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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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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 (IRS Employer ID No.)
incorporation or organization
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
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Common Shares N/A
Securities registered pursuant to Section 12(g) of the Act: Common Shares with a
par value of $0.001 --------------------
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Exhibit index is included on page 27.
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FORM 10-SB
For the Fiscal Year Ended December 31, 1998
And Period Ended July 31, 1999
TABLE OF CONTENTS
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ITEM 1 - DESCRIPTION OF BUSINESS
Summary......................................................................4
The Products.................................................................5
Applications.................................................................6
Market Potential.............................................................6
Marketing Strategy...........................................................7
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION.............................................13
Delta Products...............................................................15
Revenue......................................................................15
General and Administrative Expense...........................................16
Net Loss From Operations.....................................................16
Loss of Abandonment of Equipment.............................................16
Litigation Settlement........................................................16
Net Loss.....................................................................16
Accounts Receivable..........................................................16
Property and Equipment, Net..................................................16
Prepaid Rent.................................................................16
Employee Receivables.........................................................16
Intanglible Assets...........................................................16
Accounts Payable.............................................................16
Accrued Payables.............................................................17
Accrued Liabilities..........................................................17
Current Assets...............................................................17
Property and Equipment, Net..................................................17
Convertible Demand Notes Payable - Related Parties...........................17
Common Stock and Capital In Excess of Par....................................17
Accumulated Deficit..........................................................17
Liquidity and Capital Resources..............................................17
Year 2000 Issues.............................................................17
Need for Additional Financing................................................17
ITEM 3 - DESCRIPTION OF PROPERTY...............................................17
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICAL OWNERS
AND MANAGEMENT
Security Ownership of Certain Beneficial Owners..............................18
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS
AND CONTROL PERSONS...........................................19
Section 16(a) Beneficial Ownership Reporting Compliance......................20
ITEM 6 - EXECUTIVE COMPENSATION................................................20
Pension Plans................................................................20
Compensation of Directors....................................................21
Executive Compensation.......................................................21
Option Grants in Last Fiscal Year............................................21
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS........................21
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ITEM 8 - DESCRIPTION OF SECURITIES
Common Stock.................................................................22
Transfer Agent and Registrar.................................................22
PART II
ITEM 1 - MARKET PLACE AND DIVIDENDS OF THE COMPANY'S
COMMON EQUITY AND OTHER SHAREHOLDER MATTERS
Market Information...........................................................22
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
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES...............................23
ITEM 5 - INDEMNIFICATION OF DIRECTORS AND OFFICERS.............................25
FINANCIAL STATEMENTS...........................................................25
EXHIBITS.......................................................................26
SIGNATURES.....................................................................26
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PART I
ITEM 1 - DESCRIPTION OF BUSINESS
SUMMARY
DELTA CAPITAL TECHNOLOGIES, INC. ("Delta" or the "Company") was incorporated
under the laws of Delaware on March 4, 1998. The Company originally had
authorized share capital of 1,500 common shares with a par value of $0.001,
however, on April 27, 1998 the Company 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 the Company 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 September 8, 1999
there were 14,100,000 common shares of the Company issued and outstanding. The
Company's principal business office and registered and records office is at
Suite 255, 999 - 8th St. SW Calgary, AB T2R 1J5 Canada.
The Company is in the business of providing e-Business software and support
services.
Between March 4, 1998 and June 1, 1999 the Company's focus was directed towards
assessing various potential acquisition targets consisting of companies involved
in the development of businesses and technologies in the Internet related field.
During that period the Company spent minimal funds conducting its assessment of
various businesses and the funds required for administration of the Company
during fiscal years ended December 31, 1998 and subsequent months came from
funds raised from initial investors.
On June 1, 1999 the Company 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 pursuant to a License Agreement dated June
1, 1999 between the Company and AltaCo, as amended by a Letter Agreement dated
September 2, 1999 (the "License Agreement"). The License Agreement allows the
Company to distribute licenses for the Software through sub-licenses. The
Company is responsible for the funding, the creation and management of a
distribution network for the Software, the ongoing development of the Software
and any future products or services it acquires. The License Agreement ,
requires the Company to pay to AltaCo a non-refundable lump sum license fee of
$50,000 by November 1, 1999, $20,000 of which has already been paid by the
Company. 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. Under the License Agreement, the Company 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, the Company
may renew the License Agreement for an unlimited term for the sum of one ($1.00)
dollar.
AltaCo acquired its rights to the Software pursuant to a Licensing Agreement
dated June 1, 1999, as amended by Letter Agreement dated September 2, 1999,
between AltaCo and SiCom
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Solutions Inc. ("SiCom"), a company incorporated pursuant to the Alberta
Business Corporations Act (the "SiCom License Agreement"). The terms of the
SiCom License Agreement mirror the terms of the License Agreement and require
AltaCo to pay C$50,000 to SiCom as a non-refundable license fee by November 1,
1999, C$20,000 of which has already been paid. Under the SiCom License
Agreement, AltaCo is required to pay SiCom royalty payments in the amount 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 term of the SiCom License
Agreement is for three years commencing June 1, 1999 and upon execution of the
term, AltaCo may renew the SiCom License Agreement for an unlimited term for the
sum of one ($1.00) dollar.
Pursuant to an agreement dated June 1, 1999 between the Company and AltaCo (the
"Share Exchange Agreement") the Company agreed to issue to AltaCo 5,000,000
shares of the Company in exchange for 5,000,000 shares of AltaCo. The exchange
of the shares was completed on September 9, 1999.
As a result of the shares of AltaCo issued to the Company pursuant to the Share
Exchange Agreement, the Company became the largest single shareholder of AltaCo,
which will continue with the research, and development of the Software and its
application.
THE PRODUCTS
The Software has three distinct areas of business.
o the "Store Front", or traditional marketing, advertising,
merchandising and customer attraction processes.
o the "Front Office", where the customer does business, retrieves
information, receives customer service, and downloads products and
upgrades.
o the "Back Office", where a customer manages its financial affairs,
inventory, warehousing, manufacturing and engineering.
The Software includes a Front Office solution for prospects, customers, and
sales- and support-oriented information management that is geared to a
customer-focused information system dedicated to communication with the client
company's Back Office business systems. Effective communication between Front
Offices and Back Offices is accomplished through a secure information exchange
hub that is Electronic Data Interchange-capable (EDI-capable). The Front Office
systems create EDI data and post it to a secure e-mail box. The Back Office
systems fetch and deliver secure mail to the electronic data interchange. The
common information for both Front Office and Back Office users is managed as
part of the Basic Business Information system (BBI). Security of the BBI is
managed through the relational database and the establishment of roles
(customer, guest, sales person) and responsibilities (read, update, print). All
AltaCo products are integrated with various high-end software applications for
Back Office accounting and financing, document management systems, and Store
Front builders.
