Company is in the development stage and will need additional working capital for its planned activity, which raises substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 7. These financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Salt Lake City, Utah
September 10, 1999 /s/ Andersen Andersen & Strong |
JULY 31, DEC. 31,
1999 1998
---- ----
ASSETS
CURRENT ASSETS
Cash $1,169 $20,926
---------- -------
Total Current Assets 1,169 20,926
---------- -------
PROPERTY AND EQUIPMENT - net of accumulated depreciation 564 -
---------- -------
OTHER ASSETS
Marketing license - net of amortization - Note 3 31,908 -
Investment - net of amortization - Note 4 2,361,111 -
Trade mark - net of amortization - Note 5 3,000 -
---------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY $2,397,752 $20,926
========== =======
CURRENT LIABILITIES
Contract payable - license and royalties - Note 3 $20,270 $ -
Notes payable - Note 6 26,165 -
Accrued royalties - Note 3 1,877 -
-
Accounts payable 17,918
---------- -------
Total Current Liabilities 66,230 -
---------- -------
STOCKHOLDERS' EQUITY
Common Stock
25,000,000 shares authorized, at $0.001 par value;
13,800,000 shares issued and outstanding 13,800 8,800
Capital in excess of par value 2,546,407 51,407
Deficit accumulated during the development stage (228,685) (39,281)
---------- -------
Total Stockholders' Equity (2,397,752) 20,926
----------- ------
$2,397,752 $20,926
========== =======
|
The accompanying notes are an integral part of these financial statements.
JULY 31, DEC. 31, MARCH 4, 1999
1999 1998 TO JULY 31, 1999
---- ---- ----------------
REVENUES $ - $ - $ -
---- ---- ----
EXPENSES
Administrative 46,761 39,281 86,042
Amortization - license and royalties - Note 3 1,877 - 1,877
Amortization - investment - Note 4 138,889 - 138,889
Accrued royalties - Note 3 1,877 - 1,877
===== = =====
NET LOSS $(189,404) $(39,281) $(228,685)
========== ========= ==========
NET LOSS PER COMMON SHARE
Basic $(0.015) $ -
-------- ---
Diluted $(0.015) $ -
-------- ---
AVERAGE OUTSTANDING SHARES
Basic 12,370,000 8,800,000
---------- ---------
Diluted 12,570,000 9,000,000
---------- ---------
|
The accompanying notes are an integral part of these financial statements.
COMMON STOCK CAPITAL IN
------------------------- EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------ ------ --------- -------
Balance March 4, 1998 (date of inception) - $ - $ - $ -
Issuance of common stock for services
At $0.0002 - March 1998 800,000 800 (593) -
Issuance of common stock for cash
At $0.0075 - June 1998 8,000,000 8,000 52,000 -
Net operating loss for the period March 4,
1998 to December 31, 1998 - - - (39,291)
--------- ----- ------ -------
Balance December 31, 1998 8,800,000 8,800 51,407 (39,281)
Issuance of common stock for 36% of
outstanding stock AltaCo - at $0.50 - 5,000,000 5,000 2,495,000 -
June 1, 1999 - Note 4
Net operating loss for the seven months
Ended July 31, 1999 - - - (189,404)
--------- ----- ------ -------
BALANCE JULY 31, 1999 13,800,000 $13,800 $2,546,407 $(228,685)
========== ======= ========== ==========
|
The accompanying notes are an integral part of these financial statements.
JULY 31, DEC. 31, MARCH 4, 1999
1999 1998 TO JULY 31, 1999
---- ---- ----------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(189,404) $(39,281) $(228,685)
Adjustments to reconcile net loss to net cash
provided by operating activities
Issuance of common capital stock for expenses - 207 207
Amortization of license agreement and investment -
Note 3 and 4 140,766 - 140,766
Changes in accounts payable 15,002 - 15,001
Accrued royalties - Note 3 1,877 - 1,877
-------- -------- --------
Net (decrease) in Cash from Operations (31,759) (39,074) (70,834)
-------- -------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketing license (13,514) (13,514)
Purchase of office equipment (564) - (564)
-------- -------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans 26,081 - 26,081
Proceeds from issuance of common stock - 60,000 60,000
-------- -------- --------
Net Increase (Decrease) in Cash (19,756) 20,926 1,169
Cash at Beginning of Period 20,925 - -
-------- -------- --------
Cash at End of Period $1,169 $20,926 $1,169
======== ======== ========
NON CASH OPERATING ACTIVITIES
Issuance of 800,000 shares common stock for expenses $207
----
Issuance of 5,000,000 shares common capital stock for 36% of outstanding stock
of AltaCo 2,500,000
---------
|
The accompanying notes are an integral part of these financial statements.
1. ORGANIZATION
The Company was incorporated under the laws of the State of Delaware on March 4, 1998 with authorized common stock of 25,000,000 shares at $0.001 par value. On March 15, 1999, the Company completed a forward stock split of four shares for each outstanding share. This report has been prepared using after stock split shares from inception.
The Company was organized for the purpose of the acquisition of a license to market a software computer program. See note 3.
The Company is in the development stage.
Since its inception, the Company has completed a Regulation D offering of 8,000,000 after stock split shares of its capital stock for cash of $60,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1998, the Company had a net operating loss carry forward of $39,281. The tax benefit from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful, since the Company has no operations on which to project future net profits.
The loss carry forward will expire in the year 2019.
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted average number of shares actually outstanding in accordance with FASB No. 128.
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity, at the time of purchase, of less than three months, to be cash equivalents.
Foreign Currency Translation
Part of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the exchange rate in effect at the time, and therefore, no gain or loss from the translations is recognized.
Amortization of a Capitalized Marketing License
The Company amortizes the marketing license over its estimated useful life of three years. Any remaining unamortized capitalized costs will be expensed if it is shown to have an impairment in value or proven to be of no value. See note 3.
Financial Instruments
The carrying amounts of financial instruments, including cash, equipment, marketing license, and accounts payable, are considered by management to be their estimated fair values. These values are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
3. PURCHASE OF MARKETING LICENSE
On June 1, 1999 the Company acquired a worldwide license to market computer software known as relBuilder e-Suite of e-Business software from AltaCo (a Canadian corporation). The software is used in various business fields to aid in the development of internet businesses and technologies, which provides for competitive shopping, maximizing re-use of corporate information by bringing together data which is usually scattered across many systems.
The term of the license agreement is for three years and includes a purchase price of $50,000 Cdn. which is due anytime before November 1, 1999, of which $20,000 Cdn. had been paid by July 31, 1999, and royalty payments of 15% of the net sales with a minimum amount of $50,000 Cdn. for the first year and $200,000 Cdn. for the second year, and $300,000 Cdn. for the third year. The agreement can be canceled by notice after a 30-day default by either party or automatically terminates if any royalty payment is more than 60 days past due which will result in a loss of prior payments and a cancellation of any future liability. The agreement can be renewed at the end of three years for an unlimited time by the payment of $1 Cdn.
The purchase price of the marketing license of $50,000 Cdn. was capitalized and amortized over 3 years, at the rate of $16,667 Cdn. each year, the estimated useful life of the license, or a shorter period if the value of the license is determined to be impaired. The royalties to be paid under the agreement will be expensed.
All of the parties to the agreement have certain common officers and managers.
At the report date, the Company did not have the working capital necessary to begin the marketing activity.
4. INVESTMENT
On June 1, 1999, the Company acquired 36% of the outstanding stock of AltaCo (a corporation organized in Canada in April 1999) by the exchange of 5,000,000 common shares between each Company. AltaCo obtained the software outlined in note 3 from SiCom Solutions Inc. (a Canadian corporation) under the same terms and conditions as that given to the Company and except for this transaction, AltaCo does not have any assets or operations. Although AlaCo had no assets, the shares received were recorded on the books of the Company at $0.50 per share, amounting to $2,500,000, basedon an estimated trading value of the Company shares, and is considered by management to be the fair value of the investment. The amount will be amortized over three years, the life of the license agreement outlined in note 3.
The company has common officers and managers with AltaCo and SiCom Solutions Inc.
5. PURCHASE OF TRADE MARK
By an agreement in July 1999 and amended in December 1999, the Company purchased the trade names "Clear Choice Media" and "Clear Choice Technologies" for $3,000. The trademark will be amortized over a ten-year period or sooner if there is an impairment of value.
6. NOTES PAYABLE
The Company has the following short-term notes payable outstanding.
NAME DATE OF NOTE TERM INTEREST AMOUNT
---- ------------ ---- -------- ------
Smart Communications Inc. June 30, 1999 One year 6% 20,000
Bonanza Management July 31, 1999 90 days 12% 6,081
|
7. RELATED PARY TRANSACTIONS
Related parties have acquired 36% of the common stock issued.
The Company purchased the marketing license outlined in note 3 from related
parties.
8. STOCK OPTIONS
On August 26, 1998, by verbal agreement, the Company issued stock options to purchase 50,000 common shares to an officer at $0.03 per share that had an expiration date of August 26, 1999 and on August 11, 1999 the expiration date of the options was extended to December 31, 1999. The options were granted prior to the shares of the Company having been approved for trading. In March 1999 the Company completed a forward stock split of 4 to 1 which increased the options granted to 200,000 shares at an exercise price of $0.0075 per share. On September 15, 1999 the verbal agreement was reduced to writing. The options were given as compensation for prior services and were considered to have no value on the option date because the stock of the Company had no established market value.
9. GOING CONCERN
The Company will need additional working capital to be successful in its planned activity and to service its current debt for the coming year and therefore continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management has developed a strategy, which it believes will accomplish this objective and is presently engaged in seeking various sources of additional working capital including equity funding through a private placement, long term financing, and completion of negotiations to access development and marketing support from a major hardware/software company which has a program designed to further e-Commerce and e-Business ventures, and increased revenues from sales which will enable the company to operate for the coming year.
The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the company year.
DELTA CAPITAL TECHNOLOGIES, INC.
(Development State Company)
BALANCE SHEETS
September 30, 1999 and December 31, 1998
Unaudited
Sept. 30, 1999 Dec. 31,
1998
ASSETS
CURRENT ASSETS
Cash $10,500 $20,926
Accounts receivable - related party 6,487 -
----- -
Total Current Assets 16,987 20,926
------ ------
PROPERTY AND EQUIPMENT - net of accumulated depreciation 545 -
--- -
OTHER ASSETS
Marketing license - net of amortization - Note 3 30,031 -
Investment - net of amortization - Note 4 2,222,222 -
Trade mark - net of amortization - Note 5 2,950 -
----- -
$2,272,735 $20,926
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable - Note 6 $132,965 $ -
Accrued royalties - Note 3 3,754 -
Accounts payable 8,197
-----
Total Current Liabilities 144,916 -
------- -
STOCKHOLDERS' EQUITY
Common Stock
25,000,000 shares authorized, at $0.001 par value;
13,800,000 shares issued and outstanding 13,800 8,800
Capital in excess of par value 2,546,407 51,407
Deficit accumulated during the development stage (432,388) (39,281)
--------- --------
Total Stockholders' Equity (2,127,819) 20,926
----------- ------
$2,272,735 $20,926
|
The accompanying notes are an integral part of these financial statements.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 199 AND THE PERIOD FROM
MARCH 4, 1998 TO DECEMBER 31, 1998 AND THE PERIOD FROM
MARCH 4, 1998 (DATE OF INCEPTION) TO SEPTEMBER 30, 1999
Unaudited
Sept. 30 Dec. 31, March 4, 1999
1999 1998 to Sept. 30, 1999
REVENUES $ - $ - $ -
---- ---- ----
EXPENSES
Administrative 107,821 39,281 147,102
Amortization - license agreement - Note 3 3,754 - 3,754
Amortization - investment - Note 4 277,778 - 277,778
Accrued royalties - Note 3 3,754 - 3,754
----- = -----
NET LOSS $(393,107) $(39,281) $(432,388)
========== ========= ==========
NET LOSS PER COMMON SHARE
Basic $(0.034) $ -
-------- ---
Diluted $(0.033) $ -
-------- ---
AVERAGE OUTSTANDING SHARES
Basic 11,600,000 8,800,000
---------- ---------
Diluted 11,800,000 9,000,000
---------- ---------
|
The accompanying notes are an integral part of these financial statements.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 4, 1998 (DATE OF INCEPTION)
TO SEPTEMBER 30, 1999
CAPITAL IN
EXCESS OF ACCUMULATED
COMMON STOCK PAR VALUE DEFICIT
SHARES AMOUNT
Balance March 4, 1998 (date of inception) - $ - $ - $ -
Issuance of common stock for services
At $0.0002 - March 1998 800,000 800 (593) -
Issuance of common stock for cash
At $0.0075 - June 1998 8,000,000 8,000 52,000 -
Net operating loss for the period March 4,
1998 to December 31, 1998 - - - (39,291)
- - - --------
Balance December 31, 1998 8,800,000 8,800 51,407 (39,281)
Issuance of common stock for 36% of
outstanding stock AltaCo - at $0.50 - 5,000,000 5,000 2,495,000 -
June 1, 1999 - Note 4
Net operating loss for the seven months
Ended July 31, 1999 - - - (393,107)
- - - ---------
BALANCE SEPTEMBER 30, 1999 13,800,000 $13,800 $2,546,407 $(432,388)
========== ======= ========== ==========
|
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
STATEMENT OF CASH FLOWS
FOR THE SEVEN MONTHS ENDED JULY 31, 1999 AND THE
PERIOD FROM MARCH 4, 1998 DECEMBER 31, 1998 AND THE
PERIOD FROM MARCH 4, 1998 (DATE OF INCEPTION) TO JULY 31,
1999
JULY 31, DEC. 31, MARCH 4, 1999
1999 1998 TO JULY 31, 1999
---- ---- ----------------
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(393,107) $(39,281) $(432,388)
Adjustments to reconcile net loss to net cash
provided by operating activities
Issuance of common capital stock for expenses - 207 207
Amortization of license agreement and investment -
Note 3 and 4 277,847 - 277,847
Changes in accounts receivable (6,487) - (6,487)
Changes in accounts payable 10,435 - 10,435
Accrued royalties - Note 3 3,754 - 3,754
----- - -----
Net (decrease) in Cash from Operations (107,558) (39,074) (146,632)
--------- -------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of marketing license (33,785) (33,785)
Purchase of office equipment (564) - (564)
----- - -----
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from loans 131,481 - 131,481
Proceeds from issuance of common stock - 60,000 60,000
- ------ ------
Net Increase (Decrease) in Cash (10,426) 20,926 10,500
Cash at Beginning of Period 20,926 - -
------ - -
Cash at End of Period $10,500 $20,926 $10,500
======= ======= =======
NON CASH OPERATING ACTIVITIES
Issuance of 800,000 shares common stock for expenses $207
----
Issuance of 5,000,000 shares common capital stock for 36% of outstanding stock
of AltaCo 2,500,000
|
The accompanying notes are an integral part of these financial statements.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS
1. ORGANIZATION
The Company was incorporated under the laws of the State of Delaware on March 4, 1998 with authorized common stock of 25,000,000 shares at $0.001 par value. On March 15, 1999, the Company completed a forward stock split of four shares for each outstanding share. This report has been prepared using after stock split shares from inception.
