U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-SB
General form for registration of securities of small business issuers
Under Section 12 (b) or (g) of the Securities Exchange Act of 1934
Elgrande.com Inc.
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(Name of Small Business Issuer in its charter)
Nevada
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(State or other jurisdiction of incorporation or organization)
88-0409024
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(I.R.S. Employer Identification No.)
Suite 308, 1040 Hamilton St., Vancouver, B.C., Canada V6B2R9
------------------------------------------------------------
(Address of principal executive offices)
604 689 0808
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(Issuer's Telephone No.)
Securities to be Registered under Section 12(b) of the Act: None
Securities to be Registered under Section 12(g) of the Act:
Common Stock
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(Title of Class)
Total Number of Pages: 70
Index to Exhibits Appears on Page 30
<PAGE>
Except for the historical information contained herein, the matters set
forth in this registration statement are forward looking statements within
the meaning of the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995. These forward looking statements are
subject to risk and uncertainties that may cause actual results to differ
materially. These forward looking statements speak only as of the date
hereof and the Company disclaims any intent or obligation to update these
forward looking statements.
Item 1. Description of Business
(a) Business Development
Elgrande.com Inc., (the Registrant) was incorporated in April, 1998
under the laws of the State of Nevada.
(b) Narrative Description of Business
The Company intends to develop and market an Internet application that
enables consumers to locate and purchase goods sold directly by
manufacturers and producers, without the increased cost of intermediate
handling by distributors and retailers. For the manufacturers or producers
involved, the site will provide a sales outlet for their goods that will
ultimately generate a higher profit margin, compared to sales conducted
through traditional distribution and wholesale organizations. Elgrande.com
believes it can establish an economic model that will be superior to
traditional marketing models involving inventory and margins on sales by
providing a transaction service that eliminates much of the traditional
cost of sales for the producer, while eliminating large mark-ups for the
consumer.
As of December 1, 1998, twenty eight companies with approximately 650,000
titles have agreed to participate in the Elgrande.com System.
The company will offer the merchandise of publishers on its world wide web
site by generating descriptive web pages featuring each participating
publishers' inventory. The company creates the initial database for each
publisher's web page, and provides a means for the publishers to readily
maintain the inventory database. The prices displayed on the Elgrande site
will be comprised of the publishers wholesale price plus a US$1.50 flat
rate fee per item for Elgrande. The purchaser shall also pay a percentage
based surcharge based upon the payment method, as well as delivery charges.
For example, a client who purchases a book will see a listed price of
$11.50, which consists of the $10.00 price plus the $1.50 Elgrande fee.
Then if the purchaser pays with Visa, and opts for overnight delivery via
FedEx, then he will incur the additional charges use of his Visa card, the
cost of processing the credit card transaction, and the cost of delivery.
The site will initially focus on the sale and marketing of merchandise,
such as books, software, audio and video CDs, tapes, and computer games, as
this is the type of merchandise which has had the greatest level of sales
success on the Internet to date. Elgrande.com will continuously add new
products to its cataloging system as consumer confidence in Internet
commerce and security grows. The objective is to create an Internet portal
site that functions as a search engine, but differs in that all of the
material returned to users comprises merchandise that can be purchased
immediately from the publisher/manufacturer of the merchandise. A portal
site is an Internet site that functions as a starting point for world wide
web sessions.
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It is believed by Elgrande.com management that a search engine geared
exclusively toward retail merchandise is at this time non-existent and in
high demand. Elgrande.com filed U.S. and Canadian trademarks for the name
"SHOPENGINE" and "ELGRANDE.COM".
Consumer support for this service is high, (See Table 1.1) as Internet
shopping is increasing each year and is expected to continue to do so well
into the next century. As consumer confidence in Internet transaction
technologies increases, the Internet is expected to become the de facto
research tool for locating the cheapest source of everyday goods.
Elgrande.com intends to capitalize on this explosion as it has the team and
the technology in place to successfully create, deploy, and market the
first Internet application to provide direct purchasing at wholesale prices
to consumers, while eliminating many of the marketing costs of goods-
producing companies.
TABLE 1.1
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WEB COMMERCE
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1996 $2.6 billion
2002 $220 billion
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WEB USERS
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1996 28 million
2002 175 million
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(Source: Ziff Davis)
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According to quarterly reports, Internet sales have increased 31% during
the last quarter of this year, a result of boosted consumer confidence in
the interactive media marketplace. The "Earth's Biggest Bookstore,"
Amazon.com, grew the most with a 35% jump in revenue from $27.8 million in
the last quarter to $37.9 million this quarter. E*Trade, an online
brokerage, was up from last quarter by 31% as revenue went from $37 million
to $48.5 million, with 60% of all revenue produced over the Internet.
Companies such as Insight and CUC International were also up in Internet
sales profits this quarter. An Internet Shopping report issued by Binary
Compass Enterprises shows consumer confidence to be up from 26% to 33% and
average expenditures online have increased from $162 to $192. The report
also found that in considering online purchases, consumers are attracted to
the ease, efficiency and availability of Internet sales rather than lower
prices. (Source: Nua Internet Surveys)
Elgrande.com inventory databases will be managed using relational database
technology integrated with state-of-the-art geographically redundant
hardware units at key Internet access points globally. The Elgrande
computers will contain all of the inventory data as well as programs
necessary to permit an internet user to shop and conclude transactions.
Elgrande.com will continuously evaluate Internet architecture as part of
its operations to ensure 100% uptime and availability of the site to all
consumers worldwide. Analysis and systems evaluation will be an integral
part of Elgrande.com's ongoing effort and new technologies will be adapted
to the system as they become available and are determined practical for the
site. The proprietary relational database programming and web server
configuration has been contracted to Macdonald Harris and Associates of
Vancouver, British Columbia (MHA). MHA has been programming sophisticated
dynamically generated web sites since 1994, and currently has The Royal
Bank and Billboard Magazine sites as clients.
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In January and February of 1998, Elgrande.com conducted an initial email
survey of 200 publishing firms to determine if the firms would be inclined
to participate in an online service such as that offered by Elgrande.com.
Of 200 email letters sent, 177 replies were received in which the
respondents expressed interest in the Elgrande.com system. In October of
1998, Elgrande.com commissioned the Gartner Group of San Jose, California
to perform a study of the Company's business model and potential
marketplace. The report concluded that eighty-eight percent of the
publishers surveyed were highly probable to participate in Elgrande.com's
business model.
THE ELGRANDE.COM SYSTEM
The Elgrande.com System consists of the development and deployment of a web
site, search engine, relational databases, and administrative software
interfaces. These will accommodate online shopping for retail level and
business to business consumers, and enable management of the system by
Elgrande.com management and companies participating in the Elgrande.com
program. Initially, the products offered on Elgrande.com's website will
be limited to literature, music, software, video and games, as this market
has been widely received by the Internet public.
The system will work in the following manner:
Visitors to the Elgrande.com web site will first encounter a welcome screen
that presents a graphical user interface. This interface contains a menu
with hyperlinks that lead to other sections of the web site, and a table of
contents outlining the features, specials, articles and news available in
the current issue. A search box will be part of every page, which enables
the visitor to enter keywords, phrases or numbers to locate merchandise
within the Elgrande.com database currently listed for sale. Upon entering
the search criteria, a screen will be returned listing the matches to the
visitor's query. The query matches will be brief descriptive paragraphs of
each of the items returned. They will provide a hyperlink to a more
detailed information page, as well as an option to add each item to a
"shopping cart". The shopping cart is a software application that tracks
user's accumulated purchases via mouse clicks on selected items.
Another option to the specific product search will be the option to
"browse" through hierarchical directories of logically grouped headings
based on subject type. This service will allow the visitor to "drill down"
through the directories until a list of products is returned that matches
the subject matter sought by the visitor. The options available include
add to shopping cart, search again, go back one level, return to the home
page, or click any item in the menu bar to go to a corresponding section of
the web site.
The "shopping cart" tracks the items that the visitor has tentatively
decided to purchase on the Elgrande.com server. When the visitor has added
all the items to the shopping cart that they wish to purchase, they will
click on the "proceed to checkout" button where they will be presented with
a list of all of the items in their cart, the price per item, plus
applicable taxes. At this screen, options are presented to remove certain
items, increase or decrease the quantities of each item, or to cancel the
transaction entirely.
Once the contents of the shopping cart are edited to the satisfaction of
the visitor, the "next" button is clicked that brings the visitor to the
"shipment type" dialogue box. Here the option is presented for immediate
(overnight via courier) delivery, secondary (within 2-3 days) delivery, and
normal (land mail, first class) delivery. Besides the delivery option
boxes, price descriptions are included in general terms.
This page is also where the customer submits delivery, billing, and contact
information; including preferred method of payment. Payment options will
include instant credit card through secure server,
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telephone/credit card transaction, or submitted form/mailed money order or
check.
Upon submission of this page, a screen will be returned that has the total
cost of the transaction. The lower part of the screen will either ask for
credit card information, or provide a form to fill out notifying
Elgrande.com of a mailed payment method.
If the customer opts for instant credit card transaction, the information
will be entered onto the form, the form will be submitted, and the
transaction will be either approved or declined by the online
clearinghouse. If the transaction is approved, a final confirmation screen
is returned to the client confirming the amount billed to the credit card,
an itemized list of the products and charges, as well as the total cost for
shipping. A transaction number is issued which the client will use if they
have any reason to contact Elgrande.com at any time before, during, or
after shipment of the products. Elgrande.com will provide a tracking
screen where the client will be able to keep track of their order as it is
processed through the Elgrande.com system. Customs, duty and taxation
information is also included in the final screen before submission for
payment.
If the customer chooses to mail in payment, then the information is
collected on a form including check type, check number, account number,
etc. The subsequent screen will return all of the information included in
the next screen of a credit card transaction, but with a notice that the
orders paid for in this manner are not shipped until the funds have cleared
from the account on which the check is written. Elgrande.com ships orders
paid for by certified check or postal money order upon receipt and
verification.
COMPANY PARTICIPATION
The recruitment of companies who will provide products to sell through the
site (referred to as "Clients") will be accomplished through direct
marketing led by Elton Communications Inc., of Vancouver, British Columbia.
They have been engaged to design and implement a marketing room on the
Company's premises six months commencing on December 1st, 1998 at a cost of
CDN$112,000. The system will be briefly described to the publishers during
the initial contact, after which they will be directed to a section of the
web site not accessible to the general public that will detail the terms of
participation to the company. These terms will be as follows:
i. Elgrande.com will charge Clients US$1.50 per completed transaction of
a purchase of one item from that company's inventory as listed in the
Elgrande.com database. The Client company is responsible for
maintaining accurate inventory status records in the database, and is
expected to update the database at least once per month. The
Elgrande.com system employs software that converts any common database
format into the Elgrande.com format. Clients will be provided with a
client account number and password, which will give them access to
their section of the database only. Companies will be able to
complete standard "data dumps" over the Internet while connected to
the Elgrande.com server. Because Elgrande.com accepts any tab-delimited
database format, no additional preparation beyond pre-existing inventory
database management will be required by companies to participate in the
system. The only other charges for the transaction that the client will
be expected to absorb are the fees charged by the credit card clearing
house and the credit card companies themselves.
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ii. Clients will be mandated by policy to provide the lowest wholesale
price to the Elgrande.com clientele, and only manufacturers or those
who otherwise "create" products will be eligible for participation.
No distribution organization will be permitted entry unless they are
the only agents for a particular manufactured item. In this manner,
Elgrande.com intends to provide a very economical method of direct
marketing to manufacturers of goods and publishers of intellectual
merchandise. It is believed that this will also ensure the lowest
prices anywhere in the world for the products listed in the database,
except where discontinued inventories may be sold at significant
discount. Items sold at below cost to offset sales of other
merchandise at significant mark-up will be able to undercut
Elgrande.com, but on average, prices will be maintained at wholesale
levels, and will therefore be cheaper on average.
iii. In addition to providing Elgrande.com with inventory information,
technical data pertaining to every product listed on the search engine
will be provided if applicable. This information will be housed in a
separate searchable database that will be made available to Clients of
Elgrande.com. Elgrande.com staff will be mandated by policy to ensure
that all customers receive satisfaction as a result of their purchases
through Elgrande.com. Where Clients are dissatisfied with their
purchases upon receipt, it will be Company policy to provide refunds
in full. It is anticipated that this will bear somewhat negatively on
the bottom line, but Elgrande.com management believes any lost
revenues due to refunds will be easily recouped by satisfied repeat
customers, and all possible attempts will be made to recover funds
from the product provider. Elgrande.com analysts will provide constant
monitoring of all customer complaints to identify manufacturers and
publishers of inferior goods, who will be eliminated from the system.
iv. Upon conclusion of a transaction (payment received) the Elgrande.com
system sends email to:
* the company from whom the product is ordered;
* the customer, confirming once again the order has been processed;
* the accounting database, updating it with the transaction;
* The Elgrande.com order monitoring system;
* the shipper chosen, if applicable.
v. Elgrande.com will develop a tiered volume pricing schedule whereby
those companies that are the recipients of greater numbers of orders
through Elgrande.com than others will be entitled to pricing discounts
on per transaction fees.
vi. Certain members of Elgrande.com staff will be responsible for liaison
between Elgrande.com, participating companies, and the customers. At
all times systems evaluation will be running to identify opportunities
for expanded and improved service to both customers and Clients.
Implementation and Deployment
The public launch of the Elgrande retail web site will occur on March 1st,
1999.
The Company, in conjunction with Elton Communications is now in the process
of contacting companies
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who are publishers of literature, music, videos, games and software to
solicit their participation in the Elgrande system. Graphic production of
the web pages for the Elgrande.com site is accomplished by Elgrande staff.
The smooth integration of participant companies as they are recruited by
marketing, will be handled by the staff of Elgrande, who will work with
company representatives to ensure satisfaction. Fulfillment tracking will
be the responsibility of senior management initially until such time as
satisfactory sales levels justify the addition of personnel for that
purpose. Strategy and evaluation meetings will be conducted frequently to
assess strategy impact and possible remedies to problems as they arise.
Elgrande.com management is planning to conduct a forty-five day dry run of
all of the systems wherein a simulated transaction processing level of
200,000 transactions per day will be executed. The test is scheduled to
run at least two weeks prior to the scheduled launch of the Elgrande.com
web site. This will ensure the ability of the designated systems to handle
any unforeseen growth surges that might occur as a result of exceedingly
broad initial public acceptance. Independent analysis of software systems
performance will be contracted out to a recognized firm to confirm
reliability and functionality.
REGULATION
The Company is only subject to general business regulations.
EMPLOYEES
The company employs twelve full time employess.
Item 2. Management's Discussion And Analysis or Plan of Operation
All amounts are presented in U.S. dollars and where converted from
Canadian dollars, converted using a conversion rate of 1 to .6575.
Elgrande.com was incorporated in April 1998, and commenced
construction of an Internet site for the marketing of merchandise,
including books, videos, software, CDs, tapes and computer games. The
company commenced with the hiring of consultants in August, 1998, and
engaged McDonald Harris & Associates of Vancouver, B.C.(MD&A) in September,
1998 to develop proprietary data base programming and web server
configeration. The total cost of this program is $247,000 and the sum of
$130,000 has been paid as at November 30, 1998. The company has sufficient
funds to complete the data base, which will be completed by March 31, 1999.
There are no other contracts of a material nature required to achieve the
desired launch site. There have been no sales to date and none are
contemplated before March 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
The company has raised $997,800 to date by way of sale of common
shares. At November 30, 1998,
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Elgrande.com had cash and current receivables of $427,000, providing
sufficient liquidity to complete the program and launch the site.
The estimated cost of the web site to launch date is estimated at
$650,000. To date, the company has raised $997,800 and has sufficient
working capital to commence operations after the site is launched. The
company intends to continue to raise additional funds either through
the sale of common stock, from private loans, or other forms of
equity/debt.