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APPLICATIONS
The relBuilder e-Business suite includes six key enterprise-class applications:
ENTERPRISE COMMERCE APPLICATION: Whether for online or in-store sales, the
Company's enterprise e-Commerce application provides merchants with the ability
to effortlessly implement cross selling, up selling, product dependencies,
product interactions, comparative shopping, competitive shopping, and consumer
shopping assistance wizards. Using this application, merchants and organizations
have the ability to apply the technology to the on-line and in-store
presentation of product information that begins the customer relationship before
human contact is made. This technology can operate on a standalone basis or can
enhance other leading e-Commerce solutions.
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" architecture.
ENTERPRISE DOCUMENT ASSEMBLY APPLICATION: The Document Assembly Application is a
powerful content manager and document assembly tool that maximizes re-use of
corporate information by bringing together data that is usually scattered across
the enterprise in countless systems. The assembly of data can be used for
everything from contract building, to information portal construction and
management, to dynamic document creation and presentation.
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 and integrates with leading GroupWare
(such as Microsoft Exchange or Lotus Notes) to provide project-based calendaring
and scheduling. The Application provides a real-time graphical presentation of
underlying data, and the user interface changes to intelligently reflect
additions or deletions in the data.
ENTERPRISE CUSTOMER SERVICE APPLICATION: The Customer Service Application has
the ability to map complex call requirements, implement sophisticated
operational logic and can even integrate with a web server to allow for
web-based customer self-service or call center operations within an office, a
community or across the globe.
ENTERPRISE CONTACT MANAGEMENT APPLICATION: The Contact Management Application
integrates with leading directory servers (such as Microsoft Exchange, Lotus
Notes, and Netscape Directory Server) to enable highly complex mapping of names,
addresses, companies, contact information, corporate hierarchies, active and
non-active projects, and histories.
MARKET POTENTIAL
To progress through the stages of e-Business evolution, management of the
company believes that companies need innovative products and professional
services to help them along. According to leading research firms, worldwide
demand for e-Business related software products will experience up to four times
the growth from now to year 2002, when it will reach $20 billion (USD)/year.
Similarly, the e-Business related services markets will reach an
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estimated $300 billion (USD)/year. (Sources: International Data corporation, The
Gartner Group, The Yankee Group, and Information Week)
MARKETING STRATEGY
The marketing plan is characterized by "the whole being greater than the sum of
the parts". The Company's marketing strategy will be to build the business from
two perspectives, focusing simultaneously upon both the mass-market of micro
companies, and upon those larger corporations who were far-sighted and
innovative enough to anticipate and prepare for the emerging trend towards of
e-Business-intelligent solutions. The plan is predicated upon Delta's ability to
offer a range of pertinent, target-specific skills at affordable prices, while
providing excellent personal and corporate growth for its partners and team
members. The e-Commerce mass-market sector of the Company's activities is
designed to provide assisted integration of e-Commerce to an existing web site,
and it permits Delta's clients to either carry out the conversion in-house,
using their own personnel, or to use a Commercial Service Provider ("CSP").
Delta personnel anticipate that as soon as a client becomes comfortable with
e-Commerce, the ensuing move to the extended services of e-Business will follow.
Delta's marketing and implementation strategy is prepared for that anticipated
growth, and the Company has staff and experienced consultants who are skilled in
Enterprise e-Business Intelligence and familiar with the growing Enterprise
Project Management marketplace.
The marketing strategy has three distinct but connected opportunities:
o To capitalize on the e-Commerce marketplace as it enters the mass-market
phase with the same explosive growth as the Website wave of 1997-98.
o To exploit the emerging e-Business marketplace, using the full Enterprise
Business Management Suite and (PSO) Professional Service Organization
methods. This will entail Core Technology marketing of the Enterprise
Business Management Suite as a software engine technology for industry
leaders.
o To coordinate and amalgamate and influence all marketing programs use the
Enterprise Business Management Suite as the software foundation. The
marketing plan objective is to offer a continuum of applications software
and services, a migration path for early e-Business adopters, and multiple
entry points for any business from micro-businesses to Fortune 500
companies.
Each marketing program requires a different level of technical and marketing
expertise. The programs include:
o A Direct Marketing program where Delta will set-up or acquire full service
e-Business and e-Commerce groups in strategic worldwide locations. The
Direct Marketing model uses Professional Service Organization (PSO) methods
and will manage an in-house Commercial Service Provider (CSP).
o A Network-Franchise model designed to exploit a niche in the Internet
Service Provider (ISP) market permitting the building of a more profitable
network by converting the ISPs to Commercial Service Providers (CSPs). The
resulting network will become the
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distribution channel for the Enterprise Business Management Suite and other
Delta technology acquisitions.
o Core Technology - (OEM) Original Equipment Manufacturing, where the
Enterprise Business Management Suite is on its way to becoming an imbedded
technology in a bigger software solutions.
Target Market: Professional Service Organizations (PSO)
While the objective of the PSO market is to work with Fortune 1000 companies for
the obvious market recognition, Delta's marketing plan also calls for entry into
the equally significant but broader-based marketplace called Trading Partner
Networks (TPNs). TPNs have the full spectrum of companies, from large Fortune
1000 to Fortune 1,000,000, that supply or do trade amongst themselves. TPNs
cover the gamut of industry, including oil and gas suppliers and operators,
industrial manufacturers, home builders, renovators and maintenance companies,
and product distribution companies.
The Personal Service Organizations (PSO) market, while numerically smaller,
generates larger numbers of client and server licenses, and requires larger and
more detailed maintenance-upgrades and much larger technical integration
services.
(PSO) personnel will use Delta products to build a clearer idea or concept with
their customers through implementation and support. The objective is customer
self-sufficiency, not customer dependency. The difference Delta makes, as
compared to competitors such as Razorfish, IXL and Scient, is that Delta owns
the Enterprise Business Management Software foundation that it uses in the
professional services engagement process. Delta will deliver more than an
e-Business site; it will use the PSO's professional services to deliver a
technology-supported process, along with the necessary training and integration
to make the client company self-sufficient in the use of business-intelligent
software and systems. One of the techniques Delta employs includes the use of
dedicated web space (in the form of a project portal) to coordinate ideas,
estimates, decisions and progress, and to encourage client participation using
Delta's product and its call center to manage suggestions, improvements and
feedback.
Target Market Channels: Commercial Service Providers (CSP)
Delta's marketing strategy is characterized by a tight focus on two significant
targets:
PARTNER PROGRAM: Delta is building a network of e-Commerce and e-Business
knowledgeable consultants and solutions providers. The Partner Program will roll
out a products and services package through established contacts and clients in
key North American markets. The Partner Program relies upon the high number of
consultants with local appeal, clients and expertise. This program has both a
strategic geographic and a vertical market focus. On a geographic basis, Delta
plans to penetrate the top 23 American and Canadian markets through its Partner
Program over the course of the next 24 months with its first target markets
being Seattle and Vancouver. Delta is currently pursuing vertical markets such
as Healthcare, Education, Software Development, Oil and Gas, and Industrial
Manufacturing. This program also envisions a Network-Franchise model designed to
exploit a niche in the Internet Service Provider (ISP) market permitting the
building of a more profitable network by converting the ISPs to Commercial
Service Providers (CSPs). The resulting network will
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become the distribution channel for the Enterprise Business Management Suite and
other Delta technology acquisitions.