The Company was organized for the purpose of the acquisition of a license to market a software computer program. See note 3.
The Company is in the development stage.
Since its inception, the Company has completed a Regulation D offering of 8,000,000 after stock split shares of its capital stock for cash of $60,000.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Accounting Methods
The Company recognizes income and expenses based on the accrual method of accounting.
Dividend Policy
The Company has not yet adopted a policy regarding payment of dividends.
Income Taxes
On December 31, 1998, the Company had a net operating loss carry forward of $39,281. The tax benefit from the loss carry forward has been fully offset by a valuation reserve because the use of the future tax benefit is doubtful, since the Company has no operations on which to project future net profits.
The loss carry forward will expire in the year 2019.
Earnings (Loss) Per Share
Earnings (loss) per share amounts are computed based on the weighted average number of shares actually outstanding in accordance with FASB No. 128.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Cash and Cash Equivalents
The Company considers all highly liquid instruments purchased with a maturity, at the time of purchase, of less than three months, to be cash equivalents.
Foreign Currency Translation
Part of the transactions of the Company were completed in Canadian dollars and have been translated to US dollars as incurred, at the exchange rate in effect at the time, and therefore, no gain or loss from the translations is recognized.
Amortization of a Capitalized Marketing License
The Company amortizes the marketing license over its estimated useful life of three years. Any remaining unamortized capitalized costs will be expensed if it is shown to have an impairment in value or proven to be of no value. See note 3.
Financial Instruments
The carrying amounts of financial instruments, including cash, equipment, marketing license, and accounts payable, are considered by management to be their estimated fair values. These values are not necessarily indicative of the amounts that the Company could realize in a current market exchange.
Estimates and Assumptions
Management uses estimates and assumptions in preparing financial statements in accordance with generally accepted accounting principles. Those estimates and assumptions affect the reported amounts of the assets and liabilities, the disclosure of contingent assets and liabilities, and the reported revenues and expenses. Actual results could vary from the estimates that were assumed in preparing these financial statements.
3. PURCHASE OF MARKETING LICENSE
On June 1, 1999 the Company acquired a worldwide license to market computer software known as relBuilder e-Suite of e-Business software from AltaCo (a Canadian corporation). The software is used in various business fields to aid in the development of internet businesses and technologies, which provides for competitive shopping, maximizing re-use of corporate information by bringing together data which is usually scattered across many systems.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The term of the license agreement is for three years and includes a purchase price of $50,000 Cdn. which is due anytime before November 1, 1999, of which $20,000 Cdn. had been paid by July 31, 1999, and royalty payments of 15% of the net sales with a minimum amount of $50,000 Cdn. for the first year and $200,000 Cdn. for the second year, and $300,000 Cdn. for the third year. The agreement can be canceled by notice after a 30-day default by either party or automatically terminates if any royalty payment is more than 60 days past due which will result in a loss of prior payments and a cancellation of any future liability. The agreement can be renewed at the end of three years for an unlimited time by the payment of $1 Cdn.
The purchase price of the marketing license of $50,000 Cdn. was capitalized and amortized over 3 years, at the rate of $16,667 Cdn. each year, the estimated useful life of the license, or a shorter period if the value of the license is determined to be impaired. The royalties to be paid under the agreement will be expensed.
All of the parties to the agreement have certain common officers and managers.
At the report date, the Company did not have the working capital necessary to begin the marketing activity.
4. INVESTMENT
On June 1, 1999, the Company acquired 36% of the outstanding stock of AltaCo (a corporation organized in Canada in April 1999) by the exchange of 5,000,000 common shares between each Company. AltaCo obtained the software outlined in note 3 from SiCom Solutions Inc. (a Canadian corporation) under the same terms and conditions as that given to the Company and except for this transaction, AltaCo does not have any assets or operations. Although AltaCo had no assets, the shares received were recorded on the books of the Company at $0.50 per share, amounting to $2,500,000, basedon an estimated trading value of the Company shares, and is considered by management to be the fair value of the investment. The amount will be amortized over three years, the life of the license agreement outlined in note 3.
The company has common officers and managers with AltaCo and SiCom Solutions Inc.
5. PURCHASE OF TRADE MARK
By an agreement in July 1999 and amended in December 1999, the Company purchased the trade names "Clear Choice Media" and "Clear Choice Technologies" for $3,000. The trademark will be amortized over a ten-year period or sooner if there is an impairment of value.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
6. NOTES PAYABLE
The Company has the following short-term notes payable outstanding.
Name Date of Note Term Interest Amount
Smart Communications Inc. June 30, 1999 One year 6% 112,681
Bonanza Management July 31, 1999 90 days 12% 20,284
|
7. RELATED PARY TRANSACTIONS
Related parties have acquired 36% of the common stock issued.
The Company purchased the marketing license outlined in note 3 from related
parties.
8. STOCK OPTIONS
On August 26, 1998, by verbal agreement, the Company issued stock options to purchase 50,000 common shares to an officer at $0.03 per share that had an expiration date of August 26, 1999 and on August 11, 1999 the expiration date of the options was extended to December 31, 1999. The options were granted prior to the shares of the Company having been approved for trading. In March 1999 the Company completed a forward stock split of 4 to 1 which increased the options granted to 200,000 shares at an exercise price of $0.0075 per share. On September 15, 1999 the verbal agreement was reduced to writing. The options were given as compensation for prior services and were considered to have no value on the option date because the stock of the Company had no established market value.
9. GOING CONCERN
The Company will need additional working capital to be successful in its planned activity and to service its current debt for the coming year and therefore continuation of the Company as a going concern is dependent upon obtaining the additional working capital necessary to accomplish its objective. Management has developed a strategy, which it believes will accomplish this objective and is presently engaged in seeking various sources of additional working capital including equity funding through a private placement, long term financing, and completion of negotiations to access development and marketing support from a major hardware/software company which has a program designed to further e-Commerce and e-Business ventures, and increased revenues from sales which will enable the company to operate for the coming year.
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STATE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The accompanying financial statements do not include any adjustments to the recorded assets or liabilities that might be necessary should the Company fail in any of the above objectives and is unable to operate for the company year.
EXHIBITS:
3(i) Articles of Incorporation dated March 4, 1998 together with
Amended Articles of Incorporation dated April 23, 1998
3(ii) By-Laws of Delta Capital dated April 23, 1998
4 See Exhibit 3(ii) for By-Laws
10(a) License Agreement between Delta Capital and 827109 Alberta
Ltd. dated June 1, 1999
10(b) License Agreement between SiCom Solutions Inc. and 827109
Alberta Ltd. dated June 1, 1999
|
10(c) Letter from 827109 Alberta Ltd. to Delta Capital Technologies
Inc. dated September 2, 1999 acknowledging receipt of the
$20,000 payment and granting a three month extension of the
$30,000 payment to November 1, 1999
10(d) Letter from SiCom Solutions Inc. to 827109 Alberta Ltd. dated
September 2, 1999 acknowledging receipt of the $20,000 payment
and granting a three month extension of the $30,000 payment to
November 1, 1999
27 Financial Data Schedule
99(a) Share Exchange Agreement between Delta Capital and 827109
Alberta Ltd. dated June 1, 1999
99(b) Stock Option Agreement between Delta Capital and Judith
Miller, Corporate Secretary and Director of Delta Capital
dated September 15, 1999
|
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has caused this registration to be signed on its behalf by the undersigned, thereunder duly authorized, on the 17th day of December, 1999.
DELTA CAPITAL TECHNOLOGIES, INC.
Per:
/s/ Paul Davis
-------------------------------------
President and Chief Executive Officer
|
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
------- -----------
3(i) Articles of Incorporation dated March 4, 1998 together with Amended Articles of
Incorporation dated April 23, 1998
3(ii) By-Laws of Delta Capital dated April 23, 1998
4 See Exhibit 3(ii) for By-Laws
10(a) License Agreement between Delta Capital and 827109 Alberta Ltd. dated June 1, 1999
10(b) License Agreement between SiCom Solutions Inc. and 827109 Alberta Ltd. dated June 1,
1999
10(c) Letter from 827109 Alberta Ltd. to Delta Capital Technologies Inc. dated September
2, 1999 acknowledging receipt of the $20,000 payment and granting a three month
extension of the $30,000 payment to November 1, 1999
10(d) Letter from SiCom Solutions Inc. to 827109 Alberta Ltd. dated September 2, 1999
acknowledging receipt of the $20,000 payment and granting a three month extension of
the $30,000 payment to November 1, 1999
27 Financial Data Schedule
99(a) Share Exchange Agreement between Delta Capital and 827109 Alberta Ltd. dated June 1,
1999
99(b) Stock Option Agreement between Delta Capital and Judith Miller, Corporate Secretary
and Director of Delta Capital dated September 15, 1999
|
EXHIBIT 3(i)
CERTIFICATE OF INCORPORATION
OF
DELTA CAPITAL TECHNOLOGIES INC.
A CLOSE CORPORATION
FIRST: The name of this corporation is Delta Capital Technologies, Inc.
SECOND: Its registered office in the State of Delaware is to be located at 1313 N. Market St., Wilmington, DE 19801-1151, County of New Castle. The registered agent in charge thereof is The Company Corporation, address "same as above".
THIRD: The nature of the business and the objects and purposes proposed to be transacted, promoted and carried on, are to engage in any lawful act or activity for which corporations may be organized under the General Corporation law of Delaware.
FOURTH: The amount of total authorized shares of stock of this corporation is 1,500 shares of No par value.
FIFTH: The name and mailing address of the incorporator is: Regina Cephas, 1313 N, Market St., Wilmington, DE 19801-1151.
SIXTH: All of the corporation's issued stock, exclusive of treasury shares, shall be represented by certificates and shall be held of record by not more than thirty (30) persons.
SEVENTH: All of the issued stock of all classes shall be subject to one or more of the restriction on transfer permitted by Section 202 of the General Corporation Law.
EIGHTH: The corporation shall make no offering of any of its stock of any class which would constitute a "public offering" within the meaning of the United States Securities Act of 1933 as it may be amended from time to time.
NINTH: Directors of the corporation shall not be liable to either the corporation or its stockholders for monetary damages for a breach of fiduciary duties unless the breach involves: (1) a director's duty of loyalty to the corporation or its stockholders; (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) liability for unlawful payments of dividends or unlawful stock purchases or redemption by the corporation; or (4) a transaction from which the director derived an improper personal benefit.
I, THE UNDERSIGNED, for the purpose of forming a corporation under the laws of the State of Delaware, do make, file and record this Certificate and do certify that the facts are true, and I have accordingly, hereunder set my hand.
DATED: MARCH 4, 1998
/s/ "Regina Cephas"
Regina Cephas
|
DELTA CAPITAL TECHNOLOGIES, INC.
DELTA CAPITAL TECHNOLOGIES, INC. a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware, DOES HEREBY CERTIFY:
FIRST. That a Certificate of Incorporation of DELTA CAPITAL TECHNOLOGIES, INC. properly executed , was filed with the Secretary of State of Delaware on March 4, 1998, in good faith and with all belief that such incorporation was accurate and correct.
SECOND. That the Certificate of Incorporation was filed as a Close Corporation in error and all reference to a Close Corporation should be deleted. In addition, the stock in Article Fourth and the incorporator's name and address in Article Fifth are being corrected.
THIRD. That the Certificate of Incorporation should be corrected to read in its entirety as follows in attached Exhibit A.
IN WITNESS WHEREOF, said corporation has caused this Certificate to be signed by its Authorized Officer this 23rd day April, A.D., 1998.
/s/ "Tim Delaney" --------------------------- Authorized Signatory Tim Delaney |
Exhibit A
CERTIFICATE OF INCORPORATION
OF
DELTA CAPITAL TECHNOLOGIES INC.
A CLOSE CORPORATION
FIRST: The name of this corporation is Delta Capital Technologies, Inc.
SECOND: Its registered office in the State of Delaware is to be located at 1013 Centre Rd., Wilmington, DE 19805, County of New Castle. The registered agent in charge thereof is The Company Corporation, address "same as above".
THIRD: The nature of the business and the objects and purposes proposed to be transacted, promoted and carried on, are to engage in any lawful act or activity for which corporations may be organized under the General Corporation law of Delaware.
FOURTH: The amount of total authorized shares of stock of this corporation is 25,000,000 shares of $0.001.
FIFTH: The name and mailing address of the incorporator is: Kathleen Crowley, 1013 Centre Rd., Wilmington, DE 19805.
SIXTH: The Directors shall have the power to make or amend the By-laws; to afix
the amount to be reserved as working capital, and to authorize and cause to be
executed, mortgages and liens without limit as to the amount, upon the property
and franchise of the Corporation.
And with the consent in writing and pursuant to a vote of the holders
of a majority of the capital stock issued and outstanding, the Directors shall
have the authority to dispose, in any manner, of the whole property of the
corporation.
The By-Laws shall determine whether and to what extent the accounts and
books of this corporation, or any of them shall be open for inspection of the
stockholders; and no stockholder shall have any right of inspecting any account,
or book or document of this corporation, except as conferred by the law or the
By-Laws, or by resolution of the Stockholders.