In the first fiscal year of operations, commencing April 1, 1998, the
company will require an additional $2,000,000 to sustain an extensive
marketing program. It is expected that approximately $2,000,000 in
advertising costs will be incurred in year one to assist in the
launching of the site. Funding requirements could increase
significantly in year two, depending on the success of the marketing
program in year one. Should anticipated results be generated, the
company proposes to raise up to $20,000,000 in year two through a
public offering of securities, of which $10,000,000 would be allocated
to marketing costs.
RESULTS OF OPERATIONS
At November 30, 1998, the company had incurred expenses of $170,558,
which have been covered from the sale of common stock. Included in the
expenses is the sum of $107,028 for legal and consulting fees paid.
In addition to the incurred expenses, the company incurred start-up
costs of $100,715 as reflected on its balance sheet.
The company has sufficient funds on hand to commence commercial
operations in late March, 1999. In addition to this, the company fully
intends to continue to raise additional funds primarily from the sale
of common stock.
Results to date have been in accordance with the budget and the
company continues to operate within a predetermined operating budget.
SOURCES OF REVENUE AND PROFIT MARGINS
The company has no revenues to date and none are anticipated before
March 31, 1999 when the web site and proprietary relational database
is completed and ready for launch. The company anticipates generating
revenue from two sources, transaction fees, and advertising. Revenue
are expected to be generated commencing in April, 1999 and the company
expects to generate about $1,000,000 in revenue in the first six
months of operation. Because of heavy advertising costs, it is not
expected that the company will show a profit before the seventh month
of year two.
Impact on Inflation
The company believes that inflation plays no part in the development
of its business. The company carries no inventory, and both North
American and world inflation rates are nominal to non-existant at the
present time.
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Year 2000 Issue
The company is already compliant with the year 2000 issue and this is
not a factor in the company's business plan.
Item 3. Description of Property
The Registrant leases its approximately 3,000 square foot headquarters
office space from a third party pursuant to a lease ending August, 2001 for
$2,347.50 per month.
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Item 4. Security Ownership of Certain Beneficial Owners and Management
(a) Security Ownership of Certain Beneficial Owners holding five
percent or greater of the 10,818,800 shares of common stock outstanding as
of January 30, 1998.
<TABLE>
<CAPTION>
Title of Class Name and Address Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Common James West 1,000,000 Founder 9.2%
Ste. 308- 1040 Hamilton St.
Vancouver, B. C. V6B 2R9
Michael Page 1,000,000 Direct 9.2%
te. 308- 1040 Hamilton St.
Vancouver, B. C. V6B 2R9
Josephine Cross 1,000,000 Direct 9.2%
Ste. 307 - 19533 Fraser Hwy.
Surrey, B.C. V3S 6K7
Carlton Parfitt 1,000,000 Direct 9.2%
Ste. 308- 1040 Hamilton St.
Vancouver, B. C. V6B 2R9
</TABLE>
(b) Security Ownership of Management
<TABLE>
<CPATION>
Title of Class Name and Address(1) Amount and Nature % of
of Beneficial Owner of Beneficial Owner Class
- --------------------------------------------------------------------------
<S> <C> <C> <C>
Common Michael Page 1,000,000 9.2%
Carlton Parfitt 1,000,000 9.2%
James West 1,000,000 9.2%
All officers and directors
as a Group (3 persons) 3,000,000 27.6%
</TABLE>
(1) The address for management is that of the Registrant: Suite 308,
1040 Hamilton Street, Vancouver, B.C., Canada V6B 2R9
(c) Changes in Control
There are no arrangements which may result in a change in control of
the issuer.
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Item 5. Directors, Executive Officers, Promoters and Control Persons
(a) Directors and Executive Officers
NAME AGE POSITION 1ST YEAR WITH COMPANY
James West 35 Chief Executive Officer 1998
Michael Page 30 President, Director 1998
Carlton J. Parfitt 31 Sec., Treas., Director 1998
Business Experience
JAMES WEST: Mr. West is a founder of the Company and is the Chief
Executive Officer. From June 1996 to September 98, Mr. West was President
of Intellicom Canada Communications, Inc., Vancouver, British Columbia
specializing in the translation of marketing, public and investor relations
documents into graphically enhanced world wide web pages for corporate
clients. From January 1993 to June 1996, Mr. West was the owner/operator
of Jim West Design, a sole proprietorship specializing in corporate logo
graphic design and copywriting.
MICHAEL PAGE: Mr. Page is a founder of the Company and became President in
September, 1998. From March, 1997 to March, 1998 Mr. Page served as
president of Strategic Financial Corp., Langley, British Columbia, public
relations firm. From October 1995 to August 1996, Mr. Page was a public
relations consultant with Axion Communications, Vancouver, British
Columbia. From April 1992 to September 1995, Mr. Page was the President
and chief editor of Hammer Publishing Corp., Surrey, British Columbia where
he developed and oversaw the marketing of an annual tourist publication as
well as a quarterly in-flight magazine for Central Mountain Air.
CARLTON J. PARFITT: Mr. Parfitt is a founder of the Company. From July
1997 to May 1998, Mr. Parfitt was a Vice President of Marketing and Sales
for New Vision Entertainment, Tokyo, Japan, a television and multimedia
content distribution company. From June 1995 to June 1997, Mr. Parfitt
was a Special Assistant to the President of Mori & Associates, Tokyo, Japan,
an international business consultant. From January 1993 to January 1995,
Mr. Parfitt was the president of the Food For All Foundation, a non-profit
organization. From January 1992 to December 1992, Mr. Parfitt was a
Research Scientist engaged in software development for CTF Systems, Inc.,
Port Coquitlam, British Columbia. Mr. Parfitt graduated from Simon Fraser
University, Vancouver, British Columbia in 1991 with a degree in Physics.
(b) Significant Employees:
MARIUSZ GIRT: Mr. Girt joined the Company in October 1998 as project
manager for the Company's computer systems. From March 1998 to October
1998 Mr. Girt was a software testing engineer with Microsoft Corporation,
Redmond, Washington where he planned network scenarios simulating real time
environments for new product testing. From June 1997 to February 1998 Mr.
Girt was the manager of network and computer systems for Strategic
Financial Corporation, Langley, British Columbia. Mr. Girt was an
Information Technology Consultant with Microbell Network Solutions of
Vancouver, British Columbia from September 1995 to May 1997 with
responsibility for its network and computer systems. Mr. Girt attended the
British Columbia Institute of Technology and completed its computer science
program specializing in Network Security, TCP/IP, Routing, and Network
Topologies related to Local and Wide Area Networks.
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(c) Family Relationships: There are no family relationships to report
(d) Involvement in Certain Legal Proceedings: There are no legal
proceedings to report.
Item 6. Executive Compensation
(a) Summary Compensation Table
Name & Position Year Salary Paid
Michael T. Page 1998 $17,538.00 *
Carlton J. Parfitt 1998 $17,538.00 *
James West 1998 $17,538.00 *
*No other cash compensation or bonuses paid or accrued.
(b) Option/SAR Grants in Last Fiscal Year (Individual Grants)
No options have been granted to date.
The Registrant has a Stock Option Plan, entitled the "Elgrande.com, Inc.,
1998 Directors and Officers. Stock Option Plan" (the "Plan"). Its purpose
is to advance the business and development of the Company and its
shareholders by affording to the employees, directors and officers of the
Company the opportunity to acquire a proprietary interest in the Company by
the grant of Options to such persons under the Plan's terms. By doing so
the Company seeks to motivate, retain and attract highly competent,
motivated employees, executive Officers and Directors to lead the Company.
The effective date of the Plan is September 23, 1998. Article 3 of the
Plan provides that the Board shall exercise its discretion in awarding
Options under the Plan, not to exceed 1,000,000 shares. The per share
Option price for the stock subject to each Option shall be $0.50 per share
or such other price as the Board may determine. All Options must be
granted within ten years from the effective date of the Plan. There is no
express termination date for the Options, although the Board may vote to
terminate the Plan. Under the Plan, there have been no Options granted.
(c) Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end
Option/SAR Values : None
(d) Long-term Incentive Plans -- Awards in Last Fiscal Year: None
The Registrant has not otherwise awarded any stock options, stock
appreciation rights or other form of derivative security or common stock or
cash bonuses to its executive officers and directors.
(e) Compensation of Directors
1. Standard Arrangements
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The members of the Company's Board of Directors are reimbursed for
actual expenses incurred in attending Board meetings.
2. Other Arrangements: There are no other arrangements.
(f) Employment Contracts And Termination of Employment, And
Change-in-control Arrangements
The Company's President, Michael Page is subject to an two year employment
contract at a salary of $81,000 CN ($53,265US) per annum. The Company's
Secretary / Treasurer, Carlton Parfiett is also subject to an two year
employment contract at a salary of $81,000 CN ($53,265US) per annum.
Item 7. Certain Relationships and Related Transactions
The Company's By-Laws include a provision regarding Related Party
Transactions which requires that each participant to such transaction
identify all direct and indirect interests to be derived as a result of the
Company's entering into the related transaction. A majority of the
disinterested members of the board of directors must approve any Related
Party Transaction.
Item 8. Description of Securities
The authorized capital stock of Company consists of 200,000,000 shares of
common stock. No warrants to acquire common stock have been authorized.
There are no outstanding obligations of the Company to repurchase, redeem
or otherwise acquire any shares of the Company's common stock.
The common stock carry no preemptive rights, are not convertible,
redeemable, assessable or entitled to the benefits of any sinking fund.
The common stock affords the holders no cumulative voting rights, and the
holders of a majority of the shares voting for the election of the
directors can elect all of the directors if they should choose to do so.
Pursuant to a vote of the Shareholders on April 2, 1998, the Registrant's
Board of Directors has the authority to declare a reverse split of the
outstanding shares.
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and Other Shareholder Matters
(a) Market Information
The Registrant's stock is not listed for sale on any exchange or trading
medium. The Registrant intends to seek the listing of its Common Stock on
the OTC Electronic Bulletin Board upon the effectiveness of this Form
10-SB. Until such time, there is no public market for the Company's Common
Stock.
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(b) Holders
There are 117 holders of the Registrant's Common Stock as of January 31,
1999. There are 4,875,000 which are restricted securities as defined by
Rule 144, none of which have been held in excess of one year.
(c) Dividends
The Registrant has paid no dividends to date on its Common Stock. The
Registrant reserves the right to declare a dividend when operations merit.
Item 2. Legal Proceedings
There is no action, suit or proceeding before or by any court or
governmental agency or body, domestic or foreign, now pending or, to the
knowledge of the Registrant, threatened, against the Registrant, or any of
its properties, business affairs or business prospects of the Registrant
which would have a material effect thereon.
Item 3. Changes in and Disagreements with Accountants: None
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Item 4. Recent Sales of Unregistered Securities
During the past three years, the Registrant sold securities which were not
registered under the Securities Act of 1933, as amended, as set forth
below.
Date Name # of shares issued Consideration (U.S. $)
- ---- ---- ------------------ ----------------------
040298 James West 1,000,000 $1,000.00
040298 Michael Page 1,000,000 $1,000.00
040298 Josephine Cross 1,000,000 $1,000.00
040298 Carlton Parfitt 1,000,000 $1,000.00
040298 Jim Sheehan 500,000 $5,000.00
040298 Raymond Barth 500,000 $5,000.00
040298 Charles F. Payne 500,000 $5,000.00
040298 Glen Helfmeyer 500,000 $5,000.00
040298 Paul L. Harrison 500,000 $5,000.00
040298 Kerry J. McCullagh 500,000 $5,000.00
040298 Michael McCullagh 500,000 $5,000.00
040298 Brad Pow 500,000 $5,000.00
040298 Michael Parker 500,000 $5,000.00
040298 L. Joan McCullagh 500,000 $5,000.00
091798 Barclay Pacific Dev. Ltd. 250,000 services
091798 Wolnosc Int. Inc. 250,000 services
091798 Stacey McGrillen 50,000 services
091798 Kendall Page 50,000 services
091798 Sonja Parfitt 50,000 services
091798 Elise West 50,000 services
091798 Woojun Jeon 37,500 services
091798 Anthony Parfitt 37,500 services
091798 David Halmai 37,500 services
091798 Mavis Robinson 37,500 services
112898 293701 Alberta Ltd. 5,000 $5,000
112898 Abby Broussard 5,000 $5,000
112898 Alexander Reynolds 5,000 $5,000
112898 Anita Pow 500 $500
112898 C. Hilgenberg 5,000 $5,000
112898 Candelar Holdings 2,000 $2,000
112898 Carol Geraldi 250 $250
112898 Carole Lind-Peterson 20,000 $20,000
112898 Charlie Huddy 2,000 $2,000
112898 Christian Schenk 5,000 $5,000
112898 Clayton Ness 5,000 $5,000
112898 Craig McTavish 2,000 $2,000
112898 David Morgan 10,000 $10,000
112898 David H. Troxwell 2,000 $2,000
112898 Dean Murray 2,000 $2,000
112898 Della Grant 10,000 $10,000
15
<PAGE>
112898 Edwin Fishbaine 5,000 $5,000
112898 Elsie Harasym 1,000 $1,000
112898 Gary C. Rosholt 50,000 $50,000
112898 Gerry Franco 10,000 $10,000
112898 Gerry W. Sauve 2,000 $2,000
112898 Gilbert M. Russell 3,000 $3,000
112898 Helen Trieman 30,000 $30,000
112898 Hugh Fleshar 1,000 $1,000
112898 James D. George 10,000 $10,000
112898 Jason Booth 2,000 $2,000
112898 Jean J. Schroeter 20,000 $20,000
112898 J. Broussard Eq. Trst. 5,000 $5,000
112898 L. Christine Firby 12,000 $12,000
112898 Lance Gardiner 5,000 $5,000
112898 Leslie Abe 1,000 $1,000
112898 Maurice Schelvis 10,000 $10,000
112898 May Etta Carlson 2,000 $2,000
112898 Mel Pesony 2,000 $2,000
112898 Mitch Lascelle 10,000 $10,000
112898 Orville Brill 10,000 $10,000
112898 Otto Gassner 5,000 $5,000
112898 Patrick Bayard 5,000 $5,000
112898 Peter Samler 10,000 $10,000
112898 Peter Huber 25,000 $25,000
112898 Procan Investor 10,000 $10,000
112898 Rhett K. Martin 1,000 $1,000
112898 Robert Cooper 5,000 $5,000
112898 Robert Landry 20,000 $20,000
112898 Rudolph DeLeo 500 $500
112898 Russell McQueen 1,500 $1,500
112898 Stanley G. Kroeker 3,000 $3,000
112898 Stephen Bishop 2,000 $2,000
112898 Theodor Reinalter 15,000 $15,000
112898 Tom Nakshara 6,000 $6,000
112898 W. Margaret Houck, CMC 10,000 $10,000
112898 Wilbur P. Pool 4,000 $4,000
112898 William Pow 500 $500
112898 Wilma Perskin 5,000 $5,000
112898 Yamanishi Hldgs 5,500 $5,500
113098 Wachi Andres 15,000 $15,000
113098 Steeg Oliver 9,000 $9,000
113098 Leili Schuerch 30,000 $30,000
113098 798111 Alberta Ltd. 2,000 $2,000
113098 Ezra Schwartz 1,000 $1,000
113098 Chaim Schwartz 31,500 $31,500
113098 Chaim Slomiuc 7,500 $7,500
113098 Ed Fishbaine 13,400 $13,400
16
<PAGE>
113098 Raymond McAllister 3,000 $3,000
113098 Beatrice Williams 1,000 $1,000
113098 Alfred Williams 5,000 $5,000
113098 William Bailey 1,000 $1,000
113098 Fred Milner 1,000 $1,000
113098 Albert J. Auriat 2,000 $2,000
113098 David J. Vos 5,000 $5,000
113098 Joyce L. Vos 10,000 $10,000
113098 Delayne Pfan 2,000 $2,000
113098 Tim Whaley 350 $350
113098 Procan Investment 115,000 $115,000
113098 Kunz Daniel 11,000 $11,000
113098 Kazimierz Kozica 4,000 $4,000
113098 Paul Schmid 5,000 $5,000
113098 Kevin Bredeson 200 $200
113098 John McHugh 20,000 $20,000
113098 Peter Huber 5,000 $5,000
113098 Malic Money Mgmt 10,000 10,000
113098 Frances R. Kreway 10,000 $10,000
113098 Gary Sutter 11,000 $11,000
113098 Brenda Meyer 5,000 $5,000
113098 Sabrina Jones 3,000 $3,000
113098 Intnl. Investment Servs. 95,000 $95,000
113098 Bill Westby 1,600 $1,600
113098 Dr. Jud Hollis 500 $500
113098 Sandra J. Quinn 1,000 $1,000
113098 Peter Allard 100,000 100,000
113098 Don Moroz 1,000 $1,000
121098 Dennis Brovarone 25,000 services
The Registrant was not a reporting company pursuant to the Securities
Exchange Act of 1934 nor was it a development stage company with no
business plan. Thus it was eligible to rely upon Rule 504. Moreover, Rule
504 was available in that the Registrant sold less than$1,000,000.00 worth
of securities in the previous 12 month period and except for the
Registrant's officers and directors, the purchasers were unaffiliated
investors. The shares issued for services are for compensation to the
Company's employees, consultants and legal counsel. These sales were
entirely private transactions pursuant to which all material information as
specified in Rule 502(b)(2) was made available to the purchaser(s). Thus
the exemptions from registration afforded by Rule 4(2) and Rule 3(b) were
available to the issuer.