CORE TECHNOLOGY PROGRAM: Delta is working with key allies and is seeking
additional affiliations with major e-Commerce and e-Business organizations to
market its relBuilder technology. Delta believes there is substantial further
opportunity to pursue this Core Technology marketing strategy. The marketing of
the Core Technology began with the company's IBM "San Francisco" technology Fast
Start award and the participation in the June 1999 "Java One" conference where
significant contacts were made with IBM, Sun Microsystems, Oracle and other
companies with the potential to form strong strategic alliances.
The strategy is predicated upon Delta's ability to offer a range of pertinent,
target-specific software and services at affordable prices, while providing
excellent personal and corporate growth for its partners and team members.
Target Market Channels: Electronic Business Management
While the Internet offers incredible opportunity to get a message to a potential
customer there is still a very real "gap" between the excitement and promise of
the Internet and measurable business and commercial reality. The Delta business
process model has three distinct areas in which the company intends to address
and resolve this situation, eliminating that gap completely:
o the Store Front, or traditional marketing, advertising, merchandising
and customer attraction processes.
o the Front Office, where the customer does business, retrieves
information, receives customer service, and downloads products and
upgrades.
o the Back Office, where the company manages its financial affairs,
inventory, warehousing, manufacturing, and engineering.
Delta has identified a need to combine the power of the systems between the
Front Office and existing Back Office business applications software. The
Enterprise Business Management Suite bridges "The Gap" by providing Front Office
systems for managing, organizing and distributing information in support of
customer sales and support processes, and a method for the Front Office software
to link to the Back Office.
While management software is not new, Delta's unique software, when compared
with that of competitors such as SAP, Oracle, Baam, PeopleSoft and Seagates, has
a more attractive price point and has the additional customer advantages of
being faster and offering a higher degree of security. Delta's product range
will appeal to a much broader and prolific target market than competitive
products, thanks to its more versatile, state-of-the-art design and its ease of
integration with existing systems.
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An analysis of data provided by the US department of Trade & Commerce indicates
that the target market which Delta was formed to exploit represents one million
businesses in the U.S. and Canada, roughly 20% of the five million businesses in
operation.
Typically, new client companies in the mass market micro business range
represent a revenue opportunity to Delta of $10K to $15K in their first year,
growing to $50K the following year and then to $75K per year in their third year
of operation. This results in an overall market potential, which ranges from
roughly $10 billion per year, growing to over $60 billion annually within three
years, as more companies acquire Internet technology and become more
sophisticated with their electronic business programs.
It is clear that the Company's strategy of offering a unique set of products,
services and integration solutions to an electronic business marketplace, which
is expanding exponentially, in both the horizontal and vertical directions,
positions it strategically to achieve a high, level of financial success.
Target Market Channels: Other Equipment Manufacturers (OEM)
The OEM market builds client and server licenses bundled with their product
software and/or hardware. OEM manufacturers include companies like Oracle, Sun,
IBM or Microsoft. The Core Technology marketing slot within this framework is
potentially a very lucrative opportunity, but it entails a very real need for
Delta to establish working contracts with entities like IBM, Sun, Microsoft,
Oracle and a host of software integrators, and marketing to such mammoth groups
requires patience, persistence and timing. Given all of those, however, the
actual investment in time and money is expected to be modest, and part of an
overall technology branding exercise. The win for Delta can be enormous if the
company's technology is adopted and used by a big-name organization. Management
believes there is no impediment to pursuing the Core Technology marketing
strategy. None of the company's current financial projections envisions a win in
this particular marketing venture.
The marketing of the Delta Core Technologies began in earnest with the company's
IBM San Francisco Fast Start win, and its participation in the June, 1999, Java
One conference, where company representatives made excellent contacts within
IBM, Sun Microsystems and Oracle, leading to more in-depth meetings during the
ensuing quarter. (Refer to the technology section for additional details.)
Competition
Unlike its competition, Delta has adopted a corporate policy of accommodating
itself to each Client company's existing Back Office systems, selectively
integrating those systems on the web, rather than replacing the entire Back
Office and Front Office systems. This approach translates into client loyalty
through long-term, high-value, reference-generating relationships. Also unlike
its competition, Delta does more than just offer e-Business services to its
clients. The key to Delta's approach is the facility it affords its clients to
use Delta's own high-level, broad-appeal, enterprise-scale, innovative, and
powerful e-Business software. Delta's software has been designed with
off-the-shelf, plug-and-play, mass-market appeal in mind, and that translates
into explosive, multi-billion-dollar revenue growth potential for Delta, as the
demand for e-Business products escalates.
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Client benefits from using Delta software and services include: New competitive
advantages in the coming millennium by means of:
o expanded global markets
o greatly enhanced customer service levels
o cost efficiencies
o increased operational leverage
o a better understanding of complex business environments.
Delta's software, and its services, is designed for rapid implementation times
and low total costs of ownership, yielding maximum returns on investment for
Delta's clients.
An analysis of the following major players in the (ERP) Enterprise Resource
Planning industry is:
Microforum (TSE:MCF), IXL (NASD:IIXL), Razorfish (NSAD:RAZF), Scient
(NASD:SCNT), Proxicom (NASD:PXCM). These e-Business solutions providers, unlike
Delta, do not have a developed product that they use to implement e-Business.
Their focus is in developing a compelling Front Office solution and then
implementing several consulting stages to define and create the Back Office
application through custom development. A custom development process is
extremely costly and time intensive, and that makes a partnership with Delta,
for a plug in and play solution, highly desirable.
One or more States may seek to impose sales and tax collection obligations on
out-of-state companies conducting e-commerce that engage in or facilitate
electronic commerce. These proposals, if adopted, could substantially impair the
growth of electronic commerce and could adversely affect the Company's
opportunity to derive financial benefit from these activities.
Employees
The Company currently has two employees who are each paid $3,000 per month plus
expenses pursuant to verbal agreements entered into with the Company that
commenced on June 15, 1999. The Company also currently has two 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.
Risk Factors
As with any business at this stage of development, there are uncertainties
pertaining to the future operations of the Company and the nature of the
Company's business involves certain elements of risk including the following:
Limited Operating History
The Company is progressing beyond the start-up stage. The Company was
incorporated on March 4, 1998, and has a limited operating history. All revenue
projections and other financial projections must be considered speculative.
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New and Developing Technologies/Market Conditions
The e-Commerce/e-Business marketplaces, along with vertical applications, have
been identified as significant emerging market segments. Should these markets
segments not develop in the manner expected, or should they fail to develop as
quickly as anticipated, the Company's business, sales, finances and operating
results could be materially and adversely affected.
Reliance on Partners
The revenues of the Company, pertaining to product sales, are dependent to a
large degree on the ability of its strategic partners to generate transaction
volumes and provide new products to the Company.
Company is a New Venture. The Company is a relatively new venture and lacks
significant operating history. Because of its limited operating history the
Company may lack stability and unforeseen problems may arise which will hinder
or stifle the Company's operations and its potential growth.