The Stockholders and directors shall have the power to hold their
meetings and keep the books, documents, and papers of the Corporation outside
the State of Delaware, or at such places as may be from time to time designated
by the By-Laws or by resolution of the stock holders or directors, except as
otherwise required by the laws of Delaware.
It is the intention that the objects, purposes and powers specified in
the Third paragraph hereof shall, except where otherwise specified in said
paragraph, be nowise limited or restricted by reference to or inference from the
terms of any other clause or paragraph in this certificate of incorporation,
that the objects, purposes and powers specified in the Third paragraph and in
each of the clauses or paragraphs of this charter shall be regarded as
independent objects, purposes and powers.
SEVENTH: Directors of the corporation shall not be liable to either the corporation or its stockholders for monetary damages for a breach of fiduciary duties unless the breach involves: (1) a director's duty of loyalty to the corporation or its stockholders; (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) liability for unlawful payments of dividends or unlawful stock purchases or redemption by the corporation; or (4) a transaction from which the director derived an improper personal benefit.
IN WITNESS WHEREOF, The undersigned, being the incorporator hereinbefore named, has executed, signed and acknowledged this certificate of incorporation this 27 day of April, A.D. 1998
Incorporator
EXHIBIT 3(ii)
BYLAWS
OF
DELTA CAPITAL TECHNOLOGIES, INC.
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
1. CERTFICATES REPRESENTING STOCK Certificates representing stock in the corporation shall be signed by, or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President and by the Treasurer a an Assistant Treasurer or the Secretary a an Assistant Secretary of the corporation. Any or all the signatures on any such certificate may be a facsimile In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed apart a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one class of stock or more than one series of any class of stock, and whenever the corporation shall issue any shares of its stock as partly paid stock, the certificates representing shares of any such class or series or of any such partly paid stock shall set forth thereon the statements prescribed by the General Corporation Law. Any restrictions on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock or uncertified shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen, or destroyed, and the Board of Directors may require the owner of the lost, stolen, or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft, or destruction of any such certificate are or the issuance of any such new certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the General Corporation Law, the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the corporation shall be uncertificated shares. Within a reasonable time after the issuance or transfer of any uncertificated shares, the corporation shall send to the registered owner thereof any written notice prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be required to, issue fractions of a share. If the corporation does not issue fractions of a share, it shall (1) arrange for the disposition of fractional interests by those entitled thereto, (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such fractions
are determined, or (3) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or bearer form (represented by a certificate) which shall entitle the holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. A certificate for a fractional share or an uncertificated fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the evenf liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing the full shares or uncertificated full shares before specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the transfer or registration of transfer of shares of stock, if any, transfers or registration of transfers of shares of stock of the corporation shall be made only on the stock ledger of the corporation by the registered holder thereof, a by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and, in the case of shares represented by certificates, on surrender of the certificate or certificates for such shares of stock properly endorsed and the payment of all taxes due thereon.
5. RECORD DATE STOCKHOLDERS. 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. The Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. 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 in order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board Of Directors. If no record date has been fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date has been fixed by the Board of Directors and prior action by the Board of Directors is required by the General Corporation Law, the record date for
determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders 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 a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to notice of a meeting of stockholders or a waiver thereof or to participate or vote thereat or to consent or dissent in writing in lieu of a meeting, as the case may be, the term "share" or "shares" or "share of stock" or "shares of stock" or "stockholder" or "stockholders" refers to an outstanding share or shares of stock and to a holder or holders of record of outstanding shares of stock when the corporation is authorized to issue only one class of shares of stock and said reference is also intended to include any outstanding share or shares of stock and any holder or holders of record of outstanding shares of stock of any class upon which or upon whom the certificate of incorporation confers such rights where there are two or more classes or series of shares of stock or upon which a upon whom the General Corporation Law confers such rights notwithstanding that the certificate of incorporation may provide for more than one class or series of shares of stock, one a more of which are limited or denied such rights thereunder; provided, however, that no such right shall vest in the event of an increase or a decrease in the authorized number of shares of stock of any class or series which is otherwise denied voting rights under the provisions of the certificate of incorporation, except as any provision of law may otherwise require.
7. STOCKHOLDER MEETINGS.
- TIME. The annual meeting shall be held on the date and at the time fixed, from time to time, by the directors, provided, that the first annual meeting shall be held on a date within time months after the organization of the corporation, and each successive annual meeting shall be held on a date within thirteen months after the date of the preceding annual meeting. A special meeting shall be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such place, within or without the State of Delaware, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, the meeting shall be held at the registered office of the Corporation in the State of Delaware.
- CALL. Annual meetings and special meetings may be called by the directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be given, stating the place, date, and hour of the meeting and stating the place within the city or other municipality or community at which the list of stockholders of the corporation may be examined. The notice of an annual meeting shall state that the meeting is called for the
election of directors and for the transaction of other business which may properly come before the meeting, and shall (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state the purpose or purposes. The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called. The notice of any meeting shall also include, or be accompanied by, any additional statements, information, or documents prescribed by the General Corporation Law. Except as otherwise provided by the General Corporation Law, a copy of the notice of any meeting shall be given personally or by mail, not less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, and directed to each stockholder at his record address or at such other address which he may have furnished by request in writing to the Secretary of the corporation. Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in the United States Mail. If a meeting is adjourned to another time, not more than thirty days hence, and/or to another place, and if an announcement of the adjourned time and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open 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 or other municipality or community 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. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided over by one of the following officers in the order of seniority and if present and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none of the foregoing is in office and present and acting, by a chairman to be chosen by the stockholders. The Secretary of the corporation, or in his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the Chairman of the meeting shall appoint a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another person or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or
expressing consent a dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed Proxy shall be irrevocable if it states that it is irrevocable and, if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots, or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots, or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question, or matter determined by him or them and execute a
certificate of any fact found by him or them. Except as otherwise required by
subsection (e) of Section 231 of the Corporation Law, the provisions of that
Section shall not apply to the corporation.
- QUORUM. The holders of a majority of the outstanding shares of stock shall constitute a quorum at a meeting of stockholders for the transaction of any business. The stockholders present may adjourn the meeting despite the absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to one vote. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Any other action shall be authorized by a majority of the votes cast except where the General Corporation Law prescribes a different percentage of votes and/or a different exercise of voting power, and except as may be otherwise prescribed by the provisions of the certificate of incorporation and these Bylaws. In the election of directors, and for any other action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Except as any provision of the General Corporation Law may otherwise require, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without 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. Action taken pursuant to this paragraph shall be subject to the provisions of Section 228 of the General' Corporation Law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors of the corporation. The Board of Directors shall have the authority to fix the compensation of the members thereof. The use of the phrase "whole board" herein refers to the total number of directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a citizen of the United States, or a resident of the State of Delaware. The initial Board of Directors shall consist of (one) 1 persons. Thereafter the number of directors constituting the whole board shall be at least one. Subject to the foregoing limitation and except for the first Board of Directors, such number may be fixed from time to time by action of the stockholders or of the directors, or, if the number is not fixed, the number shall be one (1). The number of directors may be increased or decreased by action of the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members thereof shall have been named in the certificate of incorporation, shall be elected by the incorporator or incorporators and shall hold office until the first annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. Thereafter, directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and newly created directorships, shall hold office until the next annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Except as the General Corporation Law may otherwise require, in the interim between annual meetings of stockholders or of special meetings of stockholders called for the election of directors and/or for the removal of one or more directors and for the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause or without cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix, except that the first meeting of a newly elected Board shall be held as soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the State of Delaware as shall be affixed by the Board.
- Call. No call shall be required for regular meetings for which the time and place have been fixed. Special meetings may be called by or at the direction of the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for regular meetings for which the time and place have been fixed. Written, oral, or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. Notice need not be given to any director or to any member of a committee of directors who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of any such person at a meeting shall constitute a waiver of notice of such meeting, except when he attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice.
- QUORUM AND ACTION. A majority of the whole board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided, that such majority shall constitute at least one-third of the whole Board. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place Except as herein otherwise provided, and except as otherwise provided by the General Corporation Law, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. The quorum and voting provisions herein suited shall not be construed as conflicting with any provisions of the General Corporation Law and these Bylaws which govern a meeting of directors held to fill vacancies and newly created directorships in the board or action of disinterested directors.
Any member or members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board, or any such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all Persons participating in the meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present and acting, shall preside at all meetings. Otherwise, the vice-chairman of the Board, if any and if present and acting, or the President, if present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the General Corporation Law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may designate one or more committees, each committee to consist of one 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 at any meeting of the committee. In the absence or disqualification of any member of any such committee or committees, the member or
members thereof present at any meeting and not disqualified from voting, whether or not such member or members 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, shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation with the exception of any authority the delegation of which is prohibited by Section 141 of the General Corporation Law, and may authorize the seal of the corporation to be affixed to alt papers which may require it.
7- WRITTEN ACTION. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive Vice-President, one or more other Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers with such tides as the resolution of the Board of Directors choosing them shall designate. Except as may otherwise be provided in the resolution of the Board of Directors choosing him, no officer other than the Chairman or Vice-Chairman of the Board, if any, need be a director. Any number of offices may be held by the same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer shall be chosen for a term which shall continue until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform such duties in the management and operation of the corporation as shall be prescribed in the resolutions of the Board of Directors designating and choosing such officers and prescribing their authority and duties, and shall have such additional authority and duties as are incident to their office except to the extent that such resolutions may be inconsistent therewith The Secretary or an Assistant Secretary of the corporation shall record all of the proceedings of all meetings and actions in writing of stockholders, directors, and committees of directors, and shall exercise such additional authority and perform snob additional duties as the board shall assign to him. Any officer may e removed, with or without cause, by the Board of Directors. Any vacancy in any office may be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of incorporation and the provisions of Corporation Law, the power to amend, alter, or repeal these Bylaws and to adopt new bylaws may be exercised by the Board of Directors or by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of the Bylaws of Delta Capital Technologies, Inc. a Delaware corporation, as in effect on the date hereof.
Dated this 23rd day of April, 1998
/s/ "Timothy Delaney" ------------------------------------------ Secretary, Delta Capital Technologies, Inc |
(SEAL)
EXHIBIT 4
BYLAWS
OF
DELTA CAPITAL TECHNOLOGIES, INC.
(a Delaware corporation)
ARTICLE I
STOCKHOLDERS
1. CERTFICATES REPRESENTING STOCK Certificates representing stock in the corporation shall be signed by, or in the name of, the corporation by the Chairman or Vice-Chairman of the Board of Directors, if any, or by the President or a Vice-President and by the Treasurer a an Assistant Treasurer or the Secretary a an Assistant Secretary of the corporation. Any or all the signatures on any such certificate may be a facsimile In case any officer, transfer agent, or registrar who has signed or whose facsimile signature has been placed apart a certificate shall have ceased to be such officer, transfer agent, or registrar before such certificate is issued, it may be issued by the corporation with the same effect as if he were such officer, transfer agent or registrar at the date of issue.
Whenever the corporation shall be authorized to issue more than one class of stock or more than one series of any class of stock, and whenever the corporation shall issue any shares of its stock as partly paid stock, the certificates representing shares of any such class or series or of any such partly paid stock shall set forth thereon the statements prescribed by the General Corporation Law. Any restrictions on the transfer or registration of transfer of any shares of stock of any class or series shall be noted conspicuously on the certificate representing such shares.
The corporation may issue a new certificate of stock or uncertified shares in place of any certificate theretofore issued by it, alleged to have been lost, stolen, or destroyed, and the Board of Directors may require the owner of the lost, stolen, or destroyed certificate, or his legal representative, to give the corporation a bond sufficient to indemnify the corporation against any claim that may be made against it on account of the alleged loss, theft, or destruction of any such certificate are or the issuance of any such new certificate or uncertificated shares.
2. UNCERTIFICATED SHARES. Subject to any conditions imposed by the General Corporation Law, the Board of Directors of the corporation may provide by resolution or resolutions that some or all of any or all classes or series of the stock of the corporation shall be uncertificated shares. Within a reasonable time after the issuance or transfer of any uncertificated shares, the corporation shall send to the registered owner thereof any written notice prescribed by the General Corporation Law.
3. FRACTIONAL SHARE INTERESTS. The corporation may, but shall not be required to, issue fractions of a share. If the corporation does not issue fractions of a share, it shall (1) arrange for the disposition of fractional interests by those entitled thereto, (2) pay in cash the fair value of fractions of a share as of the time when those entitled to receive such
fractions are determined, or (3) issue scrip or warrants in registered form (either represented by a certificate or uncertificated) or bearer form (represented by a certificate) which shall entitle the holder to receive a full share upon the surrender of such scrip or warrants aggregating a full share. A certificate for a fractional share or an uncertificated fractional share shall, but scrip or warrants shall not unless otherwise provided therein, entitle the holder to exercise voting rights, to receive dividends thereon, and to participate in any of the assets of the corporation in the event of liquidation. The Board of Directors may cause scrip or warrants to be issued subject to the conditions that they shall become void if not exchanged for certificates representing the full shares or uncertificated full shares before specified date, or subject to the conditions that the shares for which scrip or warrants are exchangeable may be sold by the corporation and the proceeds thereof distributed to the holders of scrip or warrants, or subject to any other conditions which the Board of Directors may impose.
4. STOCK TRANSFERS. Upon compliance with provisions restricting the transfer or registration of transfer of shares of stock, if any, transfers or registration of transfers of shares of stock of the corporation shall be made only on the stock ledger of the corporation by the registered holder thereof, a by his attorney thereunto authorized by power of attorney duly executed and filed with the Secretary of the corporation or with a transfer agent or a registrar, if any, and, in the case of shares represented by certificates, on surrender of the certificate or certificates for such shares of stock properly endorsed and the payment of all taxes due thereon.
