<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended: March 31, 2000
------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to ____________
Commission file number: 000-27407
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DELTA CAPITAL TECHNOLOGIES, INC.
--------------------------------
(Exact name of small business issuer as specified in charter)
<TABLE>
<S> <C>
Delaware 98-018770
------------------------------------------------------------ -------------------------------
(State of Other jurisdiction of incorporation or organization) (IRS Employer Identification No.)
</TABLE>
Suite 255, 999 - 8th Street, SW, Calgary, Alberta T2R 1J5 Canada
----------------------------------------------------------------
(Address of principal executive offices)
(403) 244-7300
---------------------------
(Issuer's telephone number)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
The number of shares of the Registrant's common stock par value $0.001
per share (the "Common Stock"), outstanding as of May 22, 2000 was 14,588,500
shares.
Transitional Small Business Disclosure Format (check one): Yes No x
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<PAGE> 2
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
DELTA CAPITAL TECHNOLOGIES
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
March 31, 2000 and December 31, 1999
(Unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
<S> <C> <C>
ASSETS
Current Assets
Cash $ 328,928 $ 351
Accounts Receivable - affiliate 291,833 82,041
Accounts Receivable - other 140,555
----------- -----------
Total current assets 761,316 82,392
Fixed Assets, net of accumulated
depreciation of $4,322 and $76 31,055 488
Other Assets
Investment, net of accumulated
amortization of $694,445 and $486,111 1,805,555 2,013,889
Goodwill, net of accumulated
amortization of $104,729 907,647
Marketing License, net of accumulated
amortization of $9,385 and $6,569 24,400 27,216
Capitalized Development Costs 216,479
----------- -----------
2,954,081 2,041,105
----------- -----------
$ 3,746,452 $ 2,123,985
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts Payable $ 115,024 $ 40,912
Accrued Liabilities 23,424
Notes Payable 422,818 214,619
----------- -----------
Total current liabilities 561,266 255,531
Shareholders' Equity
Common stock, $.001 par value, 25,000,000 shares authorized;
14,588,500 and 13,800,000 issued and outstanding 14,588 13,800
Additional paid-in capital 4,064,619 2,546,407
Deficit accumulated during the development stage (894,021) (691,753)
----------- -----------
3,185,186 1,868,454
----------- -----------
$ 3,746,452 $ 2,123,985
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 3
DELTA CAPITAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31, 2000 and 1999 and
the Period from March 4, 1998 (Inception) to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Total
Accumulated
During the
Development
Stage
(March 4,
1998 to
March 31, March 31, March 31,
2000 1999 2000)
----------- ----------- -----------
<S> <C> <C> <C>
Revenue $ 163,759 $ - $ 163,759
Expenses
General and administrative (41,450) (18,095) (235,413)
Goodwill amortization (104,729) - (104,729)
Investment amortization (208,333) - (694,444)
License agreement amortization (2,815) - (9,384)
Interest expense (8,700) - (13,810)
----------- ----------- -----------
Total expenses (366,027) (18,095) (1,057,780)
----------- ----------- -----------
Net loss $ (202,268) $ (18,095) $ (894,021)
=========== =========== ===========
Basic and diluted loss per share $ (0.01) $ 0.00 $ (0.10)
=========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 4
DELTA CAPITAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
For the Period From March 4, 1998 (Inception) to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Deficit
Accumulated
Common Stock Additional During the
-------------------------- Paid-in Development
Shares Amount Capital Stage Total
---------- ---------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C>
Balance, March 4, 1998 - $ - $ - $ - $ -
Issuance of common stock for services (March 1998) 800,000 800 (593) 207
Issuance of common stock for cash (June 1998) 8,000,000 8,000 52,000 60,000
Net loss for the period (39,281) (39,281)
---------- ---------- ----------- ----------- -----------
Balance, December 31, 1998 8,800,000 8,800 51,407 (39,281) 20,926
Issuance of common stock (September 1999) 5,300,000 5,300 2,496,692 2,501,992
Cancellation of common stock (December 1999) (300,000) (300) (1,692) (1,992)
Net loss for the year (652,472) (652,472)
---------- ---------- ----------- ----------- -----------
Balance, December 31, 1999 13,800,000 $ 13,800 $ 2,546,407 $ (691,753) $ 1,868,454
Issuance of common stock in exchange for
Matridigm Corporation (January 2000) 500,000 500 999,500 1,000,000
Issuance of common stock for cash (February 2000) 26,000 26 51,974 52,000
Issuance of common stock for cash (March 2000) 200,000 200 341,800 342,000
Issuance of common stock for cash (March 2000) 62,500 62 124,938 125,000
Net loss for the period (202,268) (202,268)
---------- ---------- ----------- ----------- -----------
Balance, March 31, 2000 14,588,500 $ 14,588 $ 4,064,619 $ (894,021) $ 3,185,186
========== ========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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DELTA CAPITAL TECHNOLOGIES, INC.
(A Development Stage Company)
CONSOLIDATED STATEMENT OF CASH FLOW
For the Three Months Ended March 31, 2000 and 1999 and
the Period from March 4, 1998 (Inception) to March 31, 2000
(Unaudited)
<TABLE>
<CAPTION>
Total
Accumulated
During the
Development
Stage
(March 4,
1998 to
March 31, March 31, March 31,
2000 1999 2000)
---------- ----------- -----------
<S> <C> <C> <C>
Cash Flows From Operating Activities
Net loss $ (202,268) $ (18,095) $ (894,021)
Adjustments to reconcile net loss to net
cash used in operating activities
Amortization 315,877 808,557
Increase in accounts payable 61,738 102,857
Increase in accrued liabilities 23,424 23,424
Increase in accounts receivable (350,347) (432,388)
---------- ----------- -----------
Net cash used in operating activities (151,576) (18,095) (391,571)
Cash Flows From Investing Activities
Capitalized development costs (216,479) (216,479)
Purchase of marketing license (33,785)
Purchase of office equipment and leasehold improvements (30,567) (31,055)
---------- ----------- -----------
Net cash used in investing activities (247,046) 0 (281,319)
Cash Flows From Financing Activities
Proceeds from loans 208,199 422,818
Proceeds from issuance of common stock 519,000 579,000
---------- -----------
Net cash provided by financing activities 727,199 0 1,001,818
---------- ----------- -----------
Net increase (decrease) in cash 328,577 (18,095) 328,928
Cash, beginning of period 351 20,926 0
---------- ----------- -----------
Cash, end of period $ 328,928 $ 2,831 $ 328,928
========== =========== ===========
No cash payments for interest or income taxes have been made.
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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DELTA CAPITAL TECHNOLOGIES, INC.
(A Development Stage Company)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2000
(Unaudited)
Note 1. Basis of Presentation
The interim period consolidated financial statements contained herein include
the accounts of Delta Capital Technologies, Inc. and it's subsidiary (the
"Company").
The interim period consolidated financial statements have been prepared by the
Company pursuant to the rules and regulations of the U.S. Securities and
Exchange Commission (the "SEC"). Certain information and footnote disclosure
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to such
SEC rules and regulations. The interim period consolidated financial statements
should be read together with the audited consolidated financial statements and
accompanying notes included in the Company's latest annual report on Form 10-KSB
for the fiscal year ended December 31, 1999. In the opinion of the Company, the
unaudited consolidated financial statements contained herein contain all
adjustments necessary to present a fair statement of the results of the interim
periods presented.
Note 2. Summary of Significant Accounting Policies
Acquisition of A Company
Effective January 1, 2000, the Company acquired 100% of the outstanding shares
of common stock of The Matridigm Corporation ("Matridigm"), a privately held
marketing and communications company in Calgary, Alberta. This acquisition has
been accounted for under the purchase method. In consideration, the Company
issued 500,000 shares of its own common stock, warrants which entitle the seller
to acquire 490,000 common shares of the Company at $2.00 per share, and $69,286.
The cost of the acquisition totaled $1,069,286. Due to this acquisition, the
Company has recorded $1,012,376 of goodwill, which is being amortized over 31
months, its estimated useful life.
From January 1, 2000 forward, the Company's consolidated statement of operations
includes the revenue and expenses of Matridigm. Combining Matridigm's operating
results for the three months ended March 31, 1999 with those of the Company
results in the following pro forma data:
Revenue $ 193,411
Expenses 209,522
---------
Net Loss $ (16,111)
=========
Loss per Share $ (0.00)
=========
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Earnings Per Share
Basic earnings per share is computed by dividing income (loss) for the period by
the weighted average number of common shares outstanding during a period.
Diluted earnings per share takes into consideration common shares outstanding
(computed under basic earnings per share) and potentially dilutive common
shares. The weighted average number of shares was 14,300,967 and 8,800,000 for
the three months ended March 31, 2000 and March 31, 1999, respectively. The
weighted average number of shares was 9,352,620 for the period from March 4,
1998 to March 31, 2000.
Capitalized Development Costs
The Company's product reached the stage of technological feasibility as defined
by Statements of Financial Accounting Standards ("SFAS") 86 on January 1, 2000.
Accordingly, all product development costs prior to that date have been charged
to expense and all product development costs subsequent to that date have been
included in capitalized development costs.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.