Future Funding May Be Required. The Company has had only minimal revenues. In
the future the Company may require additional funding to continue operations and
to have sufficient working capital to implement its marketing plan. Future
funding may be accomplished through the sale of equity securities or some form
of borrowing, such as promissory notes. No assurance can be given that the
Company will be able to obtain future funding at all or on terms and conditions
acceptable to the Company. No assurance can be given that the Company will
operate profitably in the future or that its products and services will be
accepted in the marketplace.
Dependence Upon Key Personnel. The Company is substantially dependent upon the
efforts and abilities of its officers, Paul Davis and Kevin Wong. The loss of
the services of either of these individuals would materially and adversely
affect the operations and financial condition of the Company. At present, the
Company has no key-man life insurance on its officers or key personnel. On
August 30, 1999, an insurance company was contacted for a quote on key-man
insurance for Mr. Davis and Mr. Wong.
Experience of Management. Management of the Company has only limited business
experience. Also, Management has no experience in operating a public company. In
implementing a successful marketing plan for the Company's services, management
lacks experience. Additional management skills and knowledge will be required to
operate the Company's business profitably if sales volumes and revenues
increase, and the number of employees increase.
Risk of Obsolescence. The Company's products and services may become obsolete as
others develop products and procedures.
Competition
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
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competition from new competitors is likely to result in loss of market share,
which could negatively impact the Company's business. Competitors vary in size,
and in scope and breadth of the products and services offered and the Company
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
the Company, significantly greater name recognition, and a larger base of
customers. In addition, many of the 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.
Risks of Growth and Expansion. The Company's anticipated growth may place a
significant strain on the Company's administrative, operational and financial
resources and increase demands on its systems and controls. As the Company
increases its service offerings and expands its targeted markets, there will be
additional demands on the Company's customer support, sales and marketing and
administrative resources and network infrastructure. There can be no assurance
that the Company'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 materially
adversely affect the Company.
Adverse Effect of Rapid Technological Change and Service. The telecommunications
industry has been characterized by rapid technological change, frequent new
service introductions and evolving industry standards. The Company believes that
its future success will depend on its ability to anticipate such changes, and to
offer on a timely basis services that meet these evolving standards. There can
be no assurance that the Company will have sufficient resources to make
necessary investments or to introduce new services that would satisfy an
expanded range of customer needs.
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 period ended July 31,
1999
Delta Capital Technologies, Inc.'s ("Delta or the "Company") is at an early
stage. It has successfully achieved its first major objective: the acquisition
of Internet technologies and is now developing those technologies in readiness
for the marketplace. It plans to commence significant marketing of its
technologies early in the year 2000. Starting with its incorporation in March
1998, Delta's modest expenditures were made in support of finding appropriate
internet technologies and, as well, for audit, income tax returns and meeting
various
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regulatory requirements. Substantially all the cash required for operations
during fiscal years ended December 31, 1998 and 1999 came from investors.
On June 1, 1999, Delta acquired the rights to an exclusive worldwide license to
the "relBuilder" Enterprise Suite of business intelligent e-Commerce and
e-Business software from 827109 Alberta Ltd. ("AltaCo"), an Alberta,
Canada-based private company. The software application includes modules for
e-Commerce, e-Back office, e-Document Assembly, e-Project management, e-Customer
Services and e-Contact Management, e-Business Intelligence and as well as a core
Technology which models business rules and relationships. Under the License
Agreement, Delta will pay AltaCo 15% royalty payments in the minimum amount of
C$100,000 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 the terms of AltaCo's "End-User Licensing
Agreement."
Delta acquired a substantial interest in the AltaCo for the purpose of directing
the on-going research and development and ensuring long-term support for the
relBuilder Enterprise Suite as part of Delta's worldwide distribution plan.
AltaCo is the master distributor and integrator of the software in Canada. The
Licensing Agreement allows Delta to acquire the intellectual property for the
software upon meeting the royalty obligations.
While Delta believes the rel-Builder software suite is in many aspects unique,
there are many competitors or potential competitors that have some combination
of longer operating histories, significantly greater financial, technical,
marketing and other resources. Many of these companies have well-established
relationships with potential e-Business clients and have extensive knowledge of
the industry. Accordingly, it is possible that new competitors, or alliances
among competitors, may emerge and rapidly acquire significant market share.
However, Management feels confident, given growth projections for e-Commerce and
e-Business worldwide, that Delta can gain enough market share to develop a
successful business. There are many different definitions as to the size of this
market. Delta has developed a conservative estimate in defining the marketplace,
based on a variety of research sources (including International Data
Corporation, The Gartner Group, The Yankee Group and Information Week).
Worldwide demand for e-Business related software products will grow four times
through the year 2000 when it will reach $20 billion per annum. Similarly the
e-Business related services market is estimated to grow to more than $200
billion in the same period.
It is Management's view that virtually all businesses in future will have
e-Commerce or e-Business requirements and that the nature of the conduct of
business will be fundamentally changed. In particular, business-to-business
sales will move more dramatically upward than the more highly visible web-based
retailers who dominate so much of the popular media today. Indeed, according to
Forrester Research, the combined revenue of every single U.S. retailer on the
net was $7.8 billion in 1998 while businesses sold $43 billion worth of goods to
each other over the Web in 1998. In four years, Forrester projects
business-to-business sales will reach $1.3 trillion and it is this market that
Delta seeks to serve with its software and support services offering.
14
<PAGE>
DELTA PRODUCTS
The relBuilder e-Business suite includes six key enterprise-class applications:
ENTERPRISE COMMERCE APPLICATION: Whether for online or in-store sales, the
Company's enterprise e-Commerce application provides merchants with the ability
to effortlessly implement cross selling, up selling, product dependencies,
product interactions, comparative shopping, competitive shopping, and consumer
shopping assistance wizards. Using this application, merchants and organizations
have the ability to apply the technology to the on-line and in-store
presentation of product information that begins the customer relationship before
human contact is made. This technology can operate on a standalone basis or can
enhance other leading e-Commerce solutions.
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" architecture.
ENTERPRISE DOCUMENT ASSEMBLY APPLICATION: The Document Assembly Application is a
powerful content manager and document assembly tool that maximizes re-use of
corporate information by bringing together data that is usually scattered across
the enterprise in countless systems. The assembly of data can be used for
everything from contract building, to information portal construction and
management, to dynamic document creation and presentation.
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 and integrates with leading GroupWare
(such as Microsoft Exchange or Lotus Notes) to provide project-based calendaring
and scheduling. The Application provides a real-time graphical presentation of
underlying data, and the user interface changes to intelligently reflect
additions or deletions in the data.
ENTERPRISE CUSTOMER SERVICE APPLICATION: The Customer Service Application has
the ability to map complex call requirements, implement sophisticated
operational logic and can even integrate with a web server to allow for
web-based customer self-service or call center operations within an office, a
community or across the globe.