5. RECORD DATE STOCKHOLDERS. 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. The Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which record date shall not be more than sixty nor less than ten days before the date of such meeting. If no record date is fixed by the Board of Directors, the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held. 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 in order that the corporation may determine the stockholders entitled to consent to corporate action in writing without a meeting, the Board of Directors may fix a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted by the Board of Directors, and which date shall not be more than ten days after the date upon which the resolution fixing the record date is adopted by the Board Of Directors. If no record date has been fixed by the Board of Directors, the record date for determining the stockholders entitled to consent to corporate action in writing without a meeting, when no prior action by the Board of Directors is required by the General Corporation Law, shall be the first date on which a signed written consent setting forth the action taken or proposed to be taken is delivered to the corporation by delivery to its registered office in the State of Delaware, its principal place of business, or an officer or agent of the corporation having custody of the book in which proceedings of meetings of stockholders are recorded. Delivery made to the corporation's registered office shall be by hand or by certified or registered mail, return receipt requested. If no record date
has been fixed by the Board of Directors and prior action by the Board of Directors is required by the General Corporation Law, the record date for determining stockholders entitled to consent to corporate action in writing without a meeting shall be at the close of business on the day on which the Board of Directors adopts the resolution taking such prior action. In order that the corporation may determine the stockholders entitled to receive payment of any dividend or other distribution or allotment of any rights or the stockholders 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 a record date, which record date shall not precede the date upon which the resolution fixing the record date is adopted and which record date shall be not more than sixty days prior to such action. If no record date is fixed, the record date for determining stockholders for any such purpose shall be at the close of business on the day on which the Board of Directors adopts the resolution relating thereto.
6. MEANING OF CERTAIN TERMS. As used herein in respect of the right to notice of a meeting of stockholders or a waiver thereof or to participate or vote thereat or to consent or dissent in writing in lieu of a meeting, as the case may be, the term "share" or "shares" or "share of stock" or "shares of stock" or "stockholder" or "stockholders" refers to an outstanding share or shares of stock and to a holder or holders of record of outstanding shares of stock when the corporation is authorized to issue only one class of shares of stock and said reference is also intended to include any outstanding share or shares of stock and any holder or holders of record of outstanding shares of stock of any class upon which or upon whom the certificate of incorporation confers such rights where there are two or more classes or series of shares of stock or upon which a upon whom the General Corporation Law confers such rights notwithstanding that the certificate of incorporation may provide for more than one class or series of shares of stock, one a more of which are limited or denied such rights thereunder; provided, however, that no such right shall vest in the event of an increase or a decrease in the authorized number of shares of stock of any class or series which is otherwise denied voting rights under the provisions of the certificate of incorporation, except as any provision of law may otherwise require.
7. STOCKHOLDER MEETINGS.
-TIME. The annual meeting shall be held on the date and at the time fixed, from time to time, by the directors, provided, that the first annual meeting shall be held on a date within time months after the organization of the corporation, and each successive annual meeting shall be held on a date within thirteen months after the date of the preceding annual meeting. A special meeting shall be held on the date and at the time fixed by the directors.
- PLACE. Annual meetings and special meetings shall be held at such place, within or without the State of Delaware, as the directors may, from time to time, fix. Whenever the directors shall fail to fix such place, the meeting shall be held at the registered office of the Corporation in the State of Delaware.
- CALL. Annual meetings and special meetings may be called by the directors or by any officer instructed by the directors to call the meeting.
- NOTICE OR WAIVER OF NOTICE. Written notice of all meetings shall be given, stating the place, date, and hour of the meeting and stating the place within the city or
other municipality or community at which the list of stockholders of the corporation may be examined. The notice of an annual meeting shall state that the meeting is called for the election of directors and for the transaction of other business which may properly come before the meeting, and shall (if any other action which could be taken at a special meeting is to be taken at such annual meeting) state the purpose or purposes. The notice of a special meeting shall in all instances state the purpose or purposes for which the meeting is called. The notice of any meeting shall also include, or be accompanied by, any additional statements, information, or documents prescribed by the General Corporation Law. Except as otherwise provided by the General Corporation Law, a copy of the notice of any meeting shall be given personally or by mail, not less than ten days nor more than sixty days before the date of the meeting, unless the lapse of the prescribed period of time shall have been waived, and directed to each stockholder at his record address or at such other address which he may have furnished by request in writing to the Secretary of the corporation. Notice by mail shall be deemed to be given when deposited, with postage thereon prepaid, in the United States Mail. If a meeting is adjourned to another time, not more than thirty days hence, and/or to another place, and if an announcement of the adjourned time and/or place is made at the meeting, it shall not be necessary to give notice of the adjourned meeting unless the directors, after adjournment, fix a new record date for the adjourned meeting. Notice need not be given to any stockholder who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of a stockholder at a meeting of stockholders shall constitute a waiver of notice of such meeting, except when the stockholder attends the meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders need be specified in any written waiver of notice.
- STOCKHOLDER LIST. The officer who has charge of the stock ledger of the corporation shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open 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 or other municipality or community 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. The stock ledger shall be the only evidence as to who are the stockholders entitled to examine the stock ledger, the list required by this section or the books of the corporation, or to vote at any meeting of stockholders.
- CONDUCT OF MEETING. Meetings of the stockholders shall be presided over by one of the following officers in the order of seniority and if present and acting - the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, the President, a Vice-President, or, if none of the foregoing is in office and present and acting, by a chairman to be chosen by the stockholders. The Secretary of the corporation, or in his absence, an Assistant Secretary, shall act as secretary of every meeting, but if neither the Secretary nor an Assistant Secretary is present the Chairman of the meeting shall appoint a secretary of the meeting.
- PROXY REPRESENTATION. Every stockholder may authorize another person
or persons to act for him by proxy in all matters in which a stockholder is entitled to participate, whether by waiving notice of any meeting, voting or participating at a meeting, or expressing consent a dissent without a meeting. Every proxy must be signed by the stockholder or by his attorney-in-fact. No proxy shall be voted or acted upon after three years from its date unless such proxy provides for a longer period. A duly executed Proxy shall be irrevocable if it states that it is irrevocable and, if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A proxy may be made irrevocable regardless of whether the interest with which it is coupled is an interest in the stock itself or an interest in the corporation generally.
- INSPECTORS. The directors, in advance of any meeting, may, but need
not, appoint one or more inspectors of election to act at the meeting or any
adjournment thereof. If an inspector or inspectors are not appointed, the person
presiding at the meeting may, but need not, appoint one or more inspectors. In
case any person who may be appointed as an inspector fails to appear or act, the
vacancy may be filled by appointment made by the directors in advance of the
meeting or at the meeting by the person presiding thereat. Each inspector, if
any, before entering upon the discharge of his duties, shall take and sign an
oath faithfully to execute the duties of inspectors at such meeting with strict
impartiality and according to the best of his ability. The inspectors, if any,
shall determine the number of shares of stock outstanding and the voting power
of each, the shares of stock represented at the meeting, the existence of a
quorum, the validity and effect of proxies, and shall receive votes, ballots, or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, count and tabulate all votes, ballots, or consents,
determine the result, and do such acts as are proper to conduct the election or
vote with fairness to all stockholders. On request of the person presiding at
the meeting, the inspector or inspectors, if any, shall make a report in writing
of any challenge, question, or matter determined by him or them and execute a
certificate of any fact found by him or them. Except as otherwise required by
subsection (e) of Section 231 of the Corporation Law, the provisions of that
Section shall not apply to the corporation.
- QUORUM. The holders of a majority of the outstanding shares of stock shall constitute a quorum at a meeting of stockholders for the transaction of any business. The stockholders present may adjourn the meeting despite the absence of a quorum.
- VOTING. Each share of stock shall entitle the holder thereof to one vote. Directors shall be elected by a plurality of the votes of the shares present in person or represented by proxy at the meeting and entitled to vote on the election of directors. Any other action shall be authorized by a majority of the votes cast except where the General Corporation Law prescribes a different percentage of votes and/or a different exercise of voting power, and except as may be otherwise prescribed by the provisions of the certificate of incorporation and these Bylaws. In the election of directors, and for any other action, voting need not be by ballot.
8. STOCKHOLDER ACTION WITHOUT MEETINGS. Except as any provision of the General Corporation Law may otherwise require, any action required by the General Corporation Law to be taken at any annual or special meeting of stockholders, or any action which may be taken at any annual or special meeting of stockholders, may be taken without a meeting, without prior notice and without 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. Action taken pursuant to this paragraph shall be subject to the provisions of Section 228 of the General' Corporation Law.
ARTICLE II
DIRECTORS
1. FUNCTIONS AND DEFINITION. The business and affairs of the corporation shall be managed by or under the direction of the Board of Directors of the corporation. The Board of Directors shall have the authority to fix the compensation of the members thereof. The use of the phrase "whole board" herein refers to the total number of directors which the corporation would have if there were no vacancies.
2. QUALIFICATIONS AND NUMBER. A director need not be a stockholder, a citizen of the United States, or a resident of the State of Delaware. The initial Board of Directors shall consist of (one) 1 persons. Thereafter the number of directors constituting the whole board shall be at least one. Subject to the foregoing limitation and except for the first Board of Directors, such number may be fixed from time to time by action of the stockholders or of the directors, or, if the number is not fixed, the number shall be one (1). The number of directors may be increased or decreased by action of the stockholders or of the directors.
3. ELECTION AND TERM. The first Board of Directors, unless the members thereof shall have been named in the certificate of incorporation, shall be elected by the incorporator or incorporators and shall hold office until the first annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Any director may resign at any time upon written notice to the corporation. Thereafter, directors who are elected at an annual meeting of stockholders, and directors who are elected in the interim to fill vacancies and newly created directorships, shall hold office until the next annual meeting of stockholders and until their successors are elected and qualified or until their earlier resignation or removal. Except as the General Corporation Law may otherwise require, in the interim between annual meetings of stockholders or of special meetings of stockholders called for the election of directors and/or for the removal of one or more directors and for the filling of any vacancy in that connection, newly created directorships and any vacancies in the Board of Directors, including unfilled vacancies resulting from the removal of directors for cause or without cause, may be filled by the vote of a majority of the remaining directors then in office, although less than a quorum, or by the sole remaining director.
4. MEETINGS.
- TIME. Meetings shall be held at such time as the Board shall fix, except that the first meeting of a newly elected Board shall be held as soon after its election as the directors may conveniently assemble.
- PLACE. Meetings shall be held at such place within or without the State of
Delaware as shall be affixed by the Board.
- Call. No call shall be required for regular meetings for which the time and place have been fixed. Special meetings may be called by or at the direction of the Chairman of the Board, if any, the Vice-Chairman of the Board, if any, of the President, or of a majority of the directors in office.
- NOTICE OR ACTUAL OR CONSTRUCTIVE WAIVER. No notice shall be required for regular meetings for which the time and place have been fixed. Written, oral, or any other mode of notice of the time and place shall be given for special meetings in sufficient time for the convenient assembly of the directors thereat. Notice need not be given to any director or to any member of a committee of directors who submits a written waiver of notice signed by him before or after the time stated therein. Attendance of any such person at a meeting shall constitute a waiver of notice of such meeting, except when he attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the directors need be specified in any written waiver of notice.
- QUORUM AND ACTION. A majority of the whole board shall constitute a quorum except when a vacancy or vacancies prevents such majority, whereupon a majority of the directors in office shall constitute a quorum, provided, that such majority shall constitute at least one-third of the whole Board. A majority of the directors present, whether or not a quorum is present, may adjourn a meeting to another time and place Except as herein otherwise provided, and except as otherwise provided by the General Corporation Law, the vote of the majority of the directors present at a meeting at which a quorum is present shall be the act of the Board. The quorum and voting provisions herein suited shall not be construed as conflicting with any provisions of the General Corporation Law and these Bylaws which govern a meeting of directors held to fill vacancies and newly created directorships in the board or action of disinterested directors.
Any member or members of the Board of Directors or of any committee designated by the Board, may participate in a meeting of the Board, or any such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all Persons participating in the meeting can hear each other.
- CHAIRMAN OF THE MEETING. The Chairman of the Board, if any and if present and acting, shall preside at all meetings. Otherwise, the vice-chairman of the Board, if any and if present and acting, or the President, if present and acting, or any other director chosen by the Board, shall preside.
5. REMOVAL OF DIRECTORS. Except as may otherwise be provided by the General Corporation Law, any director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors.
6. COMMITTEES. The Board of Directors may designate one or more committees, each committee to consist of one 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 at any meeting of the committee. In the absence or disqualification of any member of any such committee or committees, the member or members thereof present at any meeting and not disqualified from voting, whether or not such member or members 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, shall have and may exercise the powers and authority of the Board of Directors in the management of the business and affairs of the corporation with the exception of any authority the delegation of which is prohibited by Section 141 of the General Corporation Law, and may authorize the seal of the corporation to be affixed to alt papers which may require it.
7- WRITTEN ACTION. Any action required or permitted to be taken at any meeting of the Board of Directors or any committee thereof may be taken without a meeting if all members of the Board or committee, as the case may be, consent thereto in writing, and the writing or writings are filed with the minutes of proceedings of the Board or committee.
ARTICLE III
OFFICERS
The officers of the corporation shall consist of a President, a Secretary, a Treasurer, and, if deemed necessary, expedient, or desirable by the Board of Directors, a Chairman of the Board, a Vice-Chairman of the Board, an Executive Vice-President, one or more other Vice-Presidents, one or more Assistant Secretaries, one or more Assistant Treasurers, and such other officers with such tides as the resolution of the Board of Directors choosing them shall designate. Except as may otherwise be provided in the resolution of the Board of Directors choosing him, no officer other than the Chairman or Vice-Chairman of the Board, if any, need be a director. Any number of offices may be held by the same person, as the directors may determine.
Unless otherwise provided in the resolution choosing him, each officer shall be chosen for a term which shall continue until the meeting of the Board of Directors following the next annual meeting of stockholders and until his successor shall have been chosen and qualified.
All officers of the corporation shall have such authority and perform such duties in the management and operation of the corporation as shall be prescribed in the resolutions of the Board of Directors designating and choosing such officers and prescribing their authority and duties, and shall have such additional authority and duties as are incident to their office except to the extent that such resolutions may be inconsistent therewith The Secretary or an Assistant Secretary of the corporation shall record all of the proceedings of all meetings and actions in writing of stockholders, directors, and committees of directors, and shall exercise such additional authority and perform snob additional duties as the board shall assign to him. Any officer may be removed, with or without cause, by the Board of Directors. Any vacancy in any office may be filled by the Board of Directors.