This Quarterly Report contains forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Securities
Exchange Act. Words such as "expects," "anticipates," "intends," "plans,"
"believes," "seeks," "estimates," and other similar expressions or variations of
such words are intended to identify these forward-looking statements.
Additionally, statements concerning future matters such as the development of
new products, enhancements or technologies, possible changes in legislation and
other statements regarding matters that are not historical fact are
forward-looking statements. Forward-looking statements involve risks and
uncertainties. Actual results could differ materially from those projected in
the forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, availability of financial resources
adequate for short-, medium- and long-term needs, demand for our products and
services and market acceptance, as well as those factors discussed in this "ITEM
2. Management's Discussion and Analysis or Plan of Operations" and else where in
this Report.
Delta Capital continues to be an early stage company. On June 1,
1999, Delta Capital acquired the exclusive worldwide license to the
relBUILDER(TM) Enterprise Suite of intelligent e-Commerce and e-Business
software from 827109 Alberta Ltd. (AltaCo), an Alberta, Canada-based private
company. Under the agreement, Delta Capital agreed to pay AltaCo fifteen percent
(15%) royalty payments in the minimum amount of US$33,785 in the first year,
US$135,000 in the second year and US$200,000 in the third year. The agreement
may be renewed beyond the initial three-year term for a nominal amount. The
software may be sub-licensed under terms of the agreement.
In the first quarter of 2000, Delta Capital moved aggressively to
plan the market entry of the recently acquired relBUILDER(TM) technologies. A
major step toward this goal was taken when Delta Capital entered into
negotiations to acquire The Matridigm Corporation, an Alberta, Canada-based
strategic marketing and communications company with special high-tech expertise.
Subsequent to the end of the quarter ended March 31, 2000, on April 19, 2000,
the acquisition was completed. Management believes the acquisition of The
Matridigm Corporation and its key managers - and the strong marketing base they
provide Delta Capital - are critical to Delta Capital's successful penetration
of both United States and international markets. Financial results of The
Matridigm Corporation first quarter have been incorporated into Delta Capital's
financial statements that form a part of this report in order to present Delta
Capital's current financial condition in a comprehensive manner.
a) Delta Capital forecasts modest revenues in 2000 and anticipates
continuing losses from operations as it introduces its relBUILDER(TM) software
and services offering into the marketplace. Delta Capital will need additional
working capital to be successful in its planned activities and continuation of
Delta Capital as a going concern is dependent upon obtaining the necessary
working capital. Management is mindful that equity markets have experienced
significant uncertainty in the first quarter of 2000, however, management has
developed a strategy that it believes will accomplish the objective of obtaining
further funding. Delta Capital anticipates that it will raise additional funds
prior to year-end in the amount of a minimum of US$3.0 million through a
combination of equity financing, participation in software/hardware industry
companies' vendor financing programs and debt financing. However, no assurance
can be given that Delta Capital will successfully consummate such financings or
that such financings will be consummated on terms favorable to Delta Capital.
Furthermore, Delta Capital believes it has adequate funds to meet its cash needs
until no earlier than the fourth quarter 2000.
b) Delta Capital plans to continue its efforts to increase
distribution and sales channels for its
8
<PAGE> 9
relBUILDER(TM) software; negotiate partnership arrangements in key markets and
gain strategic partners. Delta Capital's management believes that virtually all
businesses in future will have e-Commerce/e-Business requirements and that the
nature and conduct of business in general is fundamentally changing to
accommodate Internet technology. Delta Capital plans to have sales and support
facilities in two Canadian cities (Calgary and Toronto) and at least four major
metropolitan areas in the United States, and a United Kingdom presence by
year-end.
c) Delta Capital's relBUILDER(TM) software is proprietary and Delta
Capital continues to sponsor development of relBUILDER(TM). To that end, Delta
Capital unveiled v2.0 of relBUILDER(TM) at IBM's premiere business partner
conference, Partner World 2000, in San Diego, CA, in late January. Delta
Capital's management will focus future development based on an extensive
research program designed to test various attributes of the software in terms of
ease of use, brand awareness and other attributes of significance to success in
a competitive marketplace.
d) Delta Capital currently purchases from AtlaCo (now named Delta
Enterprise Technologies (Canada) Inc.), services at fair market rates to ensure
the above-referenced continued development of the software as well as provision
of support services. Management continues to review this relationship to
determine that Delta Capital Technologies, Inc. is gaining maximum benefit from
the arrangement as compared to undertaking these functions to its own account.
e) Delta Capital management did not make any material plant or
equipment purchases during the period under review. However, Delta Capital is
actively seeking to secure additional office space and equipment in Calgary
where it anticipates that its employee head count will rise significantly over
the next two quarters.
f) Delta Capital management anticipates that it will add
approximately 40 full time equivalent employees (FTE) before year end, in
addition to the current 45 FTEs at Delta Capital, The Matridigm Corporation and
Delta Enterprise Technologies (Canada) Inc., the majority of which will be in
sales and customer service capacities.
9
<PAGE> 10
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
Delta Capital is not a party to any material pending legal
proceedings other than ordinary routine litigation incidental to the business of
Delta Capital which Delta Capital does not believe is material.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
In March, 2000, Delta Capital completed two private placements,
pursuant to which Delta Capital received an aggregate investment of $519,000 in
exchange for 288,500 shares of common stock of Delta Capital, par value $0.001
per share (the "Common Stock") which investors purchased at a purchase price of
approximately $2.00 per share. Delta Capital intends to use the net proceeds of
the private placement for working capital, capital equipment and general
corporate purposes. The shares were exempt under Regulation S as promulgated by
the Securities and Exchange Commission, under the Securities Act of 1933, as
amended ("1933 Act), and the appropriate restrictive legend was placed on the
share certificates issued. Each purchaser represented to Delta Capital that it
was not a U.S. person as define under Regulation S and that the securities were
acquired for investment only, for its own account, and not with a view towards
distribution. The purchaser further represented that at the time the order
originated and through its execution and delivery, it remained outside the
United States.
On April 18, 2000, Delta Capital closed the purchase of all the
issued and outstanding common stock of The Matridigm Corporation, a private
Canadian corporation ("Matridigm") from Michael Steele, Cecilia Lanz, Diana
Steele, Andre Lanz and Robert Sweetman, representing all of the stockholders of
Matridigm. The exchange agreement provided for Delta Capital to receive all of
the issued and outstanding shares of Matridigm in exchange for a cash payment of
Cdn$100,000, 500,000 shares of Common Stock, and 490,000 warrants, each warrant
exercisable to purchase one share of Common Stock at US$2.00 per share.
In each case set forth in this Item 2, the securities were issued
pursuant to exemption from the registration requirements of the 1933 Act under
Section 4(2) and Rule 506 of Regulation D.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On May 18, 2000, at the annual meeting of stockholders of Delta
Capital, the following persons were unanimously elected as directors of Delta
Capital for a term of one year or until a successor has been elected and
qualified: Paul Davis, Michael Horsey, Kevin Wong, Judith Miller and Michael
Steele. In addition, Peterson Sullivan P.L.L.C. was unanimously elected as Delta
Capital's accountants for the next two years.
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.1(1) Articles of Incorporation dated March 4, 1998 together
with Amended Articles of Incorporation dated April 23,
1998
3.2(2) By-Laws of Delta Capital Technologies, Inc., a Delaware
corporation, dated April 23, 1998
4.1(3) Stock Option Agreement between Delta Capital Technologies,
Inc., a Delaware corporation, and Judith Miller, Corporate
Secretary and Director of Delta Capital dated September
15, 1999
4.2(4) Letter from Delta Capital Technologies, Inc., a Delaware
corporation, to Judith Miller dated January 7, 2000
4.3 Form of Offshore Securities Subscription Agreement to
purchase 200,000 shares of common stock of Delta Capital
Technologies, Inc., a Delaware corporation, issued to
Winward Overseas Limited, dated March 16, 2000
4.4 Schedule of Subscribers that purchased subscriptions
pursuant to the Form of Offshore Securities Subscription
Agreement set forth in 4.3 above
4.5 Placement Agent Letter Agreement by and between Delta
Capital Technologies, Inc., a Delaware corporation, and
Traction Capital, dated March 1, 2000
10.1(5) License Agreement between Delta Capital Technologies,
Inc., a Delaware corporation, and 827109 Alberta Ltd.
dated June 1, 1999
10.2(6) License Agreement between SiCom Solutions Inc. and 827109
Alberta Ltd. dated June 1, 1999
10.3(7) Letter from 827109 Alberta Ltd. to Delta Capital
Technologies, Inc., a Delaware corporation, dated
September 2, 1999 acknowledging receipt of the $20,000
payment and granting a three month extension of the
$30,000 payment to November 1, 1999
10.4(8) 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
- -----------------------------
(1) Incorporated by reference to Exhibit 3(I) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(2) Incorporated by reference to Exhibit 3(II) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(3) Incorporated by reference to Exhibit 99(B) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(4) Incorporated by reference to Exhibit 99(C) of the Company's Form 10SB, filed
with the SEC on January 11, 2000.