ENTERPRISE CONTACT MANAGEMENT APPLICATION: The Contact Management Application
integrates with leading directory servers (such as Microsoft Exchange, Lotus
Notes, and Netscape Directory Server) to enable highly complex mapping of names,
addresses, companies, contact information, corporate hierarchies, active and
non-active projects, and histories.
REVENUE
There was no revenue for fiscal year ended December 31, 1998 or for the period
ended July 31, 1999.
15
<PAGE>
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. Expenses for the period
ended July 31, 1999 were $48,639.00, primarily due to the acquisition of the
exclusive worldwide license from AltaCo as described above
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. The Company is currently selling its software and
services to a limited and restricted market as it continues to develop its
product line in advance of major marketing efforts.
LOSS ON ABANDONMENT OF EQUIPMENT
(Not applicable)
LITIGATION SETTLEMENT
The Company is currently not in litigation and does not anticipate any
litigation will arise as a result of its activities
NET LOSS
(as per discussion re net loss from operations)
ACCOUNTS RECEIVABLE
(as per annual statements)
PROPERTY AND EQUIPMENT, NET
(as per annual statements)Computer, Cell Phone, Pager, Software
PREPAID RENT
(as per annual statements)
EMPLOYEE RECEIVABLE
(as per annual statements)
INTANGIBLE ASSETS
The Company is developing a software and services package that is largely
dependent upon marketplace acceptance for its value. The software code and human
capital that has gone into developing its package is an intangible asset of
significant importance to the company.
ACCOUNTS PAYABLE
(as per annual statements)
16
<PAGE>
ACCRUED PAYABLES
(as per annual statements)
ACCRUED LIABILITIES
(as per annual statements)
CURRENT ASSETS
(as per annual statements)
PROPERTY AND EQUIPMENT, NET
(as per annual statements)
CONVERTIBLE DEMAND NOTES PAYABLE - RELATED PARTIES
(as per annual statements)
COMMON STOCK & CAPITAL IN EXCESS OF PAR
(as per annual statements)
ACCUMULATED DEFICIT
(as per annual statements)
LIQUIDITY AND CAPITAL RESOURCES
(as per annual statements)
YEAR 2000 ISSUES
The Company has no significant Year 2000 issues.
NEED FOR ADDITIONAL FINANCING
The Company anticipates that it will require additional investment to complete
development of its software and considerable additional capital to mount an
effective marketing program in its key US target markets. The amount of
additional funding is not yet known.
ITEM 3 - DESCRIPTION OF PROPERTY
Pursuant to the License Agreement the Company relies on AltaCo for the ongoing
development, technical assistance, training and maintenance associated with the
Company's use and licensing of the Software. Accordingly, the Company has not,
to date, required its own premises to carry on business and therefore neither
owns nor leases business premises. AltaCo has a verbal agreement with SiCom
whereby AltaCo carries on business free of charge at premises leased by SiCom
(the "Leased Premises") in Calgary. Alberta. The leased premises consist of
approximately 2,537 square feet on the second floor of an office building
situated at 999 - 8th Street, S.W., Calgary, Alberta. The verbal agreement
between SiCom and AltaCo is part of a proposed agreement in principal between
those two companies, pursuant to which they intend in the future to enter into a
business combination by way of merger, amalgamation or take-over which will
result in those companies being combined into one entity "(Amalco"). If that
happens, it is intended that Amalco will continue to be responsible for the
Leased Premises in accordance with the terms of the lease that SiCom is
currently a party to. The Company intends on acquiring its own leased premises
in the near
17
<PAGE>
future as it begins to undertake business pursuant to its rights under the
License Agreement but as of this date the Company has not acquired leased
premises.
ITEM 4 - SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth, as of September 13, 1999 information with
respect to the beneficial ownership by each person who is known to the Company
to be the beneficial owner of more than 5% of the Company'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. The Company's common stock is the only
class of voting securities outstanding.
<TABLE>
<CAPTION>
----------------------------------------------- -------------------------- ---------------
<S> <C> <C>
NAME, MUNICIPALITY OF RESIDENCE AND OFFICE COMMON SHARES PERCENTAGE OF
HELD BENEFICIALLY OWNED COMMON SHARES
DIRECTLY OR INDIRECTLY
----------------------------------------------- -------------------------- ---------------
Paul Davis(1) 2,410,714 17.10 %
Calgary, Alberta
President and Director
----------------------------------------------- -------------------------- ---------------
Kevin Wong(2) 803,571 5.70 %
Calgary, Alberta
Vice-President and Director
----------------------------------------------- -------------------------- ---------------
Rajesh Taneja 300,000 2.13 %
Vancouver, BC
Director
----------------------------------------------- -------------------------- ---------------
Judith Miller(3) 96,000 0.69 %
Vancouver, BC
Secretary/Treasurer and Director
----------------------------------------------- -------------------------- ---------------
T. Davis Capital Corp. 800,000 5.67%
Delta, BC
----------------------------------------------- -------------------------- ---------------
All Officers and Directors as a Group 3,610,285 25.60 %
----------------------------------------------- -------------------------- ---------------
</TABLE>
(1) Mr. Davis owns 6,750,000 shares of the 14,100,000 issued shares of AltaCo
and the shares identified represent his beneficial ownership of the
5,000,000 Delta shares issued to AltaCo.
(2) Mr. Wong owns 2,250,000 shares of the 14,100,000 issued shares of AltaCo
and the shares identified represent his beneficial ownership of the
5,000,000 Delta shares issued to AltaCo.
(3) Ms. Miller holds an option to purchase, adjusted for stock splits, 200,000
shares of the Company exercisable at US$0.0075 per share. The option
expires December 31, 1999.
The above individuals are the only key personnel presently associated with the
Company and although none of the individuals will be spending all of their time
working for the Company, each will spend as much time as is necessary.
18
<PAGE>
The 5,000,000 shares issued to AltaCo, the 800,000 shares issued to T. Davis
Capital Corp. and the 300,000 shares issued to Rajesh Taneja 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. At that point they may be
subject to even further restrictions based on the regulations and requirements
set forth in Rule 144.
ITEM 5 - DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The following table identifies the Company's directors and executive officers as
of September 8, 1999:
<TABLE>
<CAPTION>
--------------------------- ----------- ------------------------------------------------------------
<S> <C> <C>
NAME AGE POSITION
--------------------------- ----------- ------------------------------------------------------------
Paul Davis 48 President and Director since June 4, 1999
--------------------------- ----------- ------------------------------------------------------------
Kevin Wong 26 Vice President and Director since June 4, 1999
--------------------------- ----------- ------------------------------------------------------------
Rajesh Taneja 29 Vice President and Director since June 4, 1999
--------------------------- ----------- ------------------------------------------------------------
Judith Miller 59 Corporate Secretary and Director since April 28, 1998
--------------------------- ----------- ------------------------------------------------------------
</TABLE>
Directors are elected at the Company'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.
The Company'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 the Company over the last five years:
PAUL DAVIS, (P.Eng.), President and Director, is the founder and President of
SiCom Solutions Inc. He has a background in management, sales, software
development and application integration, and is creator of the Software. Mr.
