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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CROSSNET VENTURES, INC..
(Name of small business issuer in its charter)
NEVADA 98-0218023
(State or jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Bruce Elliot, President
Unit # 106107, Shah & Nahar,
Industrial Estate of Dr. E. Moses Road
Mumbai, 400018, India SEC File No.:
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(Name and address of principal executive
offices, principal place of business and
agent for service of process)
Registrant's telephone number, including area code: 91-22-494-0129
Approximate date of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement..
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, check the
following box and list the Securities Act registration statement
number of the earlier effective registration statement for the same
offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If this Form is a post-effective amendment filed pursuant to Rule
462(d) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. |__|
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. |__|
CALCULATION OF REGISTRATION FEE
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TITLE OF EACH PROPOSED PROPOSED
CLASS OF MAXIMUM MAXIMUM
SECURITIES OFFERING AGGREGATE AMOUNT OF
TO BE AMOUNT TO BE PRICE PER OFFERING REGISTRATION
REGISTERED REGISTERED UNIT (1) PRICE (1) FEE (1)
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Common Stock 2,500,000 shares $1.50 $3,750,000 $1001.25
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(1) Estimated solely for the purpose of calculating the registration
fee in accordance with Rule 457 under the Securities Act.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES
THAT THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL
THE REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY DETERMINE.
COPIES OF COMMUNICATIONS TO:
Michael A. Cane, Esq.
101 Convention Center Dr., Suite 1200
Las Vegas, NV 89109
(702) 312-6255
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The information contained in this document is subject to completion
or amendment. A registration statement relating to the securities
being sold has been filed with the Securities and Exchange
Commission. These securities may not be sold, nor may offers to buy
be accepted, prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or a
solicitation of an offer to buy, nor shall there be any sale of these
securities in any state in which such an offer, solicitation or sale
would be unlawful prior to registration or qualification under the
securities laws of that state.
SUBJECT TO COMPLETION, Dated April 28, 2000
PROSPECTUS
CROSSNET VENTURES, INC.
2,500,000 SHARES
COMMON STOCK
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We are offering to sell 2,500,000 shares of our common stock. This
is the initial public offering of shares of our common stock.
Our common stock is presently not traded on any market or securities
exchange.
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Proceeds before
Offering Price Commissions Expenses
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Per Share $1.50 $0.15 $1.35
Total $3,750,000 $375,000 $3,375,000
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The purchase of the securities offered through this prospectus
involves a high degree of risk. See section entitled "Risk Factors"
on pages 5 - 12.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these securities
or passed upon the adequacy or accuracy of this prospectus. Any
representation to the contrary is a criminal offense.
We do not presently have any agreement with any underwriter and we
are offering this common stock on a best efforts basis without any
minimum or maximum purchase requirements.
The Date Of This Prospectus Is: April 28, 2000
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TABLE OF CONTENTS
PAGE
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Summary ........................................................... 3
Risk Factors ...................................................... 5
Use of Proceeds ................................................... 12
Determination of Offering Price ................................... 13
Dilution .......................................................... 13
Selling Shareholders .............................................. 14
Plan of Distribution .............................................. 14
Legal Proceedings ................................................. 14
Directors, Executive Officers, Promoters and Control Persons ...... 15
Security Ownership of Certain Beneficial Owners and Management .... 17
Description of Securities ......................................... 18
Interest of Named Experts and Counsel ............................. 18
Disclosure of Commission Position of Indemnification for
Securities Act Liabilities ...................................... 19
Organization Within Last Five Years ............................... 19
Description of Business ........................................... 20
Plan of Operations ................................................ 31
Description of Property ........................................... 33
Certain Relationships and Related Transactions .................... 33
Market for Common Equity and Related Stockholder Matters .......... 34
Executive Compensation ............................................ 35
Financial Statements .............................................. 39
Changes in and Disagreements with Accountants ..................... 40
Available Information ............................................. 40
Until ______, all dealers that effect transactions in these
securities whether or not participating in this offering, may be
required to deliver a prospectus. This is in addition to the dealer'
obligation to deliver a prospectus when acting as underwriters and
with respect to their unsold allotments or subscriptions.
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SUMMARY
The following summary is only a shortened version of the more
detailed information, exhibits and financial statements appearing
elsewhere in this prospectus. Prospective investors are urged to
read this prospectus in its entirety.
Our Business
Our business plan is to develop and market an Internet portal web
site that will focus on the worldwide Indian community who have
access to the Internet. Our web sites will be designed to include
unique content of interest and relevance to members of the Indian
community. The address of our web site will be IndiaAt.com. We
have only recently formulated our business plan and commenced the
development of our web site. Our business operations are therefore
in the start-up phase and we have yet to earn any revenues. We are
offering shares of our common stock through this offering in order to
finance the implementation of our business plan to develop the
IndiaAt.com web site into a commercially viable and profitable
Internet business.
Our Strategy
We believe that there is a significant market opportunity for a web
site focused on the Indian community as the on-line needs of this
group have not been met by current Internet operations.
Our objective will be to establish our web site as the premium
Internet portal for the resident and non-resident Indian community.
We plan to charge a subscription fee to members of the Indian
community who use our web site. Also, we will develop our web site
in a format that will enable us to market our web site to advertisers
and electronic commerce marketers. Our objective will be to earn
additional revenues from advertising and electronic commerce
transactions.
Our History And Recent Developments
We were incorporated as a Nevada corporation on November 10, 1998 and
then acquired our business plan in September 1999 from Mr. Bruce
Elliott, our president and one of our directors. We completed a
$650,000 private placement in December 1999 to fund the commencement
of our business operations.
Our principal executive offices are located at Unit #106107, Shah &
Nahar, Industrial Estate of Dr. E. Moses Road, Mumbai, 400018, India.
Our telephone number is 91-22-494-0129.
Securities Being Offered Up to 2,500,000 shares of common stock. See
section entitled Description of Securities.
Securities Issued
And to be Issued 10,000,000 shares of common stock are issued
and outstanding as of the date of this
prospectus. There will be 12,500,000 shares
of our common stock issued and outstanding if
all shares offered through this prospectus
are sold. This number excludes a total of
750,000
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shares of common stock subject to
outstanding options. See section entitled
Description of Securities.
Plan of Distribution This offering is being sold by our officers
and directors and by registered broker-
dealers without the benefit of an
underwriter. We will not pay any commission
on any sales of any shares by our officers
and directors. We will pay a commission of
$0.15 per share on sales of shares completed
through registered broker-dealers or their
representatives. Any commissions will be
paid from the proceeds of the offering. We
are offering the shares on a best efforts
basis. There is no minimum number of shares
to be sold pursuant to this offering. See
section entitled Plan of Distribution.
Use of Proceeds The net proceeds we will receive from the
sale of the shares of common stock offered
through this prospectus will be approximately
$3,325,000 US, if the maximum numbers of
shares are sold, after deducting commissions
and offering expenses. The principal purpose
of this offering is to increase our working
capital in order that we can proceed with the
development of our IndiaAt.com Internet
portal business. See section entitled Use of
Proceeds.
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RISK FACTORS
An investment in our common stock involves a high degree of risk.
You should carefully consider the risks described below and the other
information in this prospectus and any other filings we may make with
the United States Securities and Exchange Commission in the future
before investing in our common stock. If any of the following risks
occur, our business, operating results and financial condition could
be seriously harmed. The trading price of our common stock could
decline due to any of these risks, and you could lose all or part of
your investment.
Risks Related To Our Financial Condition And Business Model
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Because We Have Only Recently Commenced Business Operations, We Face
A High Risk Of Business Failure
We were incorporated in November 1998, but only acquired our business
plan in September 1999. We commenced business operations in December
1999. We are presently in the process of establishing our web site
operations. Our web site is not yet fully operational or accessible
to the public and we have not yet earned any revenues. Accordingly,
we have only a limited operating history with which to evaluate our
business. You should consider the risks, expenses and uncertainties
that an early stage company like ours faces. These risks include our
ability or inability to:
* establish awareness of our web site with the Indian
community;
* generate content of interest and relevance to the Indian
community;
* attract a large number of advertisers from a variety of
industries who are prepared to advertise on our web sites;
* convince new users to pay a subscription fee to access our
web pages;
* establish relationships with electronic commerce marketers;
and
* respond effectively to competitive pressures.
If we are unsuccessful in addressing these risks, our business,
financial condition and results of operations will be adversely
affected and our business may fail.
Because We Are Still Developing Our Web Site, We Expect Our Losses To
Continue
To date, we have not been profitable or made any income whatsoever.
As of December 31, 1999, we had an accumulated deficit of
approximately $58,810. While we continue to work on the development
of our web site, we expect to incur increased operating expenses and
thus significant losses until operating revenues can be earned. If
we are not able to generate significant revenues from our web site
operations, then we will not be able to achieve profitability.
If We Do Not Obtain Additional Financing, Our Business May Fail
Our business plan calls for increased expenses associated with the
development and marketing of our web site operations. We anticipate
that revenues from operations will initially be insufficient to cover
these expenses. Accordingly, we are likely to have substantial
additional capital requirements after this offering is complete, and
we can provide no assurance that such funding will be available if
and when needed. Obtaining additional financing will be subject to a
number of factors, including:
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* market conditions;
* our operating performance; and
* investor sentiment.
These factors may make the timing, amount, terms and conditions of
additional financing unattractive for us. If we are unable to raise
additional capital, we may not be able to implement our business plan
and our business may fail.
Risks Related To Our Markets And Strategy
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If The Internet Is Not Widely Accepted As A Medium For Advertising
And Commerce, Our Business Will Suffer
We expect to derive a portion of our revenue for the foreseeable
future from Internet advertising, and to a lesser extent, from
electronic commerce. Electronic commerce and Internet advertising
are new and rapidly evolving income sources for Internet businesses,
particularly in developing nations such as India. As a result, we
cannot determine at this time the probability of our success in
earning income from such sources as compared with traditional media.
In addition, companies may choose not to advertise on our web site if
they do not perceive our audience demographic to be desirable or
advertising on our web site to be effective.
If Social Or Political Conditions In India Change, Our Business
Operations May Be Adversely Affected
We expect to establish our web site operations in India and to derive
a substantial portion of our revenues from the domestic Indian
market. Social and political conditions in India are more volatile
than in more developed countries. This volatility may cause our
operations to fluctuate and make it difficult for our business to
grow. Results such as this could then have an adverse effect on our
stock price. Historically, volatility has been caused by:
* significant governmental influence over many aspects of local
economies;
* political uncertainty;
* unexpected changes in regulatory requirements;
* slow or negative growth;
* imposition of trade barriers.
We have no control over these matters. Volatility resulting from
these matters may decrease our ability to expand our web site
operations in India, adversely affect Internet availability to Indian
consumers, create uncertainty regarding our operating climate and
adversely affect our customers' advertising budgets. All of which
may adversely impact our business.