(5) Incorporated by reference to Exhibit 10(A) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(6) Incorporated by reference to Exhibit 10(B) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(7) Incorporated by reference to Exhibit 10(C) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
11
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10.5(9) Share Exchange Agreement between Delta Capital
Technologies, Inc., a Delaware corporation, and 827109
Alberta Ltd. dated June 1, 1999
10.9(10) Letter from Rajesh Taneja dated December 3, 1999 regarding
acquisition of corporate names by Delta Capital
Technologies, Inc., a Delaware corporation
10.10(11) Exchange Agreement, executed April 14, 2000, among Delta
Capital Technologies Inc., a Delaware corporation, The
Matridigm Corporation, a Canadian corporation, Michael
Steele, Cecilia Lanz, Diana Steele, Andre Lanz and Robert
Sweetman
10.11 Form of Employment Agreement
10.12 Schedule of directors and employees of Delta Capital
Technologies, Inc., a Delaware corporation, who executed
employment agreements the form of which is set forth in
Exhibit 10.11
10.13 Debt Settlement Agreement by and between Delta Capital
Technologies, Inc., a Delaware corporation and Bonanza
Mgmt Ltd., a British Columbia company
27.1 Financial Data Schedule
(b) A report was filed on Form 8-K on May 3, 2000, reporting the acquisition
of all the issued and outstanding shares of capital stock of The Matridigm
Corporation.
- --------------------------------------------------------------------------------
(8) Incorporated by reference to Exhibit 10(D) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(9) Incorporated by reference to Exhibit 99(A) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(10) Incorporated by reference to Exhibit 99(E) of the Company's Form 10SB,
filed with the SEC on January 14, 2000.
(11) Incorporated by reference to Exhibit 2.1 of the Company's Form 8-K, filed
with the SEC on May 3, 2000.
12
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
DELTA CAPITAL TECHNOLOGIES, INC.
Date: May 22, 2000 By: /s/ Michael Horsey
--------------------------
Name: Michael Horsey
Title: Chairman
Date: May 22, 2000 By: /s/ Judith Miller
-------------------------
Name: Judith Miller
Title: Corporate Secretary
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INDEX TO EXHIBITS
EXHIBIT DESCRIPTION
3.1(1) Articles of Incorporation dated March 4, 1998 together
with Amended Articles of Incorporation dated April 23,
1998
3.2(2) By-Laws of Delta Capital Technologies, Inc. dated April
23, 1998
4.1(3) Stock Option Agreement between Delta Capital Technologies,
Inc. and Judith Miller, Corporate Secretary and Director
of Delta Capital dated September 15, 1999
4.2(4) Letter from Delta Capital Technologies, Inc. to Judith
Miller dated January 7, 2000
4.3 Form of Offshore Securities Subscription Agreement to
purchase 200,000 shares of common stock of Delta Capital
Technologies, Inc., a Delaware corporation, issued to
Winward Overseas Limited, dated March 16, 2000
4.4 Schedule of Subscribers that purchased subscriptions
pursuant to the Form of Offshore Securities Subscription
Agreement set forth in 4.3 above
4.5 Placement Agent Letter Agreement by and between Delta
Capital Technologies, Inc., a Delaware corporation, and
Traction Capital, dated March 1, 2000
10.1(5) License Agreement between Delta Capital Technologies, Inc.
and 827109 Alberta Ltd. dated June 1, 1999
10.2(6) License Agreement between SiCom Solutions Inc. and 827109
Alberta Ltd. dated June 1, 1999
10.3(7) Letter from 827109 Alberta Ltd. to Delta Capital
Technologies, Inc. dated September 2, 1999 acknowledging
receipt of the $20,000 payment and granting a three month
extension of the $30,000 payment to November 1, 1999
10.4(8) 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
- -----------------------------
(1) Incorporated by reference to Exhibit 3(I) of the Company's Form 10SB, filed
with the SEC on January 5, 2000.
(2) Incorporated by reference to Exhibit 3(II) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(3) Incorporated by reference to Exhibit 99(B) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(4) Incorporated by reference to Exhibit 99(C) of the Company's Form 10SB,
filed with the SEC on January 11, 2000.
(5) Incorporated by reference to Exhibit 10(A) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(6) Incorporated by reference to Exhibit 10(B) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(7) Incorporated by reference to Exhibit 10(C) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(8) Incorporated by reference to Exhibit 10(D) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
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10.5(9) Share Exchange Agreement between Delta Capital
Technologies, Inc. and 827109 Alberta Ltd. dated June 1,
1999
10.9(10) Letter from Rajesh Taneja dated December 3, 1999 regarding
acquisition of corporate names by Delta Capital
Technologies, Inc.
10.10(11) Exchange Agreement, executed April 14, 2000, among Delta
Capital Technologies Inc., a Delaware corporation, The
Matridigm Corporation, a Canadian corporation, Michael
Steele, Cecilia Lanz, Diana Steele, Andre Lanz and Robert
Sweetman
10.11 Form of Employment Agreement
10.12 Schedule of directors and employees of Delta Capital
Technologies, Inc., a Delaware corporation, who executed
employment agreements the form of which is set forth in
Exhibit 10.11
10.13 Debt Settlement Agreement by and between Delta Capital
Technologies, Inc., a Delaware corporation and Bonanza
Mgmt Ltd., a British Columbia company
27.1 Financial Data Schedule
- -----------------------------
(9) Incorporated by reference to Exhibit 99(A) of the Company's Form 10SB,
filed with the SEC on January 5, 2000.
(10) Incorporated by reference to Exhibit 99(E) of the Company's Form 10SB,
filed with the SEC on January 14, 2000.
(11) Incorporated by reference to Exhibit 2.1 of the Company's Form 8-K, filed
with the SEC on May 3, 2000.
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EXHIBIT 4.3
Form of Offshore Securities Subscription Agreement
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
This Offshore Securities Agreement is executed in reliance upon the transaction
exemption afforded by Regulation S ("Regulation S") as promulgated by the
Securities and Exchange Commission ("SEC"), under the Securities Act of 1933, as
amended ("1933 Act")
This Agreement has been executed by the undersigned in connection with
the private placement of shares of Common Stock (hereinafter referred to as the
"Shares") of
DELTA CAPITAL TECHNOLOGIES, INC.
Suite 255, 999 - 8th St. SW
Calgary, AB T2R 1J5 Canada
a corporation organized under the laws of the state of Delaware, USA, OTC
Electronic Bulletin Board symbol (DCTG) (hereinafter referred to as the
"Seller")
The Undersigned:
Winward Overseas Limited
2/3 Rue Depre
St. Peter Port
Guernsey Channel Island
a resident of a non USA jurisdiction (hereinafter referred to as the
"Purchaser"), hereby represents and warrants to, and agrees with the Seller as
follows:
1. Agreement to Subscribe
a. Purchase Price. The undersigned hereby subscribes for 200,000
common shares in the capital of the Seller (the "Shares") at $2.00
per share payable in U.S. Dollars for a total consideration of
$400,000 dollars ($US) (the "Purchase Price").
b. Form of Payment. The Purchaser shall pay the Purchase Price by
delivering good funds in U.S. dollars to the designated depository
for closing as determined by the Seller by delivery of securities
versus payment.
2. Subscriber Representations; Access to Information; Independent
Investigation.
a. Offshore Transaction. The Purchase represents and warrants to the
Seller as follows:
i The Purchaser is not a U.S. person as defined under
Regulation S;
16
<PAGE> 2
ii At the time the buy order was originated, the Purchaser was
outside the United States and is outside the United States
as of the date of the execution and delivery of this
Agreement;
iii The Purchaser is purchasing the Shares for its own account
and not on behalf of any U.S. person, and the sale has not
been prearranged with a purchaser in the United States.
Notwithstanding the contents of this paragraph, the
Purchaser may purchase the subject shares under its own
name or under the name of other Non U.S. persons as defined
under Regulation S;
iv Each distributor participating in the offering of
securities, if any, has agreed in writing that all offers
and sales of the securities prior to the expiration of a
period commencing on the date of the transaction and ending
1 year thereafter shall only be made in compliance with the
safe harbor contained in Regulation S pursuant to
registration of Shares under the Securities Act of 1933 or
pursuant to an exemption from registration;
v The Purchase represents and warrants and hereby agrees that
all offers and sales of the securities prior to the
expiration of a period commencing on the date of the
transaction and ending 1 year thereafter shall only be made
in compliance with the safe harbor contained in Regulation
S pursuant to registration of Shares under the Securities
Act of 1933 or pursuant to an exemption from registration,
and all offers and sales after the expiration of the 1 year
period shall be made only pursuant to such a registration
or to such exemption from registration;
vi The Purchaser acknowledges that the Shares have not been
registered under the Securities Act of 1933 and may not be
offered or sold in the United States or to U.S. persons
during a period commencing on the date of the transaction
and ending 1 year thereafter unless the Shares are
registered under the Securities Act of 1933 or an exemption
from the registration requirements is available;
vii The Purchaser acknowledges that the purchase of the Shares
involves a high degree of risk and further acknowledges
that it can bear the economic risk of the purchase of the
Shares including the total loss of its investment;
viii The Purchaser understands that the Shares are being offered
and sold to it in reliance on specific exemptions from the
registration requirements of the Federal and State
securities laws and that the Seller is relying upon the
truth and accuracy of the representations, warranties,
agreements, acknowledgements and understandings of the
Purchaser set forth herein in order to determine the
applicability of such exemptions and suitability of the
Purchaser to acquire the Shares.
b. Current Public Information. The Purchaser acknowledges that the
Purchaser has been furnished with or has acquired copies of the
Company's most recent Annual Report on
17
<PAGE> 3
the Form 10-K files with the SEC and the Forms 10-Q and 8-K filed
thereafter (collectively the "SEC Filings"), and other publicly
available documents.
c. Independent Investigation; Access. The Purchaser acknowledges that
the Purchaser is making the decision to purchase the Shares
subscribed for, has relied upon Independent Investigations made by
it and it's purchaser representatives, if any, and the Purchaser
and such representatives, if any, have, prior to any sale to it,
been given access and the opportunity to examine all material
books and records of the Corporation, all material contracts and
documents relating to this offering and an opportunity to ask
questions of, and to receive answers from the Seller or any person
acting on its behalf concerning the terms and conditions of this
offering. The Purchaser and its advisors, if any, have been
furnished with access to all publicly available materials relating
to the business, finances and operation of the Seller and
materials relating to the offer and sale of the Shares which have
been requested. The Purchaser, and its advisors, if any, have
received complete and satisfactory answers to any such inquiries.
d. No Government Recommendation or Approval. The Purchaser
understands that no Federal or State agency has passed on or made
any recommendation or endorsement of the Shares.