ARTICLE IV
CORPORATE SEAL
The corporate seal shall be in such form as the Board of Directors shall prescribe.
ARTICLE V
FISCAL YEAR
The fiscal year of the corporation shall be fixed, and shall be subject to change, by the Board of Directors.
ARTICLE VI
CONTROL OVER BYLAWS
Subject to the provisions of the certificate of incorporation and the provisions of Corporation Law, the power to amend, alter, or repeal these Bylaws and to adopt new bylaws may be exercised by the Board of Directors or by the stockholders.
I HEREBY CERTIFY that the foregoing is a full, true, and correct copy of the Bylaws of Delta Capital Technologies, Inc. a Delaware corporation, as in effect on the date hereof.
Dated this 23rd day of April, 1998
(SEAL)
EXHIBIT 10(a)
1. The Parties
The parties to this Agreement are:
827109 ALBERTA LTD., a corporation having its principal place of business at Suite 255-999 8th Street South West, Calgary, Alberta, Canada, which is referred to elsewhere in this Agreement as "the Licensor"; and
DELTA CAPITAL TECHNOLOGIES INC., A DELAWARE CORPORATION, having its principal place of business at 1331 Homer Street, Suite B201, Vancouver, British Columbia, Canada which is referred to elsewhere in this Agreement as "the Licensee".
2. Purpose of the Agreement
The purpose of this Agreement is for the Licensor to license the Licensee to use, market and distribute the Computer Program and Related Materials in return for which the Licensee will pay the Consideration to the Licensor.
3. Definitions
The parties agree that, in this Agreement, the following terms have the following meanings.
ACCEPTANCE This Agreement is effective and accepted
when the conditions of the "Acceptance"
section below are met.
ADDITIONAL TECHNICAL The services described in Schedule 4.
SERVICES
AFFILIATE A company which has a majority of its
voting shares owned directly or
indirectly by either the Licensee or a
company which directly or indirectly
owns a majority of the voting shares of
the Licensee.
COMPUTER PROGRAM The computer program[s] listed in the
Product Specification delivered to the
Licensee and each copy of, update of or
enhancement to such computer program.
CONFIDENTIAL INFORMATION The information specified in the Product
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Specification and the information
provided by and designated as
confidential in writing by the Licensor
to the Licensee. Confidential
Information does not include information
which is:
- publicly available or becomes so other
than by acts of the Licensee;
- received by the Licensee prior to it
being provided by the Licensor to the
Licensee; or
- received by the Licensee from a third
party.
DESIGNATED LOCATION Such address as may be designated by the
Licensee and agreed to in writing by the
Licensor, such agreement no to be
unreasonably withheld.
NET SALES Sub-License sales less Sub-Licenses cost
of goods sold and direct sales,
marketing and administrative expenses
related to the software subject to this
agreement.
PRODUCT SPECIFICATION The specification set out in SCHEDULE 1
to this Agreement.
PERFORMANCE SPECIFICATION The specification set out in SCHEDULE 2
to this Agreement.
RELATED MATERIALS The human-readable documentation which
is to be delivered with the Computer
Program. The Related Materials are
specified in the Product Specification.
SERVICE SPECIFICATION The specification set out in SCHEDULE 3
to this agreement.
SUBJECT MATTER The intellectual property right[s] or
the subject of other rights licensed
under this Agreement namely:
- the copyright subsisting in a work
entitled relBuilder Enterprise Suite;
- the Confidential Information;
- all of the above as they are embodied
in the Computer Program and Related
Materials
TERM The time period specified in the "Term"
paragraph below.
TERRITORY The geographic or economic market of the
License, namely: worldwide.
USE In respect of the Computer Program, use
means the execution of the Computer
Program by a computer's central
processing unit(s) for processing the
instructions contained in the Computer
Program.
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4. License Grant
(1) For the Consideration described below, the Licensor hereby grants a License to the Licensee under the Subject Matter to use, market and distribute the Computer Program in the Territory for the Term of this Agreement, and to use, market and distribute the Related Materials in association with such use, marketing and distribution of the Computer Program, subject to the terms and conditions of this Agreement.
(2) The License grant is exclusive and during the term and any renewals thereof will not be offered to any other party.
(3) The Licensee may modify, or customize the Computer Program and Related Materials. The Licensor is the owner of copyright in the modifications or customizations. The Licensee shall provide copies of all modifications or customizations to the Licensor.
(4) The License does not grant any ownership or security interest or title in any intellectual property right relating to the Computer Program.
(5) The Licensee has the right to sub-license the use of the Computer Program and Related Materials as specified in this paragraph.
(a) The Licensee may sub-license use of the Computer Program and Related Materials to any party;
(b) Licensee agrees to sub-license only under the terms of Licensor's "End-User Licensing Agreement", to be provided to Licensee by Licensor within thirty (30) days upon request by Licensee.
(6) The License is transferable only under the conditions specified in the "Assignability" section below.
5. Consideration
(1) The Licensee shall pay to the Licensor the Consideration of:
(a) a lump-sum License fee of $50,000.00 (CAD) payable within sixty (60) days from the effective date of this Agreement. This payment shall be non-refundable after Acceptance has occurred; and
(b) a Royalty as defined below;
(2) If the Consideration is not paid when due and upon demand by the Licensor, the Licensee shall pay to the Licensor interest at the rate of the Bank of Canada prime,
payable monthly. Interest on overdue interest is also payable at the same rate until the amount due is paid.
(3) The Royalty shall be in the following amounts for the following periods, calculated on the basis of 15% of Net Sales calculated monthly.
(4) The Licensee shall pay a royalty of at least $50,000.00 (CAD) by the end of the first year of this Agreement; an additional $200,000.00 (CAD) by the end of the second year of this Agreement; and an additional $300,000.00 (CAD) by the end of the third year of this Agreement.
6. Obligations of the Licensor
The Licensor shall provide to the Licensee, within sixty (60) days of the effective date of this Agreement taking effect:
(a) any reasonable number of copies of the Computer Program and Related Materials as described in the Product Specification requested by the Licensee; and
(b) training and technical assistance as described in the Service Specification;
7. Obligations of the Licensee
(1) The Licensee shall not make any copies of the Computer Program or Related Materials nor permit anyone else to use, have access to, or copy the Computer Program or Related Materials other than those that are specifically authorized to be made under this Agreement.
(2) Upon termination of this License, the Licensee shall return to the Licensor or destroy under oath all copies of the Computer Program and Related Materials. The Licensee shall erase all Computer Programs from any storage media before disposal of such media. Within one month of the date of the termination of this License, the Licensee shall notify the Licensor in writing of the Licensee's compliance with the requirements of this section.
8. Acceptance
(1) Acceptance and effectiveness of this Agreement will have occurred upon execution of this Agreement by authorized officers of the parties.
9. Defects
(1) Obligations of the Licensee
If the Computer Program fails to perform in accordance with the Performance Specification, the Licensee shall promptly advise the Licensor of the defect and shall assist the Licensor in identifying and fixing the defect.
(2) Obligations of the Licensor
If the Computer Program fails to perform in accordance with the Performance Specification, and the Licensee promptly advises the Licensor of the defect, then the Licensor shall, within 60 days of the communication of the existence of the defect:
(a) correct the defect, or;
(b) identify the defect and provide a schedule to the Licensee for correcting the defect.
10. Upgrades/Interim Maintenance Releases
The Licensor shall deliver to the Licensee:
(a) upgrade versions or new versions of the Computer Program and Related Materials; and
(b) interim maintenance releases of the Computer Program and Related Materials.
11. Term
(1) The term of the License is three (3) years beginning on the date this Agreement takes effect.
(2) This License terminates thirty (30) days after the non-breaching party gives notice to the breaching party of a material breach of a provision of this Agreement, unless the breaching party has remedied the breach within that time.
(3) This License terminates automatically upon the occurrence of any of the following events:
(a) The insolvency of the Licensee;
(b) The Licensee executes an assignment for the benefit of creditors;
(c) The Licensee ceases to carry on business;
(d) The Licensee becomes subject to receivership or bankruptcy proceedings;
(e) The Licensee fails to make any prescribed royalty payments within sixty
(60) days of such royalty payments being due, provided that in the event
that the Licensee is terminated as set out herein, the Licensee shall only
be responsible for its pro-rata share of its annual royalty payment
(4) The parties acknowledge that the Licensee has the right to retain, access, copy and modify all data files containing Licensee's data used or generated by the Computer Program.
(5) This agreement may be renewed upon expiration for an unlimited term for the sum of one ($1.00) unless such period is limited by operation of law.
12. Warranties
(1) The Licensor and Licensee warrant to each other as follows:
(a) Each corporate party is duly incorporated and subsisting under the laws of its place of incorporation or subsistence.
(b) Each party has the power to and is authorized to enter into this Agreement.
(c) The carrying out of this Agreement will not breach or interfere with any other agreement to which the respective party has entered into.
(d) Neither party will enter into another agreement the carrying out of which would interfere with the carrying out of this Agreement;
(2) The Licensor warrants as follows:
(a) The Licensor has the right to license the Subject Matter free of any liens or encumbrances. Any portions of the Computer Program and Related Materials, the intellectual property of which are owned by someone other than the Licensor, have been licensed to the Licensor for sub-licensing to the Licensee and others. Such License does not restrict the ability of the Licensor to grant the Licenses set out in this Agreement.
(b) The Licensor owns the right, title and interest in the physical media provided to the Licensee under this Agreement.
(c) The Computer Program is of marketable quality.
(d) To the best of the Licensor's knowledge, the use of the Computer Program does not infringe the intellectual property rights of others nor is the Licensor aware of any allegations made that the use of the Computer Program infringes the intellectual property rights of others.
(e) The Computer Program does not contain any programs which are intended to permit unauthorized access, or cause damage to other programs, data or hardware.
(3) The Licensee warrants that it shall keep the License of this Agreement free of liens, claims and encumbrances.
(4) The above warranties are instead of any and all other warranties, representations or conditions express or implied, oral or written with respect to the Computer Program and Related Materials, including any implied warranties or conditions of title, non-infringement, merchantability or fitness or suitability for a particular purpose. The Licensor disclaims and the Licensee waives all other such warranties, representations and conditions. Certain jurisdictions do not permit such exclusion of warranties, so this disclaimer may not apply to the Licensee.
13. Indemnification
(1) The Licensor shall indemnify the Licensee against all claims including liabilities and legal costs and disbursements made against the Licensee alleging that any use of the Computer Program or Related Materials constitutes infringement of any copyright, patent, trade-mark, or trade secret rights.
(2) The Licensor shall have carriage of the defense of such claim made against the Licensee and has the exclusive right to settle the claim so long as the settlement does not interfere with the business arrangements of the Licensee. The Licensee shall cooperate fully in the conduct of the defense. The Licensee shall either retain the legal counsel designated by the Licensor or may retain its own counsel at its own expense.
(3) The Licensee shall notify the Licensor as soon as possible upon any claim being made against the Licensee that its use of the Computer Program is alleged to be an infringement of the intellectual property rights of others.
(4) In the event that the Computer Program is finally held by a court of competent jurisdiction, to be an infringement of the intellectual property rights of another, then
the Licensor shall:
(a) modify the Computer Program to make it non-infringing; or
(b) obtain a License for use of the Computer Program from the other party; or
(c) terminate the License and refund any payments the Licensee has made.
14. Relief
(1) Injunctive Relief
Any unauthorized use of any intellectual property rights of the Licensor made or caused by the Licensee will result in irreparable harm to the Licensor which cannot be adequately compensated for by damages. The Licensor is entitled to a court-ordered injunction in the event such use is made or caused by the Licensee.
(2) Limitation of Damages
The Licensor shall not be liable to the Licensee for incidental, special or consequential damages caused by the breach of any term or warranty of this Agreement, including lost profits, lost data, loss of computer time or any commercial or economic loss. The liability of the Licensor shall, in any event, be limited to the total monies paid by the Licensee to the Licensor as the Consideration for this Agreement. Certain jurisdictions do not permit such exclusion of liability for consequential damages, so this disclaimer may not apply to the Licensee.
15. Dispute Resolution
(1) Governing Law
This Agreement shall be interpreted under the laws of Alberta, Canada.
(2) Arbitration
Disputes, other than those for immediate cessation of conduct by a party to this Agreement, shall be resolved under arbitration in accordance with the Licensing Agreement Arbitration Rules of the American Arbitration Association.
The Arbitration shall take place at a location agreed to by the parties in the English language.
The costs of the arbitration shall be paid equally by the parties.
The decision of the arbitrator shall be binding on the parties and may be entered in any Court having jurisdiction to do so.
16. Confidentiality
(1) The Licensee acknowledges that the Confidential Information is a trade secret and is owned by the Licensor.
(2) The Licensee will take all reasonable precautions to maintain the confidentiality of the Confidential Information and to prevent the unauthorized disclosure to others of the Confidential Information. The Licensee shall not be liable for damages caused to the Licensor by inadvertent breaches of confidentiality.
(3) The Licensee shall only disclose the Confidential Information to those of its employees who have a need to know and require access to the Confidential Information to exploit the License. The Licensee shall require each employee who receives the Confidential Information to agree in writing, prior to such disclosure, to maintain the information as confidential.
17. Non-competition
The Licensee may develop computer software similar in function to the Licensor's Computer Program. Those employees of the Licensee who develop such computer software shall not have had access to the Licensor's Confidential Information for a two-year period prior to commencing such development. Further, the Licensor shall not be engaged in, develop software, or be a party to the development, marketing or licensing of any software which could reasonably be assumed to be in competition with the software that is the subject of this agreement.
18. Reverse Engineering
The Licensee shall not reverse engineer, decompile or disassemble the object code version of the Computer Program without the prior written approval of the Licensor.
19. Assignability
(1) This License is assignable by the Licensee to another person or legal entity only with the express prior written permission of the Licensor.
(2) This Agreement is binding on the parties to this Agreement, their successors and assigns.
20. General Provisions
(1) This Agreement constitutes the entire agreement between the parties concerning the Computer Program. The parties are not relying upon any earlier representation which is not included in this Agreement.
(2) This Agreement cannot be amended or modified other than by a change made in writing and executed by the parties.