Davis has had extensive experience, including: a supervisory roll at Auto-trol
Technology Ltd., a CAD/CAM, GIS and document management company, and a
Membership at the Alberta Research Council. Mr. Davis was President and CEO of
Calgary-based HPC (High Performance Computing) Centre until mid 1996. He has a
Bachelor's Degree in Applied Science in Electrical Engineering from the
University of British Columbia, 1974.
RAJESH TANEJA, Vice President Marketing and Director, is the founder and Chief
Executive Officer of Clear Choice Media. Mr. Taneja has been directly involved
in the sales and implementation of network operations for large enterprises,
including security for military networks and communications companies. For the
past 5 years, Mr. Taneja has concentrated the majority of his activities on
developing technologies for the Internet, including secure virtual private
networks, intranets, extranets, web site and application design, web site
hosting, large scale file mirroring, and network security. To date, Mr. Taneja
has been involved in over 200 Internet related projects throughout the world.
KEVIN WONG, Vice President Technology and Director, graduated in April 1997 from
the University of Windsor, Faculty of Law, as a specialist in Intellectual
Property, Corporate and Commercial law. Mr. Wong has also completed four years
towards a Bachelor of Commerce at the University of Calgary, specializing in
human resources and accounting. Mr. Wong has done extensive research into
Java-based multi-tier client/server financial and
19
<PAGE>
telecommunications systems, and he heads the initiative to integrate the Java,
IBM's "San Francisco", API applications Programming Interface and other core
technologies of Delta's products.
JUDY MILLER, Secretary and Director, has been President and Director of J.A.M.
Corporate Consultants Inc. since March 1994, which provides a variety of
services including office management and administration, meeting and special
event planning, office redesign/relocation, and fund raising. Mrs. Miller has 25
years as Executive Assistant to the Chairman of the Board of a leading
development company in Alberta, a major transportation company in Vancouver and
a company listed on the Vancouver Stock Exchange.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Securities Exchange Act of 1934 requires the Company's
directors, officers, and persons who own more than ten percent of a registered
class of the Company's equity securities, to file with the SEC initial reports
of ownership on Form 3 and reports of changes in ownership of common stock and
other equity securities of the Company on Form 4 and/Form 5. Officers, directors
and greater-than-ten-percent shareholders are required by SEC regulations to
furnish the Company with copies of all Section 16(a) reports on Forms 3, 4, and
5 as they are filed.
The Company has assisted the reporting officers, directors and
greater-than-ten-percent shareholders in bringing their Section 16(a) reports
current and has provided information to help the Company's officers, directors
and greater-than-ten-percent shareholders in complying with their reporting
obligations.
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.
<TABLE>
<CAPTION>
- ------------------------ ---------------------------- -------------------------------------------------- -----------
ANNUAL COMPENSATION LONG TERM COMPENSATION
---------------------------- -------------------------------------------------- -----------
AWARDS PAYOUTS
- ------------------------ ---------------------------- --------------------------------------- ---------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
OTHER SECURITIES RESTRICTED
ANNUAL UNDER SHARES OR LTIP ALL OTHER
NAME AND PRINCIPAL YEAR COMPEN- OPTIONS RESTRICTED PAY-OUTS COMPEN-
POSITION ENDING SALARY BONUS SATION GRANTED SHARE UNITS SATION
- ------------------------ --------- --------- -------- ----------- ------------- ------------- ---------- -----------
Paul Davis 1998 Nil Nil Nil Nil Nil Nil Nil
President (1)
- ------------------------ --------- --------- -------- ----------- ------------- ------------- ---------- -----------
</TABLE>
Note: There were no compensation payments to Chief Executive Officer for
preceding 3 yrs.
(1) The Company 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
The Company does not have defined benefit pension plan that provides annual
benefits to any Executive Officers.
20
<PAGE>
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 the
Company 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
<TABLE>
<CAPTION>
- ---------------------- ---------------------- ---------------------- --------------------- ---------------------
NAME NUMBER OF SECURITIES % OF TOTAL OPTIONS EXERCISE OR EXPIRATION DATE
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE
GRANTED IN FISCAL YEAR
- ---------------------- ---------------------- ---------------------- --------------------- ---------------------
<S> <C> <C> <C> <C> <C>
Judith Miller 200,000 200,000 US$0.0075 Dec. 31, 1999
- ---------------------- ---------------------- ---------------------- --------------------- ---------------------
</TABLE>
Pursuant to a verbal agreement among the board of directors of the Company,
Judith Miller was granted a stock option to purchase 200,000 common shares of
the Company at a price of US$0.0075 per common share until August 26, 1999. On
August 11, 1999, by way of written consent resolution, the board of directors
extended the stock option expiration date from August 26, 1999 to December 31,
1999. On September 15, 1999 the terms of the stock option agreement were reduced
to writing.
ITEM 7 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company 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 the Company acquired certain of
is assets, as described below are conducted as arm's-length transactions and
were in the best interest of the Company. The Company intends to continue to
exercise its best business judgement and discretion in involving any such
conflicts between the Company and others with respect to these and all other
matters, and the Company believes that it will generally be able to resolve such
conflicts on an equitable basis.
Pursuant to the Share Exchange Agreement, the Company issued 5,000,000 common
shares to AltaCo and in exchange was issued 5,000,000 common shares of AltaCo.
Paul Davis, President and Director of the Company 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 the Company 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.
21
<PAGE>
Rajesh Taneja, Director of the Company and is Vice-President Marketing of
AltaCo. Mr. Taneja owns 300,000 shares of the Company and he receives C$3,000
per month as an employee of the Company.
Judy Miller, Director and Secretary of the Company owns 96,000 shares of the
Company and has an option to purchase 200,000 shares of the Company for $0.0075
per share exercisable until December 31, 1999. Ms. Miller originally
participated in a private placement for 24,000 shares of the Company at $.001
per share prior to the consolidation of the Company's shares on a 4:1 basis. The
Company 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 the Company.
ITEM 8 - DESCRIPTION OF SECURITIES
COMMON STOCK
The Company 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 the
Company underwent a one for four stock split increasing its issued and
outstanding to 8,800,000 common shares. As at September 10, 1999 there were
14,100,000 common shares of the Company issued and outstanding.
TRANSFER AGENT AND REGISTRAR
The Company's Transfer Agent is Signature Stock Transfer in Dallas, Texas.
PART II
ITEM 1 - MARKET PLACE AND DIVIDENDS ON THE COMPANY'S COMMON EQUITY AND OTHER
SHAREHOLDER MATTERS
MARKET INFORMATION
The Company'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 the
Company's outstanding stock, and there can be no assurance that an active public
market will develop. The Company's common stock commenced trading in March 1999
and the highest and lowest prices for the Company's common stock during the
calendar quarter ended June 30, 1999 and the closing bid price on such date is
as follows:
22
<PAGE>
Delta Capital Technologies Inc. (Monthly Summary of Trades):
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- -------------------- ------------------ ------------------- ------------------ ------------------ --------------
DATE HIGH LOW CLOSE IND VOLUME
- -------------------- ------------------ ------------------- ------------------ ------------------ --------------
Sept/99 2.60 2.00 2.60 62,000 11
- -------------------- ------------------ ------------------- ------------------ ------------------ --------------
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
- -------------------- ------------------ ------------------- ------------------ ------------------ --------------
</TABLE>
Dividend Policy
The Company has not paid any cash dividends on its common stock and does not
anticipate paying any cash dividends in the foreseeable future. The Company
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 the
Company's financial condition, operating results, capital requirements,
applicable contractual restrictions and other factors as the board of directors
deems relevant.