3. Issuer Representations.
a. Reporting Company Status. The Seller is a reporting issuer as
defined by Rule 902 of Regulation S. The Seller is in full
compliance, to the extent applicable, with all reporting
obligations under wither Section 12(b), 12(g), or 15(d) of the
Securities Act of 1934, as amended (the "Exchange Act"). The
Seller has registered its common stock pursuant to Section 12 of
the Exchange Act and the common stock trades on the OTC Electronic
Bulletin Board.
b. Offshore Transaction.
i The Seller has not offered these securities to any person
in the United States or to any U.S. person as that term is
defined in Regulation S;
ii At the time the buy order was originated, the Seller and/or
its agent reasonably believed the Purchaser was outside the
United States and was not a U.S. person;
iii The Seller and/or its agents reasonably believe that the
transaction has not been prearranged with a purchaser in
the United States.
c. No Directed Selling Efforts. In regard to this transaction, the
Seller has not conducted any "direct selling efforts" as that term
is defined in Rule 902 of Regulation S nor has the Seller
conducted any general solicitation relating to the offer and sale
of the Shares within securities to persons resident within the
United States or elsewhere.
18
<PAGE> 4
4. Legends on Certificates. The transaction restriction in connection with
this offshore offer and sale restrict the Purchaser from offering and
selling to U.S. persons, or for the account or benefit of a U.S. person,
for a 1 year period. The rules require the placement of such a
restrictive legend on share certificates. Rule 903 governs the 1 year
transaction restriction.
5. To the extent that the Purchaser is a resident of Ontario the Purchaser
is purchasing the Shares under the exemption from prospectus requirements
available under section 72(1)(d) of the Ontario Securities Act which
provides that the Purchaser must purchase as Principal and the trade must
have an aggregate acquisition cost of not less than $150,000. Under the
Ontario Securities Act the Shares purchased will be subject to
restrictions on resale within Ontario until such time as:
a) the appropriate "hold period" has been satisfied and the Purchaser
has complied with other applicable requirements, including the
filing of appropriate reports pursuant to applicable securities
legislation;
b) a further statutory exemption may be relied upon by the Purchaser;
or
c) an appropriate discretionary order is obtained pursuant to
applicable securities laws.
Since the Seller's not a reporting issuer in the Province of Ontario, the
applicable hold period may never expire, and if no further statutory
exemption may be relied upon and if no discretionary order or ruling is
obtained this could result in the Purchaser having to hold the Shares for
an indefinite period of time. Pursuant to the Ontario Securities Act a
restrictive legend will be placed on the certificate representing the
Shares which reflect the above referenced hold period.
6. Exemption; Reliance on Representations. The Purchaser understands that
the offer and sale of the Shares is not being registered under the 1933
Act. The Seller is relying on the rules governing offers and sales made
outside the United States pursuant to Regulation S. Rules 901 through 905
of Regulation S govern this transaction.
7. Transfer Agent Instructions. The Seller's transfer agent will be
instructed to issue one or more share certificates representing Shares
with a restrictive legend in the names of purchasers to be specified
prior to the closing and that the Shares have been issued pursuant to
Regulation S. The Seller further warrants that no instructions have been
given to the transfer agent and that these shares be freely transferable
on the books and records of the Company subject to compliance with
applicable securities laws.
8. Stock Delivery Instructions. The share certificates shall be delivered to
the Purchaser on a delivery versus payment basis at such times and places
to be mutually agreed.
9. Closing Date. The date of the issuance of the sale of the Shares (the
"Closing Date") shall be on or before March 16, 2000, or such other
mutually agreed to time and place.
10. Conditions to the Company's Obligation to Sell. The Purchaser understands
the Seller's obligation to sell the Shares to the Purchaser is
conditioned upon:
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<PAGE> 5
a. The receipt and acceptance by the Seller of this Subscription
Agreement for all the Shares as evidenced by execution of this
Subscription Agreement by the President or Vice President of the
Seller;
b. Delivery into the closing depository by the Purchaser of good
funds as payment in full for the purchase of the Shares;
c. The shareholders of the Seller approving additional shares to be
authorized, if necessary, sufficient to satisfy the terms of this
Agreement.
11. Conditions to the Purchaser's Obligation to Purchase. The Seller
understands that the Purchaser's obligation to purchase the Shares is
conditioned upon:
a. Acceptance by the Purchaser of a satisfactory Subscription
Agreement for the sale of the Shares;
b. Delivery of Shares of common stock with restrictive legend;
c. The Purchaser's determination, in its sole and absolute
discretion, to acquire the Shares pursuant to this Agreement.
12. Governing Law. This Agreement shall be governed by and interpreted in
accordance of the laws of the State of Delaware.
IN WITNESS WHEREOF, This Offshore Securities Subscription Agreement was
executed on the date first written below.
DATED AT ___________________, THIS ____ DAY OF MARCH, 2000
WINWARD OVERSEAS LIMITED
Per:
-----------------------------------------
(Authorized Signatory)
Title: President
Accepted this ____ day of March, 2000
DELTA CAPITAL TECHNOLOGIES, INC.
Per:
-----------------------------------------
Paul Davis, President
20
<PAGE> 1
EXHIBIT 4.4
Schedule of Subscribers Who Executed Offshore Securities Subscription Agreement
Evidenced in Exhibit 4.3
<TABLE>
<CAPTION>
Name Number of Common Shares Subscribed to
- ---- -------------------------------------
<S> <C>
Keith Lambert 37,500
Martin Lambert 25,000
Daryl H. Connolly 25,000
R. Gore 1,000
Winward Overseas Limited 200,000
</TABLE>
21
<PAGE> 1
EXHIBIT 4.5
Placement Agent Letter Agreement
March 1st, 2000
DELTA CAPITAL TECHNOLOGIES INC.
#255 - 999 8th Street SW
Calgary, T2R 1J5
ATTENTION: MR. PAUL DAVIS - PRESIDENT
Dear Paul:
Further to our meetings over the past few weeks, we understand that Delta
Capital Technologies Inc. (hereinafter referred to as "Delta Capital
Technologies" or the "Company") is desirous of receiving strategic advice
pursuant to its growth strategy. We further understand that Delta Capital
Technologies is looking to Traction Capital for said assistance.
The purpose of this letter is to confirm that you agree to appoint Traction
Capital and Traction Capital agrees to act as Delta Capital Technologies's
financial advisor to assist Delta Capital Technologies in the strategic analysis
of the options available to it regarding its growth strategy. The activity to be
undertaken will initially involve raising capital through an equity issue and
thereafter Traction Capital's advisory services pursuant to the development of a
strategic analysis regarding the Company's next equity issue and its approach
regarding potential mergers, acquisitions - corporate or asset, amalgamations or
some other as yet unidentified methodology). (the "CONTEMPLATED TRANSACTION").
By its acceptance of this letter, the Company hereby appoints Traction Capital,
and Traction Capital agrees to act as the financial advisor to the Company in
connection with a Contemplated Transaction on the terms and subject to the
conditions set forth below.
1. The engagement of Traction Capital shall be for a period of 6 months
commencing on March 1st, 2000, (from which date this letter agreement
shall be deemed to be effective), unless extended by mutual agreement of
the Company and Traction Capital or terminated earlier by Delta Capital
Technologies or Traction Capital upon giving 30 days written notice to
that effect to the other party; provided, however, that if this agreement
is terminated by Delta Capital Technologies, Traction Capital will be
entitled to the fees set forth in subparagraph 3 hereof in the event that
at any time prior to the expiration of 12 months after the termination or
expiry of this letter agreement any Contemplated Transaction that
Traction Capital has provided advisory services thereon, is consummated.
2. Traction Capital will provide the following financial advisory services
to the Company in connection with the Contemplated Transaction:
a. We will solicit prospective purchasers of securities in the
Company and will assist in the negotiation and sale of said
securities.