(3) Covenants concerning intellectual property are to be construed as being independent of other provisions in this Agreement.
(4) In the event that any portion of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then the remaining portions of the Agreement shall survive unaffected.
(5) Notice may be sent, by any means whatsoever, to the address specified at the beginning of this Agreement or at such other address for notice which may be given by notification of the other party in writing. Notice is effective on the date that the notice is received. Notice by courier or registered mail is deemed to be given on the date recorded as delivered. Notice by telecopy or Telex is deemed to be made on the date and at the time it is sent and acknowledged as being received.
(6) The waiver by any party of a breach of this Agreement does not constitute a waiver of other breaches or rights under this Agreement.
(7) Delays or non-performance of any obligations under this Agreement caused by events beyond the control of the party having the obligation, shall not be a breach of this Agreement. The time for carrying out the obligation shall extend for a period equal to the time over which the conditions existed.
(8) The headings in this Agreement are for reference purposes only and cannot be used to construe the terms of the Agreement.
(9) This Agreement does not establish a joint venture or partnership between the Licensor and Licensee.
(10) This Agreement shall be recorded in any and all offices where such recordal is necessary under the laws of the respective country.
EXECUTED AT Vancouver, British Columbia, Canada, this 1 day of June, 1999.
Licensor
/s/ "Paul Davis"
----------------------------
By: Paul Davis
Title: President
|
Licensee
/s/ "Judith Miller"
-----------------------------
By: Judith Miller
Title: Corporate Secretary
|
SCHEDULE 1
Product Specification
(1) The Computer Program to be delivered under this Agreement is a set of instructions or statements expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result and has the following characteristics:
(a) Brand Name: relBuilder Enterprise Suite
(2) The Computer Program shall be in executable form.
(3) The Related Materials shall include:
(a) operation and user manuals
(b) instructions
(4) The Computer Program shall be in the form of:
(a) source code in a form which may be compiled or assembled to executable code.
Confidential Information
(1) The following items are confidential and proprietary to the Licensor:
(a) the source code version of the Computer Program;
(b) the Computer Program system specification;
(c) the methods and concepts embodied in the Computer Program;
(d) the structure, sequence and organization of the Computer Program.
(2) All written forms of the Confidential Information shall bear a conspicuous notice identifying the subject matter as being Confidential Information. The Licensee shall not remove such notice.
SCHEDULE 2
Performance Specification
(1) "as-documented"
(a) The Licensor warrants that the Computer Program will perform in accordance with its description in its documentation on the computer hardware and operating system specified in its documentation.
(b) The Licensor does not warrant that the Computer Program will operate with any other Computer Program not so specified in the documentation.
(c) The only remedy of the Licensee under this warranty is the Licensee may terminate the License. If the Licensee terminates the License under this warranty, the Licensor shall pay to the Licensee 90% of the License fee paid by the Licensee.
SCHEDULE 3
Service Specification
(1) Training
The Licensor shall train a reasonable number of employees of the Licensee in the use and operation of the Computer Program.
(2) Technical Assistance
The Licensor shall provide the following technical assistance:
(a) Installation support; and
(b) Troubleshooting support.
(3) Maintenance
The Licensor shall maintain the Computer Program and Related Materials in an operable form as described in the Product Specification and Performance Specification.
SCHEDULE 4
Additional Technical Services
The Licensor shall provide the following technical services:
(a) Integration training for Licensee developers;
(b) Support for Licensee developers; and
(c) Architectural training for Licensee developers.
EXHIBIT 10(b)
1. The Parties
The parties to this Agreement are:
SICOM SOLUTIONS INC., a corporation having its principal place of business at Suite 255 - 999 8th Street South West, Calgary, Alberta, Canada, which is referred to elsewhere in this Agreement as "The Licensor"; and
827109 ALBERTA LTD., a corporation having its principal place of business at Suite 255 - 999 8th Street South West, Calgary, Alberta, Canada, which is referred to elsewhere in this Agreement as "the Licensee".
2. Purpose of the Agreement
The purpose of this Agreement is for the Licensor to license the Licensee to use, market and distribute the Computer Program and Related Materials in return for which the Licensee will pay the Consideration to the Licensor.
3. Definitions
The parties agree that, in this Agreement, the following terms have the following meanings.
ACCEPTANCE This Agreement is effective and accepted
when the conditions of the "Acceptance"
section below are met.
ADDITIONAL TECHNICAL The services described in SCHEDULE 4.
SERVICES
AFFILIATE A company which has a majority of its
voting shares owned directly or
indirectly by either the Licensee or a
company which directly or indirectly
owns a majority of the voting shares of
the Licensee.
COMPUTER PROGRAM The computer program[s] listed in the
Product Specification delivered to the
Licensee and each copy of, update of or
enhancement to such computer program.
CONFIDENTIAL INFORMATION The information specified in the Product
|
Specification and the information provided by and designated as confidential in writing by the Licensor to the Licensee. Confidential Information does not include information
which is:
- publicly available or becomes so other
than by acts of the Licensee;
- received by the Licensee prior to it
being provided by the Licensor to the
Licensee; or
- received by the Licensee from a third
party.
DESIGNATED LOCATION Such address as may be designated by the
Licensee and agreed to in writing by the
Licensor.
PRODUCT SPECIFICATION The specification set out in SCHEDULE 1
to this Agreement.
PERFORMANCE SPECIFICATION The specification set out in SCHEDULE 2
to this Agreement.
RELATED MATERIALS The human-readable documentation which
is to be delivered with the Computer
Program. The Related Materials are
specified in the Product Specification.
SERVICE SPECIFICATION The specification set out in SCHEDULE 3
to this agreement.
SUBJECT Matter The intellectual property
right[s] or the subject of other rights
licensed under this Agreement namely:
- the copyright subsisting in a work
entitled relBuilder Enterprise Suite;
- the Confidential Information;
- all of the above as they are embodied
in the Computer Program and Related
Materials
TERM The time period specified in the "Term"
paragraph below.
TERRITORY The geographic or economic market of the
License, namely: worldwide.
USE In respect of the Computer Program, use
means the execution of the Computer
Program by a computer's central
processing unit(s) for processing the
instructions contained in the Computer
Program.
|
4. License Grant
(1) For the Consideration described below, the Licensor hereby grants a License to
the Licensee under the Subject Matter to use, market and distribute the Computer Program in the Territory for the Term of this Agreement, and to use, market and distribute the Related Materials in association with such use, marketing and distribution of the Computer Program, subject to the terms and conditions of this Agreement.
(2) The License grant is exclusive.
(3) The Licensee may modify, or customize the Computer Program and Related Materials. The Licensor is the owner of copyright in the modifications or customizations. The Licensee shall provide copies of all modifications or customizations to the Licensor.
(4) The License does not grant any ownership or security interest or title in any intellectual property right relating to the Computer Program.
(5) The Licensee has the right to sub-license as specified in this paragraph.
(a) The Licensee may sub-license any party;
(b) Sub-Licensees may only license use of the Computer Program and Related Materials, under the terms of Licensor's "End-User Licensing Agreement", to be provided to Sub-Licensee by Licensor within thirty (30) days upon request by Sub-Licensee.
(6) The License is transferable only under the conditions specified in the "Assignability" section below.
5. Consideration
(1) The Licensee shall pay to the Licensor the Consideration of:
(a) a lump-sum License fee of $50,000.00 (CAD) payable within sixty (60) days from the effective date of this Agreement. This payment shall be non-refundable after Acceptance has occurred; and
(b) a Royalty as defined below;
(2) If the Consideration is not paid when due and upon demand by the Licensor, the Licensee shall pay to the Licensor interest at the rate of the Bank of Canada prime, payable monthly. Interest on overdue interest is also payable at the same rate until the amount due is paid.
(3) The Royalty shall be in the following amounts for the following periods,
calculated on the basis of 15% of net sales.
(4) The Licensee shall pay a royalty of at least $50,000.00 (CAD) by the end of the first year of this Agreement; an additional $200,000.00 (CAD) by the end of the second year of this Agreement; and an additional $300,000.00 (CAD) by the end of the third year of this Agreement.
6. Obligations of the Licensor
The Licensor shall provide to the Licensee, within ninety (90) days of the effective date of this Agreement taking effect:
(a) any reasonable number of copies of the Computer Program and Related Materials as described in the Product Specification requested by the Licensee; and
(b) training and technical assistance as described in the Service Specification;
7. Obligations of the Licensee
(1) The Licensee shall not make any copies of the Computer Program or Related Materials nor permit anyone else to use, have access to, or copy the Computer Program or Related Materials other than those that are specifically authorized to be made under this Agreement.
(2) Upon termination of this License, the Licensee shall return to the Licensor or destroy under oath all copies of the Computer Program and Related Materials. The Licensee shall erase all Computer Programs from any storage media before disposal of such media. Within one month of the date of the termination of this License, the Licensee shall notify the Licensor in writing of the Licensee's compliance with the requirements of this section.
8. Acceptance
(1) Acceptance and effectiveness of this Agreement will have occurred upon execution of this Agreement by authorized officers of the parties.
9. Defects
(1) Obligations of the Licensee
If the Computer Program fails to perform in accordance with the Performance Specification, the Licensee shall promptly advise the Licensor of the defect and shall assist the Licensor in identifying and fixing the defect.
(2) Obligations of the Licensor
If the Computer Program fails to perform in accordance with the Performance Specification, and the Licensee promptly advises the Licensor of the defect, then the Licensor shall, within 90 days of the communication of the existence of the defect:
(a) correct the defect, or;
(b) identify the defect and provide a schedule to the Licensee for correcting the defect.
10. Upgrades/Interim Maintenance Releases
The Licensor shall deliver to the Licensee:
(a) upgrade versions or new versions of the Computer Program and Related Materials; and
(b) interim maintenance releases of the Computer Program and Related Materials.
11. Term
(1) The term of the License is three (3) years beginning on the date this Agreement takes effect.
(2) This License terminates thirty (30) days after the non-breaching party gives notice to the breaching party of a material breach of a provision of this Agreement, unless the breaching party has remedied the breach within that time.
(3) This License terminates automatically upon the occurrence of any of the following events:
(a) The insolvency of the Licensee;
(b) The Licensee executes an assignment for the benefit of creditors;
(c) The Licensee ceases to carry on business;
(d) The Licensee becomes subject to receivership or bankruptcy proceedings;
(4) The parties acknowledge that the Licensee has the right to retain, access, copy and modify all data files containing Licensee's data used or generated by the Computer Program.
12. Warranties
(1) The Licensor and Licensee warrant to each other as follows:
(a) Each corporate party is duly incorporated and subsisting under the laws of its place of incorporation or subsistence.
(b) Each party has the power to and is authorized to enter into this Agreement.
(c) The carrying out of this Agreement will not breach or interfere with any other agreement to which the respective party has entered into.
(d) Neither party will enter into another agreement the carrying out of which would interfere with the carrying out of this Agreement;
(2) The Licensor warrants as follows:
(a) The Licensor has the right to license the Subject Matter free of any liens or encumbrances. Any portions of the Computer Program and Related Materials, the intellectual property of which are owned by Licensor or are owned by someone other than the Licensor, and have been licensed to the Licensor for sub-licensing to the Licensee and others. Such License does not restrict the ability of the Licensor to grant the Licenses set out in this Agreement.
(b) The Licensor owns the right, title and interest in the physical media provided to the Licensee under this Agreement.
(c) The Computer Program is of marketable quality.
(d) To the best of the Licensor's knowledge, the use of the Computer Program does not infringe the intellectual property rights of others nor is the Licensor aware of any allegations made that the use of the Computer Program infringes the intellectual property rights of others.
(e) The Computer Program does not contain any programs which are intended to permit unauthorized access, or cause damage to other programs, data
or hardware.
(3) The Licensee warrants that it shall keep the License of this Agreement free of liens, claims and encumbrances.
(4) The above warranties are instead of any and all other warranties, representations or conditions express or implied, oral or written with respect to the Computer Program and Related Materials, including any implied warranties or conditions of title, non-infringement, merchantability or fitness or suitability for a particular purpose. The Licensor disclaims and the Licensee waives all other such warranties, representations and conditions. Certain jurisdictions do not permit such exclusion of warranties, so this disclaimer may not apply to the Licensee.
13. Indemnification
(1) The Licensor shall indemnify the Licensee against all claims including liabilities and legal costs and disbursements made against the Licensee alleging that any use of the Computer Program or Related Materials constitutes infringement of any copyright, patent, trade-mark, or trade secret rights.
(2) The Licensor shall have carriage of the defense of such claim made against the Licensee and has the exclusive right to settle the claim so long as the settlement does not interfere with the business arrangements of the Licensee. The Licensee shall cooperate fully in the conduct of the defense. The Licensee shall either retain the legal counsel designated by the Licensor or may retain its own counsel at its own expense.
(3) The Licensee shall notify the Licensor as soon as possible upon any claim being made against the Licensee that its use of the Computer Program is alleged to be an infringement of the intellectual property rights of others.
(4) In the event that the Computer Program is finally held by a court of competent jurisdiction, to be an infringement of the intellectual property rights of another, then the Licensor shall:
(a) modify the Computer Program to make it non-infringing; or
(b) obtain a License for use of the Computer Program from the other party; or
(c) terminate the License and refund any payments the Licensee has made.
14. Relief
(1) Injunctive Relief
Any unauthorized use of any intellectual property rights of the Licensor made or caused by the Licensee will result in irreparable harm to the Licensor which cannot be adequately compensated for by damages. The Licensor is entitled to a court-ordered injunction in the event such use is made or caused by the Licensee.
(2) Limitation of Damages
The Licensor shall not be liable to the Licensee for incidental, special or consequential damages caused by the breach of any term or warranty of this Agreement, including lost profits, lost data, loss of computer time or any commercial or economic loss. The liability of the Licensor shall, in any event, be limited to the total monies paid by the Licensee to the Licensor as the Consideration for this Agreement. Certain jurisdictions do not permit such exclusion of liability for consequential damages, so this disclaimer may not apply to the Licensee.
15. Dispute Resolution
(1) Governing Law
This Agreement shall be interpreted under the laws of Alberta, Canada.