On all transactions depicted, no sales commission was paid by the Company
to Pacific Rim Investment Inc. pursuant to the April 2, 1998, Offering
Sales Agency Agreement. (See Exhibit 10(ii)). Pacific Rim Investment Inc.
is a corporation organized under the law of the Pacific island nation of
Vanuatu. Pacific Rim has two principals. They are Geoffrey Robert Gee and
John Caldwell Malcolm.
Item 5. Indemnification of Directors and Officers
Article 11 of the Company's By-laws provides that every person who was
or is a party or is
17
<PAGE>
threatened to be made a party to or is involved in any action, suit or
proceeding, whether civil, criminal, administrative or investigative, by
reason of the fact that he or a person for whom he is the
legal representative is or was a director or officer of the corporation or
is or was serving at the request of the corporation or for its benefit as
a director or officer of another corporation, or as its representative in
a partnership, joint venture, trust or other enterprise, shall be
indemnified and held harmless to the fullest extent legally permissible
under the General Corporation Law of the State of Nevada against all
expenses, liability and loss (including attorney's fees, judgments, fines
and amounts paid or to be paid in settlement) reasonably incurred or
suffered by him in connection therewith.
18
<PAGE>
PART F/S
ELGRANDE.COM INC.
(A Development Stage Company)
TABLE OF CONTENTS
ACCOUNTANTS' REPORT 1
FINANCIAL STATEMENTS
Balance Sheet 2
Statement of Operations and Accumulated Deficit 3
Stockholders' Equity (Deficit) 4
Statement of Cash Flows 5
NOTES TO FINANCIAL STATEMENTS 6
19
<PAGE>
WILLIAMS & WEBSTER PS
CERTIFIED PUBLIC ACCOUNTS
Seafirst Financial Center
W 601 Riverside, Suite 1970
Spokane, WA 99207
(509) 838-5111
Board of Directors
Elgrande.com Inc.
1040 Hamilton Street
Vancouver, British Columbia
Canada V6B 2R9
Independent Auditor's Report
We have audited the accompanying balance sheet of Elgrande.com Inc. (a
development stage company) as of November 30, 1998 and the related
statements of operations and accumulated deficit, cash flows, and
stockholders' equity for the period from April 8, 1998 (inception) to
November 30, 1998. 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 audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audit
provides 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 Elgrande.com Inc. as of
November 30, 1998, and the results of its operations and its cash flows for
the period from April 8, 1998 (inception) to November 30, 1998, in
conformity with generally accepted accounting principles.
As discussed in Note 2, the Company has been in the development stage since
its inception on April 8, 1998. Realization of a major portion of the
assets is dependent upon the Company's ability to meet its future financing
requirements, and the success of future operations. Management's plans
regarding those matters also are described in Note 2. These factors raise
substantial doubt about the Company's ability to continue as a going
concern. The financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
Williams & Webster, P.S.
Spokane, Washington
January 20, 1999
20
<PAGE>
ELGRANDE.COM INC.
(A Development Stage Company)
BALANCE SHEET
November 30, 1998
A S S E T S
CURRENT ASSETS
Cash $ 236,350
----------
PROPERTY AND EQUIPMENT
Computer hardware 38,407
Furniture and fixtures 20,878
Database and software 296,408
Less accumulated depreciation (2,160)
----------
TOTAL PROPERTY AND EQUIPMENT 353,533
----------
OTHER ASSETS
Deposit 3,600
Organizational costs, net of $5,285 amortization 100,715
----------
TOTAL OTHER ASSETS 104,315
----------
TOTAL ASSETS $ 694,198
==========
L I A B I L I T I E S & S T O C K H O L D E R S ' E Q U I T Y
CURRENT LIABILITIES
Accounts payable $ 234,189
Accrued interest 529
Stock over-subscription payable 90,000
----------
TOTAL CURRENT LIABILITIES 324,718
----------
LONG-TERM DEBT
Note payable 39,543
----------
TOTAL LIABILITIES 364,261
----------
COMMITMENTS AND CONTINGENCIES -
----------
STOCKHOLDERS' EQUITY
Common stock, 200,000,000 shares authorized,
$.001 par value; 10,793,800 shares issued and
outstanding 10,794
Additional paid-in capital 1,027,996
Subscriptions receivable (538,050)
Accumulated deficit during developmental stage (170,803)
----------
TOTAL STOCKHOLDERS' EQUITY 330,182
----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 694,198
==========
The accompanying notes are an integral part of these
financial statements.
2
21
<PAGE>
ELGRANDE.COM INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
For the Period Ended November 30, 1998
R E V E N U E S $ -
----------
E X P E N S E S
Legal and professional fees 107,028
Software and internet services 11,568
Marketing and public relations 18,217
Rent 9,965
Depreciation and amortization 7,445
Office and administration 6,208
Travel and entertainment 5,224
Communication 2,669
Production and programming 1,950
Interest 529
----------
TOTAL EXPENSES 170,803
----------
NET LOSS (170,803)
ACCUMULATED DEFICIT, BEGINNING BALANCE -
----------
ACCUMULATED DEFICIT, ENDING BALANCE $ (170,803)
==========
NET LOSS PER COMMON SHARE $ (0.0181)
==========
WEIGHTED AVERAGE NUMBER OF
COMMON STOCK SHARES OUTSTANDING 9,436,725
==========
The accompanying notes are an integral part of these
financial statements.
3
22
<PAGE>
ELGRANDE.COM INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
For the Period Ended November 30, 1998
<TABLE>
<CAPTION>
Common Shares
-------------------- Additional Total
Number Paid-in Subscriptions Accumulated Stockholders'
of Shares Amount Capital Receivable Deficit Equity
--------- -------- ---------- ------------ ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Issuance of common stock
in April, 1998:
For cash at $.001
per share 4,000,000 $ 4,000 $ - $ - $ - $ 4,000
For cash at $.01
per share 5,000,000 5,000 45,000 50,000
Issuance of common stock
in September, 1998
for services at $.06
per share 850,000 850 49,150 50,000
Issuance of common stock
in November, 1998
For cash and
subscription
at $1.00 per
share less expense
of $9,010 943,800 944 933,846 (538,050) 396,740
Loss for period ending,
November 30, 1998 (170,803) (170,803)
---------- --------- ---------- --------- ---------- ---------
Balance
November 30, 1998 10,793,800 $ 10,794 $ 1,027,996 $ (538,050) $ (170,803) $ 329,937
========== ========= ========== ========= ========== =========
</TABLE>
The accompanying notes are an integral part of these
financial statements.
4
23
<PAGE>
ELGRANDE.COM INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the Period Ended November 30, 1998
Cash flows from operating activities:
Net loss $ (170,803)
Adjustments to reconcile net loss
to net cash used by operating activities:
Depreciation and amortization 7,445
Increase in:
Accounts payable 59,989
Accrued interest 529
Over-subscriptions payable 90,000
----------
Net cash used in operating activities (12,840)
----------
Cash flows from investing activities:
Purchase of property and equipment (141,950)
Deposit on leased property (3,600)
Payment on organizational costs (106,000)
----------
Net cash used in investing activities (251,550)
Cash flows from financing activities:
Issuance of stock 500,740
----------
Net increase in cash 236,350
Cash, beginning of period -
----------
Cash, end of period $ 236,350
==========
SUPPLEMENTAL DISCLOSURES:
Cash paid for interest and income taxes:
Interest $ -
==========
Income taxes $ -
==========
NON-CASH INVESTING ACTIVITIES
Note issued for purchase of property and equipment $ 39,543
Purchase commitment for database 174,200
----------
Total $ 213,743
==========
The accompanying notes are an integral part of these
financial statements.
5
24
<PAGE>
NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS
Elgrande.com Inc., formerly Intellicom Internet Corp (hereinafter "the
Company"), was incorporated in April 1998 under the laws of the State of
Nevada primarily for the purpose of developing and marketing internet
applications, specifically for books, software, audio and video media and
computer games. The name change to Elgrande.com Inc. was effective on
September 19, 1998. The Company maintains an office in Vancouver, British
Columbia, Canada.
The Company is in the development stage, and as of November 30, 1998 had
not realized any significant revenues from its planned operations.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
This summary of significant accounting policies of Elgrande.com Inc. is
presented to assist in understanding the Company's financial statements.
The financial statements and notes are representations of the Company's
management which is responsible for their integrity and objectivity. These
accounting policies conform to generally accepted accounting principles and
have been consistently applied in the preparation of the financial
statements.
DEVELOPMENT STAGE ACTIVITIES
The Company has been in the development stage since its formation on April
8, 1998. It is primarily engaged in developing and marketing internet
applications.
GOING CONCERN
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern.
As shown in the accompanying financial statements, the Company incurred a
net loss of $170,803 for 1998. At November 30, 1998, current liabilities
exceed current assets by $88,368. The Company, being a developmental stage
enterprise, is currently putting technology in place which will, if
successful, mitigate these factors which raise substantial doubt about the
Company's ability to continue as a going concern. The financial statements
do not include any adjustments relating to the recoverability and
classification of recorded assets, or the amounts and classification of
liabilities that might be necessary in the event the Company cannot
continue in existence.
Management has established plans designed to increase the sales of the
Company's products. Management intends to seek new capital from new equity
securities issuances that will provide funds needed to increase liquidity,
fund internal growth and fully implement its business plan.
25
<PAGE>
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Accounting Method
The Company's financial statements are prepared using the accrual method of
accounting.
Loss Per share
Loss per share was computed by dividing the net loss by the weighted
average number of shares outstanding during the period. The weighted
average number of shares was calculated by taking the number of shares
outstanding and weighting them by the amount of time that they were
outstanding.
Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, the Company considers all
short-term debt securities purchased with a maturity of three months or
less to be cash equivalents.
Provision for Taxes
At November 30, 1998, the Company had net operating loss of approximately
$170,803. No provision for taxes or tax benefit has been reported in the
financial statements, as there is not a measurable means of assessing
future profits or losses.
Use of Estimates
- ----------------
The process of preparing financial statements in conformity with generally
accepted accounting principles requires the use of estimates and
assumptions regarding certain types of assets, liabilities, revenues, and
expenses. Such estimates primarily relate to unsettled transactions and
events as of the date of the financial statements. Accordingly, upon
settlement, actual results may differ from estimated amounts.
26
<PAGE>
NOTE 3 - PROPERTY AND EQUIPMENT
Property and equipment are stated at cost. Depreciation and amortization
are provided using the straight line method over the estimated useful lives
of the assets. The useful lives of property, plant and equipment for
purposes of computing depreciation and amortization are five and seven
years. The following is a summary of property, equipment and accumulated
depreciation and amortization:
Accumulated Depreciation
------------------------
Cost or Amortization
---- ---------------
Computers $ 38,407 $1,915
Furniture and fixtures 20,878 245
Database 296,408 -
------- -----
$355,693 $2,160
======= =====
The database is expected to be completed in March, 1999, and amortization
will begin at that time. See related Note 7.
NOTE 4 - INTANGIBLE ASSETS
During the period ended November 30, 1998, Elgrande.com Inc. incurred
organization costs of $106,000. These organization costs are being
amortized over the useful life of sixty months beginning September 1, 1998.
During the period ending November 30, 1998, $5,285 was recorded as
amortization of organization costs.
NOTE 5 - COMMON STOCK
Upon incorporation, 4,000,000 shares of common stock were distributed at
$.001 per share to the board of directors for $4,000. The second share
issuance was for 5,000,000 common shares at $.01 per share for $50,000.
Under Regulation D, Rule 504, 943,800 shares of common stock were issued at
$1.00 per share for cash and subscriptions. At November 30, 1998, $538,050
in stock subscriptions were receivable and subsequently $491,305 of this
was received by January 11, 1999. At November 30, 1998 the Company's stock
offering was over-subscribed by $90,000, which was repaid in December,
1998.
27
<PAGE>
NOTE 5 - COMMON STOCK (Continued)
In September 1998, the Company adopted the Elgrande.com Inc. 1998 Directors
and Officers Stock Option Plan, a non-qualified plan. This plan allows the
Company to distribute up to 1,000,000 shares of common stock to officers,
directors, employees and consultants through the authorization of the
Company's Board of Directors. In the period ending November 30, 1998, the
Company issued 850,000 common stock shares of common stock under this plan
for the services of consultants. The Company valued these services at
$50,000. The shares issued under this plan include negotiation rights and
will begin to vest in April, 1999 with 20% of shares vesting every six
months until the consultants are fully vested in their shares.
NOTE 6 - RELATED PARTIES
Certain consultants which received common stock under the Company's non-
qualified stock option plan are related to the Company's directors and
stockholders. Of the 850,000 shares issued to consultants, 187,500 shares
were issued to family members of directors who provided services to the
Company.
NOTE 7 - COMMITMENTS AND CONTINGENCIES
Lease Commitments
The Company leases office space in Vancouver, B.C., Canada from Yaletown
Centre Investment Ltd. for $2,347.50 per month. The lease is effective
from September 1, 1998 to August 31, 2001. The terms of the lease required
the Company to give the lessor a $3,600 refundable security deposit.
Future minimum rental commitments under the operating lease are as follows:
Year Ending November 30, 1999 $28,170
Year Ending November 30, 2000 28,170
Year Ending November 30, 2001 21,128
-------
$77,468
=======
Database Development
The Company's purchase commitment for services to develop a database at
November 30, 1998 totaled $247,000, of which $72,800 was paid in 1998 and
the balance of $174,200 is expected to be paid by March 1999. As of
November 30, 1998, the Company considered that the majority of the services
contracted for were payable and accrued the balance owed of $174,200 as
part of accounts payable.
28
<PAGE>
NOTE 8 - TRANSLATION OF FOREIGN CURRENCY
The Company has adopted Financial Accounting Standard No. 52. The Canadian
foreign exchange rate has remained approximately the same since inception
therefore, there are no material exchange rate transaction gains or losses.
In the future, the Company will record such transactions in the Statement
of Stockholders' Equity.
NOTE 9 - CONCENTRATION OF CREDIT RISK FOR CASH HELD AT BANKS
The Company maintains cash balances at two banks. Accounts at each
institution are insured by the Federal Deposit Insurance Corporation up to
$100,000. At November 30, 1998 the cash balance at one institution
exceeded this insured amount by $87,660.