22
<PAGE> 2
b. We will familiarize ourselves to the extent we consider
appropriate and feasible with the current business, operations,
properties, financial condition and strategic opportunities
available to the Company;
c. We will strategically develop a proposal pursuant to the Company's
next equity issue.
d. We will strategically develop a proposal pursuant to the Company's
growth strategy via mergers and acquisitions.
e. We will make a presentation to the Board of the Company or
subcommittee therein regarding items c. and d. above,
f. We will provide such other services as the Company and Traction
Capital mutually agree are appropriate in the circumstances.
3. For Traction Capital's services hereunder, Delta Capital Technologies
agrees to pay Traction Capital a one-time marketing fee of $7,500 plus
$5,000 per month for three months thereafter. In addition, in respect of
the successful completion of the Contemplated Transaction, or any
transaction related thereto the Company agrees to pay a success fee of 8%
on the Aggregate Consideration received by the Company or its
shareholders in respect of the successful completion of the Contemplated
Transaction. Any or all fees due herein proposed will be payable upon
closing (in whole or in part) of the Contemplated Transaction.
4. Delta Capital Technologies would also be required to reimburse Traction
Capital for all reasonable out-of-pocket expenses incurred by Traction
Capital pursuant to its activities regarding a Contemplated Transaction.
Any travel expenses would be pre-approved by Delta Capital Technologies.
5. All or part of the amounts payable under paragraphs 3 and 4 hereof may be
subject to the federal Goods and Services Tax ("tax"). Where tax is
applicable, an additional amount equal to the amount of tax owing thereon
will be charged to the Company.
6. Delta Capital Technologies would, subject to confidentiality
considerations (which will be in Delta Capital Technologies's sole
discretion), arrange for Traction Capital to have such timely access to
the respective directors, officers, employees, independent auditors and
other consultants and corporate information of Delta Capital Technologies
as we may reasonably require or deem appropriate in carrying out our
engagement.
7. The Company hereby agrees to indemnify Traction Capital its officers
directors and employees and said Indemnity shall be in addition to and
not in substitution for, any liability which the Company or any other
party may have to us or other parties may have apart from such Indemnity.
8. We and each of our directors, officers, employees and agents will keep
strictly confidential and will use only for the purpose of performing our
obligations hereunder all information, whether written or oral, acquired
from the Company, its agents and advisors in connection with our work
hereunder except information that was made available to the public prior
to our engagement or
23
<PAGE> 3
that thereafter becomes available to the public other than through a
breach by us of our obligations hereunder.
If the foregoing is in accordance with your understanding, please indicate your
agreement to the above terms and conditions by signing the enclosed copy of this
letter and returning it to us.
Yours very truly,
TRACTION CAPITAL
By: /s/ Jeff Dunphy
--------------------------------------
Jeff Dunphy
The foregoing is in accordance with our understanding and is accepted and agreed
to by us this ( day of March, 2000)
Per: /s/ Paul Davis
--------------------------------------
Paul Davis - President
DELTA CAPITAL TECHNOLOGIES INC.
24
<PAGE> 1
EXHIBIT 10.11
Form of Employment Agreement
EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of the 1st day of January, 2000.
BETWEEN:
DELTA CAPITAL TECHNOLOGIES INC., a company subsisting under the
laws of Delaware with an office at Suite 255, 999 - 8th St. SW
Calgary, AB T2R 1J5 Canada.
(the "Company")
AND:
MIKE STEELE of 2351 Chicootimi Drive N.W., Calgary, Alberta
(the "Executive")
WHEREAS:
A. The Company trades on the NASD OTC Electronic Bulletin Board and is in
the business of developing e-Business software;
B. The Executive is a shareholder of The Matridigm Corporation and has
experience in providing marketing, communications and advertising
services;
C. The Company is proposing to acquire The Matridigm Corporation and wishes
to enter into an employment agreement with the Executive;
D. For their mutual benefit, and with the approval of the Company's Board of
Directors, the parties have agreed to set out all of the terms and
conditions of their employment relationship in this employment agreement
(the "Agreement").
IN CONSIDERATION FOR the premises, and the mutual covenants and
agreements herein contained, the Company and the Executive have agreed that the
terms and conditions of their employment relationship shall be as follows:
1. EMPLOYMENT AND DUTIES
1.1 The Executive's responsibilities and duties shall include those items
outlined in the Position Profile attached as Schedule "A" to this
Agreement, and such other duties and responsibilities as may reasonably
be assigned to him/her from time to time by the Company's Chief Executive
Officer (or other senior officer of the Company acting in such capacity).
The Executive represents and warrants to the Company that he/she has the
required skills and experience to perform the duties and discharge the
responsibilities described in Schedule "A". The Executive shall
faithfully and diligently perform the duties and discharge the
responsibilities assigned to him/her, devoting his/her best efforts and
full business time to the business and interests of the Company.
25
<PAGE> 2
1.2 While employed under this Agreement, the Executive shall not be involved,
directly, and whether as principal, partner, agent, shareholder, officer,
advisor, employee or in any other manner whatsoever, in any other
business, enterprise or undertaking in direct competition with the
Company, other than managing his/her personal investments and finances
and participating in charitable activities which do not detract from the
Executive fulfilling his/her responsibilities and duties to the Company.
1.3 All policies regarding employment, required behaviour and similar matters
(collectively referred to as "Company Policies") published by the Company
or delivered to the Executive prior to or following this Agreement are
incorporated within this Agreement as though fully set forth in this
Agreement. The Executive agrees to be bound by and adhere to all such
Company Policies as presently exist or as may be hereafter issued or
modified by the Company. Without limiting the foregoing, the Executive
agrees to conduct business on behalf of the Company in a manner
consistent with proper and ethical business practices and consistent with
the best interests of the Company.
2. TERM OF EMPLOYMENT
2.1 The Executive's employment under this Agreement, notwithstanding the date
of this Agreement, shall be deemed to have commenced on January 1, 2000,
and continue for a minimum of five (5) years from that date or until
terminated pursuant to the provisions set out in Article 5 of this
Agreement.
3. COMPENSATION
3.1 For the services rendered by the Executive under this Agreement, the
Company shall pay the Executive, less required statutory deductions, a
base annual salary ("Base Salary"): and an annual incentive bonus in the
form of cash and/or stock options ("Incentive Bonus"), a discretionary
annual bonus dependent on the Company's financial performance ("Profit
Bonus"), all as set out in Schedule "B" attached to this Agreement (all
elements of compensation hereafter collectively described as "Total
Compensation"). Although the Company will be responsible for the payment
of the Total Compensation, the Company may, for administrative purposes,
have The Matridigm Corporation pay the Total Compensation.
3.2 The Company has agreed, subject to the approval of the Company's Board of
Directors, to grant the Executive options to purchase the Company's
capital shares in those amounts and on those terms and conditions set out
in Schedule "B".
3.3 The Executive shall be entitled to such employee benefits generally
provided from time to time to full-time salaried employees of the Company
or its subsidiaries, which will include coverage under the provincial
Medical Services Plan (100% of the premium paid by the Company) and
participation in a health and welfare group benefit insurance plan (the
"Group Plan") providing Extended Medical, Dental, Vision, Pharmaceutical,
Accidental Death & Dismemberment, Life Insurance, Short Term Disability
and Long Term Disability coverages. It is understood and agreed that the
extent to which the Company may supply and pay the premiums for such
employee benefits are matters solely within the Company's discretion and
may be changed from time to time as the Company, in its absolute
discretion, may decide.
26
<PAGE> 3
3.4 The Executive agrees and acknowledges that it is a bona fide occupational
qualification of his/her position with the Company that travel may be
required. The Company shall pay or reimburse the Executive for all
reasonable travel and entertainment expenses incurred by the Executive in
connection with the performance of his/her duties, subject to the
approval of the Company. The Executive shall only be entitled to
reimbursement to the extent that the Executive follows the reasonable
procedures established by the Company for reimbursement of such expenses
which will include, but will not necessarily be limited to, providing
satisfactory evidence of such expenditures. The Executive expressly
agrees that said expenses are incurred as part of the Executive's work
for the Company and are not compensation as set forth in paragraphs 3.1,
3.2 and 3.3.
4. VACATION
4.1 The Executive shall receive an annual paid vacation of four weeks. Such
vacation entitlement will accrue to the Executive at the start of each
fiscal year and shall be pro-rated in the years in which the Executive's
employment pursuant to this Agreement begins and terminates. The
Executive's vacation will be scheduled in consultation with the Company
so that it will synchronize with the overall staffing needs of the
Company.
5. TERMINATION
5.1 The Company may terminate the Executive's employment at any time without
notice, pay in lieu of notice or severance compensation of any kind, with
the written consent of the Executive or if the Company has just cause for
termination. It is agreed that just cause includes any material and
intentional breach by the Executive of the terms of this Agreement, any
conviction for a criminal or penal offence, and any conduct which
constitutes just cause for summary dismissal under the law.
5.2 In the absence of written consent, just cause, or a Change in Control of
the Company (as hereafter defined), subsequent to January 1, 2000 the
Company may terminate the Executive's employment by:
(a) giving the Executive twelve (12) months written notice of
termination of employment, and:
(i) paying to the Executive all of his Base Salary, Incentive
Bonus, Profit Bonus and Stock Options due to the Executive
during the twelve (12) month period following notice by the
Company;
or, in the alternative,
(b) by immediately terminating the Executive's employment and paying
the Executive (less any required statutory deductions) any Base
Salary, Incentive Bonus, Profit Bonus, Stock Options and unused
vacation pay accrued to the date of the termination in lieu of
notice and:
(i) paying the Executive (less any required statutory
deduction) any Base Salary, Incentive Bonus, Profit Bonus,
Stock Options and vacation pay due to the Executive during
the twelve (12) month period following termination by the
Company.