If The Indian Currency Depreciates Relative To The U.S. Dollar, Then
Our Revenues Will Decline
Our reporting currency is the U.S. dollar. We anticipate that our
revenues from operations within India will be earned in the Indian
rupee. Our revenues from domestic Indian customers will decline in
value if the Indian ruppe depreciates relative to the U.S. dollar.
Accordingly, our revenues will decrease if
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the Indian rupee depreciates relative to the U.S. dollar, with the
result that our business operations and financial condition may be
harmed.
If Internet Use In India And By Overseas Indians Does Not Grow, Our
Business Will Suffer
The Internet market in India is in an early stage of development. Our
future success depends on the continued growth of the Internet in
India. In addition, our future success depends on increasing
numbers of Indian consumers accepting and using the Internet. Our
business, financial condition and results of operations will be
adversely affected if Internet usage by resident and non-resident
Indians does not continue to grow or grows more slowly than we
anticipate. Internet usage in these markets may be inhibited for a
number of reasons, including:
* the cost of Internet access;
* the availability of a telecommunications infrastructure;
* ease of use
* language barriers; and
* quality of service.
If The Telecommunications Infrastructure In India Is Not Improved,
Our Business Will Be Limited In It's Growth
Access to the Internet requires a relatively advanced
telecommunications infrastructure. The telecommunications
infrastructure in many parts of India is not as well-developed as in
the United States or other countries. The quality and continued
development of the telecommunications infrastructure in India will
have a substantial impact on our ability to deliver our services and
on the market acceptance of the Internet in India in general. If
further improvements in the Indian telecommunications infrastructure
are not made, the Internet will not gain broad market acceptance in
India. If access to the Internet in India does not continue to grow
or grows more slowly than we anticipate, our business, financial
condition and results of operations will be adversely affected.
If We Are Unable To Attract Users To Our Web Site, Our Business,
Financial Condition And Results Of Operations Will Be Harmed
We will not be able to earn revenues unless we are successful in
attracting users to our web site. We presently do not have any brand
name recognition among consumers. Accordingly, we plan on initiating
marketing efforts to establish brand recognition for our web site.
In addition, our success in marketing our web site will depend on our
success in providing high quality content, features and
functionality. We must also continually improve the responsiveness,
functionality and features of our web site and develop products and
services that are attractive to users and advertisers. If we fail to
promote our web site successfully or if visitors to our network or
advertisers do not perceive our services to be of high quality, then
we will not be able to achieve projected usage or revenues. This
would have an adverse effect on our business, financial condition and
results of operations.
If We Are Not Able To Effectively Manage Expanding Operations, Then
Our Business May Be Harmed
Our business plan anticipates that our business operations will
undergo significant expansion as we establish our Web site
operations. This expansion will require us to hire additional
personnel and
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establish offices in locations within India. We
anticipate that this growth will place a significant strain on our
managerial, operational and financial resources. To accommodate this
growth, we must successfully find and train additional employees,
acquire and implement new computer hardware and software systems and
establish new offices. We may not succeed with these efforts. Our
failure to expand in an efficient manner could cause our expenses to
be greater than anticipated, our revenues to grow more slowly than
expected and could otherwise have an adverse effect on our business,
financial condition and results of operations.
If We Are Unable To Hire And Retain Key Personnel, Then We May Not Be
Able To Implement Our Business Plan
We depend on the services of our senior management and key technical
personnel. In particular, our success depends on the continued
efforts of our president and chief executive officer, Bruce Elliott,
and our chief operating officer, Yogesh Parekh. The loss of the
services of Mr. Elliott, Mr. Parekh or any of our key management,
sales or technical personnel could have an adverse effect on our
business, financial condition and results of operations. In addition,
our success is largely dependent on our ability to hire highly
qualified managerial, sales and technical personnel. These
individuals are in high demand and we may thus not be able to attract
the staff we need within our budget.
If We Are Not Able To Compete Effectively, Then Our Business Will Be
Harmed
There are many companies that provide web site and online
destinations targeted to both resident and non-resident Indians.
Competition for visitors, advertisers and electronic commerce
partners is intense and is expected to increase significantly in the
future because there are no substantial barriers to entry in our
market. Increased competition could result in:
* lower advertising rates;
* our inability to charge subscription fees to users;
* our inability to attract visitors to our Web sites; and
* our inability to attract advertisers to our Web sites.
Any one of these could adversely affect our business, financial
condition and results of operations. In addition, our competitors may
develop competing web sites that gain greater market acceptance. It
is also possible that new competitors may emerge and acquire
significant market share. Our inability to attract visitors and
revenue due to competition will have an adverse effect on our
business, financial condition and results of operations.
Risks Related To The Internet And Our Technology Infrastructure
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If We Experience Significant Network Interruptions, Then We Will Lose
Visitor Traffic and Revenue And May Suffer Harm To Our Reputation
Once we commence operations, our business will depend on the
continued, uninterrupted operation of the computer systems and
networks that will operate our web site. These computer systems and
networks are vulnerable to disruptions, such as system crashes, that
could cause our web site to cease operation. If we experience delays
and interruptions, visitor traffic may decrease and our brand name
could be adversely affected with the result that we would experience
a delay in earning revenues or a decrease in revenues. We plan to
maintain our computer servers in India and we will rely on
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telecommunication systems in India for the operation and use of our
Web sites. If we fail to protect our systems against damage from
fire, hurricanes, power loss, telecommunications failure, break-ins
or other events, disruptions to our web site operations could have an
adverse effect on our business, financial condition and results of
operations.
Because of Concerns Over Security Of Electronic Commerce Transactions
And Confidentiality Of Information On The Internet, We May Find The
Use Of Our Web Site Reduced And Our Growth Impeded
A significant barrier to the growth of electronic commerce over the
Internet has been the need for security. If we are unable to
convince our potential customers that our web site is secure for
Internet commerce, then we will be unable to enter into arrangements
with electronic commerce marketers or sell products or services via
our web site. We anticipate incurring significant costs to protect
against the threat of security breaches and to alleviate the
perception of security risks. If unauthorized persons were
successful in penetrating our security, however, they could
misappropriate proprietary information or cause interruptions in our
services. Security breaches could therefore have an adverse effect on
our business, financial condition and results of operations.
Risks Related To Legal Uncertainty
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If We Become Subject To Burdensome Government Regulations Affecting
The Internet, Our Business Could Be Adversely Affected
To date, governmental regulations have not materially restricted use
of the Internet in our markets. However, the legal and regulatory
environment that pertains to the Internet is uncertain and may
change. Uncertainty and new regulations could increase our costs of
doing business and prevent us from delivering our products and
services over the Internet. The growth of the Internet may also be
significantly slowed. This could delay growth in demand for our
network and limit the growth of our revenues. In addition to new laws
and regulations being adopted, existing laws may be applied to the
Internet. New and existing laws may cover issues that include:
* sales and other taxes;
* user privacy;
* pricing controls;
* characteristics and quality of products and services;
* consumer protection;
* cross-border commerce;
* libel and defamation;
* copyright, trademark and patent infringement; and
* other claims based on the nature and content of Internet
materials.
If We Become Subject To Claims Regarding Foreign Laws And
Regulations, Our Business May Be Adversely Effected
Because we will have employees, property and business operations in a
number of countries, we may be subject to the laws and the court
systems of a number of different jurisdictions. In addition, these
laws may be changed or new laws may be enacted in the future.
International litigation is often
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expensive, time consuming and distracting. Accordingly, any of
the foregoing could have an adverse effect on our business, financial
condition and results of operations.
Because We May Be Selling A Number of Different Products Through Our
Web Site, We May Be Subject To Claims Based On Defects Or Other
Problems Connected With These Products
Our business plan anticipates that we will enter into arrangements to
offer third-party products and services on our web site under which
we may be entitled to receive a share of revenues generated from
these transactions. These arrangements may subject us to claims,
including product liability or personal injury claims, from these
products or services, even if we do not ourselves manufacture or
provide the products or services. These claims may require us to
incur significant expenses in their defense or satisfaction. While we
anticipate that our agreements with these parties will provide that
we will be indemnified against such liabilities, such indemnification
may not be adequate. Although we plan to carry general liability
insurance, our insurance may not cover all potential claims to which
we are exposed or may not be adequate to indemnify us for all
liability that may be imposed. Any imposition of liability that is
not covered by insurance or is in excess of insurance coverage could
have an adverse effect on our business, financial condition and
results of operations or could even result in the imposition of
criminal penalties.
Risks Related To This Offering
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Because We have Not Limited The Use Of The Proceeds From This
Offering, They May Be Used In Ways In Which You Do Not Agree
We have not committed the net proceeds of this offering to any
particular purpose. Our management will therefore have significant
flexibility in applying the net proceeds of this offering, including
ways in which stockholders may disagree. If we do not apply the funds
we receive effectively, our business will be negatively effected and
we may lose significant business opportunities. See section entitled
Use of Proceeds.
Because Existing Shareholders May Sell Their Stock At Below The Price
Of Shares Sold In This Offering, Share Prices May Decline In The
Future
The market price of our common stock could decline as a result of
sales by our existing stockholders of their shares of common stock in
the market after this offering, or even the perception that these
sales could occur. These sales also might make it difficult for us to
sell equity securities in the future at a time and at a price that we
deem appropriate.
Because We Are Controlled By A Small Group Of Our Existing
Stockholders, Decisions May Be Made Regarding The Operations Of The
Company That Differ From Those You Would Prefer
Our directors, executive officers and affiliates currently
beneficially own approximately 76.5% of the outstanding shares of our
common stock, and after the offering will beneficially own
approximately 61.2% of the outstanding shares of our common stock.
Accordingly, they will have significant influence in determining the
outcome of any corporate transaction or other matter submitted to the
stockholders for approval, including mergers, consolidations and the
sale of all or substantially all of our assets, and also the power to
prevent or cause a change in control. The interests of these
stockholders may differ from the interests of the other stockholders.
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Because The Price Per Share Of This Offering Significantly Exceeds
The Net Tangible Book Value Per Share, You Will Suffer Immediate And
Substantial Dilution If You Participate In This Offering
The public offering price per share of this offering significantly
exceeds the net tangible book value per share of our common stock.
Accordingly, investors purchasing shares in this offering will suffer
immediate and substantial dilution of their investment.
If A Market For Our Common Stock Is Developed, Our Stock Price May Be
Volatile
There is currently no market for our common stock and we can provide
no assurance that a market will develop at a later date. If a market
later develops, we anticipate that the market price of our common
stock will be subject to wide fluctuations in response to several
factors, including:
* actual or anticipated variations in our results of
operations;
* our ability or inability to generate new revenues;
* increased competition; and
* conditions and trends in the Internet and electronic commerce
industries.
Further, we anticipate that our common stock may be traded on the
Nasdaq OTC Bulletin Board. Companies traded on the OTC Bulletin
Board have traditionally experienced extreme price and volume
fluctuations. There is no assurance that our common stock will be
traded on the OTC Bulletin Board. If our common stock is traded on
the OTC Bulletin Board, our stock price may be adversely impacted by
factors that are unrelated or disproportionate to our operating
performance. These market fluctuations, as well as general
economic, political and market conditions, such as recessions,
interest rates or international currency fluctuations may adversely
affect the market price of our common stock.