OPTIONS EXERCISED
None of the Company's previously granted stock options have been exercised.
WARRANTS EXERCISED
To date the Company 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 the Company and its accountants since
the Company's inception in March of 1998.
ITEM 4 - RECENT SALES OF UNREGISTERED SECURITIES
During April of 1998, the Company issued to T. Davis Capital Corp. 200,000
shares of restricted common stock as repayment of the $206.95 incorporating
expenses paid on the Company'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.
23
<PAGE>
During April, 1998 the Company sold 2,000,000 shares of unrestricted common
stock, and received $60,000. This offering was a private placement and the
Company was exempt from registration under the Exchange Act. Further the Company
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 the Company friends,
relatives and business associates of the Company'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 the Company were issued to the following in the
indicated amounts:
<TABLE>
<CAPTION>
- ------------------------------------------ ------------------- -------------------------------- ----------------
NAME NUMBER NAME NUMBER
OF SHARES OF SHARES
- ------------------------------------------ ------------------- -------------------------------- ----------------
<S> <C> <C> <C>
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
- ------------------------------------------ ------------------- -------------------------------- ----------------
</TABLE>
During March, 1999 the 2,200,000 shares of the Company, 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 the Company issued to Rajesh Taneja 300,000 shares of
restricted common stock in lieu of $3,000 as payment for the rights and
ownership to the British Columbia sole proprietor company names "Clear Choice
Media" and "Clear Choice Technologies". 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.
During September, 1999 the Company 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.
The Company is registering all of its issued and outstanding shares of its
capital stock with a par value of $0.001 per share. From inception through
September 10, 1999 the Company has not issued or sold unregistered shares of its
common stock.
24
<PAGE>
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 the Company, 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 an 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's
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 the Company
pursuant to the foregoing provisions, the Company understands that in the
opinion of the Securities Exchange Commission, such indemnification is against
public policy as expresses 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
25
<PAGE>
EXHIBITS:
2(a) License Agreement between the Company and 827109 Alberta Ltd. dated
June 1, 1999
2(b) License Agreement between SiCom Solutions Inc. and 827109 Alberta Ltd.
dated June 1, 1999
2(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
2(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 3(ii) By-Laws of the Company dated April 23, 1998
3(ii) By Laws dated April 23, 1998
4 See Exhibit 3(ii) for By-Laws
10(a) Share Exchange Agreement between the Company and 827109 Alberta Ltd.
dated June 1, 1999
10(b) Stock Option Agreement between the Company and Judith Miller,
Corporate Secretary and Director of the Company dated September 15,
1999
27 Financial Data Schedule
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 ______ day of September
1999.
DELTA CAPITAL TECHNOLOGIES, INC.
Per:
/s/ Paul Davis
-------------------------------------
President and Chief Executive Officer
<PAGE>
<TABLE>
<S> <C> >
ANDERSEN ANDERSEN & STRONG, L.C. 941 EAST 3300 SOUTH, SUITE 202
CERTIFIED PUBLIC ACCOUNTANTS AND BUSINESS CONSULTANTS SALT LAKE CITY, UTAH 84106
MEMBER SEC PRACTICE SECTION OF THE AICPA TELEPHONE 801-486-0096
FAX 801-486-0098
E-Mail [email protected]
</TABLE>
BOARD OF DIRECTORS
DELTA CAPITAL TECHNOLOGIES, INC.
VANCOUVER, B.C. 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 over all financial statements
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 the 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 /s/ Andersen Andersen & Strong
September, 10, 1999 ------------------------------
Andersen Andersen & Strong
A member of ACF International with affiliated offices worldwide
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
JULY 31, 1999 AND DECEMBER 31, 1998
================================================================================
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 -
-------- --------
MARKETING LICENSE-net of amortization-Note 3 11,637 -
-------- --------
$ 13,370 $ 20,926
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable-Note 4 $ 26,165 $ -
Accounts payable 14,918 -
-------- --------
Total Current Liabilities 41,083 -
-------- --------
STOCKHOLDERS' EQUITY
Common stock
25,000,000 shares authorized, at $0.001 par value;
8,800,000 shares issued and outstanding 8,800 8,800
Capital in excess of par value 51,407 51,407
Deficit accumulated during the development stage (87,920) (39,281)
------- -------
Total Stockholders' Equity (27,713) 20,926
------- ------
$ 13,370 $ 20,926
======== ========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
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
================================================================================
JUL 31 DEC 31, MAR 4, 1998
1999 1998 TO JUL 31, 1999
------ ---- ---------------
REVENUES $ - $ - $ -
EXPENSES 48,639 39,281 87,920
-------- -------- --------
NET LOSS $(48,639) $(39,281) $(87,920)
======== ======== ========
NET LOSS PER COMMON SHARE
Basic $ - $ -
-------- ---------
Diluted $ - $ -
======== =========
AVERAGE OUTSTANDING SHARES
Basic 8,800,000 8,800,000
--------- ---------
Diluted 9,000,000 9,000,000
========= =========
The accompanying notes are an integral part of these financial statements.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE PERIOD FROM MARCH 4, 1998 (DATE OF INCEPTION)
TO JULY 31, 1999
================================================================================
<TABLE>
<CAPTION>
COMMON STOCK CAPITAL IN
------------------- EXCESS OF ACCUMULATED
SHARES AMOUNT PAR VALUE DEFICIT
------ ------ --------- -------
<S> <C> <C> <C>
BALANCE MARCH 4, 1998 (date of inception) - $ - $ - $ -
Issuance of common stock for services
at $.0002 - March 1998 800,000 800 (593) -
Issuance of common stock for cash
at $.0075 - June 1998 8,000,000 8,000 52,000 -
Net operating loss for the period March 4,
1998 to December 31, 1998 - - - (39,281)
---------- ------- -------- --------
BALANCE DECEMBER 31, 1998 8,800,000 8,800 51,407 (39,281)
Net operating loss for the seven months
ended July 31, 1999 - - - (48,639)
---------- ------- -------- --------
BALANCE JULY 31, 1999 8,800,000 $ 8,800 $ 51,407 $(87,920)
========== ======= ======== =========
</TABLE>
The accompanying notes are an integral part of these financial statements.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
STATEMENT OF 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
================================================================================
<TABLE>
<CAPTION>
JUL 31, DEC 31, MAR 4, 1998
1999 1998 to JUL 31, 1999
---- ---- --------------
<S> <C> <C> <C>
CASH FLOWS FROM
OPERATING ACTIVITIES
Net loss $(48,639) $(39,281) $(87,921)
Adjustments to reconcile net loss to
net cash provided by operating
activities
Issuance of common capital stock for expenses -- 207 207
Amortization 1,878 -- 1,878
Changes in accounts payable 15,002 -- 15,002
------- -------- --------
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 capital stock for expenses $207
====
The accompanying notes are an integral part of these financial statements.