27
<PAGE> 4
5.3 If and when the Company elects to terminate the Executive's employment
pursuant to paragraph 5.2 of this Agreement, the Executive will accept,
on the date given, the working notice, if any, and payment of the Base
Salary, Incentive Bonus, Profit Bonus, Stock Options and, unused vacation
pay, if any, therein described in full and final satisfaction and accord
of any and all claims which the Executive has or may have for
compensation resulting from, arising out of or connected with the
termination of this Agreement and his/her employment with the Company, it
being understood and agreed that payment of the said monies will serve to
release and forever discharge the Company, its officers, directors,
predecessors, successors and assigns from any and all manner of claims,
complaints, actions, causes of action, damages, costs and expenses which
the Executive then has or may have at common law, in equity or under
statute.
5.4 This Agreement and the employment of the Executive by the Company shall
terminate upon the death of the Executive, upon the Executive becoming
disabled (as defined below) or upon the Executive reaching the age of 65
years. For the purposes of this agreement, "Disabled" shall mean that the
Executive shall have qualified for and be receiving benefits under the
Company's long-term disability insurance plan or, if there is no such
plan in place, that the Executive shall have qualified for and be
receiving disability benefits under the Canada Employment Insurance Act
and/or the Canada Pension Plan. In the event of the termination of the
Executive's employment and this Agreement due to the Executive's death,
the Company will not be required or liable to pay the Executive, his/her
estate or any benefit plan insurer any compensation beyond the Base
Salary, Incentive Bonus, Profit Bonus, unused vacation pay, and Group
Plan premiums accrued due and owing under this Agreement as at the date
of death, provided however, that the Company will be obliged to honour
any share options set out in Article 3 of this Agreement which are
exercised by the executors, administrators or representatives of the
estate of the Executive within 120 days of the Executive's death.
5.5 The Executive may terminate this Agreement and his/her employment with
the Company for Good Reason. For the purposes of this Agreement, "Good
Reason" means termination by the Executive after:
(a) a material breach of the provisions of this Agreement by the
Company;
(b) a material adverse change in the Executive's reporting
relationships, duties or scope of responsibilities;
(c) failure of the Company to re-appoint Executive to an office or to
a more senior office;
(d) failure of the Company's members to elect or re-elect the
Executive to the Board of Directors;
(e) failure of the Company, by act, omission, amendment to the
instruments governing its organization and operation or otherwise,
to vest in the Executive and maintain the position, duties and
responsibilities contemplated by this Agreement;
(f) failure by the Company to pay any portion of the compensation
payable to the Executive under this Agreement; or
(g) a Change in Control (as defined below)of the Company, where either
the Executive is unilaterally assigned duties or responsibilities
materially inconsistent with, or diminished from, the Executive's
duties and responsibilities with the company immediately prior to
the Change in Control, or the Executive's status, duties,
28
<PAGE> 5
responsibilities, titles or offices with the Company are
materially diminished from those in effect immediately prior to
the Change of Control, as determined in the good faith opinion of
the Executive,
provided however, Good Reason shall exist with respect to a matter
described above that is capable of being corrected by the Company only if
such matter is not corrected by the Company within a reasonable period of
time following the Company's receipt of written notice of such matter
from the Executive, and in no event shall a termination by the Executive
occurring more than 60 days following any such written notice be for Good
Reason.
5.6 This Agreement and the Executive's employment hereunder may also
terminate as a result of the occurrence of a Qualifying Event (as defined
below) during the period between 90 days prior to an announcement of and
one-year after a Change in Control. For the purposes of this Agreement,
either of the following shall constitute a "Qualifying Event":
(a) the express termination of the Executive's employment by the
Company without just cause; or
(b) a constructive dismissal of the Executive whereby the Company
unilaterally and materially changes a material term or condition
of the Executive's contract of service other than as expressly
permitted under this Agreement, provided, however, that with
respect to a change described herein that is capable of being
corrected by the Company, it shall only constitute a Qualifying
Event if it is not corrected by the Company within a reasonable
period of time following the Company's receipt of written notice
of non-acceptance of such change from the Executive, which said
notice of non-acceptance will only be effective if received by the
Company within 60 days of the change.
5.7 For the purposes of this Agreement, a "Change in Control" shall be deemed
to have occurred when:
(a) a person (meaning an individual, a partnership, or other group or
association as defined in the Canada Business Corporations Act)
alone or with its affiliates, associates or persons with whom such
person is acting jointly or in concert, acquires beneficial
ownership of more than 50% of the total voting rights attached to
all classes of shares then outstanding of the Company having under
all circumstances the right to vote on any resolution concerning
the election of directors;
(b) the Company's shareholders approve an agreement to merge or
consolidate, or otherwise reorganize, with or into one or more
entities, as a result of which less than 50% of the total voting
rights attached to all classes of shares of the surviving or
resulting entity are, or are to be, owned by the former
shareholders of the Company; or
(c) the shareholders or the directors of the Company approve the sale
of 50% or more of the Company's business and/or assets.
5.8 If and when the Executive terminates his/her employment with the Company
for Good Reason pursuant to paragraph 5.5 of this Agreement, or upon the
occurrence of a Qualifying Event pursuant to paragraph 5.6 of this
Agreement, the Company shall pay the Executive (less any required
statutory deductions) any Base Salary, Incentive Bonus, Profit Bonus,
Stock Options and pro-rated vacation pay accrued due to the date of such
termination and which would otherwise have been owing for a period of
twenty (20) months thereafter provided, however, that if such termination
takes place prior to January 1, 2000 the payment to the Executive will
29
<PAGE> 6
include the Stock Options that would otherwise have accrued to the
Executive during the twenty month period following January 1, 2000.
5.9 If and when the Executive elects to terminate his employment pursuant to
paragraph 5.6 of this Agreement, or upon the occurrence of a Qualifying
Event pursuant to paragraph 5.7, and the Company pays the Executive the
monies proscribed in paragraph 5.8 of this Agreement, the Executive will
accept payment of the monies on the date of payment by the Company in
full and final satisfaction and accord of any and all claims which the
Executive has or may have for compensation resulting from, arising out of
or connected with the termination of this Agreement and his/her
employment with the Company, it being understood and agreed that payment
of the said monies will serve to release and forever discharge the
Company, its officers, directors, predecessors, successors and assigns
from any and all manner of claims, complaints, actions, causes of action,
damages, costs and expenses which the Executive then has or may have at
common law, in equity or under statute.
5.10 The Executive may terminate his/her employment other than for Good Reason
by giving the Company three month's written notice of termination. In
such event, the Company will not be required or liable to pay the
Executive or any benefit plan insurer any compensation or benefit
premiums beyond those which are accrued due and owing under this
Agreement as at the effective date of termination.
5.11 The Executive agrees that all materials, files, documents and data
pertaining to the business carried on by the Company (the "Materials"),
shall remain the property of the Company. Such Materials include not only
paper, but all data stored on electromagnetic or optical disks,
diskettes, tapes or other media accessible through the use of a computer.
Upon termination of the Executive's employment, all such Materials in the
possession of the Executive shall promptly be delivered up to the
Company, and no samples, photostatic copy, duplication or reproduction of
such Materials shall be made or taken by the Executive without the
express written consent of the Company.
6. NON-DISCLOSURE AND CONFIDENTIALITY
6.1 In this Article:
(a) "Confidential Information" means all information, data, facts,
knowledge, plans, feasibility studies, approvals, business
projections, trade secrets and know-how (whether or not reduced to
writing or stored in electronic form) in any way concerning or
relating to the business of the Company which is not in the public
domain and which in any way has been or may be communicated to the
Executive by the Company under this Agreement or is acquired by,
or learned of by the Executive Confidant, either directly or
indirectly, from the Company.
(b) "Confidant Group" means directors, officers, employees, agents and
advisors of the Company and its affiliates and their respective
directors, officers, employees, agents and advisors;
(c) "Person" shall be interpreted broadly to mean any corporate
entity, association, proprietorship, group, joint venture,
partnership or individual.
6.2 The Executive acknowledges that the Confidential Information is and will
remain the sole and exclusive property of the Company and agrees that
he/she will at all times keep all Confidential
30
<PAGE> 7
Information in the strictest confidence, will hold all Confidential
Information in trust for the Company; and will not at any time directly,
indirectly or in any other manner:
(a) reproduce, exploit or disclose the Confidential Information, in
whole or in part, to or for any Person;
(b) publish, or in any way participate or assist in the publishing of,
any Confidential Information; or
(c) utilize any Confidential Information, except as provided below in
Article 6.4 of this Agreement.
6.3 The Executive will take all steps available and will use its best efforts
to ensure that each member of the Confidant Group will keep the
Confidential Information in strictest confidence and that no member of
the Confidant Group will reproduce, exploit or disclose the Confidential
Information, in whole or in part, to or for any Person.