If Our Stock Price Is Volatile, We May Become Subject To Securities
Litigation Which Is Expensive And Could Result In A Diversion Of Our
Resources
In the past, following periods of volatility in the market price of a
particular company's securities, securities class action litigation
has often been brought against that company. Many companies in our
industry have been subject to this type of litigation in the past. We
may also become involved in this type of litigation. Litigation is
often expensive and diverts management's attention and resources,
which could have a material adverse effect upon our business,
financial condition and results of operations.
Forward-Looking Statements
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Many statements made in this prospectus are forward-looking
statements that are not based on historical facts. Because these
forward-looking statements involve risks and uncertainties, there are
important factors that could cause actual results to differ
materially from those expressed or implied by these forward-looking
statements, including those discussed under this section entitled
Risk Factors.
This prospectus contains market data related to our business and the
Internet. This market data includes projections that are based on a
number of assumptions. The assumptions include that:
- no catastrophic failure of the Internet will occur;
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- the number of people online and the total number of hours spent
online
will increase significantly over the next five years,
especially in India;
- the value of online advertising dollars spent per online user
hour will
increase;
- the download speed of content will increase dramatically; and
- Internet security and privacy concerns will be adequately
addressed.
If any one or more of the foregoing assumptions turns out to be
incorrect, actual results may differ from the projections based on
these assumptions. The Internet-related markets may not grow over the
next three to four years at the rates projected by our market data,
or at all. The failure of these markets to grow at these projected
rates may have a material adverse effect on our business, results of
operations and financial condition, and the market price of our
common stock.
The forward-looking statements made in this prospectus relate only to
events as of the date on which the statements are made.
USE OF PROCEEDS
The net proceeds we will receive from the sale of the shares of
common stock offered by us will be approximately $3,325,000 US, if
the maximum numbers of shares are sold, after deducting commissions
and offering expenses.
The principal purpose of this offering is to increase our working
capital in order for us to proceed with the development of our
IndiaAt.com Internet portal business. As of the date of this
prospectus, we have not made any specific expenditure plans with
respect to the proceeds of this offering. Accordingly, our management
will have significant flexibility in applying the net proceeds of the
offering. We may use a portion of the net proceeds to acquire or
invest in complementary businesses, technologies, services or
products; however, we currently have no commitments or agreements
with respect to any such transactions. Pending any use, the net
proceeds of this offering will be invested in short-term, interest-
bearing securities. No part of the proceeds of this offering are
expected to be used to discharge any indebtedness.
The actual expenditures of the proceeds of the offering may differ
substantially from the estimated use of proceeds. The actual
expenditures of the proceeds of this offering will be determined by
our board of directors in the best interests of advancing our
business. The actual expenditures will also vary from the estimated
use of proceeds if less than all of the shares offered are sold.
We anticipate that the net proceeds from the offering will be
sufficient to meet our financial requirements for only a short period
of time. Accordingly, we anticipate that we will require substantial
additional capital to fund our contemplated business plan in the near
future.
We anticipate expenses associated with the offering, including legal,
accounting and stock transfer agent expenses, will be approximately
$50,000 US.
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DETERMINATION OF OFFERING PRICE
The $1.50 per share offering price of our common stock was
arbitrarily determined based on our current perceived financing
needs. There is no relationship whatsoever between this price and
our assets, earnings, book value or any other objective criteria of
value.
DILUTION
Our net tangible book value as of December 31, 1999 was approximately
$635,190, or $0.064 per share of our common stock. Net tangible book
value per share is determined by dividing the amount of our total
tangible assets less total liabilities by the number of shares of
common stock outstanding at that date. Dilution in net tangible book
value per share represents the difference between the amount per
share paid by purchasers of common stock in this offering and the net
tangible book value per share of common stock immediately after the
completion of this offering. After giving effect to the issuance and
sale of the shares of common stock offered by us and after deducting
the estimated commission and offering expenses payable by us, our pro
forma net tangible book value as of December 31, 1999 would have been
$3,960,190, or $0.317 per share. This represents an immediate
increase in net tangible book value of $0.253 per share to existing
stockholders and an immediate dilution of $1.183 per share to new
investors purchasing shares in this offering.
The following table illustrates the pro forma per share dilution
assuming the maximum number of shares offered are sold.
- ---------------------------------------------------------------------
Public offering price $1.50 per share
(before deduction of commissions and offering
expenses)
Net offering proceeds $3,325,000
(after deduction of commissions and offering
expenses)
Net tangible book value per share on December 31, $0.064 per share
1999
Increase in net tangible book value per share $0.25 per share
attributable to this offering
Performa net tangible book value per share at $0.317 per share
December 31, 1999
Dilution per share to new investors $1.183 per share
Dilution as a percentage 78.9%
- ---------------------------------------------------------------------
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SELLING SHAREHOLDERS
There are no selling shareholders in this offering of common stock.
All stock will be sold by the company.
PLAN OF DISTRIBUTION
This offering of common stock is being sold by our officers and
directors and by registered broker-dealers without the benefit of an
underwriter. We will not pay any commission on any sales of any
shares by our officers and directors. We will pay a commission of
$0.15 per share on sales of shares completed through registered
broker-dealers or their representatives. Any commissions owed will
be paid from the proceeds of the offering
We are offering the shares on a best efforts basis. There is no
minimum number of shares required to be sold in this offering.
In order to subscribe for shares, an investor must complete and
execute the form of subscription agreement attached to this
prospectus and deliver the executed subscription agreement to us
together with payment of the purchase price for the shares payable to
Crossnet Ventures, Inc. by cashier's or certified check.
We may complete the offering through multiple closings at any time
after receipt of subscription agreements. We may reject or accept any
subscription in whole or in part at our discretion. We may close the
offering or any portion of the offering, or extend it, without notice
to subscribers. We may immediately use the proceeds obtained from
the offering.
Upon our acceptance of a subscription agreement, we will deliver to
each subscriber a copy of the fully executed agreement evidencing the
number of shares subscribed for. If we do not accept any subscription
or any portion of a subscription, the amount of the subscription not
accepted will remain a non-interest bearing loan payable by us to the
subscriber on demand.
LEGAL PROCEEDINGS
We are not currently a party to any legal proceedings.
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DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
Our executive officers and directors and their respective ages as of
April 20, 2000 are as follows:
Directors:
Name of Director Age
- ---------------- -----
Bruce Elliott 51
Yogesh Parekh 38
Howard Thomson 52
Logan Anderson 45
Jost Steinbruchel 59
Executive Officers:
Name of Officer Age Office
- ------------------ ----- -------
Bruce Elliott 51 President and Chief Executive
Officer
Yogesh Parekh 38 Chief Operating Officer
Howard Thomson 52 Chief Financial Officer,
Secretary and Treasurer
The following information sets forth the names of our officers and
directors, their present positions, and certain of their biographical
information.
Bruce Elliott is our president and chief executive officer and is a
member of our board of directors. Mr. Elliott was appointed to our
board of directors on October 30, 1999. Mr. Elliott was appointed as
our president and chief executive officer on November 1, 1999. Mr.
Elliott is the founder and executive director of the WorldWide Web
Institute International, a company that provides global Internet
training and consulting. Mr. Elliott has been the chief executive
officer of the World Wide Web Institute International from 1997 to
present. The World Wide Web Institute International is the largest
Internet training and consulting organization in Asia with 22
locations operational in India and Malaysia. The WorldWide Web
Institute International was recently granted status as a Microsoft e-
commerce knowledge partner in India. Mr. Elliott is also a co-
founder of Internet ProLink, a large Swiss based Internet access
provider. Mr. Elliott was chief operating officer of Internet
ProLink from 1995 to 1998. Internet ProLink was acquired by PSInet,
a large American Internet service provider, in 1998.
Yogesh Parekh is our chief operating officer and is a member of our
board of directors. Mr. Parekh was appointed to our board of
directors on January 24, 2000. Mr. Parekh has been our chief
operating officer since January 24, 2000. Mr. Parekh is presently a
partner and the chief operating officer of Ad Factors, an advertising
agency in India. Mr. Parekh co-founded Ad Factors in March 1985. Ad
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Factors is the largest financial ad agency in India. Prior to
joining Ad Factors, Mr. Parekh was a partner in Sky-Ads, an
advertising and marketing business, from March 1983 to March 1985.
Howard Thomson is our chief financial officer, secretary and
treasurer and is a member of our board of directors. Mr. Thomson was
appointed to our board of directors on November 11, 1998. Mr.
Thomson has been our chief financial officer, secretary and treasurer
since November 11, 1998. Mr. Thomson was employed from 1981 to 1998
in senior management positions with the Bank of Montreal, including 5
years as Branch Manager, 4 years as Regional Marketing Manager and 5
years as Senior Private Banker. Mr. Thomson retired from the Bank of
Montreal in 1998. Mr. Thomson resided in London, England prior to
joining the Bank of Montreal and was employed by the National
Westminster Bank in England for 13 years. Mr. Thomson is also a
director of Skinvisible, Inc., a publicly reporting company and a
company that has developed and is marketing an anti-bacterial skin
care product and the whose common stock is traded on the OTC Bulletin
Board. Mr. Thomson is also a director and the secretary and
treasurer of Worldbid Corporation, a publicly reporting company.
Logan B. Anderson is a member of our board of directors. Mr.
Anderson was appointed a director of the company on November 11, 1998
and was our president from November 11, 1998 to November 1, 1999.
Mr. Anderson is a graduate of Otago University, New Zealand, with a
bachelor's degree of commerce in accounting and economics (1977). He
is an associated chartered accountant (New Zealand) and was employed
by Coopers & Lybrand in New Zealand (1977-1980) and Canada (1980-
1982). From 1982 to 1992, Mr. Anderson was comptroller of Corhart
Management Group, Inc., a management service company which was
responsible for the management of a number of private and public
companies. Mr. Anderson has been principal of various private
financial consulting service companies since 1993. Mr. Anderson has
been an officer and director of a number of private and public
companies in the past 12 years, including PLC Systems, Inc. and 3D-
Systems Inc. Mr. Anderson is also a director and the president of
Worldbid Corporation, a publicly reporting company.
Jost Steinbruchel is a member of our board of directors. Mr.
Steinbruchel was appointed to our board of directors on October 30,
1999. Since 1984, Mr. Steinbruchel has operated his own company in
Geneva Switzerland specializing in financial engineering in
international trade throughout a wide network of banking relations,
principally in Europe, China, Australia and Africa. Previously, he
spent 20 years of his professional career as an executive in
international banking with Lloyds of London, Citicorp and Credit
Suisse. Mr. Steinbruchel has a law degree from Sorbonne, Paris. Mr.
Steinbruchel is also a director of Skinvisible, Inc, a publicly
reporting company.
Term of Office
Our Directors are appointed for terms of one year to hold office
until the next annual general meeting of the holders of our common
stock, as provided by the Nevada Revised Statutes, or until removed
from office in accordance with our bylaws. Our officers are
appointed by our board of directors and hold office until removed by
the board.