NOTE 10 - LONG-TERM DEBT
The Company's long-term debt consists of a note secured by furniture and
computers for $47,000. The terms of this agreement call for a balloon
payment of all principal on November 30, 2000. The Company's management
expects to pay this amount by the due date of the loan, which does not
contain a stipulated rate of interest. Upon origination the estimated
current value of this debt was $39,543. Imputed interest accrued at 8% per
annum from September 15, 1998 to November 30, 1998 was $529.
29
<PAGE>
PART III
Item 1. Index to Exhibits
3. (i) Articles of Incorporation
(ii). By-laws
10.1 Offering Sales Agency Agreement among El Grande.Com, Inc.,
and Pacific Rim Investment Inc.
10.2 MacDonald Harris & Associates Ltd., Consulting Agreement
10.3 M. Page Employment Agreement
10.4 J. Parfitt Employment Agreement
27 Financial Data Schedule
30
<PAGE>
Signatures
In accordance with Section 12 of the Securities Exchange Act of 1934, the
registrant caused this registration statement to be signed on its behalf by
the undersigned, thereunto duly authorized.
Elgrande.com Inc.
(Registrant)
By:
MICHAEL PAGE
- ------------
Michael Page, President, Chairman of the Board
January 29, 1999
CARLTON PARFITT
- ---------------
Carlton Parfitt, Chief Financial Officer, Secretary-Treasurer, Director
January 29, 1999
31
EXHIBIT 3.i
ARTICLES OF INCORPORATION
OF
INTELLICOM INTERNET CORP.
KNOW ALL MEN BY THESE PRESENTS:
That we the undersigned, have this day voluntarily associated ourselves
together for the purpose of forming a corporation under the laws of the
State of Nevada and do hereby certify:
ONE
The name of this corporation is INTELLICOM INTERNET CORP.
TWO
The resident agent of said corporation shall be Pacific Corporate Services
Company, 7631 Bermuda Road, Las Vegas, NV., 89123 and such other offices as
may be determined by the By-Laws in and outside the State of Nevada.
THREE
The objects to be transacted, business and pursuit and nature of the
business, promoted or carried on by this corporation are and shall continue
to be engaged in any lawfiil activity.
FOUR
The members of the governing board shall be styled Directors and the first
Board of Directors shall consist of one (1). The number of stockholders of
said corporation shall consist of one (1). The number of directors and
shareholders of this corporation may, from time to time, be increased or
decreased by an amendment to the By-Laws of this corporation in that
regard, and without the necessity of amending these Articles of
Incorporation. The name and address of the first Board of Directors and of
the Incorporator signing these Articles as follows:
KENDALL WHITE
307-19533 FRASER HWY
SURREY, B.C. CANADA, V3S 6K7
FIVE
The Corporation is to have perpetual existence.
SIX
The total authorized capitalization of this Corporation shall be and is the
sum of 200,000,000 shares of Common Stock at $0.001 par value, said stock
to carry hill voting power and tile said shares shall be issued fully paid
at such time as the Board of Directors may designate in exchange for cash,
property, or services, the stock of other corporations or other values,
rights, or things, and the judgement of
32
<PAGE>
the Board of Directors as to the value thereof shall be conclusive.
SEVEN
The capital stock shall be and remain non-assessable. The private property
of the stockholders shall not be liable for the debts or liabilities of the
Corporation.
IN WITNESS WHEREOF, I have set my hand this 2ND day of April 1998.
KENDALL WHITE
Province of British Columbia
Canada
On this 2ND day of April, 1998 before me, a Notary Public in and for said,
Province of British Columbia, Canada. Personally appeared, Kendall White
known to me to be the person whose name is subscribed to the foregoing
instrument, and he duly acknowledged to me that she executed the same for
the purpose therein mentioned.
IN WITNESS WHEREOF, I have set my hand and offered by official seal in, The
City of Vancouver, Province of British Columbia, Canada, the day and year
in this Certificate first above written.
Notary Public
LAUREN S. CHERNEY
Barrister & Solicitor
115B 19705 Fraser Highway
Langley, B.C. V3A 7E9
33
<PAGE>
FILED
IN THE OFFICE OF THE
SECRETARY OF STATE OF THE
STATE OF NEVADA
OCT 22 1998
No. C7812-98
DEAN HELLER, SECRETARY OF STATE
CERTIFICATE OF AMENDMENT OF ARTICLES OF INCORPORATION
(after Issuance of stock)
Intellicom Internet Corp.
- -------------------------
Name of Corporation
We the undersigned Michael Page and
-----------------------------------------------------
(President or Vice President)
Carlton Parfitt of Intellicom Internet Corp.
- -------------------------------------------------------------------------
Secretary or Assistant Secretary Name of Corporation
Do hereby certify:
That the Board of Directors of said corporation at a meeting duly
convened, held on the 18 day of September, 1998, adopted a resolution to
amend the original articles as follows:
Article One is hereby amended to read as follows:
The name of the corporation is Elgrande.Com Inc.
The number of shares of the corporation outstanding and entitled to vote
on an amendment to the Articles of Incorporation is one; that the said
change(s) and amendment have been consented to and approved by a majority
vote of the stockholders holding at least a majority of each class of
stock outstanding and entitled to vote thereon.
Michael Page
-------------------------------------------
President or Vice President
Charlie Parfitt
-------------------------------------------
Secretary or Assistant Secretary
Province of British Columbia
County of Vancouver
On Sept. 21, 1998, personally appeared before me, a Notary Public,
Michael Page and Carlton Parfitt
- ---------------------------------
(name of persons appearing and signing document)
who acknowledged that they executed the above instrument.
S/s BRIGITTE A. FARKAS
----------------------
Signature of Notary
BRIGITTE A. FARKAS
Notary Public
#201, 1039 Richards St.
Vancouver, B.C. V6B 3E4
Tel: 681-5936 Fax 681-5930
34
EXHIBIT 3.ii
BYLAWS
OF
INTELLICOM INTERNET CORP.
A Nevada Corporation
ARTICLE 1
---------
OFFICES
SECTION 1. The registered office of this corporation shall be
in the County of Clark, State of Nevada.
SECTION 2. The corporation may also have offices at such
other places both within and without the State of Nevada as the Board of
Directors may from time to time determine or the business of the
corporation may require.
ARTICLE 2
---------
MEETINGS OF STOCKHOLDERS
SECTION 1. All annual meetings of the stockholders shall be
held at the registered office of the corporation or at such other place
within or without the State of Nevada as the Directors shall determine.
Special meetings of the stockholders may be held at such time and place
within or without the State of Nevada as shall be stated in the notice of
the meeting, or in a duly executed waiver of notice thereof.
SECTION 2. Annual meetings of the stockholders, commencing
with the year 1999 shall be held on the 2nd of April, each year if not a
legal holiday and, if a legal holiday, then on the next secular day
following, or at such other time as may be set by the Board of Directors
from time to time, at which the stockholders shall elect by vote a Board of
Directors and transact such other business as may properly be brought
before the meeting.
SECTION 3. Special meetings of the stockholders, for any
purpose or purposes, unless otherwise prescribed by statute or by the
Articles of Incorporation, may be called by the President or the Secretary
by resolution of the Board of Directors or at the request in writing of
stockholders owning a majority in amount of the entire capital stock of the
corporation issued and outstanding and entitled to vote. Such request shall
state the purpose of the proposed meeting.
SECTION 4. Notices of meetings shall be in writing and signed
by the President or Vice-President or the Secretary or an Assistant
Secretary or by such other person or persons as the Directors shall
designate. Such notice shall state the purpose or purposes for which the
meeting is called and the time and the place, which may be within or
without this State, where it is to be held. A copy of such notice shall be
either delivered personally to or shall be mailed, postage prepaid, to each
stockholder of record entitled to vote at such meeting not less than ten
nor more than sixty days before such meeting. If mailed, it shall be
directed to a stockholder at his address as it appears upon the records of
the corporation and upon such mailing of any such notice, the service
thereof shall be complete and the time of the notice shall begin to run
from the date upon which such notice is deposited in the mail for
transmission to such stockholder. Personal delivery of any such notice to
any officer of a corporation or association, or to any member of a
partnership shall constitute delivery of such notice to such corporation,
association or partnership. In the event of the transfer of stock after
delivery of such notice of and prior to the holding of the meeting it shall
not be necessary to deliver or mail notice of the meeting to the
transferee.
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SECTION 5. Business transacted at any special meeting of
stockholders shall be limited to the purposes stated in the notice.
SECTION 6. The holders of a 10% of the stock issued and
outstanding and entitled to vote thereat, present in person or represented
by proxy, shall constitute a quorum at all meetings of the stockholders for
the transaction of business except as otherwise provided by statute or by
the Articles of Incorporation. If, however, such quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote there at, present in person or represented by proxy, shall
have power to adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present or
represented. At such adjourned meeting at which a quorum shall be present
or represented, any business may be transacted which might have been
transacted at the meeting as originally notified. The Company may have
more than one shareholder.
SECTION 7. When a quorum is present or represented at any
meeting, the vote of the holders of a 10% of the stock having voting power
present in person or represented by proxy shall be sufficient to elect
directors or to decide any question brought before such meeting, unless the
question is one upon which by express provision of the statutes or of the
Articles of Incorporation, a different vote shall govern and control the
decision of such question.
SECTION 8. Each stockholder of record of the corporation
shall be entitled at each meeting of stockholders to one vote for each
share of stock standing in his name of the books of the corporation. Upon
the demand of any stockholder, the vote for Directors and the vote upon any
question before the meeting shall be by ballot.
SECTION 9. At any meeting of the stockholders any stockholder
may be represented and vote by a proxy or proxies appointed by an
instrument in writing. In the event that any such instrument in writing
shall designate two or more persons to act as proxies, a majority of such
persons present at the meeting, or, if only one shall be present, then that
one shall have and may exercise all of the powers conferred by such written
instrument upon all of the persons so designated unless the instrument
shall otherwise provide. No proxy or power of attorney to vote shall be
used to vote at a meeting of the stockholders unless it shall have been
filed with the secretary of the meeting when required by the inspectors of
election. All questions regarding the qualifications of voters, the
validity of proxies and the acceptance of or rejection of votes shall be
decided by the inspectors of election who shall be appointed by the Board
of Directors, or if not so appointed, then by the presiding officer of the
meeting.
SECTION 10. Any action which may be taken by the vote of the
stockholders at a meeting may be taken without a meeting if authorised by
the written consent of stockholders holding at least a majority of the
voting power, unless the provisions of the statutes or of the Articles of
Incorporation require a greater proportion of voting power to authorise
such action in which case such greater proportion of written consents shall
be required.
ARTICLE 3
---------
DIRECTORS
SECTION 1. The business of the corporation shall be managed
by it's Board of Directors which may exercise all such powers of the
corporation and do all such lawful acts and things as are not by statute or
by the Articles of Incorporation or by these Bylaws directed or required to
be exercised or done by the stockholders.
SECTION 2. The number of Directors which shall constitute the
whole board shall be One. The number of Directors may from time to time be
increased or decreased to not less than one nor more than fifteen by action
of the Board of Directors. The Directors shall be elected at the annual
meeting of the stockholders and except as provided in section 2 of this
Article, each Director elected shall hold office until his successor is
elected and qualified. Directors need not be stockholders.
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SECTION 3. Vacancies in the Board of Directors including
those caused by an increase in the number of directors, may be filled by a
majority of the remaining Directors, though less than a quorum, or by a
sole remaining Director, and each Director so elected shall hold office
until his successor is elected at an annual or a special meeting of the
stockholders. The holders of a two-thirds of the outstanding shares of
stock entitled to vote may at any time peremptorily terminate the term of
office of all or any of the Directors by vote at a meeting called for such
purpose or by a written statement filed with the secretary or , in his
absence, with any other officer. Such removal shall be effective
immediately, even if successors are not elected simultaneously and the
vacancies on the Board of Directors resulting therefrom shall only be
filled from the stockholders.
A vacancy or vacancies in the Board of Directors shall be deemed to
exist in case of the death, resignation or removal of any Directors, or if
the authorised number of Directors be increased, or if the stockholders
fail at any annual or special meeting of stockholders at which any Director
or Directors are elected to elect the full authorised number of Directors
to be voted for at that meeting.
The stockholders may elect a Director or Directors at any time to fill
any vacancy or vacancies not filled by the Directors. If the Board of
Directors accepts the resignation of a Director tendered to take effect at
a future time, the Board or the stockholders shall have power to elect a
successor to take office when the resignation is to become effective.
No reduction of the authorised number of Directors shall have the
effect of removing any Director prior to the expiration of his term of
office.
ARTICLE 4
---------
MEETINGS OF THE BOARD OF DIRECTORS
SECTION 1. Regular meetings of the Board of Directors shall
be held at any place within or without the State which has been designated
from time to time by resolution of the Board or by written consent of all
members of the Board. In the absence of such designation regular meeting
shall be held at the registered office of the corporation. Special meetings
of the Board may be held either at a place so designated or at the
registered office.
SECTION 2. The first meeting of each newly elected Board of
Directors shall be held immediately following the adjournment of the
meeting of stockholders and at the place thereof. No notice of such meeting
shall be necessary to the directors in order legally to constitute the
meeting, provided a quorum be present. In the event such meeting is not so
held, the meeting may be held at such time and place as shall be specified
in a notice given hereinafter provided for special meetings of the Board of
Directors.
SECTION 3. Regular meetings of the Board of Directors may be
held without call or notice at such time and at such place as shall from
time to time be fixed and determined by the Board of Directors.
SECTION 4. Special meetings of the Board of Directors may be
called by the Chairman or the President or by the Vice-President or by any
two directors.
Written notice of the time and place of special meetings shall be
delivered personally to each director, or sent to each director by mail or
by other form of written communication, charges prepaid, addressed to him
at his address as it is shown upon the records or if not readily
ascertainable, at the place in which the meetings of the directors are
regularly held. In case such notice is mailed or telegraphed, it shall be
deposited in the United States mail or delivered to the telegraph company
at least forty-eight (48) hours prior to the time of the holding of the
meeting. In case such notice is delivered as above provided, it shall be so
delivered at least twenty-four (24) hours prior to the time of the holding
of the meeting. Such mailing, telegraphing or delivery as above provided
shall be due, legal and personal notice to such director.
SECTION 5. Notice of the time and place of holding an
adjourned meeting need not be given
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to the absent directors if the time and place be fixed at the meeting
adjourned.
SECTION 6. The transaction of any meeting of the Board of
Directors, however called and noticed or wherever held, shall be as valid
as though had at a meeting duly held after regular call and notice, if a
quorum be present, and if, either before or after the meeting, each of the
directors not present signs a written waiver of notice, or a consent to
holding such meeting, or approvals of the minutes thereof. All such
waivers, consents or approvals shall be filed with the corporate records or
made a part of the minutes of the meeting.
SECTION 7. A majority of the authorised number of directors
shall be necessary to constitute a quorum for the transaction of business,
except to adjourn as hereinafter provided. Every act or decision done or
made by a majority of the directors present at a meeting duly held at which
a quorum is present shall be regarded as the act of the Board of Directors,
unless a greater number be required by law or by the Articles of
Incorporation. Any action of a majority, although not at a regularly called
meeting, and the record thereof, if assented to in writing by all of the
other members of the Board shall be as valid and effective in all respects
as if passed by the Board in regular meeting.
SECTION 8. A quorum of the directors may adjourn any
directors meeting to meet again at stated day and hour; provided, however,
that in the absence of a quorum, a majority of the directors present at any
directors meeting, either regular or special, may adjourn from time to time
until the time fixed for the next regular meeting of the Board.