6.4 If the Company requests the return of any Confidential Information, the
Executive will immediately:
(a) return all Confidential Information to the Company and will not
retain any reproductions or extracts of the Confidential
Information for any purpose; and
(b) destroy all documents, memoranda, notes and records prepared by
the Executive based on or arising from the Confidential
Information and certify such destruction to the Company in a form
reasonably satisfactory to the Company.
6.5 The Executive may disclose Confidential Information only in the following
limited circumstances:
(a) to a Person who has entered into a non-disclosure and
confidentiality agreement with the Company in substantially the
same form as this Agreement;
(b) to a member of the Confidant Group who is directly involved and
needs to know the contents of the Confidential Information in
order to analyze and evaluate the Company's business, who has been
provided with a copy of this Agreement by the Executive and who
has acknowledged in writing that he/she is bound by the terms of
the Agreement;
(c) if required by law to disclose Confidential Information, in which
case the Executive will first seek agreement with the Company on
the form of the disclosure prior to its being made; or
(d) with the prior written permission of the Company.
6.6 Notwithstanding anything to the contrary, the provisions of this
Agreement shall not apply to the following Confidential Information:
(a) Confidential Information which at the time of disclosure is
already in the public domain;
(b) Confidential Information which, after disclosure, is published or
otherwise becomes part of the public domain through no fault of
the Executive;
31
<PAGE> 8
(c) Confidential Information which was already in the Executive's
possession at the time of disclosure and was not acquired,
directly or indirectly, from the Company; or
(d) Confidential Information which the Executive received from a third
person who did not acquire it, directly or indirectly, from the
Company and who did not require the Executive to hold it in
confidence.
6.7 The Executive:
(a) acknowledges that the success, profitability and competitive
position of the Company requires that strict confidentiality be
maintained at all times with respect to all Confidential
Information, and that any breach of such confidentiality is
capable of causing substantial damage to the Company;
(b) acknowledges and agrees that a breach by him/her of any of the
covenants contained in the above paragraphs 6.2, 6.3, 6.4 or 6.5
of this Agreement would result in irreparable harm to the business
carried on by the Company, such that the Company could not be
adequately compensated for such harm by an award of damages.
Accordingly, the Executive agrees that in the event of any such
breach, in addition to all other remedies available to the Company
at law or in equity, the Company shall be entitled as a matter of
right to obtain from a Court of competent jurisdiction such relief
by way of restraining order, injunction, decree or otherwise as
may be appropriate to ensure compliance with the provisions of
paragraphs 6.2, 6.3, 6.4 and 6.5 of this Agreement.
6.8 The covenants contained in this Article 6 of this Agreement shall remain
in full force and effect, together with the Company's right to enforce
such covenants and recover damages in the event of a breach of any such
covenants, notwithstanding the termination of the Executive's employment
with the Company.
7. RESTRICTIVE COVENANTS
7.1 The Executive agrees that following termination of this Agreement, for a
period of twelve (12) months, within a geographic radius of 100
kilometers from any business office that the Company operates from time
to time, or any business office that the Company reasonably intends to or
may operate, the Executive will not individually or in partnership or in
conjunction with any person, association, syndicate, partnership, firm,
company, corporation or other business enterprise, whether as principal,
partner, agent, shareholder, officer, advisor, employee or in any other
manner whatsoever:
(a) except for the benefit of the Company or its subsidiaries or its
affiliates, solicit any clients or customers of the Company or its
subsidiaries with whom he/she has dealt in the course of being
engaged in the business of the Company or its subsidiaries;
(b) solicit or intend to solicit, interfere with or endeavour to
procure, recruit, entice or advise the Company's employees away
from the Company for any reason, including, but not limited to,
other employment opportunities existing or contemplated and within
the knowledge of the Executive.
7.2 The Executive acknowledges that he/she has extensive knowledge of all the
services and products proposed or to be provided by, and the present
customers and clients of, the Company and its subsidiaries and therefore
fully understands and accepts the scope of the restraints on
32
<PAGE> 9
his/her activities set out above as being necessary, reasonable and
fundamental to the protection of the competitive advantage of the Company
in its business, its trade secrets, confidential information and
goodwill, while at the same time do not place undue restrictions on
his/her ability to utilize at the conclusion of his/her employment, the
knowledge and skills gained by him/her while employed by the Company.
7.3 The Executive acknowledges and agrees that a breach by him/her of any of
the covenants contained in paragraphs 7.1 or 7.2 of this Agreement would
result in irreparable harm to the business carried on by the Company,
such that the Company could not be adequately compensated for such harm
by an award of damages. Accordingly, the Executive agrees that in the
event of any such breach, in addition to all other remedies available to
the Company at law or in equity, the Company shall be entitled as a
matter of right to obtain from a Court of competent jurisdiction such
relief by way of restraining order, injunction, decree or otherwise as
may be appropriate to ensure compliance with the provisions of paragraphs
7.1 and 7.2 of this Agreement.
7.4 The Company and the Executive acknowledge that the covenants made in
section 7.1 of this Agreement are made in recognition of the Executive's
specific knowledge of the Company's business and of the fact that the
Company intends to carry on its business throughout the geographic area
specified therein. If any of such covenants shall be held to be
unreasonable by a Court of competent jurisdiction by reason of the area,
duration or type or scope of service, then said covenant shall be given
effect in such reduced form as may be decided or directed by such Court.
Notwithstanding the foregoing, if any portion of such covenant should be
declared to be unenforceable or invalid for any reason whatsoever, such
declaration shall be severable from this Agreement and shall not affect
the enforceability or validity of the remaining portions of such
covenant.
8. ENTIRE AGREEMENT
8.1 The terms of this Agreement may be amended or supplemented by those terms
as may be set out in Schedule B. To the extent that there is an
inconsistency between this Agreement and Schedule B, the terms and
conditions contained in Schedule B shall prevail.
8.2 This Agreement, and any policies and Schedules, referred to herein
constitute the complete and entire agreement between the Executive and
the Company concerning the employment of the Executive and, as of the
date this Agreement is executed, replace and supersede any and all prior
agreements, written or oral, between the Executive and the Company or any
of its predecessors or affiliates relating thereto. Except as
specifically set forth in this Agreement, neither party makes any
representation or warranty, express or implied, statutory or otherwise,
to the other.
8.3 The Executive hereby agrees that all restrictions contained in this
Agreement are reasonable and valid and hereby expressly waives any and
all defences to their strict enforcement by the Company.
8.4 No waiver or modification of this Agreement or any covenant, condition or
restriction herein contained shall be valid unless executed in writing by
both the Company and the Executive.
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<PAGE> 10
9. CONSIDERATION
9.1 The parties acknowledge and agree that this Agreement has been executed
by each of them in consideration of the mutual promises and covenants
herein contained, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged.
9.2 The parties hereby waive any and all defences relating to an alleged
failure or lack of consideration in connection with this Agreement.
9.3 In the event that this Agreement provides a lesser benefit to the
Executive than the minimum standard contained in any applicable
provincial legislation, the minimum standard contained in the legislation
shall prevail to the extent of such inconsistency.
10. NOTICE
10.1 Any notice required to be given under this Agreement shall be
sufficiently given if delivered by hand or sent by registered mail to the
Executive at: 2351 Chicoutimi Drive N.W., Calgary, Alberta and to the
Company at: Suite 255, 999 - 8th Street S.W., Calgary, Alberta.
11. SEVERABILITY
11.1 All paragraphs and covenants contained in this Agreement are severable,
and in the event that any of them shall be held to be invalid,
unenforceable or void by a court or tribunal of competent jurisdiction,
such paragraphs or covenants shall be severed and the remainder of this
Agreement shall remain in full force and effect.
12. INTERPRETATION
12.1 Headings are included in this Agreement for convenience of reference only
and do not form part of this Agreement.
13. GOVERNING LAW
13.1 This Agreement shall be governed by the laws of Alberta and the federal
laws of Canada applicable therein.
14. ENUREMENT
14.1 The provisions of this Agreement shall be binding upon the Executive,
his/her heirs, executors, administrators, successors and assigns, and
shall enure to the benefit of the Company, its successors and assigns.
15. ASSIGNMENT
15.1 This Agreement may not be assigned by either party.
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<PAGE> 11
16. INDEPENDENT LEGAL ADVICE
16.1 By the execution of this Agreement, the Executive acknowledges that
he/she has received independent legal advice with regard to all of the
terms and conditions set forth herein. Should the Executive waive
independent legal advice, he/she acknowledges that the Executive does so
of his/her own free will, free of any duress, unconscionability, or such
other factor as may be applicable. If the Executive waives independent
legal advice, the Executive acknowledges same by affixing his/her
initials next to this clause.
IN WITNESS WHEREOF this Agreement has been executed by the parties at
_________________, __________________, as of the day, month and year first above
written.
- ------------------------------------------- )
Witness Signature ) ---------------------
) MICHAEL STEELE
- ------------------------------------------- )
Witness Address )
)
- ------------------------------------------- )
)
)
- ------------------------------------------- )
Occupation )
DELTA CAPITAL TECHNOLOGIES INC.
Per:
---------------------------------
AUTHORIZED SIGNATORY
35
<PAGE> 12
SCHEDULE "A"
JOB DESCRIPTION
DELTA CAPITAL TECHNOLOGIES, INC.