Significant Employees
We have no significant employees other than the officers and
directors described above.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table provides the names and addresses of each person
known to us to own more than 5% of our outstanding common stock as of
April 20, 2000, and by the officers and directors, individually and
as a group. Except as otherwise indicated, all shares are owned
directly.
Percentage of Common
Stock Beneficially Owned
Name and Address Amount and Nature Prior to After
Title of Class of Beneficial Owner of Beneficial Owner Offering(1) Offering
- -------------- ------------------- ------------------- ----------- --------
Common Stock Bruce Elliott 3,000,000 shares 29.30% 23.77%
Director, President 150,000 options
Chief Executive Officer
4, Rue Des Barques
4207, Geneva,
Switzerland
Common Stock Yogesh Parekh 2,000,000 shares 20.47% 16.60%
Director,
Chief Operating 200,000 options
Officer
233 North Palo Cedro Drive
Diamond Bar, CA 91765
Common Stock Howard Thomson 150,000 shares 2.33% 1.89%
Director, Secretary
and Treasurer 100,000 options
1521 Purcell Drive
Coquitlam, BC V3E 3B6
Common Stock Logan Anderson 1,800,000 shares 18.14% 14.72%
Director 150,000 options
P.O. Box 1998G
Seven Mile Beach
Grand Cayman, BWI
Common Stock Jost Steinbruchel 700,000 shares 7.44% 6.04%
Director 100,000 options
Rue de l'Arquebuse 8
Case Postale 5359
1211 Geneva, Switzerland, 11
Common Stock All Officers and
Directors 7,650,000 shares 77.67% 63.02%
as a Group 700,000 options
(5 persons)
- -----------------------------------------------------------------------------
Under Rule 13d-3, certain shares may be deemed to be beneficially
owned by more than one person (if, for example, persons share the
power to vote or the power to dispose of the shares). In addition,
shares are deemed to be beneficially owned by a person if the person
has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as the information is provided.
In computing the percentage ownership of any person, the amount of
shares outstanding is deemed to include the amount of shares
beneficially owned
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<PAGE>
by such person (and only such person) by reason of
these acquisition rights. As a result, the percentage of outstanding
shares of any person as shown in this table does not necessarily
reflect the person's actual ownership or voting power with respect to
the number of shares of common stock actually outstanding at April
20, 2000. As of April 20, 2000, there were 10,000,000 shares of the
company's common stock issued and outstanding. In addition, there
were 750,000 shares subject to options exercisable within 60 days of
the date of this registration statement. Thus, all percentage
calculations in this column are based on 10,750,000 outstanding
shares.
DESCRIPTION OF SECURITIES
General
Our authorized capital stock consists of 25,000,000 shares of common
stock at a par value of $0.001 per share.
The following description of our capital stock is not complete and is
subject to and qualified in its entirety by our articles of
incorporation and bylaws, which are included as exhibits to the
registration statement of which this prospectus forms a part, and by
the provisions of applicable Nevada law.
Common Stock
As of April 20, 2000, there were 10,000,000 shares of our common
stock issued and outstanding that were held by approximately 21
stockholders of record.
Holders of our common stock are entitled to one vote for each share
on all matters submitted to a stockholder vote. Holders of common
stock do not have cumulative voting rights. Therefore, holders of a
majority of the shares of common stock voting for the election of
directors can elect all of the directors. Holders of our common
stock representing a majority of the voting power of our capital
stock issued and outstanding and entitled to vote, represented in
person or by proxy, are necessary to constitute a quorum at any
meeting of our stockholders. A vote by the holders of a majority of
our outstanding shares is required to effectuate certain fundamental
corporate changes such as a liquidation, merger or an amendment to
our Articles of Incorporation.
Holders of common stock are entitled to share in all dividends that
the board of directors, in its discretion, declares from legally
available funds. In the event of a liquidation, dissolution or
winding up, each outstanding share entitles its holder to participate
pro rata in all assets that remain after payment of liabilities and
after providing for each class of stock, if any, having preference
over the common stock. Holders of our common stock have no pre-
emptive rights, no conversion rights and there are no redemption
provisions applicable to our common stock.
INTERESTS OF NAMED EXPERTS AND COUNSEL
No expert or counsel named in this prospectus as having prepared or
certified any part of this prospectus or having given an opinion upon
the validity of the securities being registered or upon other legal
matters in connection with the registration or offering of the common
stock was employed on a contingency basis, or had, or is to receive,
in connection with the offering, a substantial interest, direct or
indirect, in the registrant or any of its parents or subsidiaries.
Nor was any such person connected with the registrant or any of its
parents or subsidiaries as a promoter, managing or principal
underwriter, voting trustee, director, officer, or employee.
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<PAGE>
Michael A. Cane of Cane & Company, LLC, our independent legal
counsel, has provided an opinion on the validity of our common stock.
DISCLOSURE OF COMMISSION POSITION OF INDEMNIFICATION FOR SECURITIES
ACT LIABILITIES
Our directors and officers are indemnified as provided by the Nevada
Revised Statutes (the "NRS") and our Bylaws. We have been advised
that in the opinion of the Securities and Exchange Commission
indemnification for liabilities arising under the Securities Act is
against public policy as expressed in the Securities Act, and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities is asserted by one of our
directors, officers, or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our
legal counsel the matter has been settled by controlling precedent,
submit the question of whether such indemnification is against public
policy to a court of appropriate jurisdiction. We will then be
governed by the court's decision.
ORGANIZATION WITHIN LAST FIVE YEARS
We were incorporated as a Nevada corporation in November 1998. We
commenced operations in September 1999 when we acquired our business
plan from Mr. Bruce Elliott, our President and one of our directors.
We completed a $650,000 private placement in December 1999 to fund
the commencement of our business operations.
Our former president, Logan Anderson, was also the company's sole
promoter upon its inception. Other than the purchase of his stock
and the consulting agreement described below, Mr. Anderson has not
entered into any agreement with the company in which he is to receive
from the company or provide to the company any thing of value.
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<PAGE>
DESCRIPTION OF BUSINESS
Our business plan is to develop and market an Internet web site
business for the worldwide Indian Internet community through our
IndiaAt.com Internet address. We have only recently formulated our
business plan and commenced our business. Our business operations
are in the start-up phase and we have yet to earn any revenues. We
are offering shares of our common stock through this offering in
order to finance the implementation of our business plan to develop
the IndiaAt.com web site into a commercially viable and profitable
Internet web site.
We are proposing to develop our web site as an Internet portal site
that will focus on the needs of persons in the worldwide Indian
community with access to the Internet. We believe that there is a
significant market opportunity as the on-line needs of the Indian
community have not been met by current Internet businesses.
Our web site will be designed to include unique content of interest
and relevance to members of the Indian community. Our objective is
to establish our web site as the premium Internet portal for
products, services and information of interest to the worldwide
Indian community.
We plan to charge subscription fees to members of the Indian
community who use our web site. We will develop our web site in a
format that will enable us to market the site to advertisers and
electronic commerce marketers. Our objective is to earn additional
revenues from advertising on our web site and from electronic
commerce transactions.
INDUSTRY BACKGROUND
Growth of the Internet and the World Wide Web
The Internet and the World Wide Web are experiencing dramatic growth
in terms of the number of users. The growth in the number of web
users and the amount of time users spend on the web is being driven
by the increasing importance of the Internet as a communications
medium and an information resource and a sales and distribution
channel. As Internet usage continues to grow, advertisers and
electronic commerce marketers are increasingly using the web to
locate customers, advertise and facilitate transactions.
Growth of Online Electronic Commerce
The Internet is dramatically affecting the methods by which consumers
and businesses are buying and selling goods and services. Electronic
commerce offers the opportunity to establish new competitive
standards by expanding distribution channels, integrating internal
and external processes and offering a cost-effective method of
providing products and services. The Internet provides online
merchants with the ability to reach a global audience and to operate
with minimal infrastructure, reduced overhead and greater economies
of scale, while providing consumers and businesses with a broad
selection of products and services, increased pricing power and
unparalleled convenience. As a result, a growing number of parties
are transacting business on the Internet.
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Advertising on the Internet
The Internet allows advertisers to more precisely target desired
audiences while tracking impression levels, user demographics and
effectiveness of advertisements. As a result, a growing number of
businesses are marketing their products and services on the Internet.
Internet Portals
Internet portals are networks of web sites that are organized around
a central home page. The home page of the portal site generally
includes access to Internet directories and search engines as well as
added commodity tools such as weather, news feeds, stock quotes and
personal home pages. Internet directories list web sites by specific
topics of interest and contain links to these sites. Search engines
capture, store and index web site information in order to retrieve
web site listings in response to a user's inquiry.
Internet sub-portals are networks of web sites which are focused on
specific subjects or areas of interest and are linked to the
principal Internet portal site. Users can access sub-portals through
the portal's home page or directly from search engines, Internet
directories or links from other sites.
The advantage of Internet portals to users is that these portals
provide users with basic information and static links to a broad
variety of topics. However, because most portals have many similar
tools and features and provide limited content, there is very little
differentiation between existing Internet portals.
The Indian Internet Community
Asia represents one of the fastest growing Internet usage markets in
the world. More particularly, we believe that Internet usage in
India is on the verge of dramatic growth. Internet usage in India
doubled in 1998. Industry participants estimate that Internet usage
in India will grow at a 100% per annum growth rate for the
foreseeable future.
We anticipate that the number of Indian people using the Internet
will expand dramatically now that the government has allowed private
Internet service providers to commence business inside the country.
In addition, there are approximately 25,000,000 non-resident Indians
living abroad, of which approximately 20% are computer literate and
connected to the Internet.
Our Market Opportunity
We believe that now is an opportune time to develop and market an
Internet portal business focused on the resident and non-resident
Indian on-line community for the following reasons:
(A) The number of Internet users in the domestic and non-resident
Indian communities is rapidly increasing. Internet usage in
India is dramatically increasing and is anticipated to grow
faster than in developed nations over the next several years.
Accordingly, there is a significant opportunity to offer
Internet services to this new on-line community;
(B) While there has been a dramatic growth in the number of on-line
Indian Internet users, the vast majority of existing Internet
web sites remain focused on the English speaking markets and the
domestic and non-resident Indian communities have been under-
serviced by existing Internet
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based businesses. Accordingly, we believe there is an unmet market
demand from the on-line Indian community;
(C) There has yet to emerge a dominant Internet portal business
focused on the Indian community. Accordingly, we perceive there
exists the opportunity to become one of the first companies to
develop an Internet portal business focused on the Indian
community;
(D) An on-line community focused on the Indian population will offer
businesses and advertisers the ability to directly reach the
Indian community, with the results of improved advertising
efficiency and improved likelihood of successful sales. We
perceive that there is a demand from advertisers and electronic
commerce marketers to reach the Indian community through the
Internet which is presently not being met by existing Internet
Web sites. Accordingly, we perceive there exists the
opportunity to earn significant advertising and electronic
commerce revenues from an Indian portal business that is
successful in targeting the Indian community.