ARTICLE 5
---------
COMMITTEES OF DIRECTORS
SECTION 1. The Board of Directors may, by resolution adopted
by a majority of the whole Board, designate one or more committees of the
Board of Directors, each committee to consist of two or more of the
directors of the corporation which, to the extent provided in the
resolution, shall and may exercise the power of the Board of Directors in
the management of the business and affairs of the corporation and may have
power to authorise the seal of the corporation to be affixed to all papers
which may require it. Such committee or committees shall have such name or
names as may be determined from time to time by the Board of Directors. The
members of any such committee present at any meeting and not disqualified
from voting may, whether or not they constitute a quorum, unanimously
appoint another member of the Board of Directors to act at the meeting in
the place of any absent or disqualified member. At meetings of such
committees, a majority of the members or alternate members at any meeting
at which there is a quorum shall be the act of the committee.
SECTION 2. The committee shall keep regular minutes of their
proceedings and report the same to the Board of Directors.
SECTION 3. Any action required or permitted to be taken at
any meeting of the Board of Directors or of any committee thereof may be
taken without a meeting if a written consent thereto is signed by all
members of the Board of Directors or of such committee, as the case may be,
and such written consent is filed with the minutes of proceedings of the
Board or committee.
ARTICLE 6
---------
COMPENSATION OF DIRECTORS
SECTION 1. The directors may be paid their expenses of
attendance at each meeting of the Board of Directors and may be paid a
fixed sum for attendance at each meeting of the Board of Directors or a
stated salary as director. No such payment shall preclude any director from
serving the corporation in any
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other capacity and receiving compensation therefor. Members of special or
standing committees may be allowed like reimbursement and compensation for
attending committee meetings.
ARTICLE 7
---------
NOTICES
SECTION 1. Notices to directors and stockholders shall be in
writing and delivered personally or mailed to the directors or stockholders
at their addresses appearing on the books of the corporation. Notice by
mail shall be deemed to be given at the time when the same shall be mailed.
Notice to directors may also be given by telegram.
SECTION 2. Whenever all parties entitled to vote at any
meeting, whether of directors or stockholders, consent, either by a writing
on the records of the meeting or filed with the secretary, or by presence
at such meeting and oral consent entered on the minutes, or by taking part
in the deliberations at such meeting without objection, the doings of such
meeting shall be as valid as if had at a meeting regularly called and
noticed, and at such meeting any business may be transacted which is not
excepted from the written consent to the consideration of which no object
for want of notice is made at the time, and if any meeting be irregular for
want of notice or of such consent, provided a quorum was present at such
meeting, the proceedings of said meeting may be ratified and approved and
rendered likewise valid and the irregularity or defect therein waived by a
writing signed by all parties having the right to vote at such meeting; and
such consent or approval of stockholders may be by proxy or attorney, but
all such proxies and powers of attorney must be in writing.
SECTION 3. Whenever any notice whatever is required to be
given under the provisions of the statutes, of the Articles of
Incorporation or of these Bylaws, a waiver thereof in writing, signed by
the person or persons entitled to said notice, whether before or after the
time stated therein, shall be deemed equivalent thereto.
ARTICLE 8
---------
OFFICERS
SECTION 1. The officers of the corporation shall be chosen by
the Board of Directors and shall be a President, a Secretary and a
Treasurer. Any person may hold two or more officers.
SECTION 2. The Board of Directors at it's first meeting after
each annual meeting of stockholders shall choose a Chairman of the Board
who shall be a director, and shall choose a President, a Secretary and a
Treasurer, none of whom need be directors.
SECTION 3. The Board of Directors may appoint a Vice-Chairman
of the Board, Vice-Presidents and one or more Assistant Secretaries and
Assistant Treasurers and such other officers and agents as it shall deem
necessary who shall hold their offices for such terms and shall exercise
such powers and perform such duties as shall be determined from time to
time by the Board of Directors.
SECTION 4. The salaries and compensation of all officers of
the corporation shall be fixed by the Board of Directors.
SECTION 5. The officers of the corporation shall hold office
at the pleasure of the Board of Directors. Any officer elected or appointed
by the Board of Directors may be removed any time by the Board of
Directors. Any vacancy occurring in any office of the corporation by death,
resignation, removal or otherwise shall be filled by the Board of
Directors.
SECTION 6. The CHAIRMAN OF THE BOARD shall, preside at
meetings of the stockholders and the Board of Directors, and shall see that
all orders and resolutions of the Board of Directors are carried into
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effect.
SECTION 7. The VICE-CHAIRMAN shall, in the absence or
disability of the Chairman of the Board, perform the duties and exercise
the powers of the Chairman of the Board and shall perform other such duties
as the Board of Directors may from time to time prescribe.
SECTION 8. The PRESIDENT shall be the chief executive officer
of the corporation and shall have active management of the business of the
corporation. He shall execute on behalf of the corporation all instruments
requiring such execution except to the extent the signing and execution
thereof shall be expressly designated by the Board of Directors to some
other officer or agent of the corporation.
SECTION 9. The VICE-PRESIDENT shall act under the direction
of the President and in the absence or disability of the President shall
perform the duties and exercise the powers of the President. They shall
perform such other duties and have such other powers as the President or
the Board of Directors may from time to time prescribe. The Board of
Directors may designate one or more Executive Vice-Presidents or may
otherwise specify the order of seniority of the Vice-Presidents. The duties
and powers of the President shall descend to the Vice-Presidents in such
specified order of seniority.
SECTION 10. The SECRETARY shall act under the direction of the
President. Subject to the direction of the President he shall attend all
meetings of the Board of Directors and all meetings of the stockholders and
record the proceedings. He shall perform like duties for the standing
committees when required. He shall give, or cause to be given, notice of
all meetings of the stockholders and special meetings of the Board of
Directors, and will perform other such duties as may be prescribed by the
President or the Board of Directors.
SECTION 11. The ASSISTANT SECRETARIES shall act under the
direction of the President. In order of their seniority, unless otherwise
determined by the President or the Board of Directors, they shall, in the
absence or disability of the Secretary, perform the duties and exercise the
powers of the Secretary. They shall perform other such duties and have such
other powers as the President or the Board of Directors may from time to
time prescribe.
SECTION 12. The TREASURER shall act under the direction of the
President. Subject to the direction of the President he shall have custody
of the corporate funds and securities and shall keep full and accurate
accounts of receipts and disbursements in books belonging to the
corporation and shall deposit all monies and other valuable effects in the
name and to the credit of the corporation in such depositories as may be
designated by the Board of Directors. He shall disburse the funds of the
corporation as may be ordered by the President or the Board of Directors,
taking proper vouchers for such disbursements, and shall render to the
President and the Board of Directors, at it's regular meetings, or when the
Board of Directors so requires, an account of all his transactions as
Treasurer and of the financial condition of the corporation.
SECTION 13. If required by the Board of Directors, he shall
give the corporation a bond in such sum and with such surety as shall be
satisfactory to the Board of Directors for the faithful performance of the
duties of his office and for the restoration to the corporation, in case of
his death, resignation, retirement or removal from office, of all books,
papers, vouchers, money and other property of whatever kind in his
possession or under his control belonging to the corporation.
SECTION 14. The ASSISTANT TREASURER in the order of their
seniority, unless other wise determined by the President or the Board of
Directors, shall, in the absence or disability of the Treasurer, perform
the duties and exercise the powers of the Treasurer. They shall perform
such other duties and have such other powers as the President or the Board
of Directors may from time to time prescribe.
ARTICLE 9
---------
CERTIFICATES OF STOCK
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SECTION 1. Every stockholder shall be entitled to have a
certificate signed by the President or a Vice-President and the Treasurer
or an Assistant Treasurer, or the Secretary or an Assistant Secretary of
the corporation, certifying the number of shares owned by him in the
corporation. If the corporation shall be authorised to issue more than one
class of stock or more than one series of any class, the designations,
preferences and relative, participating, optional or other special rights
of the various classes of stock or series thereof and the qualifications,
limitations or restrictions of such rights, shall be set forth in full or
summarised on the face or back of the certificate which the corporation
shall issue to represent such stock.
SECTION 2. If a certificate is signed (a) by a transfer agent
other than the corporation or it's employees or (b) by a registrar other
than the corporation or it's employees, the signatures of the officers of
the corporation may be facsimiles. In case any officer who has signed or
whose facsimile signature has been placed upon a certificate shall cease to
be such officer before such certificate is issued, such certificate may be
issued with the same effect as though the person had not ceased to be such
officer. The seal of the corporation, or a facsimile thereof, may, but need
not be, affixed to certificates of stock.
SECTION 3. The Board of Directors may direct a new
certificate or certificates to be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have been
lost or destroyed upon the making of an affidavit of that fact by the
person claiming the certificate of stock to be lost or destroyed. When
authorising such issue of a new certificate or certificates, the Board of
Directors may, in it's discretion and as a condition precedent to the
issuance thereof, require the owner of such lost or destroyed certificate
or certificates, or his legal representative, to advertise the same in such
manner as it shall require and/or give the corporation a bond in such sum
as it may direct as indemnity against any claim that may be made against
the corporation with respect to the certificate alleged to have been lost
or destroyed.
SECTION 4. Upon surrender to the corporation or the transfer
agent of the corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the corporation, if it is satisfied that
all provisions of the laws and regulations applicable to the corporation
regarding transfer and ownership of shares have been complied with, to
issue a new certificate to the person entitled thereto, cancel the old
certificate and record the transaction upon it's books.
SECTION 5. The Board of Directors may fix in advance a date
not exceeding sixty (60) days nor less than ten (10) days preceding the
date of any meeting of stockholders, or the date for the payment of any
dividend, or the date for the allotment of rights, or the date when any
change or conversion or exchange of capital stock shall go into effect, or
a date in connection with obtaining the consent of stockholders for any
purpose, as a record date for the termination of the stockholders entitled
to notice of and to vote at any such meeting, and any adjournment thereof,
or entitled to receive payment of any such dividend, or to give such
consent, and in such case, such stockholders, and only such stockholders as
shall be stockholders of record on the date so fixed, shall be entitled to
notice of and to vote at such meeting, or any adjournment thereof, or to
receive such payment of dividend, or to receive such allotment of rights,
or to exercise such rights, or to give such consent, as the case may be,
notwithstanding any transfer of any stock on the books of the corporation
after any such record date fixed as aforesaid.
SECTION 6. The corporation shall be entitled to recognise the
person registered on it's books as the owner of shares to be the exclusive
owner for all purposes including voting and dividends, and the corporation
shall not be bound to recognise any equitable or other claim to or interest
in such share or shares on the part of any other person, whether or not it
shall have express or other notice thereof, except as otherwise provided by
the laws of Nevada.
ARTICLE 10
----------
GENERAL PROVISIONS
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SECTION 1. Dividends upon the capital stock of the
corporation, subject to the provisions of the Articles of Incorporation, if
any, may be declared by the Board of Directors at any regular or special
meeting, pursuant to law. Dividends may be paid in cash, in property or in
shares of the capital stock, subject to the provisions of the Articles of
Incorporation.
SECTION 2. Before payment of any dividend, there may be set
aside out of any funds of the corporation available for dividends such sum
or sums as the directors from time to time, in their absolute discretion,
think proper as a reserve or reserves to meet contingencies, or for
equalising dividends or for repairing or maintaining any property of the
corporation or for such other purpose as the directors shall think
conducive to the interest of the corporation, and the directors may modify
or abolish any such reserve in the manner in which it was created.
SECTION 3. All checks or demands for money and notes of the
corporation shall be signed by such officer or officers or such other
person or persons as the Board of Directors may from time to time
designate.
SECTION 4. The fiscal year of the corporation shall be fixed
by resolution of the Board of Directors.
SECTION 5. The corporation may or may not have a corporate
seal, as may be from time to time be determined by resolution of the Board
of Directors. If a corporate seal is adopted, it shall have inscribed
thereon the name of the corporation and the words "Corporate Seal" and
"Nevada". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or in any manner reproduced.
ARTICLE 11
----------
INDEMNIFICATION
Every person who was or is a party or is a threatened to be made a
party to or is involved in any action, suit or proceeding, whether civil,
criminal, administrative or investigative, by reason of the fact that he or
a person of whom he is the legal representative is or was a director or
officer of the corporation or is or was serving at the request of the
corporation or for it's benefit as a director or officer of another
corporation, or as its representative in a partnership, joint venture,
trust or other enterprise, shall be indemnified and held harmless to the
fullest extent legally permissible under General Corporation Law of the
State of Nevada time to time against all expenses, liability and loss
(including attorney's fees, judgements, fines and amounts paid or to be
paid in settlement) reasonably incurred or suffered by him in connection
therewith. The expenses of officers and directors incurred in defending a
civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of
the action, suit or proceeding upon receipt of an undertaking by or on
behalf of the director or officer to repay the amount if it is ultimately
determined by a court of competent jurisdiction that he is not entitled to
be indemnified by the corporation. Such right of indemnification shall be
a contract right which may be enforced in any manner desired by such
person. Such right of indemnification shall not be exclusive of any other
right which such directors, officers or representatives may have or
hereafter acquire and, without limiting the generality of such statement,
they shall be entitled to their respective rights of indemnification under
any bylaw, agreement, vote of stockholders, provision of law or otherwise,
as well as their rights under this Article.
The Board of Directors may cause the corporation to purchase and
maintain insurance on behalf of any person who is or was a director or
officer of the corporation, or is or was serving at the request of the
corporation as a director or officer of another corporation, or as it's
representative in a partnership, joint venture, trust or other enterprise
against any liability asserted against such person and incurred in any such
capacity or arising out of such status, whether or not the corporation
would have the power to indemnify such person.
The Board of Directors may from time to time adopt further Bylaws with
respect to indemnification
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and amend these and such Bylaws to provide at all times the fullest
indemnification permitted by the General Corporation Law of the State of
Nevada.
ARTICLE 12
----------
AMENDMENTS
SECTION 1. The Bylaws may be amended by a majority vote of
all the stock issued and outstanding and entitled to vote at any annual or
special meeting of the stockholders, provided notice of intention to amend
shall have been contained in the notice of the meeting.
SECTION 2. The Board of Directors by a majority vote of the
whole Board at any meeting may amend these Bylaws, including Bylaws adopted
by the stockholders, but the stockholders may from time to time specify
particular provisions of the Bylaws which shall not be amended by the Board
of Directors.
APPROVED AND ADOPTED THIS 2ND DAY OF APRIL, 1998.
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EXHIBIT 10.1
INTELLICOM INTERNET CORP.
OFFERING SALES AGENCY AGREEMENT
This Agreement is made by and between INTELLICOM INTERNET CORP. a Nevada
Corporation ("the Company") and Pacific Rim Investments, Inc., a
Corporation organised under the laws of the Republic of Vanuatu (the "Sales
Agent") concerning an offering of Shares of the Company's Common Stock to
be conducted by the Sales Agent (the "Shares" and the "Offering").
The Parties Agree as follows:
1. ENGAGEMENT AS SALES AGENT. Pacific Rim Investments, Inc., is hereby
engaged by the Company as a Sales Agent for the Offering to sell up to
5,000,000 Common Shares at a price to the Purchasers thereof of $0.01 U.S.
per Share. The Sales Agent's engagement shall be on a "best efforts"
"continuous offering" basis. This Agreement shall terminate when all of the
Shares to be offered pursuant to this Agreement are sold unless terminated
earlier pursuant to this Agreement. The Sales Agent will promptly deliver
funds by noon of the third business day following it's receipt into an
account of the Company, and all payments will be made by wire transfer of
funds to the Company. Promptly upon execution of this Agreement, the
Company shall cause such certificates representing 5,000,000 Shares of
Common Stock to be issued in the name of the Sales Agent. Such certificates
shall be free of any restrictive legend as to it's transferability.
However, the Company's Transfer Agent shall prohibit the transfer of Shares
except as certified by the Sales Agent and the Company of the sale of the
Shares pursuant to this Offering and as set forth in Paragraph below.