(2) Arbitration
Disputes, other than those for immediate cessation of conduct by a party to this Agreement, shall be resolved under arbitration in accordance with the Licensing Agreement Arbitration Rules of the American Arbitration Association.
The Arbitration shall take place at a location agreed to by the parties in the English language.
The costs of the arbitration shall be paid equally by the parties.
The decision of the arbitrator shall be binding on the parties and may be entered in any Court having jurisdiction to do so.
16. Confidentiality
(1) The Licensee acknowledges that the Confidential Information is a trade secret and is owned by the Licensor.
(2) The Licensee will take all reasonable precautions to maintain the confidentiality
of the Confidential Information and to prevent the unauthorized disclosure to others of the Confidential Information. The Licensee shall not be liable for damages caused to the Licensor by inadvertent breaches of confidentiality.
(3) The Licensee shall only disclose the Confidential Information to those of its employees who have a need to know and require access to the Confidential Information to exploit the License. The Licensee shall require each employee who receives the Confidential Information to agree in writing, prior to such disclosure, to maintain the information as confidential.
17. Non-competition
The Licensee may develop computer software similar in function to the Licensor's Computer Program. Those employees of the Licensee who develop such computer software shall not have had access to the Licensor's Confidential Information for a two-year period prior to commencing such development.
18. Reverse Engineering
The Licensee shall not reverse engineer, decompile or disassemble the object code version of the Computer Program without the prior written approval of the Licensor.
19. Assignability
(1) This License is assignable by the Licensee to another person or legal entity only with the express prior written permission of the Licensor.
(2) This Agreement is binding on the parties to this Agreement, their successors and assigns.
20. General Provisions
(1) This Agreement constitutes the entire agreement between the parties concerning the Computer Program. The parties are not relying upon any earlier representation which is not included in this Agreement.
(2) This Agreement cannot be amended or modified other than by a change made in writing and executed by the parties.
(3) Covenants concerning intellectual property are to be construed as being
independent of other provisions in this Agreement.
(4) In the event that any portion of this Agreement is held by a court of competent jurisdiction to be invalid or unenforceable, then the remaining portions of the Agreement shall survive unaffected.
(5) Notice may be sent, by any means whatsoever, to the address specified at the beginning of this Agreement or at such other address for notice which may be given by notification of the other party in writing. Notice is effective on the date that the notice is received. Notice by courier or registered mail is deemed to be given on the date recorded as delivered. Notice by telecopy or Telex is deemed to be made on the date and at the time it is sent and acknowledged as being received.
(6) The waiver by any party of a breach of this Agreement does not constitute a waiver of other breaches or rights under this Agreement.
(7) Delays or non-performance of any obligations under this Agreement caused by events beyond the control of the party having the obligation, shall not be a breach of this Agreement. The time for carrying out the obligation shall extend for a period equal to the time over which the conditions existed.
(8) The headings in this Agreement are for reference purposes only and cannot be used to construe the terms of the Agreement.
(9) This Agreement does not establish a joint venture or partnership between the Licensor and Licensee.
(10) This Agreement shall be recorded in any and all offices where such recordal is necessary under the laws of the respective country.
EXECUTED AT Calgary, Alberta, Canada, this 1 day of June, 1999.
Licensor
/s/ "Paul Davis"
----------------------------------------
By: Paul Davis
Title: President and Chief Executive Officer
|
Licensee
/s/ "Paul Davis"
----------------------------------------
By: Paul Davis
Title: President
|
SCHEDULE 1
Product Specification
(1) The Computer Program to be delivered under this Agreement is a set of instructions or statements expressed, fixed, embodied or stored in any manner, that is to be used directly or indirectly in a computer in order to bring about a specific result and has the following characteristics:
(a) Brand Name: relBuilder Enterprise Suite
(2) The Computer Program shall be in executable form.
(3) The Related Materials shall include:
(a) operation and user manuals
(b) instructions
(4) The Computer Program shall be in the form of:
(a) source code in a form which may be compiled or assembled to executable code.
Confidential Information
(1) The following items are confidential and proprietary to the Licensor:
(a) the source code version of the Computer Program;
(b) the Computer Program system specification;
(c) the methods and concepts embodied in the Computer Program;
(d) the structure, sequence and organization of the Computer Program.
(2) All written forms of the Confidential Information shall bear a conspicuous notice identifying the subject matter as being Confidential Information. The Licensee shall not remove such notice.
SCHEDULE 2
Performance Specification
(1) "as-documented"
(a) The Licensor warrants that the Computer Program will perform in accordance with its description in its documentation on the computer hardware and operating system specified in its documentation.
(b) The Licensor does not warrant that the Computer Program will operate with any other Computer Program not so specified in the documentation.
(c) The only remedy of the Licensee under this warranty is the Licensee may terminate the License. If the Licensee terminates the License under this warranty, the Licensor shall pay to the Licensee 90% of the License fee paid by the Licensee.
SCHEDULE 3
Service Specification
(1) Training
The Licensor shall train a reasonable number of employees of the Licensee in the use and operation of the Computer Program.
(2) Technical Assistance
The Licensor shall provide the following technical assistance:
(a) Installation support; and
(b) Troubleshooting support.
(3) Maintenance
The Licensor shall maintain the Computer Program and Related Materials in an operable form as described in the Product Specification and Performance Specification.
SCHEDULE 4
Additional Technical Services
The Licensor shall provide the following technical services:
(a) Integration training for Licensee developers;
(b) Support for Licensee developers; and
(c) Architectural training for Licensee developers.
EXHIBIT 10(c)
827109 ALBERTA LTD.
#255 - 999 - 8TH STREET, SW, CALGARY, ALBERTA T2R 1J5
PH: (403) 244-7300 FAX: (403) 244-7211
September 2, 1999
Delta Capital Technologies Inc.
c/o B201, 1331 Homer Street
Vancouver, BC V6B 5M5
Dear Sirs:
With reference of the License Agreement between 827109 Alberta Ltd. ("AlbertaCo") and Delta Capital Technologies Inc. ("DeltaCap"), dated June 1, 1999, Section 5(a), Consideration, "a lump-sum fee of $50,000.00 (CAD) payable within sixty (60) days from the effective date of this Agreement", we hereby acknowledge receipt of $20,000.00 (CAD).
Further, we grant a three (3) month extension to DeltaCap for payment of the balance of funds in the amount of $30,000.00 until November 1, 1999.
Yours truly,
827109 ALBERTA LTD.
/s/ "Paul Davis" Paul Davis President |
EXHIBIT 10(d)
[SiCOM LETTERHEAD]
September 2, 1999
827109 Alberta Ltd.
#205, 999 - 8th Street SW
Calgary, AB T2R 1J5
Dear Sirs:
With reference of the License Agreement between SiCom Solutions Inc. ("SiCom") and 827109 Alberta Ltd. ("AlbertaCo"), dated June 1, 1999, Section 5(a), Consideration, "a lump-sum fee of $50,000.00 (CAD) payable within sixty (60) days from the effective date of this Agreement," we hereby acknowledge receipt of $20,000.00 (CAD).
Further, we grant a three (3) month extension to AlbertaCo for payment of the balance of funds in the amount of $30,000.00 until November 1, 1999.
Yours truly,
SiCOM SOLUTIONS INC.
/s/ "Paul Davis" Paul Davis President |
| ARTICLE 5 |
| This schedule contains summary financial information extracted from the audited balance sheets of the Company at July 31, 1999 and December 31, 1998 and the statement of operations, stockholders' equity, and cash flow for the seven months ended July 341, 1999 and the period from March 4, 1998 to December 31, 1998 and the period from March 4, 1998 (date of inception) to July 31, 1999. |
| CIK: 0001066764 |
| NAME: DELTA CAPITAL TECHNOLOGIES INC. |
| MULTIPLIER: 1 |
| CURRENCY: U.S. Dollars |
| PERIOD TYPE | 12 mos | 7 mos |
| FISCAL YEAR END | Dec 31 1998 | Dec 31 1999 |
| PERIOD START | Jan 01 1998 | Jan 01 1999 |
| PERIOD END | Dec 31 1998 | Jul 31 1999 |
| EXCHANGE RATE | 1 | 1 |
| CASH | $20,926 | $1,169 |
| SECURITIES | 0 | 0 |
| RECEIVABLES | 0 | 0 |
| ALLOWANCES | 0 | 0 |
| INVENTORY | 0 | $564 |
| CURRENT ASSETS | $20,926 | $1,169 |
| PP&E | 0 | $11,637 |
| DEPRECIATION | 0 | 0 |
| TOTAL ASSETS | $20,926 | $13,370 |
| CURRENT LIABILITIES | 0 | $41,083 |
| BONDS | 0 | 0 |
| PREFERRED MANDATORY | 0 | 0 |
| PREFERRED | 0 | 0 |
| COMMON | 8,800,000 | 8,800,000 |
| OTHER SE | 0 | 0 |
| TOTAL LIABILITY AND EQUITY | $20,926 | $13,370 |
| SALES | 0 | 0 |
| TOTAL REVENUES | 0 | 0 |
| CGS | 0 | 0 |
| TOTAL COSTS | 0 | 0 |
| OTHER EXPENSES | $39,281 | $48,639 |
| LOSS PROVISION | ($39,281) | ($48,639) |
| INTEREST EXPENSE | 0 | 0 |
| INCOME PRETAX | 0 | 0 |
| INCOME TAX | 0 | 0 |
| INCOME CONTINUING | 0 | 0 |
| DISCONTINUED | 0 | 0 |
| EXTRAORDINARY | 0 | 0 |
| CHANGES | 0 | 0 |
| NET INCOME | ($39,281) | 0 |
| EPS BASIC | 0 | 0 |
| EPS DILUTED | 0 | 0 |
EXHIBIT 99(a)
SHARE EXCHANGE AGREEMENT (hereinafter referred to as "Agreement") between Delta Capital Technologies, Inc., a Delaware corporation (hereinafter referred to as "Delta"), and 827109 Alberta Ltd., an Alberta, Canada corporation (hereinafter referred to as "AlbertaCO").
THE PARTIES AGREE as follows:
1. The parties intend that the securities exchange described herein between Delta and AlbertaCO will, if allowable, be tax free in accordance with the provisions of Section 368(a)(1)(B) of the Internal Revenue Code and with the Income Tax Act of Canada. In the event that it is not allowable, the parties hereto confirm that the value attributed to the AlbertaCO shares will be shareholder equity at par value.
2. Exchange of Securities. Subject to the terms and conditions herein, at the time of the closing referred to in Section 6 hereof (the "Closing Date"), Delta will issue and deliver, or cause to be issued and delivered to AlbertaCO 5,000,000 shares of Delta's restricted common stock, in exchange for 5,000,000 shares of common stock of AlbertaCO to be issued. The shares of Delta and AlbertaCO will be allocated as set forth in SCHEDULE I, attached.
3. Representations and Warranties by AlbertaCO. AlbertaCO represents and warrants to Delta, all of which representations and warranties shall be true at the time of closing, and shall survive the closing for a period of six (6) months from the date of closing that:
a) AlbertaCO is a corporation duly organized and validly existing and in good standing under the laws of Alberta, Canada and has the corporate powers to own its property and carry on its business as and where it is now being conducted. Copies of the Certificate of Incorporation and the By-Laws of AlbertaCO, which have heretofore been furnished by AlbertaCO to Delta, are true and correct copies of said Certificate of Incorporation and By-Laws including all amendments to the date hereof.
b) The authorized capital stock of AlbertaCO is an unlimited number of shares at no par value, of which 9,000,000 shares have been validly issued and are now outstanding.
c) AlbertaCO is authorized to issue 5,000,000 shares of common stock, at par value of $0.001 per share (the "Shares").
d) AlbertaCO has full power to exchange the Shares upon the terms provided for in this Agreement, the Shares will be duly and validly issued and will be free and clear of any lien or other encumbrance, and no party has an option or right to purchase any of the Shares from AlbertaCO other than Delta in accordance with this Agreement.
e) From the date hereof, and until the date of closing, no dividends or distributions of capital, surplus, or profits shall be paid or declared by AlbertaCO in redemption of their outstanding shares or otherwise and no additional shares shall be issued by said corporation.
f) Since the date hereof, AlbertaCO has not engaged in any transaction other than transactions in the normal course of the operations of their business, except as specifically authorized by Delta in writing.
4. Representations and Warranties by Delta. Delta represents and warrants to AlbertaCO all of which representations and warranties shall be true at the time of closing, and shall survive the closing for a period of six (6) months from the date of closing that:
a) Delta is a corporation duly organized and validly existing and in good standing under the laws of the State of Delaware and has the corporate power to own its properties and carry on its business as now being conducted and has authorized capital stock consisting of 25,000,000 shares of common stock, $.001 par value per share, of which there are 8,800,000 shares presently outstanding.
b) Delta has the corporate power to execute and perform this Agreement, and to deliver the stock required to be delivered to AlbertaCO hereunder.
c) The execution and delivery of this Agreement, and the issuance of the stock required to be delivered hereunder have been duly authorized by all necessary corporate actions, and neither the execution nor delivery of this Agreement, nor the issuance of the stock, nor the performance, observance or compliance with the terms and provisions of this Agreement will violate any provision of law, any order of any court or other governmental agency, the Certificate of Incorporation or By-Laws of Delta or any indenture, agreement or other instrument to which Delta is a party, or by which Delta is bound, or by which any of its property is bound.
d) The shares of common stock of Delta deliverable pursuant hereto will on delivery in accordance with the terms hereof, be duly authorized, validly issued, and fully paid, and non-assessable.