Our Business Plan
Our objective is to develop a web site that will be the largest
vertical Internet consumer portal for both the domestic and non-
resident Indian communities. Our plan to accomplish this objective
is comprised of the following components:
(A) The first component of our business plan will be to develop the
web site. We plan to include content of interest and relevance
to the Indian community that is not presently available on the
Internet in an organized and accessible format. We will also
target the Indian expatriate community by tailoring the content
of our site such that it is oriented for the tastes and
interests of this on-line community.
(B) The second component of our business plan calls for the
marketing of our site in order to attract Internet users from
the Indian community. We will attempt to attract users who will
pay a subscription fee in order to access the information,
products and services on our site. In order to achieve this
objective, we will have to successfully convince new users that
the content of our web site is sufficiently unique and of value
to justify the commitment by the user to pay a subscription fee.
(C) The third component of our business plan is to capitalize on the
usage of our web site by the Indian community in order to earn
revenue from advertisers and electronic commerce activities
placed on the site.
Development of Our Web Site
We plan to develop our Internet portal web site to be a forum for
members of the Indian on-line community to access products,
information and services. In the first phase of our development, we
are planning to develop a central home page and a series of sub-
portal pages on the following topics of interest to the Indian
community:
* music,
* religion and scripture,
* alternative medicine,
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* books/publications,
* food and entertainment.
We plan to develop additional sub-portal web site pages for the
following topics of interest once the web site pages comprising the
first phase of our development plan are operational:
* Indian matrimonial service,
* information services,
* astrology,
* directory of non-resident Indians,
* financial news and trade exchange.
We will structure our web site such that each topic area will have
two levels of access. The first level of access will be available at
no cost to our subscribers and the second level of access will offer
premium services at a cost to users, including access to the
electronic commerce features of our site.
We plan to generate revenue from each of our services. To accomplish
this, we will charge subscription fees to our users and offer
electronic commerce services. In keeping with our objective of
making each topic area service a stand-alone web site, we will
develop each service into a portal of its own. To accomplish this we
will have:
* one product manager and one content manager for each such
sub-portal;
* a single web master overseeing all operations of the portal
and any sub-portals;
* a market manager for marketing subscriptions.
Our web site will be presented in all major Indian languages and with
a very specialized Indian culture bias. Our objective is to ensure
that we deliver the unique content to the Indian community they
demand and which is not available from competitors. In order to
achieve this objective, we plan to design our site to incorporate the
following features:
* customized global, regional and local content covering a
variety of topics in principal Indian languages;
* a broad range of Indian language community features such as
chat areas, bulletin boards, personal and classified ads,
that would allow users to interact with each other;
* easy to use interfaces and consistent navigation experiences
that facilitate usage by the growing number of Indian on-line
users who will be using the Internet for the first time;
* search capabilities that can be customized by country, region
and/or language;
* sophisticated electronic commerce capabilities to facilitate
electronic commerce transactions between our users and
electronic commerce marketers.
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Web Site Structure And Development
We plan to develop our web site using a portal web site structure
where one central page leads the user to various other web pages
containing information, services and products of interest. Users
will be directed to our home page at our www.IndiaAt.com web site.
From our home page, users will then be able to access our various
sub-portal pages as they are developed. Users will also be able to
access each sub-portal independently without going through our home
page.
First Phase of Our Web Site Development
We plan to focus on development of each of the following sub-portals
in our first stage of development:
1. IndiaAtMusic.com/e-Sanjeet.com.
We plan to develop a specialized sub-portal for Indian music
that will provide content on a broad range of music from pure
classical music to popular Indian film music. We plan to enter
into distribution agreements with producers of Indian music in
order that we can offer Indian music in an "MP3" format from our
site.
There has recently been a growing interest in Indian music,
particularly in Indian pop music. While some music companies
are offering a few clips of music via their web sites, there
appears to be no Internet web site dedicated to distribution of
Indian music on the Internet. We plan to seek distribution
agreements with smaller Indian music companies who have the
quality of music, but do not have the distribution reach to
market their music products or are not themselves able to
distribute their music on the Internet. We will be required to
negotiate distribution agreements with these music companies for
the right to sell their music to our users via our web site.
We are proposing to generate revenues from this sub-portal from
the following activities:
* advertising fees charged to music companies that will pay
for promoting their products on our sub-portal;
* commissions generated on actual sales of music completed
through our web sites via distribution arrangements with
music companies;
* advertising and other fees from artists and musicians who
will pay for marketing their music on our site.
2. IndiaAtReligion/e-Bhagwan.com.
We plan to develop a sub-portal which will focus on Indian
religion. This sub-portal would include content on Indian
religion with its Apex trinity, namely Brahma, Vishnu and Sheba.
Additional topics will include Indian rituals, scriptures,
tantra, mantra and yantra, and other Indian religious subjects.
The objective of this sub-portal would be to attract Indian
users who desire Indian religious experience and enlightenment,
but do not have access to traditional daily Indian religious
rituals. We anticipate that this sub-portal would focus on
non-resident Indians
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who do not have the opportunity to engage
in traditional Indian religious rituals in their present
communities.
We are proposing this sub-portal would earn revenue generated
from the following activities:
* Payments from religious foundations who want to fund such a
site for propagation of Indian religious precepts;
* Payments from temple trusts who want to promote their
unique services for specific religious deities;
* Payments from Indian devotees who want to visit temples and
perform rituals on-line through the Internet;
* Commission from sales of devotional material, like joss and
incense sticks, holy books and religious artifacts
completed between our users and electronic commerce
marketers via our web sites.
3. IndiaAtHealth.com/e-Ayurved.com.
We plan to develop a sub-portal devoted exclusively to Indian
alternative medicine systems known as "Ayurveda". Indian herbal
medicine, known as "Ayurveda", has a huge following because of
its perceived natural effectiveness and perceived lack of side
effects. There is presently no organized system for
distribution, sales and delivery of Indian herbal medicine.
This sub-portal would be focused on Indians residing outside of
India who do not have access to the manufacturers and
distributors of traditional Indian herbal medicine.
We anticipate this portal would generate revenues from the
following activities:
* advertising fees and sales commissions from manufacturers
of Indian herbal medicines;
* fees charged to our users who pay for consultations and
information via our web site;
* fees charged to universities who are prepared to conduct
Internet courses on Indian herbal medicine via our web
site;
* fees charged to Indian herbal medicine doctors who want to
expand their practice via the Internet by using our web
site.
4. IndiaAtBooks/e-Kitaab.com.
We plan to develop a sub-portal dedicated to the Indian books
and publication industry. This industry is very vast, but has
not developed distribution channels on the Internet to the
extent that has been developed in North America and Europe for
English speaking books and publications. The rapid expansion in
the Internet has largely ignored publications in principal
Indian languages and which originate from India.
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We plan to generate revenues from this sub-portal from various
book and magazine publishers who are able to sell books and
magazines to our users via our web site.
5. IndiaAtFood/e-Khana.com
We plan to develop a sub-portal dedicated exclusively to Indian
food. Indian food is gaining popularity worldwide. Content for
this sub-portal will include recipes and information on methods
of preparation, utensils, ingredients and cooking appliances for
various forms of cooking practices in India. We believe that
this sub-portal will be in demand due to the gaining increase in
the worldwide popularity of Indian food and the fact that there
appears to be little content on Indian food on the Internet at
present.
We plan to generate revenues from this sub-portal from the
following activities:
* Commissions on videos and books on Indian cooking sold
through our web site;
* Commissions from Indian cuisine appliance manufacturers who
market and sell their products via our web sites.
6. IndiaAtFilm/e-filmiduniya.com.
We plan to develop a sub-portal devoted to the Indian film
industry which is the largest in the world in terms of size and
number of films made per year. To date, and to our knowledge,
no one has attempted to market and distribute Indian films over
the Internet. Accordingly, we perceive a sizable market
opportunity due to the popularity of Indian films.
We plan to develop the sub-portal as an electronic film magazine
with news, views, clips on promotions, productions and star fan
clubs. We also plan to develop the sub-portal to offer
business-to-business possibilities. We believe that there are
large business-to-business possibilities in view of the fact
that the government of India has only recently declared the
Indian film industry an "Industry". Due to the Indian
regulatory regime, the Indian film industry has to date been
extremely unorganized and unregulated with no access to public,
institutional or bank funds. Accordingly, we perceive there is
a large opportunity to use our sub-portal for business-to-
business transactions.
We plan to generate revenues from this sub-portal through the
following activities:
* commissions from film producers and distributors whose
films and videos are sold to our users via our web site;
* commissions from sales of magazines, videos and CD's which
are sold via our web site.
7. Indian News and Television.
We plan to develop a portal for Indian news and local
information. This sub-portal will be divided into a network of
sub-portals addressing principal Indian cities and regions (such
as
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IndiaAtDelhi, IndiaAtMumbaai, IndiaAtCalcutta) and specific
Indian areas of interest (such as IndiaAtTechnews,
IndiaAtTechjobs). We plan to use this sub-portal as a key
element of our strategy to charge users subscription fees for
access to our site.
Second Phase of Our Web Site Development
During the second phase of our web site development, we plan to
develop the following sub-portals:
Internet Site Description
- ------------- -----------
E-Bazar.com A trading web site for Indian goods and services
E-Vanijyabazar.com A web site for the Indian financial and investment
market.
E-Pathshala.com An Internet school and learning resource for Indian
students.
E-Vdesi.com An Internet directory of Indians and Indian
businesses, in the format of a Yellow Pages directory.
E-Jyotish.com A web site dedicated to Indian astrology.
E-Shadi.com A web site dedicated to Indian matrimonial services.
E-Watan.com A web site dedicated to Indian information.
E-Dann.com A web site dedicated to Indian development through
donations
The sub-portal sites to be developed in our second phase of
operations are subject to the successful implementation of the sub-
portals to be developed in our first phase of operations and will be
subject to obtaining necessary financing.
Marketing
We anticipate that we will need to undertake significant marketing
efforts in order to attract on-line members of the Indian community
to our web site. A successful marketing effort will be essential to
our success as our business plan calls for our revenues to be earned
from subscription fees, advertising charges and commissions on
electronic commerce transactions. It will not be possible for us to
earn these revenues if we are not able to attract users to our site.
Our initial marketing focus will be a series of public presentations
targeted at the non-resident Indian community. We are planning
presentations in cities and countries where there are significant
populations of non-resident Indians. We will focus our presentations
on making non-resident Indians aware of the unique content of our
site. We plan to deliver a comprehensive information kit and CD-ROM
to all invitees who sign up as subscribers.
We will also market our web site through on-line advertising on
complementary Internet web sites. We may also market our web site
through conventional media, such as newspapers and magazines focused
on the Indian community, and through advertising mail-outs focused on
the non-resident Indian community.
We believe that a successful marketing campaign would increase usage
of our web sites, as well as attract advertisers and electronic
marketers to our site.
Advertising And Electronic Commerce
We plan to earn revenues from advertising on our web site and from
electronic commerce transactions completed between our users and
marketers who offer their products and services through our site.