SENIOR VP MARKETING & DEVELOPMENT
(02/14/00)
- --------------------------------------------------------------------------------
1. NATURE OF WORK - OVERVIEW
The Senior Vice President, Marketing & Development (The Marketing &
Development VP), will join Delta Capital Technologies Board of Directors
and Executive Management Committee in order to provide broad access to
information, resources and decision making to assist in performance of his
duties. The Marketing & Development VP will be responsible for Delta's
overall marketing and the development as well as strengthening of current
and future business units as described below.
2. NATURE OF THE WORK - DELTA MARKETING
The Senior Vice President, Marketing & Development, reporting to the
President & CEO, will develop the firm's detailed marketing strategy.
Leading a marketing team, he will determine the demand for products and
services offered by Delta, undertake comparative competitive analysis and
identify potential consumers
The Marketing & Development VP is responsible for developing pricing
strategy with an eye towards maximizing Delta's revenues and share of
market and, ultimately according to the company's business plan, its
profits while ensuring that the Delta's customers are satisfied. In
collaboration with Delta's management, The Marketing & Development VP
shall monitor trends that indicate the need for new products and services
and make recommendations to senior management with respect to product
development. The Marketing & Development VP work shall work with in-house
advertising and promotion personnel and outside consultants to best
promote Delta's products and services and to attract potential users.
The Marketing & Development VP shall institute an appropriate sales
strategy and hire a sales team (s) in consultation with Delta senior
management. He will oversee the assignment of sales territories and goals
and establish training programs for sales representatives. He will advise
sales representatives on ways to improve their sales performance. He will
oversee regional sales teams and their staff, and deploy to the company's
regional expansion plans.
The Marketing & Development VP shall serve as a key liaison person between
Delta's management and Delta's advertising & promotion agency, Matridigm
Corporation, to which many advertising and promotional functions may be
contracted out. He shall also work with inside staff and outside
contractors in the development and execution of promotional strategies and
programs.
The Marketing & Development VP will work with Delta's senior management in
development and execution of public relations programs directed toward
Delta's general marketplace audiences and its investors and investor
targets.
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<PAGE> 13
3. NATURE OF WORK - BUSINESS UNIT DEVELOPMENT
Delta contemplates the formation of new business units and the
strengthening of existing business units through mergers, acquisitions and
growth. The Marketing & Development VP shall play a vital role in
determining the Company's strategic approach to business unit development
and in the execution of approved strategies.
a. APPLICATION SERVICE PROVIDER - The Marketing & Development
VP will assume the lead role in the development of Delta's
Application Service Provider (ASP) business. He will, in
conjunction with senior management, oversee development of
the ASP business plan and, also in conjunction with senior
management, oversee the general staffing and other
requirements of this as yet undefined Delta business unit.
When the unit has been developed, it shall report to the VP
Marketing. In the alternative, Delta may develop this
business unit by way of acquisition. The Marketing &
Development VP- as a key member of Delta's management team
- will take the lead role in the identification of ASP
acquisition opportunities and their place within Delta's
corporate structure. The Marketing & Development VP's job
description will be adjusted as the form and nature of the
ASP business unit is defined.
b. MATRIDIGM CORPORATION - The Marketing & Development VP will
work with Delta's senior management and the management of
Delta's Matridigm Corporation subsidiary in the continued
development of that business unit's mainline advertising
and promotional activities. He shall liaise with Matridigm
Corporation as previously described in the "Nature of Work
- Delta Marketing" section above. The Marketing &
Development VP shall also work with Delta senior management
and Matridigm's management in the introduction of digital
services to the unit, including but not limited to, a
variety of Internet-enabled technologies and integration
services.
37
<PAGE> 14
SCHEDULE "B"
COMPENSATION
<TABLE>
<S> <C>
Base Salary: $84,000
Annual Salary Increase: Years 1-2 - Inflation +3%
Years 3-5 (If applicable) - Inflation +5%
Profit Bonus (Annually): One share of the executive bonus pool as set forth by the
Chairman of the Board of Directors of Delta Capital at his
sole discretion and based on the overall performance of the company.
Incentive Bonus (Annually): The executive will receive a 20% of base salary bonus based on the
company's success in meeting its revenue and EBITDA objectives as
defined in the business plan. In addition, the executive will
receive the following performance incentives:
1. Additional 5% of base salary for exceeding revenue projections by 5%
2. Additional 10% of base salary for exceeding revenue projections by 10%
3. 100,000 bonus stock options at the $2 strike price for fiscal year 2000 upon
meeting the company's revenue objectives, vested at year-end.
4. 100,000 bonus stock options at the $2 strike price for launching the
"applications service provider" business as per the business plan*,
vested at year-end.
* The applications service provider (ASP) is defined as commercial ready and
deployed to plan when the company has met its ASP revenue objectives, acquired
or built a network and operations center, and deployed sales and marketing personnel.
Bonus stock options beyond fiscal year 2000 will be based on organizational
goals and objectives established from time-to-time by the Chairman of the Board.
Warrants: As detailed in the Exchange Agreement.
</TABLE>
38
<PAGE> 15
SCHEDULE "C"
39
<PAGE> 1
EXHIBIT 10.12
Schedule of Directors and Employees Who Executed Form of Employment Agreement
Evidenced in Exhibit 10.11
Michael Steele
Cecilia Lanz
Robert Sweetman
40
<PAGE> 1
EXHIBIT 10.13
DEBT SETTLEMENT AGREEMENT
THIS AGREEMENT is made as of the 14th day of April, 2000.
BETWEEN:
DELTA CAPITAL TECHNOLOGIES INC., a Delaware company having an
office at Suite 255 - 999 - 8th Street South West, Calgary,
Alberta, T2R 1J5
(the "Company")
OF THE FIRST PART
AND:
BONANZA MGMT LTD., a British Columbia company, with an address of
PO Box 48792 Bentall, Vancouver, British Columbia V2X 1A6
(the "Creditor")
OF THE SECOND PART
WHEREAS:
A. The Company is indebted to the Creditor in the amount of US$410,261.64
(the "Debt");
B. The Company has agreed to issued to the Creditor 136,754
(US$410,261.64/US$3.00 per share) common shares (the "Shares") in total
satisfaction of the Debt; and
C. The Creditor has agreed to accept the Shares from the Company in total
satisfaction of the Debt.
THEREFORE, in consideration of the premises and the mutual covenants and
agreements set forth in this Agreement, the parties agree as follows:
1.00 Debt Settlement
1.01 The Company will pay and satisfy the Debt by issuing the Shares to the
Creditor at a deemed price of US$3.00 per share for an aggregate amount equal
to the Debt payable on April 18, 2000.
1.02 The Creditor acknowledges and agrees that all outstanding accounts have
been rendered by the Creditor to the Company to the date of this Agreement and
upon issuance of the Shares to the Creditor there will be no outstanding
liability of the Company to the Creditor.
2.00 Headings
2.01 The headings and section references in this Agreement are for convenience
of reference only and do not form a part of this Agreement and are not intended
to interpret, define or limit the scope, extent or intent of this Agreement or
any provision thereof.
41
<PAGE> 2
3.00 Governing Law
3.01 This Agreement and all matters arising hereunder shall be governed by,
construed and enforced in accordance with the laws of the State of Delaware and
all disputes arising under this Agreement shall be referred to, and the parties
attorn to the jurisdiction of, the courts of appropriate jurisdiction in the
State of Delaware.
4.00 Enurement
4.01 This Agreement shall enure to the benefit of and be binding upon the
parties hereto and their respective successors and permitted assigns.
5.00 Carrying Out Agreement
5.01 Each of the parties hereto hereby covenants and agrees to execute such
further and other documents and instruments and do such other things as may be
necessary to implement and carry out the intent of this Agreement.
6.00 Assignment
6.01 This Agreement shall not be assignable by the Creditor without the
written consent of the Company.
7.00 Counterparts
7.01 This Agreement, or any amendment to it, may be executed in counterparts,
each of which will be deemed an original agreement and all of which will
together constitute one agreement.
8.00 Amendment
8.01 Except as herein otherwise provided, no subsequent alteration, amendment,
change or addition to this Agreement shall be binding upon the parties hereto
unless reduced to writing and signed by the parties.
42
<PAGE> 3
IN WITNESS WHEREOF the parties hereto have executed this Agreement as of
the day and year first above written.
DELTA CAPITAL TECHNOLOGIES, INC.
Per:
/s/ Michael E. Horsey
----------------------------------------
Michael E. Horsey, Chairman of the Board
BONANZA MGMT LTD.
Per:
/s/ Terry Butchart
----------------------------------------
Terry Butchart, President
43
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 2000.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 328,928
<SECURITIES> 0
<RECEIVABLES> 432,388
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 761,316
<PP&E> 35,377
<DEPRECIATION> 4,322
<TOTAL-ASSETS> 3,746,452
<CURRENT-LIABILITIES> 561,266
<BONDS> 0
0
0
<COMMON> 14,588
<OTHER-SE> 3,170,598
<TOTAL-LIABILITY-AND-EQUITY> 3,746,452
<SALES> 163,759
<TOTAL-REVENUES> 163,759
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> (366,027)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (8,700)
<INCOME-PRETAX> (202,268)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (202,268)
<EPS-BASIC> (0.01)
<EPS-DILUTED> 0
</TABLE>