2. COMPLIANCE WTTH SECURITIES LAWS. The Company and the Sales Agent have
and will comply with all necessary or desirable statutory or regulatory
requirements in the United States of America ("United States"), the
Republic of Vanuatu and each state or nation in which the securities may be
offered or sold in connection with the Offering. The Sales Agent will not
act without having received all such consents or approvals of governmental
or other agencies, persons or institutions which may be reasonably
considered necessary or desirable in connection with the Offering and such
consents or approvals having been received in terms acceptable to the
Company and the
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Sales Agent and being in full force and effect. The Company and the Sales
Agent agree that the Offering shall be conducted in the Republic of Vanuatu
and that the Sales Agent shall provide a legal opinion acceptable to the
Company as to compliance with all relevant laws of the Republic of Vanuatu.
3. MATERIAL INFORMATION AND OFFERING MATERIALS. The Company
has provided the Sales Agent with all material information regarding the
Company, it's operations, management, principal owners, financial condition
and business plans. Upon request of the Sales Agent, the Company shall
prepare an Offering Memorandum which fully and fairly describes the
Company, the securities and terms of the Offering in compliance with the
requirements of Regulation D of the United States Securities and Exchange
Commission (the "Memorandum"). The Company will prepare and deliver to the
Sales Agent as many copies of the Memorandum as the Sales Agent may
reasonably require. The Sales Agent shall not prepare or use a Memorandum
or other sales material without the prior review and written consent of the
Company.
4. SALES COMMISSION. The Sales Agent shall be paid a sales commission of
10% of the sales price per Share for each Share sold by the Sales Agent in
the Offering. The commission shall be deducted from the proceeds of the
Sale of the Shares deposited from time to time by the Sales Agent with the
Company and accompanied by an accounting of the sales and commissions
deducted therefrom.
5. DUE DILIGENCE COOPERATION. The Company agrees that all documents and
other information relating to the Company's affairs have been and will be
made available upon request to the Sales Agent at the Sales Agents office
and copies of any such documents will be furnished upon request to the
Sales Agent. Included within the documents which must be made available as
soon as possible to the extent not already in the possession of the Sales
Agent are at least the Company's Articles of Incorporation and all
amendments thereto, the Company's By-Laws and all amendments thereto,
Minutes of all the Company's Incorporates, Directors and Shareholders
Meetings, all financial statements of the Company, and correct copies of
any material contracts or agreements to which the Company is a party.
6. SALES & BENEFICIAL OWNERSHIP RECORDS. Within 30 days of the completion
or termination of the Offering, the Sales Agent shall provide the Company
with an accurate account of all sales made
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in the Offering. Such account shall indicate the name and address of each
individual purchaser, the number of Shares purchased and whether the
certificate or certificates evidencing the Shares purchased are to be
issued to the purchasers in joint tenancy or otherwise. In the event the
purchaser is reasonably believed to be subject to U.S. income taxation, the
Sales Agent shall also provide the purchaser's social security number or
taxation ID number of the Purchaser. In the event, that Purchasers do not
elect to receive individual certificates for Shares purchased, the Sales
Agent shall continue to hold the certificates for the Shares as the Record
Owner on behalf of the Beneficial Owner(s) who are such Purchaser(s) as
have elected for the Sales Agent to hold the Shares. The Sales agent shall
promptly notify the Company of changes to the Beneficial Owners for whom it
serves as record owner and shall indemnity and hold harmless the Company
and its Transfer Agent from all liability arising from its holding Shares
on behalf of the Purchasers thereof.
7. COMPANY'S EXPENSES. The Company agrees that it will bear all costs and
expenses incident to the issuance, offer, sale and delivery of the Shares,
including all expenses, fees and legal council fees of qualification under
securities laws, the fees and disbursements of legal counsel and
accountants for the Company, the cost of preparing and printing sales
material or Memorandum and related exhibits, including all amendments and
supplements to the Memorandum, the cost of printing as many Memorandums as
the Sales Agent reasonably may deem necessary, and the expenses incurred by
Company representatives in attending a reasonable number of "due diligence"
meetings (which shall include all expenses of presentations reasonably
specified by the Sales Agent) with the Sales Agents representatives and any
other expenses customarily paid by an issuer.
8. SALES AGENT EXPENSES. The Sales Agent shall pay its own expenses
including all mailing, telephone, travel and clerical costs and all other
office costs incurred or to be incurred by the Sales Agent or by it's sales
personnel in connection with the Offering as well as all fees and expenses
of any legal counsel whom it may employ to represent it in connection with
the Offering.
9. RIGHT OF INSPECTION. For a period of five years after the date of this
Agreement, the Sales Agent will have the right, at
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the Sales Agent's expense, to have a person or persons selected by the
Sales Agent, review the books and records of the Company, provided that the
Sales Agent may cause such review no more than once in any twelve (12)
month period.
10. FINDER. The Company and the Sales Agent represent to each other that no
person has acted as a finder in connection with this Agreement and each
will indemnify the other party with respect to any claim for finders fees
in connection herewith.
11. INDEMNIFICATION. The Parties agree to indemnify, defend, and hold each
other and each person, if any, who controls the Company or the Sales Agent,
free and harmless from and against any and all losses, claims, demands,
liabilities, and expenses (including reasonable legal or other expenses
incurred in connection with defending or investigating any such claims or
liabilities, whether or not resulting in any liability to the Party or
controlling person(s) which the Party or controlling person(s) may incur
under the United States law, U.S. State Securities Laws, common law or
Vanuatu law or otherwise, but only to the extent that such liabilities
arise out of or are based upon any untrue statement or alleged untrue
statement of a material fact (or omission of a material fact necessary to
make the statements not misleading) contained in any document prepared
pursuant to this Agreement; provided, however, that this indemnity
agreement shall not apply to statements or omissions made in reliance upon
information furnished by either Party, in writing, expressly in use for any
document prepared pursuant to this Agreement. The foregoing indemnity shall
not be deemed to protect Party or controlling person(s) to which either
Party would otherwise be subject by reason of willful misfeasance, bad
faith, or gross negligence in the performance of their duties, or by reason
of their reckless disregard of their obligations and duties under this
Agreement; and such indemnity shall further not apply to any violations,
statements or omissions made in reliance upon written information furnished
to either Party expressly for use in any documents prepared pursuant to
this Agreement. Each Party and their controlling person(s) agree to give
the other Party and their controlling person(s) an opportunity to
participate in the defense or preparation of the defense of any action
brought to enforce any such claim or liability for which the Parties have
agreed to indemnity and defend, and each Party shall have the right so to
participate. Th agreement of each Party under the foregoing indemnity is
expressly conditioned upon notice of any such action having been sent by
the Party or controlling person(s), as the case may be, to the other Party,
promptly after the
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commencement of such action against either Party or controlling person(s),
such notice either being accompanied by copies of papers served or filed in
connection with such action or by a statement of the nature of the action
to the extent known to the Party. Failure to notify the other Party within
a reasonable amount of time of any such action shall relieve the other
Party of it's respective liabilities under the foregoing indemnity, but
failure to notify the other Patty shall not relieve it from any liability
which it may have to the other Party or controlling person(s) other than on
account of this indemnity provision. Neither Party shall be liable for
amounts paid in settlement of any such claim if such settlement was
effected without its prior notification. The provisions of this paragraph
shall not in any way prejudice any right or rights which either Party may
have against the other Party under any Federal or State securities law, at
common law or otherwise.
12. NOTICE OF LEGAL PROCEEDINGS. It is agreed that the Company and the
Sales Agent will each advise the other patty immediately and confirm in
writing the receipt of any threat of or the initiation of any steps or
procedures which would impair or prevent the right to offer the Shares or
the issuance of any orders or other prohibitions, preventing or impairing
the proposed offering, by the SEC or any other regulatory authority. In the
case of the happening of any such event, neither the Company nor the Sales
Agent will acquiesce in such steps, procedures or suspension orders and
each party agrees to actively defend any such actions or orders unless both
parties agree in writing to the acquiescence in such actions or orders.
13. CANCELLATION. If for any reason the Company or the Sales Agent decides
in their sole discretion not to proceed with the Offering, such party shall
provide written notice of such termination to the other party. The Company
nor the Sales Agent shall have any liability to the other if either decides
not to proceed with the Offering for any reason whatsoever.
14. NOTICES. All notices hereunder shall be in writing and be delivered or
mailed, certified mail with return receipt requested, to the following
addresses, or be by telegram sent to the following addresses with written
confirmation thereafter forwarded:
To the Company: President
INTELLICOM INTERNET CORP.
#1009-470 Granville St.
Vancouver, B.C. CANADA V6C 1V5
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To the Sales Agent:
Pacific Rim Investments, Inc.
2nd Floor, Pilioko House,
Rue Emile Mercet, Box # 782,
Port Vila, Vanuatu, South Pacific.
15. INDEPENDENT STATUS OF PARTIES. Nothing in this Agreement shall render
either Party a general partner of the other. Nor shall either Party be a
general agent for the other, nor any agency authority be deemed given to
the other Party except as expressly set forth in this Agreement or by
subsequent written authorization of either Party.
16. DISPUTE RESOLUTION. Any dispute or controversy arising out of or
relating to this Agreement, or any breach of this Agreement shall be
settled by negotiated and good faith use
of dispute resolution alternatives prior to litigation. Any Party who fails
to proceed in good faith with alternative dispute resolution as determined
by a Court with jurisdiction or by the competent Finder of Fact in
Arbitration shall be liable to the non-breaching Party for the cost of
defending the claim in dispute regardless of the outcome of said dispute
resolution.
17. ENTIRE AGREEMENT. This Agreement contains the entire Agreement among
the parties which may not be amended nor may any rights hereunder be waived
except by an instrument in writing signed by the party sought to be charged
with such amendment or waiver.
18. GOVERNING LAW. This Agreement shall be construed in accordance with,
and governed by, the laws of Nevada.
19. BINDING EFFECT. This Agreement shall be binding upon and shall inure to
the benefit of the parties and their respective personal representatives
and assigns, except as above set forth.
20. COUNTERPART SIGNATURES. This Agreement may be executed in any number of
counterparts of the signature page, each of which shall be considered an
original. In addition, a signature transmitted by fax identifying the
source thereof shall be considered an original signature.
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EXECUTED BY THE PARTIES AS SET FORTH BELOW AS OF THIS 2nd, DAY OF APRIL,
1998.
Intellicom Internet Corp. Pacific Rim Investments, Inc.
By: JAMES WEST By: CHARLES BURN
James West, President Charles Burn, CEO
50
EXHIBIT 10.2
CONSULTING SERVICES AGREEMENT
-----------------------------
THIS AGREEMENT made as of the 20th day October, 1998
BETWEEN:
MACDONALD HARRIS & ASSOCIATES LTD, a British Columbia
corporation having its office at 1010 Seymour Street,
Vancouver, British Columbia, V6B 4Y4, Fax No.: (604)
608-0632 ("MHA")
AND:
ELGRANDE.COM INC, having its office at 7361 Bermuda
Road, Las Vegas, Nevada 89123, USA, Fax No.: (604)
713-0872 ("Client")
WITNESSES that the parties agree as follows:
1. INTERPRETATION
--------------
1.1 DEFINITIONS
The following terms shall, when used in this Agreement, have the
following meanings:
(a) "AFFILIATE" means, in relation to a party, any entity in which
that party owns both legally and beneficially not less than 80%
of the voting securities or rights and which is directly
controlled by that party;
(b) "COMPONENT SOFTWARE" includes software authoring tools and
server programmes and other like software components developed
and owned by MHA and used in the creation of the Site Software;
(c) "CONFIDENTIAL INFORMATION" means all commercial, financial,
legal, personal and/or technical information concerning the
Disclosing Party or any of its Affiliates disclosed by the
Disclosing Party or any of its Affiliates to the Receiving Party
or any of its Affiliates, the further disclosure of which could
reasonably be expected to have an adverse impact on the
Disclosing Party or any of its Affiliates to which it pertains,
and any information otherwise identified by the Disclosing Party
as "confidential", and all computer software owned or used by
the Disclosing Party in its business, but excludes information
that:
(i) is in the public domain, or becomes in the public domain
other than as a result of a breach of this agreement by
the Receiving Party; or
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(ii) is known to the Receiving Party before disclosure to it by
the Disclosing Party;
(iii) is disclosed to the Receiving Party by a third person who
is under no obligation of confidentiality with respect
thereto; or
(iv) forms part of any software source code that is intended to
be accessible to an end-user browser accessing a web site
including, without limitation, HTML and Java scripts and
other client-side software source code.
(d) "DISCLOSING PARTY" means MHA in respect of its disclosure of its
Confidential Information to Client, and Client in respect of its
disclosure of its Confidential Information to MHA;
(e) "DOMAIN" means that portion of a URL (Universal Resource
Locator) that lies immediately to the right of the protocol
identifier, such as "http://" and immediately to the left of
the very first single forward slash "/" (reading the URL from
left to right) -- for example, in the URL
"http://www.mha.ca/exmet/" the domain is "www.mha.ca";
(f) "EXPENSES" means those expenses that are reimbursable to MHA by
Client pursuant to paragraph 4.2;
(g) "FEES" means the fees payable to MHA under paragraph 4.1;
(h) "NON-PRODUCTION SERVER SOFTWARE" means server software used on
non-production servers;
(i) "PRODUCTION SERVER SOFTWARE" means server software used on
production servers;
(j) "RECEIVING PARTY" means MHA as recipient of Confidential
Information of Client, and Client as recipient of Confidential
Information of MHA;
(k) "SERVICES" means consulting and related services to be performed
by MHA hereunder, as generally described in paragraph 2.1 and
Schedule A;
(l) "SHOP ENGINE" means an online public web site where the
principal perceived utility of the domain containing such web
site is to provide a search service for an open-ended inventory
database of third party consumer products (not including used
products) available for immediate online purchase and where the
entity operating the domain is acting strictly as a transaction
broker for such products, which are neither owned nor handled by
such entity;
(m) "SITE SOFTWARE" means software created by MHA specifically for
the Client under this Agreement, which software facilitates
operation and management of the Client's business of operating
an online retail transaction service for the sale of third party
products but specifically excludes Component Software;
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(n) "SOFTWARE" means Site Software and Component Software;
(o) "TERM" means the term of this Agreement, including any
extensions thereof, as determined under paragraph 8.1.
1.2 REFERENCES: Unless otherwise stated, a reference to "this
Agreement" or "herein", "hereof", "hereunder" and other similar terms
refers to this Agreement as a whole, together with any schedules hereto and
any amendments hereto, and not just to the particular clause or paragraph
in which those words appear and a reference herein to a numbered or
lettered section or paragraph refers to the section or paragraph bearing
that number or letter in this Agreement.
1.3 CAPTIONS: The captions in this Agreement have been inserted for
reference and as a matter of convenience only and in no way define, limit
or enlarge the scope or meaning of this Agreement or any of its provisions
1.4 NUMBER: In this Agreement, words importing the singular number
only shall include the plural and vice versa and words importing the
masculine gender shall include the feminine and neuter genders and vice
versa.
1.5 SCHEDULE: The attached Schedule A to this Agreement forms an
integral part of this Agreement.
2. SERVICES AND LICENSE
--------------------
2.1 SERVICES: MHA shall provide to Client the Services described in
paragraph 1 of Schedule A. MHA will deliver to Client a written report at
the end of each calendar month during the Term outlining the progress made
during that month.
2.2 ASSISTANCE: Client shall provide MHA with access to information,
materials, equipment and facilities as may be necessary for MHA to perform
the Services.
2.3 LICENSE: Subject to the payment of all Fees and Expenses, MHA
hereby grants to Client the exclusive license to use the Site Software and
the non-exclusive license to use the Component Software in conjunction with
its use of the Site Software. Client may permit Affiliates to use the
Software provided however that the number of domains using the Software
shall at no time exceed five, subject to paragraph 9.6, and provided that
Client shall ensure that Affiliate's use of the Software shall be in
compliance with terms and conditions of this Agreement, including without
limitation, the credit and proprietary rights notices set forth in
paragraph 2.4 of this Agreement. Client agrees that it will not transfer,
lease, rent, sublicense or franchise the Software to any other person or
entity except that it may sublicense the Software to its Affiliates as
provided herein, or transfer the Software in connection with the transfer
of its entire business or of a domain, in either case in compliance with
paragraph 9.6. Client acknowledges and agrees that MHA may at all times
use and license others to use the Component Software without restriction.