Our
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objective is to develop a network of web sites that will provide
a highly targeted platform for advertising and electronic commerce
over a broad range of consumer and business topics focused on the
Indian community.
We will attempt to establish relationships with advertisers who are
prepared to pay for advertising on our site. Our objective will be
to offer advertisers a unique opportunity to purchase advertising
which is focused on the Indian community. In order to achieve this
objective, we anticipate that we will contract with third party
auditing companies who will verify usage of our web sites in order
that we can substantiate use of our web sites by the Indian
community. We plan to establish an internal advertising sales force
that will initiate relationships with potential advertisers. We will
also consider using third party advertising agencies in order to sell
advertising.
We will develop our web site as an electronic commerce platform in
order that we can facilitate electronic commerce transactions. We
plan to initiate relationships with potential electronic commerce
marketers who are seeking to sell goods and services to the Indian
community. We will pursue relationships with electronic commerce
marketers in which we will enable the marketing and sale of goods and
services through our web site in consideration for the payment of a
fee or commission by the electronic commerce marketer. We anticipate
that any fees or commissions would be payable only upon completion of
sales through our web site or as a result of a referral through our
web site.
We are also considering the following activities with the objective
of earning revenue:
* Business to consumer e-commerce transactions via on-line
malls and stores;
* Business to business electronic commerce by providing
qualified leads to subscribers and sponsors;
* Consumer to consumer electronic commerce via on-line auction
sales and exchange boards;
* E-mail notification services to subscribers;
* Hosting and production of television and radio broadcast over
the Internet for subscribers and sponsors which target the
overseas Indian community;
* Personalization of sites for subscribers who want their own
personal web site;
* Hosting of electronic commerce sites for subscribers.
Offices
We plan to set up the technical office for our IndiaAt.com web site
business in Hyderabad, India. We believe that Hyderabad is the best
location for our technical office because:
* Hyderabad is acknowledged as being the main software
development center in India.
* Approximately 63% of the world's overseas Indians residing in
the United States come from the State of Andhra Pradesh (AP)
to which Hyderabad is the capital city. We view this
connection between Hyderabad and overseas Indians as being
essential as expatriate Indians
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will be dominant users of the Internet and consumers in the
short-term until Internet access within India increases.
* Our officers and directors have the business connections
within the city of Hyderabad necessary to execute our
business plan. The business office will be located in Bombay
and we plan to evaluate opening additional content
development offices to be located in Bombay, Delhi, Calcutta,
Madras, and Bangalore. These development offices are
essentially for assembling local content for the IndiaAt.com
portal and initiating commerce activities with local
businesses in these cities and regions.
We may also consider establishing one or more offices in North
America and/ or Europe. Any office outside India would be used
primarily for marketing our web site to members of the non-resident
Indian community and for promotional purposes.
Web Site Development
We plan to conduct the majority of the technical and content
development work in India because of the greater availability and
affordability of Indian technical expertise, local content and
journalists.
Competition
We will compete for users, advertisers and electronic commerce
marketers with a wide range of companies, including:
* Internet portal companies, such as Excite, Yahoo and Lycos;
* Internet search engines and directories, including AskJeeves
and LookSmart;
* On-line content web sites focused on the Indian community,
including NRIOL.com, Rediff.com and Indiaabroad.com;
* Publishers and distributors of conventional media, such as
newspapers, magazines, television and radio, which are
focused on the Indian community, including Rediff.com,
India123.com, IndiaWorld.com and IndiaExpress.com;
* Web sites maintained by Internet services providers located
in India, including VSNL.com and satyam online.com;
* General purpose consumer on-line services, including America
OnLine and MSN.
The presence of established competitors could materially adversely
affect our ability to successfully implement our business plan, to
attract users and to earn revenues from our web site operations.
We have limited financial, marketing technical and other resources
that are necessary to implement our business plan. Many of our
current and potential competitors have significantly greater
financial, marketing, technical and other resources than we do. Our
competitors may be able to devote greater resources to the
development, promotion and sale of their web-sites than we can. In
addition, our
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<PAGE>
competitors may be able to offer the services and
information we are planning to provide at prices which are below the
prices offered by us or which may be free.
We will also compete with traditional advertising media, such as
newspapers, magazines, radio and television, for a share of
advertisers' total advertising budgets. If advertisers perceive the
Internet or our web sites to be an ineffective or limited as an
advertising medium, then they may be reluctant to advertise on our
site.
Additional factors that will affect our ability to compete against
our competitors will include:
* Our ability to attract members of the on-line Indian
community to our web site.
* Our ability to develop relevant and important content to the
Indian community.
* Our ability to market our web site to advertisers.
* Our ability to establish relationships with electronic
commerce marketers.
* Our ability to convince members of the on-line Indian
community that our site is of sufficient value to justify
payment of a subscription fee by users.
Government Regulation
We anticipate that our web site will be accessed by users from
multiple state and international jurisdictions. There is a risk that
our activities may thus be the subject of government regulation from
multiple jurisdictions in the future or that governments will
interpret their laws as having jurisdiction over our business along
with others. Applicability of these laws may result in our being
prohibited from conducting transactions with users in certain states
or countries or that we may have to incur increased expense in order
to conduct business with users in certain states or countries.
Due to the increasing popularity and use of the Internet, it is
possible that a number of laws and regulations may be adopted with
respect to the Internet generally, covering issues such as user
privacy, pricing, and characteristics and quality of products and
services. Similarly, the growth and development of the market for
Internet commerce may prompt calls for more stringent consumer
protection laws that may impose additional burdens on those companies
conducting business over the Internet. The adoption of any
additional laws or regulations may decrease the growth of commerce
over the Internet, increase the our cost of doing business or
otherwise have a harmful effect on our business.
As our web site will be available over the Internet in multiple
states and foreign countries, and as the users of the web site are
resident in such states and foreign countries, such jurisdictions may
claim that we are required to qualify to do business as a foreign
company in each such state or foreign country. Failure to qualify as
a foreign company in a jurisdiction where required to do so could
subject us to taxes and penalties.
We are not aware of any environmental laws that will be applicable to
the operation of our Internet web site business.
Inflation And Foreign Currency Exchange Rate Losses
If we are successful in earning revenues, we anticipate that a
significant portion of our revenue will be earned in Indian rupee.
As a result, our revenues may be impacted by fluctuations in value of
the
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Indian rupee relative to the U.S. dollar. In addition, a portion
of our monetary assets and liabilities and our accounts payable and
operating expenses will be denominated in Indian rupee. Therefore, we
are exposed to foreign currency exchange risks. However, while a
significant portion of our revenue may be in Indian rupee, a
significant portion of our operating expenses will also be in the
Indian rupee. As a result, we anticipate that we will not need to try
to reduce our exposure to exchange rate fluctuations by using hedging
transactions. Notwithstanding these factors, we may experience
economic loss and a negative impact on earnings and equity as a
result of foreign currency exchange rate fluctuations.
PLAN OF OPERATIONS
Our plan of operations for the twelve months following the date of
this registration statement is to complete the following objectives
within the time period specified:
A. We plan to establish our business office in Bombay and technical
office in Hyderabad, India by August, 2000. We anticipate
spending approximately $50,000 on establishing our offices over
the next twelve months;
B. We plan to commence development of our web site portal and sub-
portals as early as possible with the objective of having our
Internet portal site and the sub-portals comprising phase one of
our business plan in full operation by July 31, 2000. We
anticipate spending approximately $740,000 on this development
over the next twelve months;
C. We plan to commence marketing our web site in August, 2000 by
conducting targeted presentations to groups of non-resident
Indians. We also plan to undertake advertising and marketing
promotions in both traditional and Internet media by August,
2000. The Company anticipates spending approximately $300,000
on these marketing expenses over the next twelve months;
D. We plan to commence marketing our web site to advertisers and
electronic marketers in August, 2000. We anticipate spending
approximately $1,300,000 on this expense over the next twelve
months.
E. We also anticipate spending approximately $75,000 on the
purchase of necessary plant and equipment for our business
operations over the next twelve months.
We thus anticipate that we will spend approximately $2,465,000 over
the next twelve month period in pursuing our stated plan of
operations. Of these anticipated expenditures, we anticipate that
approximately $1,760,000 will be spent in the next six months. Our
existing cash reserves and the proceeds of this offering of our
common stock will be used to finance our plan of operations over the
next twelve months.
We anticipate that we will hire twelve (12) additional employees over
the next twelve month period in implementing this plan of operations.
We expect these employees to include the following positions:
Position
Chief Technical Officer
Director Sales and Marketing/ International
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<PAGE>
Director Sales and Marketing/ International
Director Sales and Marketing/ International
Director of Resource Guides
Web designer
Web developers (four in total)
Data base administrator
Portal project manager
We believe that we will be able to complete our stated plan of
operations if we are able to sell all of the shares of our common
stock that are offered in this offering. Our actual expenditures and
business plan may differ from the stated plan of operations. Our
Board of Directors of the Company may decide not to pursue this plan
of operations. In addition, we may modify our plan based on the
available amount of financing in the event that we cannot sell all of
the offered shares of common stock. We do not, however, have any
arrangement in place for any debt or equity financing that would
enable us to meet our stated plan of operations.
We had cash in the amount of $637,590 on December 31, 1999. We
anticipate that our monthly operating expenses will increase to
approximately $300,000 per month once we commence implementation of
our plan of operations. We also expect that we will expend $75,000
on research and development over the next twelve months. In the
event we are not successful in completing any sales of our common
stock through in this offering, we anticipate that we could sustain
our business operations for less than three months without additional
equity financing based on our current cash position and anticipated
operating expenses. Due to our lack of operating history and minimal
revenues, there exits substantial doubt about our ability to continue
as a going concern.
We anticipate continuing operating losses in the foreseeable future.
We base this expectation in part on the expectation that we will
incur substantial development and operating expenses in completing
our stated plan of operations. Our future financial results are also
uncertain due to a number of factors, many of which are outside our
control. These factors include, but are not limited to:
* Our ability to develop and implement a web site that is of
interest to the resident and non-resident Indian community;
* Our ability to generate user customer traffic on our web
site;
* Our ability to attract users who are prepared to pay a
subscription fee to access our web site;
* Our ability to attract advertisers who are prepared to pay
for advertisements on our web site;
* Our ability to attract electronic marketers who are prepared
to market their goods and services through our web site;
* the announcement or introduction of competing web sites; and
* general economic conditions and economic conditions specific
to the Internet and electronic commerce.
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We believe the above discussion contains a number of forward-looking
statements. Our actual results and our actual plan of operations may
differ materially from what is stated above. Factors which may cause
our actual results or our actual plan of operations to vary include,
among other things, decisions of our board of directors not to pursue
a specific course of action based on its re-assessment of the facts
or new facts, changes in the Internet business or general economic
conditions and those other factors identified in this prospectus.