</TABLE>
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE 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 carryforward 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.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
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 translation 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. All royalty
payments will be expensed. 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 realized in 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 world wide license to market computer
software known as reIBuilder.e-suite of e-business software from 827109 Alberta
LTD and SiCom Solution Inc. (Canadian corporations). 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 terms of the agreement is for three years and includes an initial payment of
$50,000cn which is due anytime before November 1, 1999, of which $20,000cn has
been paid, and royalty payments of 15% of the net sales with a minimum amount of
$50,000cn for the first year and $200,000cn for the second year and $300,000cn
for the third year. The agreement can be cancelled by notice after a 30 day
default by either party or automatically terminates if any royalty payment is
more than 60 days past due. The agreement can be renewed at the end of three
years for an unlimited time by the payment of $1cn.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
3. PURCHASE OF MARKETING LICENSE - continued
The amounts paid or to be paid toward the purchase price of $50,000cn are
capitalized and amortized over 3 years, the estimated useful life of the
license, or a shorter period if the value of the license is determined to be
impaired.
All of the parties to the agreement have certain common officers and they
believe the contract amount of $50,000cn for the purchase of the license was a
fair value.
At the report date the Company did not have the working capital necessary to
begin the marketing activity.
4. 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
5. STOCK OPTIONS
On August 26, 1998 the Company issued stock options to purchase 200,000 common
shares to an officer at .0075 per share which will expire December 31, 1999. The
options were given as compensation for prior services and on the option date
were considered to have no fair value.
6. RELATED PARTY TRANSACTIONS
Related parties have acquired 28% of the common stock issued.
The Company purchased the marketing license outlined in note 3 from related
parties.
7. GOING CONCERN
The Company will need additional working capital to be successful in its planned
activity and continuation of the Company as a going concern is dependent upon
obtaining the working capital necessary and the management of the Company has
developed a strategy, which it believes will accomplish this objective through
additional equity funding, and long term financing, which will enable the
Company to operate in the future.
<PAGE>
DELTA CAPITAL TECHNOLOGIES, INC.
(DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (Continued)
================================================================================
8. SUBSEQUENT EVENTS
On September 9, 1999 the Company acquired 36% of the outstanding stock of
827109 Alberta LTD by the issuance of 5,000,000 common shares of the Company.
It is the intent of 827109 Alberta LTD to acquire all of the outstanding stock
of SiCom Solutions Inc. (parties to the license purchase contract above) in a
stock for stock exchange, and by using the acquired shares of the Company as
part of the consideration, to be completed by December 31, 1999.
On September 9, 1999 the company issued 300,000 common shares of its stock for
the exclusive rights to the trade names "Clear Choice Media and "Clear Choice
Technologies".
After the completion of the above stock issues the outstanding stock of the
Company amounted to 14,100,000 shares.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
2(a) License Agreement between the Company and 827109 Alberta Ltd.
dated June 1, 1999
2(b) License Agreement between SiCom Solutions Inc. and 827109
Alberta Ltd. dated June 1, 1999
2(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
2(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
3(ii) By-Laws of the Company dated April 23, 1998
4 See Exhibit 3(ii) for By-Laws
10(a) Share Exchange Agreement between the Company and 827109 Alberta
Ltd. dated June 1, 1999
10(b) Stock Option Agreement between the Company and Judith Miller,
Corporate Secretary and Director of the Company dated September
15, 1999
27 Financial Data Schedule
The above noted Exhibits have been incorporated into the Form 10-SB by
reference.
27
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
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;
<PAGE>
- 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.
2
<PAGE>
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,
3
<PAGE>
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.
4
<PAGE>
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;
5
<PAGE>
(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.
6
<PAGE>
(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.
7
<PAGE>
(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.
8
<PAGE>
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.
9
<PAGE>
(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.
10
<PAGE>
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
11
<PAGE>
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.
12
<PAGE>
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.
13
<PAGE>
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.
14
<PAGE>
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.
15
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:
<PAGE>
- 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.
2
<PAGE>
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.
3
<PAGE>
(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.
5
<PAGE>
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;
6
<PAGE>
(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.
7
<PAGE>
(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.
8
<PAGE>
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.
9
<PAGE>
(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.
10
<PAGE>
(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.
11
<PAGE>
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
12
<PAGE>
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.
13
<PAGE>
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.
14
<PAGE>
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.
15
<PAGE>
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.
16
827109 ALBERTA LTD.
#255 - 999 - 8TH STREET, SW, CALGARY, ALBERTA T2R 1J5
PH: (403) 24407300 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
#255 - 999 - 8th Street, S.W.
Calgary, Alberta, Canada T2R 1 J5
SICOM Phone: (403) 244 - 7300 Fax: (403) 244 - 7211
E-mail: [email protected]
---------------------------
SiCOM SOLUTIONS INC. www.ebizsolutions.com
---------------------
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
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
<PAGE>
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
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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
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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.
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- 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
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<PAGE>
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.
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<PAGE>
- 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
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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.
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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)
9
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
<PAGE>
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
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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
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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.
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- 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
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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.
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- 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
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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.
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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)
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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.
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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.
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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
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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:
<TABLE>
<CAPTION>
<S> <C>
If to AlbertaCO then: If to Delta, then:
Suite 255, 999 8th Street SW, Calgary, AB, Canada T2R 1J5 1331 Homer Street, Suite B201, Vancouver, BC, Canada
V6B 1H3
</TABLE>
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.
DELTA CAPITAL TECHNOLOGIES, INC. 827109 ALBERTA LTD.
/s/ Judith Miller /s/ Paul Davis
- -------------------------------- -------------------------------------
Judith Miller, President Paul F. Davis, CEO
5
<PAGE>
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 he, 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.
- ------------------------------
Notary Public
6
<PAGE>
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.
- -------------------------------
Notary Public
7
<PAGE>
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
8
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
<PAGE>
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
--------------------
Authorized Signatory
2
<PAGE>
SIGNED, SEALED and DELIVERED )
by JUDITH MILLER in the presence of: )
)
) "Judith Miller"
- ----------------------------------------------------- ) ---------------
Witness ) JUDITH MILLER
)
- ----------------------------------------------------- )
Address )
)
- ----------------------------------------------------- )
)
)
- ----------------------------------------------------- )
)
)
- ----------------------------------------------------- )
Occupation )
3
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
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 31, 1999 and the period from March 4, 1998 to December 31,
1998 and the period from March 4, 1998 (date at inception) to July 31, 1999.
</LEGEND>
<CIK> 0001066764
<NAME> DELTA CAPITAL TECHNOLOGIES INC.
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C> <C>
<PERIOD-TYPE> 12-MOS 7-MOS
<FISCAL-YEAR-END> DEC-31-1999 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
0 0
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
</TABLE>