2.4 CREDIT: Client agrees to permit MHA to include a small permanent
graphical hyperlinked logo tag not smaller than 215 pixels by 45 pixels and
descriptive text not smaller than
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that generated by the HTML sizing code "<FONT SIZE=0>" to the effect of:
"Web and Database Design, Programming and Development by Macdonald Harris
& Associates Ltd." and "This site was developed using MHA's Visual Server
Side database connectivity tools." located on the top screen of the "about
page" which is to be directly accessible from the front page of the
www.elgrande.com and every other domain of Client or its Affiliate running
the Software. Furthermore, it is agreed that all legal notices necessary
to protect the proprietary rights of the parties will be included on, the
"about page". Client shall not delete or alter the graphical hyperlinked
logo tag and text notices under any circumstances. MHA hereby authorizes
Client to reproduce and display its logo for the foregoing purposes.
Client further agrees to permit MHA to identify Client as a customer of MHA
and for such purposes, hereby authorizes MHA to reproduce and display
Client's logo on MHA's web site and other promotional material, and to
create hyperlinks to Client's web site(s) from MHA's web site.
2.5 HARDWARE AND SOFTWARE ACQUISITIONS: As part of the Services, MHA
will acquire production server software licenses, including licenses for
Oracle 8 database server software and a secure transaction server software.
As part of the Services, MHA will acquire and transfer to Client a
production server to be used by Client to host its web site and database.
The production server software licenses and the production server provided
by MHA to Client must have a combined retail value not less than $50,000 at
the time of acquisition by MHA.
2.6 ADDITIONAL SERVICES: Client may from time to time request MHA
to perform additional services that are beyond the scope of this Agreement
including any modification of the Software. If MHA performs such
additional services, it will be entitled to compensation at its then
current professional rates for such additional services. If MHA has
declined to provide additional services requested by Client, Client may
engage a third party to provide the additional services provided however
that such third party must sign MHA's standard non-disclosure agreement
before Client provides such third party with access to the Software.
3. PROPRIETARY RIGHTS
------------------
3.1 SOFTWARE: Client acknowledges and agrees that except for the
license granted herein, MHA shall retain all rights, including copyright
and other intellectual property rights, in and to the Site Software and the
Component Software. Without limiting the generality of foregoing, MHA
shall at all times retain have the right to use and license others to use
the Component Software, in other databases, virtual store fronts, web
sites, intranets, extranets, on-line e-commerce systems and other network
computing systems.
3.2 SERVER SOFTWARE: MHA acknowledges and agrees that all production
server software licenses acquired will become the property of Client upon
completion of the Services. Client acknowledges and agrees that MHA shall
at all times remain the exclusive owner of all licenses to non-production
server software acquired in connection with the Services, including without
limitation, development server tools and development resources.
3.3 HARDWARE: MHA acknowledges and agrees that the production server
shall be transferred to Client upon completion of the Services. Client
acknowledges and agrees that all non-production servers and hardware
acquired in connection with the Services shall at all times remain the
exclusive property of MHA.
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4. FEES AND EXPENSES
-----------------
4.1 FEES: Client shall pay MHA for the Services the Fees set out in
paragraph 2 of Schedule A. Social service tax ("PST") and Goods and
services tax ("GST") are not included in the Fees. PST and GST, if any,
will be paid by Client to MHA on each payment in respect of the Fees.
4.2 EXPENSES: Client shall reimburse MHA at cost for the following
pre-authorized reasonable Expenses incurred in performing the Services:
travel and accommodation costs, long distance telecommunications costs,
courier, and reproduction costs, and other reasonable out-of-pocket costs.
MHA shall give Client, at its request, copies of receipts or other
customary expense documentation for Expenses incurred.
5. CONFIDENTIAL INFORMATION
------------------------
5.1 CONFIDENTIALITY: The Receiving Party will maintain the
confidentiality of the Confidential Information and prevent the
unauthorized disclosure to others of Confidential Information. The
Receiving Party shall disclose Confidential Information only to its
directors, officers and employees who require access to such Confidential
Information for the performance of its obligations under this Agreement or
the exercise of its rights under the licenses granted pursuant to this
Agreement, including but not limited to, the use of the Software. If
requested by the Disclosing Party, the Receiving Party shall require each
of its directors, officers or employees who have access to the Confidential
Information, and any third person to whom the Confidential Information is
disclosed with the consent of the Disclosing Party, to execute and deliver
to the Disclosing Party a written confidentiality agreement in favour of
the Disclosing Party on terms and conditions substantially as set out in
this section and as approved in writing by the Disclosing Party.
5.2 RETURN OF CONFIDENTIAL INFORMATION: Upon termination of this
Agreement, or otherwise upon demand of the Disclosing Party, the Receiving
Party shall deliver to the Disclosing Party all copies, whether written, in
the form of computer data or otherwise, of the Confidential Information and
all documents and materials prepared by or for the Receiving Party which
include or refer to Confidential Information and the Receiving Party shall
delete all Confidential Information from any computer system, retrieval
system or database of the Receiving Party, provided however that the
foregoing obligation shall not apply to Client's exercise of its rights
under the licenses of the Software granted pursuant to this Agreement,
including but not limited to the use of the Software, and if termination
occurs pursuant to paragraph 8.5, the modification of the Software. The
Receiving Party shall cause all third parties to whom it has provided any
Confidential Information to comply with this paragraph and, if requested by
the Disclosing Party, the Receiving Party shall provide to the Disclosing
Party a statutory declaration of a senior officer of the Receiving Party
confirming that the Receiving Party and all such third parties have
complied with the provisions of this paragraph.
5.3 DISCLOSURE REQUIRED BY LAW: The Receiving Party shall not be in
breach of this Agreement as a result of the disclosure of any Confidential
Information required by law or judicial or administrative process, provided
that the Receiving Party provides the Disclosing Party with as much notice
as is reasonably possible in the circumstances prior to making any such
disclosure of
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Confidential Information and cooperates with the Disclosing Party in any
application, proceedings or other action undertaken by the Disclosing Party
to obtain a protective order or other means of protecting the
confidentiality of the Confidential Information required to be disclosed.
5.4 PUBLICITY: Neither party nor any member of its staff will
without the other party's consent comment publicly or make any statements
to a member of any media group regarding the other party, its Affiliates,
and their principals, employees, customers, and business. Notwithstanding
anything in this Agreement, MHA may publicize for promotional purposes
general technical and statistical information regarding the performance and
efficiency of Client's or its Affiliate's Shop Engine web site servers,
including traffic and transaction volume statistics and database size
statistics, but specifically excluding client contact and customer specific
information. At MHA's request, Client will provide to MHA access to the
foregoing information.
5.5 AFFILIATES: The Receiving Party shall cause any of its
Affiliates to whom Confidential Information is disclosed to comply with the
terms of this section 5.
6. NON-COMPETITION; NON-SOLICITATION
---------------------------------
6.1 NON-COMPETITION: For a period of 90 days after the date that a
Client's or its Affiliate's Shop Engine web site is made accessible to
members of the public, MHA will not provide to any third party a Shop
Engine. For a period of 8 months from the date that a Client's or its
Affiliate's Shop Engine web site is made accessible to members of the
public, MHA will not provide to any third party a Shop Engine that offers
for sale a combination of products that includes books, music and computer
software. The foregoing non-competition covenant shall have no force or
effect in the event of any termination of this Agreement prior to the end
of the Term.
6.2 NON HIRING RESTRICTION: Neither MHA nor Client shall solicit
directly or indirectly, hire, nor retain in any fashion throughout Canada,
any employee, officer, contractor or agent of the other, unless mutually
agreed to between the parties, prior to and for a period of two years from
the date of completion of the Services.
7. LIMITED WARRANTY; LIABILITY LIMITED
-----------------------------------
7.1 LIMITED WARRANTY: MHA warrants that the Software, when correctly
used on correctly functioning hardware and internet access services and
when used with correctly maintained and functioning databases, will for a
period of 12 months from the date that the Software is delivered to the
Client:
(i) enable Client's clients to import product data using a
pre-determined ASCII delimited text format suitable for
database professionals;
(ii) enable manual editing of Client's client and contact
records through a password protected graphical user
interface;
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<PAGE>
(iii) enable customers of the Client to search for and order
products listed in the inventory databases through an
online graphical user interface at Client's Shop Engine
web site(s);
(iv) enable payment processing through a reputable online
payment solution provider specified by Client and
reasonably acceptable to MHA as to practical and technical
viability; and
(v) enable tracking of banner graphic images to indicate which
image was shown, to which IP address the image was shown,
the number of click - throughs for each image and to
enable the control of the number of times the image
appears (assuming there is adequate site traffic).
THE FOREGOING ARE THE EXCLUSIVE WARRANTIES UNDER THIS AGREEMENT AND IN LIEU
OF ALL OTHER WARRANTIES AND CONDITIONS, WHETHER EXPRESSED OR IMPLIED,
INCLUDING WITHOUT LIMITATION, ANY IMPLIED WARRANTY OR CONDITION OF
MERCHANTABILITY, DURABILITY, FITNESS FOR A PARTICULAR PURPOSE OR NON-
INFRINGEMENT OF A THIRD PARTY RIGHTS.
For any breach of the foregoing warranties, Client's exclusive remedy and
MHA's entire liability will be commercially reasonable efforts of MHA,
during the stated warranty period, to correct errors in the Software that
cause the breach of warranty.
7.2 LIABILITY LIMITED: IN NO EVENT WILL A PARTY BE LIABLE TO THE
OTHER PARTY OR ANY THIRD PARTY FOR ANY DIRECT, INDIRECT, INCIDENTAL,
SPECIAL OR CONSEQUENTIAL OR ACCIDENTAL DAMAGES, INCLUDING WITHOUT
LIMITATION, DAMAGES FOR BUSINESS INTERRUPTION, OR LOSS OF PROFITS, REVENUE,
DATA OR USE OF THE PROGRAM, OR BODILY INJURY OR DEATH OR PROPERTY DAMAGE OR
LOSS, WHETHER IN CONTRACT OR TORT, INCLUDING NEGLIGENCE, EVEN IF THAT PARTY
HAS BEEN ADVISED THE POSSIBILITY OF SUCH DAMAGE. THE PROVISIONS OF THIS
SECTION 7 ALLOCATE THE RISKS UNDER THIS AGREEMENT BETWEEN MHA AND THE
CLIENT AND THIS ALLOCATION OF RISK IS REFLECTED IN THE PRICING.
8. TERM
----
8.1 TERM: This Agreement shall be for the Term set out in paragraph
4 of Schedule A, subject to earlier termination pursuant to paragraphs 8.2,
and to extension by the mutual written agreement of the parties.
8.2 TERMINATION BY MHA FOR BREACH: MHA may terminate this Agreement
effective immediately upon written notice to Client if Client is in default
under, or breach of, this Agreement and has not remedied that default or
breach within five business days after receipt of written notice from MHA
specifying the default or breach.
8.3 TERMINATION BY CLIENT FOR CONVENIENCE: At any time up until the
date that MHA has delivered to Client the production server and a test
version of the Site Software, Client may terminate this Agreement for
convenience upon written notice to MHA, which termination will be effective
immediately upon receipt of written notice by MHA.
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8.4 IMMEDIATE TERMINATION OF LICENSE: The license granted under this
Agreement shall automatically terminate, without any further action by MHA,
if Client becomes insolvent or unable to pay its debts as they become due
or ceases to pay its debts as they become due in the ordinary course of
business or makes an assignment for the benefit of its creditors, or is
liquidated or dissolved or any proceedings are commenced against Client
under any debtor's relief law and such proceedings have not been vacated or
set aside within 30 days or a receiver is appointed for Client or any of
its assets.
8.5 OTHER TERMINATION BY CLIENT: Client shall have the right to
terminate this Agreement if MHA makes an assignment on behalf of its
creditors, or is liquidated or dissolved or any proceedings are commenced
against MHA under any debtor's relief law and such proceedings have not
been vacated or set aside within 30 days or a receiver is appointed for MHA
or any of its assets. Upon termination pursuant to this paragraph 8.5,
Client shall have the option to continue to have the right to use and
modify the Software subject to the same restrictions as are specified in
paragraph 2.3 of this Agreement, at no additional cost to Client, provided
however that Client has paid all amounts which would have been otherwise
owing hereunder to the date of termination.
8.6 OBLIGATIONS ON TERMINATION: Upon termination of this Agreement
prior to the end of the Term, MHA shall be entitled to receive the
following:
(a) payment in accordance with paragraphs 4.1 and 4.2 of Fees for
Services performed, and Expenses incurred, to the effective date
of termination, including without limitation, the per diem Fees
for the Services to the effective date of termination calculated
using the per diem rate of $1,467 (equals $44,000/30 days);
(b) the February 1, 1999 installment held in trust for the benefit
of MHA by Ladner Downs as provided in paragraph 2 of Schedule A;
and
(c) an amount calculated as follows:
$88,000 x (The number of days from November 1,
1998 to the effective date of termination)
------------------------------------------
120
Client acknowledges and agrees that the amounts payable for early
termination under (b) and (c) above, if any, are not penalties but a
genuine pre-estimate of the damages which will be suffered by MHA as a
result of early termination on the part of Client for convenience.
In the event of any termination prior to the end of the Term, Client shall
be entitled to received from MHA the following:
(a) all work product produced by MHA in its performance of the
Services under this Agreement to the effective date of
termination, regardless of the medium on which such work product
has been produced or stored, but excluding all Software and
licenses therefor;
-8-
58
<PAGE>
(b) if acquired by MHA pursuant to this Agreement prior to the
effective date of termination, the production server and all
production server software licences.
8.7 SURVIVAL: Notwithstanding any other provisions of this
Agreement, the provisions of Sections 3, 4, 5, 6 and 7 and paragraphs 2.3,
2.4, 2.6, 8.5, 8.6, 8.7 and 9.1 and all provisions of this Agreement
necessary for the interpretation or enforcement of any of the foregoing
sections and paragraphs shall survive the termination of all or any part of
this Agreement and shall continue in full force and effect, and references
in this Agreement to termination of this Agreement shall not apply to those
sections and paragraphs unless the parties agree in writing. Except as
specifically provided in this Agreement, the termination of this Agreement
does not release any party from any liability or obligation arising prior
to the date of termination.
9. GENERAL CONDITIONS
------------------
9.1 RELATIONSHIP: Client and MHA are independent contractors, and
each party and its employees and agents are not, and shall not represent
themselves to be, directors, officers, employees, agents, partners or joint
venturers of the other party or an Affiliate. Nothing herein shall be
deemed to require that MHA provide its services exclusively to Client, and
MHA hereby acknowledges that Client shall not be required, on behalf of MHA
or any of its employees, to make the remittances or payments required of
employees and that neither MHA nor any of its employees shall be entitled
to the benefits provided by Client to its employees.
9.2 AUTHORITY LIMITED: Neither party nor its employees and agents
are authorized to make any contract, or incur any legal obligation, binding
upon the other party or its Affiliates, without the consent of the other
party in each case.
9.3 LAW: This Agreement is governed by British Columbia law,
excluding rules of private international law that lead to the application
of any other law.
9.4 DISPUTE SETTLEMENT: All disputes arising out of or in connection
with this Agreement, or in respect of any defined legal relationship
associated with, or derived from, this Agreement, will be referred to and
finally resolved by arbitration under the rules of the British Columbia
International Commercial Arbitration Centre ("BCICAC"). There will be one
arbitrator. The appointing authority is the BCICAC. The case will be
administered by the BCICAC in accordance with its "Procedures for Cases
under the BCICAC Rules". The place of arbitration is Vancouver, Canada.