DESCRIPTION OF PROPERTY
We do not own any real property. Our personal property presently
consists of two Hewlett Packard personal computer systems. Our
principal executive offices are located in rental property at Unit
#106107, Shah & Nahar Industrial Estate of Dr. E. Moses Road, Mumbai,
400018, India. Our telephone number is 91-22-494-0129.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
Except as discussed below, none of the following parties has, since
our date of incorporation, had any material interest, direct or
indirect, in any transaction with us or in any presently proposed
transaction which has or will materially affect us:
* Any of our directors or officers;
* Any person proposed as a nominee for election as a director;
* Any person who beneficially owns, directly or indirectly, shares
carrying more than 10% of the voting rights attached to our
outstanding shares of common stock;
* Any of our promoters;
* Any relative or spouse of any of the foregoing persons who has
the same house as such person.
We acquired our business plan from Mr. Bruce Elliott on September 30,
1999 when we entered into a consulting agreement with Mr. Elliott.
Mr. Elliott is our president and a member of our board of directors.
For a discussion of the terms and conditions of our agreement with
Mr. Elliott, see the section entitled -- Executive Compensation -
Employment Agreements.
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<PAGE>
MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
No Present Public Market
There is presently no public market for our common stock. We
anticipate applying for trading of our common stock on the over the
counter bulletin board upon the effectiveness of the registration
statement of which this prospectus forms a part. However, we can
provide no assurance that our shares will be traded on the bulletin
board or, if traded, that a public market will materialize.
Holders of Our Common Stock
As of the date of this registration statement, we had 21 registered
shareholders.
Stock Option Grants
To date, we have granted options to purchase 750,000 shares of common
stock, 700,000 of which have been issued to officers and directors.
Registration Rights
We have not granted registration rights to any persons.
Dividends
There are no restrictions in our Articles of Incorporation or bylaws
that restrict us from declaring dividends. The Nevada Revised
Statutes, however, do prohibit us from declaring dividends where,
after giving effect to the distribution of the dividend:
(A) we would not be able to pay our debts as they become due in
the usual course of business; or
(B) our total assets would be less than the sum of our total
liabilities, plus the amount that would be needed to
satisfy the rights of shareholders who have preferential
rights superior to those receiving the distribution.
We have not declared any dividends. We do not plan to declare any
dividends in the foreseeable future.
Rule 144 Shares
A total of 7,000,000 shares of our common stock will be available for
resale to the public after July 24, 2000 in accordance with the
volume and trading limitations of Rule 144 of the Act. In addition,
2,000,000 shares of our common stock will be available for resale to
the public after November 15, 2000 and 1,000,000 shares of common
stock after December 31, 2000, also in accordance with the volume and
trading limitations of Rule 144 of the Act.
In general, under Rule 144 as currently in effect, a person who has
beneficially owned shares of a company's common stock for at least
one year is entitled to sell within any three month period a number
of shares that does not exceed the greater of:
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1. 1% of the number of shares of the company's common stock then
outstanding which, in our case, will equal approximately 100,000
shares as of the date of this prospectus; or
2. the average weekly trading volume of the company's common stock
during the four calendar weeks preceding the filing of a notice on
form 144 with respect to the sale.
Sales under Rule 144 are also subject to manner of sale provisions
and notice requirements and to the availability of current public
information about the company.
Under Rule 144(k), a person who is not one of the company's
affiliates at any time during the three months preceding a sale, and
who has beneficially owned the shares proposed to be sold for at
least 2
years, is entitled to sell shares without complying with the manner
of sale, public information, volume limitation or notice provisions
of Rule 144.
As of the date of this prospectus, all of the 7,000,000 shares that
may be sold pursuant to Rule 144 after July 24, 2000 are held by
persons who are our affiliates.
EXECUTIVE COMPENSATION
Summary Compensation Table
The table below summarizes the compensation earned for services
rendered for our most recent fiscal year ended December 31, 1999 by
our chief executive officer and our next four most highly compensated
executive officers.
Annual Compensation Long Term Compensation
------------------- ----------------------
Other All
Annual Other
Com- Com-
pen- Restricted pen-
sa- Stock Options/* LTIP sa-
Name Title Year Salary Bonus tion Awarded SARs (#)payouts($)tion
- ---- ----- ---- ------ ----- ------ ------- ------- --------- ----
Bruce President 1999 $18,000 $0 0 0 0 0 0
Elliott
Director
Yogesh Chief 1999 $0 $0 0 0 0 0 0
Parekh Operating
Officer
Director
Howard Secretary 1999 $0 $0 0 0 0 0 0
Thomson Treasurer
Director
Logan Director 1999 $0 $0 0 0 0 0 0
Anderson
Jost Director 1999 $0 $0 0 0 0 0 0
Steinbruchel
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Stock Option Grants
We did not grant any stock options to the executive officers named
above during our most recent fiscal year ended December 31,1999. The
following table sets forth information with respect to stock options
granted to each of the named executive officers since December 31,
1999:
Number of Percentage
Securities of Total
Underlying Options Exercise
Options Granted to Price Expiration
Name Granted Employees (per Share) Date
- ---------------------- ---------- --------- ----------- -----
Bruce Elliott 150,000 20.0% $2.00 01/31/2003
President and Director
Howard Thomson 100,000 13.3% $2.00 01/31/2003
Chief Financial Officer
Secretary and Treasurer
Director
Yogesh Parekh 200,000 26.7% $2.00 01/31/2003
Chief Operating Officer
Director
Logan Anderson 150,000 20.0% $2.00 01/31/2003
Director
Jost Steinbruchel 100,000 13.3% $2.00 01/31/2003
Director
Exercises of Stock Options
None of the options granted to any of the Named Executive Officers
have been exercised.
Employment Agreements
As of March 20, 2000, we had three employees, including Mr. Bruce
Elliott, our President and a director, Mr. Yogesh Parekh, our Chief
Operating Officer and a director, and Mr. Howard Thomson, our
Secretary, Treasurer and Chief Financial Officer. Both Mr. Elliott
and Mr. Parekh provide their services on a full-time basis and Mr.
Thomson provides his services on a part-time basis. In addition, Mr.
Logan Anderson, one of our directors, provides his services to us as
a consultant on a part-time basis. We do not have any additional
employees or consultants at the present time.
The services of Mr. Bruce Elliott, our President and a member of our
board of directors, are provided pursuant to a consulting agreement
dated September 30, 1999. The services provided to us by Mr.
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<PAGE>
Elliott include exercising general direction and supervision of our
business and financial affairs and managing and supervising the
development and marketing of our business. Mr. Elliott provides his
services to us on a full-time basis, provided that Mr. Elliott is
permitted to attend to the further development and expansion of his
World Wide Web Institute business provided that his activities do not
conflict with his duties to us. We pay Mr. Elliott a consulting fee of
$6,000 per month. Mr. Elliott's consulting agreement is for a three-year
term expiring September 30, 2002. We may terminate Mr. Elliott's
consulting agreement at our option by payment to Mr. Elliott of an
amount equal to $36,000.
Mr. Elliott transferred the Business Plan for our IndiaAt.com
business upon execution of his consulting agreement. The transfer of
the Business Plan by Mr. Elliott to us is absolute and will not
revert to Mr. Elliott upon termination of the consulting agreement,
other than for termination by us in the event that we decide not to
pursue our IndiaAt.com business.
The services of Mr. Yogesh Parekh, our Chief Operating Officer and a
member of our board of directors, are provided pursuant to a
consulting agreement dated February 1, 2000. The services provided
to us by Mr. Parekh include the management and supervision of the
development and marketing of our IndiaAt.com business and providing
general supervision and management of our day-to-day business
operations. Mr. Parekh provides his services to us on a full-time
basis. We pay Mr. Parekh a consulting fee of $10,000 per month. Mr.
Parekh's consulting agreement is for a two-year term expiring
February 1, 2002. We may terminate this consulting agreement at our
option by payment to Mr. Parekh of an amount equal to $60,000.
The services of Mr. Howard Thomson, our Secretary, Treasurer, Chief
Financial Officer and a member of our board of directors, are
provided pursuant to an employment agreement dated January 1, 2000.
The services provided to us by Mr. Thomson include ensuring that our
corporate records are properly maintained and supervising and
advising on the conduct of our financial affairs and co-ordinating
our auditing functions. Mr. Thomson is required to devote
approximately 15% of his business time to our business until such
time that our positive working capital equals or exceeds $750,000, at
which time Mr. Thomson will devote approximately 50% of his business
time to our business. We currently pay Mr. Thomson a salary of
$1,000 per month. The salary will increase to $4,000 per month upon
Mr. Thomson being required to devote 50% of his business time to our
business. Mr. Thomson's employment agreement is for a one-year term
expiring January 1, 2001. We may terminate the employment agreement
at our option at any time upon payment to Mr. Thomson of an amount
equal to the greater of $30,000 or an amount equal to six times Mr.
Thomson's salary at the date of termination.
The services of Mr. Logan Anderson, a member of our board of
directors, are provided pursuant to a consulting agreement dated
January 1, 2000. The services provided to us by Mr. Anderson include
advising our management on our business and financial affairs and
advising our management on our overall corporate direction. Mr.
Anderson is required to devote approximately 15% of his business time
to our business until such time as our positive working capital
equals or exceeds $750,000, at which time Mr. Anderson has agreed to
devote approximately 50% of his business time to our business. We
currently pay Mr. Anderson a consulting fee of $1,000 per month.
This consulting fee will increase to $5,000 per month upon Mr.
Anderson being required to devote 50% of his business time to our
business. Mr. Anderson's consulting agreement is for a one-year term
expiring January 1, 2001. We may terminate this consulting agreement
at our option at any time upon payment to Mr. Anderson of an amount
equal to the greater of $30,000 or an amount equal to six times Mr.
Anderson's consulting fee at the date of termination.
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We pay to Mr. Jost Steinbruchel, a member of our board of directors,
a fee of $1,000 per month in consideration for Mr. Steinbruchel's
acting as one of our directors. We do not have a consulting
agreement or employment agreement with Mr. Steinbruchel. Any
payments to Mr. Steinbruchel would cease upon Mr. Steinbruchel
ceasing to act as a director.
Advisors
We have entered into an advisor agreement with Lord Meghnad
Jagdishandra Desai. Lord Desai has agreed to advise and provide
input to us on the development and marketing of our IndiaAt.com
business. Lord Desai will also advise us on the development of sub-
portals for our IndiaAt.com business in the areas of finance,
politics, sociology and other Indian external and internal affairs.
We have agreed to pay to Lord Desai a consulting fee of $2,100 per
month. In addition, we have agreed to grant to Lord Desai options to
purchase 50,000 shares of our common stock at a price of $2.00 per
share.