5. Conditions to the Obligations of AlbertaCO. The obligations of AlbertaCO are subject to the conditions that:
a) AlbertaCO shall not have discovered any material error or misstatement in any of the representations and warranties made by Delta herein and all the terms and conditions of this Agreement to be performed and complied with by Delta shall have been performed and complied with.
b) There shall have been no substantial adverse changes in the conditions, financial, business otherwise of Delta from the date of this Agreement, and until the date of closing, except for changes resulting from those operations in the usual and ordinary course of business, and between such dates the business and assets of Delta shall not have been materially adversely affected as the result of any fire, explosion, earthquake, flood, accident, strike, lockout, combination of workmen, taking over of any such assets by any governmental authorities, riot, activities of armed forces, or acts of God or of the public enemies.
c) AlbertaCO shall upon request, at the time of closing, receive an opinion of counsel to the effect that: (1) Delta is a corporation duly organized and validly existing under the laws of the State of Delaware, and has the power to own and operate its properties wherever the same shall be located as of the Closing Date; (2) the execution, delivery and performance of this Agreement by Delta has been duly authorized by all necessary corporate action and constitutes a legal, valid and binding obligation of Delta, enforceable in accordance with its terms; (3) the securities to be delivered to AlbertaCO pursuant to the terms of this Agreement have been validly issued, fully paid and non-assessable; (4) the exchange of the securities herein contemplated does not require the registration of the shares of Delta to be issued pursuant to any Federal law dealing with the issuance, sale, transfer, and/or exchange of corporate securities; (5) to the best of its knowledge Delta is not under investigation by the SEC, the NASD or any state securities commission; (6) that there are no known securities violations; (7) all shares issued by Delta have been validly issued in accordance with Delaware or Federal law, are fully paid and non-assessable; and (8) there are no outstanding options, rights, warrants, conversion privileges or other agreements which would require issuance of additional shares.
6. Conditions to the Obligations of Delta . The obligations of Delta hereunder shall be subject to the conditions that:
a) Delta shall not have discovered any material error or misstatement in any of the representations and warranties by AlbertaCO herein, and all the terms and conditions of this Agreement to be performed and complied with by AlbertaCO shall have been performed and complied with.
b) There shall have been no substantial adverse changes in the conditions, financial, business otherwise of AlbertaCO from the date of this Agreement, and until the date of closing, except for changes resulting from those operations in the usual and ordinary course of business, and between such dates the business and assets of AlbertaCO shall not have been materially adversely affected as the result of any fire, explosion, earthquake, flood, accident, strike, lockout, combination of workmen, taking over of any such assets by any governmental authorities, riot, activities of armed forces, or acts of God or of the public enemies.
c) Delta shall upon request and at the time of closing, receive an opinion of counsel to the effect that: (1) AlbertaCO is duly organized and validly existing under the laws of Alberta, Canada and has the power and authority to own its properties and to carry on its respective business wherever the same shall be located and operated as of the Closing Date; and, (2) this Agreement has been duly executed and delivered by
AlbertaCO and constitutes a legal, valid and binding obligation of AlbertaCO enforceable in accordance with its terms.
d) AlbertaCO does not now have, nor will it have on the date of closing, any known liabilities or contingent liabilities.
7. Closing Date. The closing shall take place on or before ________________, 1999, or as soon thereafter as is practicable, at the Law Offices of Gordon Fretwell, #920 - 800 West Pender St., Vancouver, BC, or at such other time and place as the parties hereto shall agree upon.
8. Actions at the Closing. At the closing, Delta and AlbertaCO will each deliver, or cause to be delivered to the other, the securities to be exchanged in accordance with Section I of this Agreement and each party shall pay any and all Federal and State taxes required to be paid in connection with the issuance and the delivery of their own securities. All stock certificates shall be in the name of the party to which the same are deliverable.
9. Conduct of Business, Board of Directors, etc . Between the date hereof and
the Closing Date, the parties will conduct their business in the same
manner in which it has heretofore been conducted and the parties will not:
(1) enter into any contract, etc., other than in the ordinary course of
business; or (2) declare or make any distribution of any kind to their
stockholders, without first obtaining the written consent of the other
party.
10. Upon closing, a new Director will be elected by the shareholders of Delta, such that the Board of Directors will consist of the following individuals.
Paul F. Davis
Kevin K. Wong
Judith Miller
11. Upon closing, Judith Miller, President and Secretary of Delta will tender her resignation as President and upon election of the above Board of Directors, and subject to the authority of the Board of Directors as provided by law and the By-Laws of Delta, the officers of Delta, after the closing date of this Agreement shall be as follows:
Paul F. Davis, President
Kevin K. Wong, Vice President
Judith Miller, Secretary & Treasurer
12. Access to the Properties and Books of Parties. The parties hereby grant to each other, through their duly authorized representatives and during normal business hours between the date hereof and the Closing Date, the right of full and complete access to the properties of each other and full opportunity to examine each other's books and records.
13. Miscellaneous
a) This Agreement shall be construed and enforced in accordance with the laws of the State of Delaware.
b) Each of AlbertaCO and Delta shall bear and pay all costs and expenses incurred by it or on its behalf in connection with the consummation of this Agreement, including, without limiting the generality of the foregoing, fees and expenses of financial consultants, accountants and counsel and the cost of any documentary stamps, sales and excise taxes which may be imposed upon or be payable in respect to the transaction.
c) At any time before or after the approval and adoption by the respective stockholders of AlbertaCO and Delta, if required, this Agreement may be amended or supplemented by additional written agreements, as may be determined in the judgment of the respective Boards of Directors of AlbertaCO and Delta to be necessary, desirable or expedient to further the purpose of this Agreement, to clarify the intention of the parties, to add to or to modify the covenants, terms or conditions contained herein, or otherwise to effectuate or facilitate the consummation of the transaction contemplated hereby. Any written
agreement referred to in this paragraph shall be validly and sufficiently authorized for the purposes of this Agreement if signed on behalf of AlbertaCO or Delta, as the case may be, by its Chairman of the Board, or its President.
d) This Agreement may be executed in any number of counterparts and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts together shall constitute but one agreement.
e) This Agreement shall be binding upon and shall inure to the benefit of the heirs, executors, administrators and assigns of AlbertaCO and Delta.
f) All notices, requests, instructions, or other documents to be given hereunder shall be in writing and sent by registered mail:
If to AlbertaCO then: If to Delta, then: Suite 255, 999 8th Street SW, Calgary, AB, Canada T2R 1331 Homer Street, Suite B201, Vancouver, BC, Canada 1J5 V6B 1H3 |
This Agreement has been duly approved or adopted by the Board of Directors, and duly approved or adopted by the stockholders of the constituent corporation, as required, in the manner provided by the laws of the State of Delaware, the Chairman of the Board, the President or the Secretary of said corporations under the respective seals of said corporations by the authority of the directors and stockholders of each, as required, as the act, deed and agreement of each of said corporations. This Agreement may be signed in two or more counterparts.
AGREEMENT, dated as of this 1 day of June , 1999, between Delta and AlbertaCO.
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DELTA CAPITAL TECHNOLOGIES, INC. 827109 ALBERTA LTD.
/s/ "Judith Miller" /s/ "Paul Davis"
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Judith Miller, President Paul F. Davis, CEO
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Acknowledgment of Execution of Agreement
By Officer of
Delta Capital Technologies, Inc.
STATE OF ______________)
) ss.
COUNTY OF ____________)
BE IT REMEMBERED that on this ______ day of ___________, __________, personally came before me, a Notary Public in and for jurisdiction aforesaid, Judith Miller, President of Delta Capital Technologies, Inc., a Delaware corporation, and one of the corporations described in and which executed the foregoing Agreement, known to me personally to be such, and she, the said, Judith Miller, as such President, duly executed said Agreement before me and acknowledged said Agreement are in the handwriting of said President of Delta Capital Technologies, Inc.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.
Acknowledgment of Execution of Agreement
By Officer of
827109 Alberta Ltd.
STATE OF ______________)
) ss.
COUNTY OF ____________)
BE IT REMEMBERED that on this ______ day of ___________, 1999, personally came before me, a Notary Public in and for jurisdiction aforesaid, Paul Davis, President of 827109 Alberta Ltd., an Alberta, Canada corporation, and one of the corporations described in and which executed the foregoing Agreement, known to me personally to be such, and he, the said, Paul Davis, as such Chief Executive Officer, duly executed said Agreement before me and acknowledged said Agreement are in the handwriting of said Chief Executive Officer of 827109 Alberta Ltd.
IN WITNESS WHEREOF, I have hereunto set my hand and seal of office the day and year aforesaid.
SCHEDULE I
ALLOCATION OF 5,000,000 SHARES
OF DELTA CAPITAL TECHNOLOGIES, INC. RESTRICTED COMMON STOCK
TO BE ISSUED TO:
827109 Alberta Ltd.
#255, 999 8th Street SW
Calgary, Alberta, Canada
T2R 1J5
ALLOCATION OF 5,000,000 SHARES
OF 827109 ALBERTA LTD. COMMON STOCK
TO BE ISSUED TO:
Delta Capital Technologies, Inc.
1331 Homer Street, Suite B201
Vancouver, BC
V6B 1H3
EXHIBIT 99(b)
STOCK OPTION AGREEMENT
THIS AGREEMENT made as of the 15th day of September, 1999
BETWEEN:
JUDITH MILLER, of Suite B201 - 1331 Homer Street, Vancouver, British Columbia V6B 5M5
(hereinafter called the "Optionee")
OF THE FIRST PART
AND:
DELTA CAPITAL TECHNOLOGIES INC., a company duly incorporated under the laws of the State of Delaware and having an office at Suite 255 - 999 - 8th Street South West, Calgary, Alberta
(hereinafter called the "Company")
OF THE SECOND PART
WHEREAS:
A. The Optionee is a Director of the Company and in that capacity is devoting considerable time and effort to the development of the Company; and
B. The Company wishes to encourage the best efforts of the undernoted and wishes to recognize the Optionee's efforts and risk;
NOW THEREFORE in consideration of the aforenoted efforts and service and these premises and other good and valuable consideration:
1. Subject to the hereinafter provisions, the Company hereby grants to the undernoted Optionee an option to purchase, in whole or in part, as fully paid and non-assessable, 200,000 shares of the Company at a price of US$0.0075 per share exercisable until December 31, 1999.
2. In the event that the Optionee ceases to serve the Company in the above-mentioned capacity, all the rights granted to the Optionee hereunder as to any of the shares herein optioned, which the Optionee has not theretofore purchased, shall terminate within 30 days of such event.
3. In the event of the death of the Optionee during the term of this Agreement, this Agreement shall terminate except that the Optionee's personal representatives shall be entitled to exercise all or any part of the option granted herein PROVIDED ALWAYS that payment is tendered prior to December 31, 1999.
4. If the Optionee at any time and from time to time during the term of this Agreement desires to purchase any of the optioned shares, the Optionee may do so by giving notice to the Company at its registered office within the time herein noted for exercise of the option, subject to the terms and conditions of this Agreement.
5. Payment for any of the optioned shares shall be made by tendering to the Company at its registered office the Optionee's cheque in favour of the Company in the full amount of the purchase price payable hereunder for such number of the shares comprised in the election.
6. If, at any time during the continued existence of this Agreement, there shall be any alteration in the capital stock of the Company, other than a mere increase in the authorized or issued capital, then the outstanding option shall attach to an appropriate unaltered percentage of the number of the shares or securities of the Company which shall have been created by any such alteration, and the price payable on the exercise of the option, shall be adjusted proportionately to the change in the shares resulting from such capital alteration.
7. The Option and the Shares subject to the Option (collectively referred to as the "Securities") are subject to registration under the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities statutes. Optionee acknowledges that unless a registration statement with respect to the Securities is filed and declared effective by the Securities and Exchange Commission and the appropriate
state governing agency, the Securities have or will be issued in reliance on
specific exemptions from such registration requirements for transactions by an
issuer not involving a public offering and specific exemptions under state
statutes. Any disposition of the Securities may, under certain circumstances, be
inconsistent with such exemptions. The Securities may be offered for sale, sold,
or otherwise transferred only if i) registered under the Securities Act, and in
some cases, under the applicable state securities acts, or, if not registered,
ii) only if pursuant to an exemption from such registration requirements and
only after the Optionee provides an opinion of counsel or other evidence
satisfactory to the Company to the effect that registration is not required. In
some states, specific conditions must be met or approval of the securities
regulatory authorities may be required before any such offer or sale. The
Company is under no obligation to register the Securities with the Securities
and Exchange Commission or any state agency. If rule 144 is available (and no
assurance is given that it will be), only routine sales of the Common Stock in
limited amounts can be made after one year following the acquisition date of the
Securities, as determined under rule 144(d), in accordance with the terms and
conditions of rule 144. The Company is under no obligation to make rule 144
available. In the event rule 144 is not available, compliance with regulation A
or some other disclosure exemption may be required before the Optionee can sell,
transfer, or otherwise dispose of the Securities without registration. The
Company and its registrar and transfer agent will maintain a stop transfer order
against the transfer of the Securities, and this Option and any other
certificate or agreement representing the Securities is subject to the following
legend:
THE SECURITIES REPRESENTED BY THIS OPTION, AGREEMENT, OR CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND ARE "RESTRICTED SECURITIES" WITHIN THE MEANING OF RULE 144 PROMULGATED UNDER THE SECURITIES ACT. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY NOT BE SOLD OR TRANSFERRED WITHOUT COMPLYING WITH RULE 144 IN THE ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER COMPLIANCE UNDER THE SECURITIES ACT.
The Company may refuse to transfer the Securities to any transferee who does not furnish in writing to the Company the same representations and warranties set forth in this paragraph and agree to the same conditions with respect to such Securities as are set forth herein. The Company may further refuse to transfer the Securities if certain circumstances are present reasonably indicating that the proposed transferee's representations are not accurate. In any event, the Company may refuse to consent to any transfer in the absence of an opinion of legal counsel, satisfactory to and independent of counsel of the Company, that such proposed transfer is consistent with the above conditions and applicable securities laws.
8. This Agreement is neither assignable nor transferable.
9. Time shall be of the essence of this Agreement.
10. This Agreement shall enure to the benefit of and bind the parties hereto and shall, to the extent hereinbefore provided, enure to the parties' heirs, executors, successors, administrators and assigns.
11. The provisions herein constitute the entire agreement between the parties and supersede all previous understandings and agreements.
12. This Agreement is subject to the approval of the regulatory authorities where required by the laws, regulations and by-laws to which the Company is subject.
IN WITNESS WHEREOF the parties hereto have executed these presents as of the day and year first above written.
DELTA CAPITAL TECHNOLOGIES INC.
Per:
/s/ "Paul Davis"
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Authorized Signatory
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by JUDITH MILLER in the presence of: )
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) "Judith Miller"
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