The language of the arbitration is English. If at the time a dispute
arises, the BCICAC does not exist, the dispute shall be resolved by
arbitration pursuant to the COMMERCIAL ARBITRATION ACT (BRITISH COLUMBIA).
9.5 NOTICES: All notices, including but not limited to approvals and
consents, must be in writing. Notice may be given personally or sent by
facsimile transmission to the addresses or fax numbers set out on page one.
A party may change its address or fax number for notices by subsequent
notice. Notices given by facsimile transmission are considered received on
the business day following the date of transmission.
9.6 ASSIGNMENT: This Agreement and the license granted herein may
not be transferred, leased, sublicensed, subcontracted or assigned by
either party to any other entity
-9-
59
<PAGE>
without the prior written consent of the other party, except however in the
event of a sale of all or substantially all of the assets and business of
a party, consent of the other party will not be required. Client or its
Affiliate may not transfer any domain that uses the Software apart from a
sale of all or substantially all of the assets and business of the Client
unless Client has paid to MHA a transfer fee in respect of the Software
being transferred to the third party transferee (which transfer fee shall
in no event exceed $300,000), and unless the third party transferee has
entered into a written license agreement with MHA. Upon the transfer by
Client or its Affiliate of a domain using the Software, the number of
domains at which Client or its Affiliate may use the Software under
paragraph 2.3 of this Agreement shall be reduced by the corresponding
number.
9.7 AMENDMENT: This Agreement may be amended only by a written
agreement signed by Client and MHA.
9.8 NON WAIVER: A waiver by any party of any breach of this
Agreement by another party does not operate as a waiver of any continuing
or subsequent breach. Waivers are not enforceable unless in writing.
9.9 SEVERABILITY: If any part of this Agreement is invalid, all
other parts of this Agreement remain enforceable.
9.10 ENTIRE AGREEMENT: This Agreement is the entire agreement between
the parties regarding its subject matter. All prior agreements and
communications, whether verbal or written, are of no legal effect.
9.11 ENUREMENT: This Agreement enures to the benefit of and is
binding upon the parties and their respective successors and permitted
assigns.
9.12 FURTHER ASSURANCES: Each party shall do all such things and
execute and deliver all such documents and instruments as may be required
to give full effect to the obligations set forth in this Agreement.
-10-
60
<PAGE>
9.13 CURRENCY: All monetary values in this Agreement are in Canadian
dollars.
IN WITNESS WHEREOF the parties have executed this Agreement as
of the day and year first above written.
MACDONALD HARRIS & ASSOCIATES LTD.
By: /s/ MURRAY MACDONALD
______________________________
Murray Macdonald
ELGRANDE.COM INC.
By: /s/ MICHAEL PAGE
______________________________
Michael Page
-11-
61
<PAGE>
SCHEDULE A
----------
1. DESCRIPTION OF SERVICES
-----------------------
Creation of a commercial web site and associated database to facilitate
client's electronic commerce activities located at the domain name
elgrande.com.
2. FEES
----
Client shall pay the following amounts on account of Fees on the first day
of the month specified below:
October 1998 $60,000*
November 1998 $52,000*
December 1998 $44,000
January 1999 $92,000
February 1999 $44,000**
March 1999 $88,000***
*MHA acknowledges that Client has as of the date of signing of this
Agreement paid $50,000 of the October 1, 1998 instalment of $60,000. The
remaining $10,000 of the October 1, 1998 instalment together with the
November 1, 1998 instalment of $52,000, for a total of $62,000 will be paid
to MHA concurrent with the signing of this Agreement.
**Client agrees to pay the February 1, 1999 instalment of $44,000 to MHA's
lawyers, Ladner Downs, to be held in trust for the benefit of MHA, which
sum may be released by Ladner Downs to MHA on the earlier of the following:
(a) five business days have elapsed after the Client has
failed to pay a scheduled instalment under the Agreement;
(b) any termination of the Agreement; or
(c) February 1, 1999.
***In lieu of cash payment, Client may deliver to MHA free trading common
shares in a capital of Elgrande.com Inc. in such quantity that the value of
the common shares delivered shall not be less than $88,000 together with
all fees, commissions and other charges ordinarily payable upon liquidation
of such shares, which value will be calculated by reference to the Current
Market Price. If free trading common shares in the necessary quantity are
not available on June 1, 1999, Client shall pay to MHA $88,000 in cash.
The "Current Market Price" at any date shall be the weighted averaged price
per share for common shares for 20 consecutive trading days before such
date on the NASD-OTC EBB in the common shares (or, if the common shares are
not listed on the NASD-OTC EBB, on such other stock exchange or market on
which the common shares are listed). The weighted averaged price shall be
determined by dividing the aggregate sale price of
-1-
62
<PAGE>
all such shares sold on the said exchange or a market during the said 20
consecutive trading days by the total number of such shares so sold.
3. TERM
----
This Agreement shall be effective from October 20, 1998 and terminate on
March 1, 1999 unless earlier terminated in accordance with the Agreement or
extended by the mutual agreement of the parties.
-2-
63
<PAGE>
November ___, 1998
DIRECTION TO PAY
TO: Ladner Downs
1200 Waterfront Centre
200 Burrard Street
P.O. Box 48600
Vancouver, B.C.
V7X 1T2
RE: The sum of $44,000 hereby paid by the undersigned to Ladner
Downs in trust by certified cheque, representing the February 1,
1999 instalment of fees payable under the Consulting Services
Agreement between Macdonald Harris & Associates Ltd. and
Elgrande.com Inc. dated as of October 20, 1998 (the "Agreement")
The undersigned hereby irrevocably authorizes Ladner Downs to pay to
Macdonald Harris & Associates Ltd. the sum of $44,000 held by Ladner Downs
in trust for the benefit of Macdonald Harris & Associates Ltd., on the
earlier of the following:
(a) five business days have elapsed after the undersigned has
failed to pay a scheduled instalment under the Agreement;
(b) any termination of the Agreement; or
(c) February 1, 1999.
ELGRANDE.COM INC.
By:__________________________
Michael Page
64
EXHIBIT 10.3
CONSULTING AGREEMENT
This Consulting Agreement ("the Agreement") made this 1st day of September
1998.
BETWEEN:
INTELLICOM INTERNET CORP., a Nevada Corporation, with offices at 308-1040
Hamilton Street, Vancouver, B.C. Canada. ("Intellicom")
AND,
MICHAEL PAGE, an individual resident in Vancouver, B.C. Canada.
("Page")
WHEREAS, Intellicom wishes to engage Page as a consultant on the terms
and conditions set out herein and Page wishes to be engaged on the terms
and conditions set out herein.
NOW THEREFORE WITNESSETH THAT, the parties for valuable consideration
contained herein agree with each other as follows:
1. Intellicom herein agrees to engage Page as a consultant and Page
hereby accepts said engagement with Intellicom upon the terms and
conditions set forth.
2. The consulting engagement shall commence on October 1st 1998 and shall
continue for 2 (two) years. If Intellicom's common shares do not trade
before September 30th 2000 then this agreement shall terminate on that
date.
3. Page is engaged as a full time consultant.
4. Page shall also carry out such other duties as the Board of Directors
or the President shall assign from time to time.
5. Compensation shall be as follows: FEES: Page shall be paid the sum of
$6750.00 Cdn per month unless increased by the Board of Directors at
an annual review.
6. Page shall diligently and competently devote their full business time,
attention and energies to the performance of their duties under this
Agreement commencing October 1st 1998.
7. Page agrees to exert their best effort to preserve for the benefit of
Intellicom the good will of Intellicom's clients and those who may
have business relations with it.
65
<PAGE>
8. Notwithstanding anything else contained herein, Intellicom may give
notice, with 60 days prior written notice to Page, that Intellicom is
being wound up and that the Board of Directors have passed a
resolution stating that the business of Intellicom be terminated and
its assets liquidated, and as such this Agreement will therein be
terminated and all of the rights, obligations and duties of the
parties hereunder are at an end. In the event that during the term of
this Agreement, Page shall become disabled by accident or illness so
as to be unable to perform the duties required of Page under this
Agreement for a period of 60 consecutive days then Intellicom may at
the expiration of such 60 day period suspend Page's services and
Intellicom's rights, obligations and duties under this Agreement shall
terminate except of the restrictions imposed on for confidentiality
herein which shall survive. All shares not vested at termination shall
be returned to treasury for cancellation.
9. Notwithstanding anything contained herein in this Agreement,
Intellicom may discharge Page for cause at any time upon 15 (fifteen)
days' written notice and upon the occurrence of such discharge for
cause this Agreement and all rights, duties and obligations shall
terminate except as to those in regards to confidentiality which shall
remain in force and effect.
10. For a period of two years commencing from the date upon which Page is
terminated or ceases to be a consultant of Intellicom then Page shall
not directly or indirectly enter into or carry on as owner, employee
or otherwise, a business that competes with the business of
Intellicom.
11. Page shall be entitled annually to three (3) weeks paid vacation.
12. This Agreement is inclusive and supersedes any and all employment,
consulting or other agreements whether written or oral by and between
Page and Intellicom and any such prior agreements are hereby cancelled
effective as at the date of this Agreement.
13. Page agrees to abide by the confidentiality terms attached as Exhibit
"A" and said terms are part of this Agreement and incorporated herein.
The confidentiality terms of this Agreement shall stand alone as a
condition of Intellicom entering into this Agreement with Page and
said terms shall survive the termination of Page's engagement as a
consultant and such termination shall not be grounds for the release
of any confidential material to any third party.
14. This Agreement shall inure to the benefit of and be binding upon
Intellicom, its successors and assigns, including, but not limited to,
(1) any corporation which may acquire all substantially all of
Intellicom's assets and business, (2) any corporation with or into
which Intellicom may be consolidated or merged, (3) any corporation
that is the successor corporation in a share exchange and Page, their
heirs, guardians and personal and legal representatives.
66
<PAGE>
15. This Agreement shall be governed by the law of the Province of British
Columbia and in all respects in accordance with said law.
16. Page agrees to perform their duties hereunder for any subsidiary of
Intellicom as directed by the President or Board of Directors.
17. This Agreement contains the entire agreement of the parties and may
only be amended in writing.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SET THEIR
HAND AS OF THE DAY FIRST ABOVE WRITTEN.
/s/
-------------------------
INTELLICOM INTERNET CORP.
/s/ MICHAEL PAGE
-------------------------
MICHAEL PAGE
67
EXHIBIT 10.4
CONSULTING AGREEMENT
This Consulting Agreement ("the Agreement") made this 1st day of September
1998.
BETWEEN:
INTELLICOM INTERNET CORP., a Nevada Corporation, with offices at 308-1040
Hamilton Street, Vancouver, B.C. Canada. ("Intellicom")
AND,
CARLTON PARFITT, an individual resident in Vancouver, B.C. Canada.
("Parfitt")
WHEREAS, Intellicom wishes to engage Parfitt as a consultant on the
terms and conditions set out herein and Parfitt wishes to be engaged on the
terms and conditions set out herein.
NOW THEREFORE WITNESSETH THAT, the parties for valuable consideration
contained herein agree with each other as follows:
1. Intellicom herein agrees to engage Parfitt as a consultant and Parfitt
hereby accepts said engagement with Intellicom upon the terms and
conditions set forth.
2. The consulting engagement shall commence on October 1st 1998 and shall
continue for 2 (two) years. If Intellicom's common shares do not trade
before September 30th 2000 then this agreement shall terminate on that
date.
3. Parfitt is engaged as a full time consultant.
4. Parfitt shall also carry out such other duties as the Board of
Directors or the President shall assign from time to time.
5. Compensation shall be as follows: FEES: Parfitt shall be paid the sum
of $6750.00 Cdn per month unless increased by the Board of Directors
at an annual review.
6. Parfitt shall diligently and competently devote their full business
time, attention and energies to the performance of their duties under
this Agreement commencing October 1st 1998.
7. Parfitt agrees to exert their best effort to preserve for the benefit
of Intellicom the good will of Intellicom's clients and those who may
have business relations with it.
68
<PAGE>
8. Notwithstanding anything else contained herein, Intellicom may give
notice, with 60 days prior written notice to Parfitt, that Intellicom
is being wound up and that the Board of Directors have passed a
resolution stating that the business of Intellicom be terminated and
its assets liquidated, and as such this Agreement will therein be
terminated and all of the rights, obligations and duties of the
parties hereunder are at an end. In the event that during the term of
this Agreement, Parfitt shall become disabled by accident or illness
so as to be unable to perform the duties required of Parfitt under
this Agreement for a period of 60 consecutive days then Intellicom may
at the expiration of such 60 day period suspend Parfitt's services and
Intellicom's rights, obligations and duties under this Agreement shall
terminate except of the restrictions imposed on for confidentiality
herein which shall survive. All shares not vested at termination shall
be returned to treasury for cancellation.
9. Notwithstanding anything contained herein in this Agreement,
Intellicom may discharge Parfitt for cause at any time upon 15
(fifteen) days' written notice and upon the occurrence of such
discharge for cause this Agreement and all rights, duties and
obligations shall terminate except as to those in regards to
confidentiality which shall remain in force and effect.
10. For a period of two years commencing from the date upon which Parfitt
is terminated or ceases to be a consultant of Intellicom then Parfitt
shall not directly or indirectly enter into or carry on as owner,
employee or otherwise, a business that competes with the business of
Intellicom.
11. Parfitt shall be entitled annually to three (3) weeks paid vacation.
12. This Agreement is inclusive and supersedes any and all employment,
consulting or other agreements whether written or oral by and between
Parfitt and Intellicom and any such prior agreements are hereby
cancelled effective as at the date of this Agreement.
13. Parfitt agrees to abide by the confidentiality terms attached as
Exhibit "A" and said terms are part of this Agreement and incorporated
herein. The confidentiality terms of this Agreement shall stand alone
as a condition of Intellicom entering into this Agreement with Parfitt
and said terms shall survive the termination of Parfitt's engagement
as a consultant and such termination shall not be grounds for the
release of any confidential material to any third party.
14. This Agreement shall inure to the benefit of and be binding upon
Intellicom, its successors and assigns, including, but not limited to,
(1) any corporation which may acquire all substantially all of
Intellicom's assets and business, (2) any corporation with or into
which Intellicom may be consolidated or merged, (3) any corporation
that is the successor
69
<PAGE>
corporation in a share exchange and Parfitt, their heirs, guardians
and personal and legal representatives.
15. This Agreement shall be governed by the law of the Province of British
Columbia and in all respects in accordance with said law.
16. Parfitt agrees to perform their duties hereunder for any subsidiary of
Intellicom as directed by the President or Board of Directors.
17. This Agreement contains the entire agreement of the parties and may
only be amended in writing.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE SET THEIR
HAND AS OF THE DAY FIRST ABOVE WRITTEN.
/s/
-------------------------
INTELLICOM INTERNET CORP.
/s/ CARLTON PARFITT
-------------------------
CARLTON PARFITT
70
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 8-MOS
<FISCAL-YEAR-END> NOV-30-1998
<PERIOD-START> APR-08-1998
<PERIOD-END> NOV-30-1998
<CASH> 236,350
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 236,350
<PP&E> 353,533
<DEPRECIATION> 2,160
<TOTAL-ASSETS> 694,198
<CURRENT-LIABILITIES> 324,718
<BONDS> 39,543
0
0
<COMMON> 10,794
<OTHER-SE> 319,143
<TOTAL-LIABILITY-AND-EQUITY> 694,198
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 170,803
<LOSS-PROVISION> 170,803
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (170,803)
<INCOME-TAX> 0
<INCOME-CONTINUING> (170,803)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (170,803)
<EPS-PRIMARY> (0.018)
<EPS-DILUTED> 0
</TABLE>