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FINANCIAL STATEMENTS
Index to Financial Statements:
1. Report of Independent Auditor
2. Audited Financial Statements:
a. Balance Sheet
b. Statement of Operations and Accumulated Deficit
c. Statement of Changes in Stockholders' Equity
d. Statement of Cash Flows
e. Notes to Audited Financial Statements
3. Supplemental Statement:
a. Statement of Operating Expenses
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<PAGE>
CROSSNET VENTURES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
WITH
INDEPENDENT AUDITOR'S REPORT THEREON
<PAGE>
INDEX TO FINANCIAL STATEMENTS
-----------------------------
Page
----
Independent Auditor's Report. . . . . . . . . . . . . . 1
Financial Statements:
Balance Sheet . . . . . . . . . . . . . . . . . . . . 2
Statement of Operations
and Accumulated Deficit . . . . . . . . . . . . . . 3
Statement of Changes in Stockholders' Equity. . . . . 4
Statement of Cash Flows . . . . . . . . . . . . . . . 5
Notes to Financial Statements . . . . . . . . . . . . 6-10
Supplemental Statement:
Statement of Operating Expenses . . . . . . . . . . . 12
<PAGE>
INDEPENDENT AUDITORS' REPORT
To the Board of Directors
Crossnet Ventures, Inc.
We have audited the accompanying balance sheet of Crossnet Ventures,
Inc., a development stage company, as of December 31, 1999 and 1998,
and the related statements of operations and accumulated deficit,
changes in stockholders' equity, and statement of cash flows for the
periods then ended. These financial statements are the responsibility
of Crossnet Venture's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Crossnet
Ventures, Inc. as of December 31, 1999 and 1998, and the results of its
operations, changes in stockholders' equity and cash flows for the
periods then ended, in conformity with generally accepted accounting
principles.
Our audit was made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental statement of
operating expenses is presented for the purposes of additional analysis
and is not a required part of the basic financial statements and, in
our opinion, is fairly stated in all material respects in relation to
the basic financial statements taken as a whole.
Sarna & Company
Westlake Village, California
January 20, 2000
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
ASSETS
DECEMBER 31,
------------
1999 1998
---- ----
Current Assets
Cash $ 637,590 $ 0
---------- ----------
Total Current Assets 637,590 0
Other Assets
Domain Names 2,000 0
Net Property and Equipment 2,000 0
TOTAL ASSETS $ 639,590 $ 0
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Total Current Liabilities $ 2,400 $ 0
Stockholders' Equity
Common Stock, $0.001 par value
100,000,000 shares authorized,
10,000,000 shares issued 10,000 0
Additional Paid In Capital 687,000 0
Accumulated deficit <59,810> 0
---------- ----------
Total Stockholders' Equity 637,190 0
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 639,590 $ 0
See Notes to Financial Statements
2
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND ACCUMULATED DEFICIT
Year Inception
Ended 11/10/98 to
12/31/99 12/31/98
---------- -----------
Revenues $ 0 $ 0
Operating Expenses <59,810> 0
--------- -----------
Loss Before Provision for <59,810> 0
Income Taxes
Provision for Income Taxes <0> 0
--------- -----------
Net Loss <59,810> 0
Deficit, December 31, 1998 <0> 0
Accumulated Deficit, December 31, 1999 $ <59,810> $ 0
========= ===========
Net Loss per Share $ <0.09> $ 0
========= ===========
Weighted Average Shares Outstanding 5,621,951 0
========= ===========
See Notes to Financial Statements
3
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
Total
Common Stock Additional Accumulated Stock-
Dollar Paid in Deficit holders'
Shares Amount Capital Equity
------ ------ ---------- ----------- --------
Balances
December 31, 1998 ---- $ ---- $ ---- $ ---- $ ----
Common Stock Issued
First Offering
July 16,1999
$.001 per share 7,000,000 7,000 ---- ---- 7,000
Common Stock Issued
Second Offering
November 17,1999
$.02 per share 2,000,000 2,000 38,000 ---- 40,000
Common Stock Issued
Third Offering
December 31, 1999
$.65 per share 1,000,000 1,000 649,000 ---- 650,000
Net Loss
Period Ended
December 31, 1999 ---- ---- ---- (59,810) (59,810)
------------------------------------------------------
Balances
December 31, 1999 10,000,000 $ 10,000 $ 687,000 $ (59,810) $ 637,190
=======================================================
See Notes to Financial Statements
4
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
Year Inception
Ended 11/10/98 to
12/31/99 12/31/98
-------- --------
Cash Flows from Operating Activities:
Net Loss $ <59,810> $ 0
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities
Increase <Decrease> in:
Accounts Payable and
Accrued Expenses 2,400 0
--------- --------
Net Cash Used by Operating Activities <57,410> 0
Cash Flows from Investing Activities:
Domain Names $ < 2,000> $ 0
--------- ---------
Net Cash Used by Investing Activities < 2,000> 0
Cash Flows from Financing Activities:
Net Proceeds from the Issuance of
Common Stock 697,000 0
Net Cash Provided by Financing Activities 697,000 0
--------- ---------
Net Increase in Cash 637,590 0
Cash at Beginning of Period 0 0
--------- --------
Cash at End of Period $ 637,590 $ 0
========= ========
Supplemental Disclosure: None
See Notes to Financial Statements
5
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
- ---------------------------------------------------
General
- -------
Crossnet Ventures, Inc. (the "Company") was originally incorporated on
November 10, 1998 in the state of Nevada.
The Company is engaged in the acquisition and development of a
proprietary commercial web site located at "www.indiaat.com". Through
its website, the Company plans to be the leading portal for access to
all information regarding India and it's people. Crossnet Ventures,
Inc. plans to earn revenues from advertising generated on this site,
electronic commerce transactions, and user subscription fees.
Basis of Presentation
- ---------------------
The Company reports revenue and expenses using the accrual method of
accounting for financial and tax reporting purposes.
Use of Estimates
- ----------------
Management uses estimates and assumptions in preparing these financial
statements in accordance with generally accepted accounting principles.
Those estimates and assumptions affect the reported amounts of assets
and liabilities, the disclosure of contingent assets and liabilities,
and the reported revenues and expenses.
Development Stage Company
- -------------------------
Crossnet Ventures, Inc. meets the guidelines of SFAS No. 7 and as such
is classified as a development stage company.
6
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Pro Forma Compensation Expense
- ------------------------------
Crossnet Ventures, Inc. accounts for costs of stock-based compensation
in accordance with APB No. 25, "Accounting for Stock Based
Compensation" instead of the fair value based method in SFAS No. 123.
No stock options have been issued by Crossnet Ventures, Inc.
Accordingly, no pro forma compensation expense is reported in these
financial statements.
Depreciation, Amortization and Capitalization
- ---------------------------------------------
The Company records depreciation and amortization when appropriate
using both straight-line and declining balance methods over the
estimated useful life of the assets (five to seven years).
Expenditures for maintenance and repairs are charged to expense as
incurred. Additions, major renewals and replacements that increase the
property's useful life are capitalized. Property sold or retired,
together with the related accumulated depreciation, is removed from the
appropriate accounts and the resultant gain or loss is included in net
income. Depreciation and amortization were not recorded at December
31,1999 as the Company's assets were not at the point of being ready
for their intended use.
Income Taxes
- ------------
The Company accounts for its income taxes in accordance with Statement
of Financial Accounting Standards No. 109, "Accounting for Income
Taxes". Under Statement 109, a liability method is used whereby
deferred tax assets and liabilities are determined based on temporary
differences between basis used for financial reporting and income tax
reporting purposes. Income taxes are provided based on tax rates in
effect at the time such temporary differences are expected to reverse.
A valuation allowance is provided for certain deferred tax assets if it
is more likely than not, that the Company will not realize the tax
assets through future operations.
7
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
Fair Value of Financial Instruments
- -----------------------------------
Financial accounting Standards Statement No. 107, "Disclosures About
Fair Value of Financial Instruments", requires the Company to disclose,
when reasonably attainable, the fair market values of its assets and
liabilities which are deemed to be financial instruments. The
Company's financial instruments consist primarily of cash and certain
investments.
Per Share Information
- ---------------------
The Company computes per share information by dividing the net loss for
the period presented by the weighted average number of shares
outstanding during such period.
Year 2000 Compliance
- --------------------
The Year 2000 issue is the result of computer programs having been
written using two digits (rather than four) to define years. Computers
or other equipment with date-sensitive software may recognize "00" as
1900 rather than 2000. This could result in system failures or
miscalculations. If the Company or significant customers, suppliers or
other third parties fail to correct Year 2000 issues, the Company's
ability to operate could be affected.
The following disclosure is pursuant to the Year 2000 Readiness and
Disclosure Act.
Crossnet Ventures' Year 2000 program is designed to minimize the
possibility of Year 2000 interruptions. Any such interruption may have
a material adverse impact on the Company's future operating results.
In 1999, the Company established procedures to identify and assess
systems and processes vulnerable to Year 2000 problems. The Company
also developed procedures to monitor levels of compliance within its
stated goals of compliance.
8
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - CONTINUED
- ---------------------------------------------------------------
In each area of vulnerability, various testing and readiness
methodologies are being used to identify and correct suspect systems,
processes or supplier interfaces. The Company has met its Year 2000
compliance goals prior to December 31, 1999.
Recently Issued Accounting Pronouncements
- -----------------------------------------
Recently issued accounting pronouncements will have no significant
impact on the Company and its reporting methods.
NOTE 2 - PROVISION FOR INCOME TAXES
- -----------------------------------
The provision for income taxes for the period ended December 31, 1999
represents the minimum state income tax expense of the Company, which
is not considered significant.
NOTE 3 - COMMITMENTS AND CONTINGENCIES
- --------------------------------------
Management Consulting Agreements
- --------------------------------
The Company currently has a management consulting agreement with an
individual to perform the duties of President and Chief Executive
Officer. The term of the agreement is for 3 years at $6,000 per month.
9
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Litigation
- ----------
The Company is not presently involved in any litigation.
NOTE 4 - SUBSEQUENT EVENT
- -------------------------
On January 1, 2000, the Company entered into an employment agreement
with a Director of the Company to perform the duties of Secretary,
Treasurer, and Chief Financial Officer. The term of this agreement is
1 year, at a salary of $1,000 per month, until such occasion the amount
of time devoted to the company increases to 50% of the employee's
business time, upon which the salary will increase to $4,000 per month.
On January 1, 2000, the Company entered into an additional consulting
agreement with a Director of the Company to advise management of the
Company's business and financial affairs. The term of this agreement
is 1 year, at a consulting fee of $1,000 per month, until such occasion
the amount of time devoted to the company increases to 50% of the
consultant's business time, upon which the consulting fee will increase
to $5,000 per month.
10
<PAGE>
SUPPLEMENTAL STATEMENT
<PAGE>
CROSSNET VENTURES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATING EXPENSES
Year Inception
Ended 11/10/98 to
12/31/99 12/31/98
-------- --------
Operating Expenses
Accounting $ 2,485 $ 0
Bank Charges 124 0
Legal Fees 6,155 0
Licensing Fees 10,000 0
Office Supplies 82 0
Project Management 18,000 0
Start-up costs expensed 10,000 0
Market Research 12,964 0
-------- --------
Total Operating Expenses $ 59,810 $ 0
======== ========
See Notes to Financial Statement
12
<PAGE>
CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
We have had no changes in or disagreements with our accountants.
AVAILABLE INFORMATION
We have filed a registration statement on form SB-2 under the
Securities Act of 1933 with the Securities and Exchange Commission
with respect to the shares of our common stock offered through this
prospectus. This prospectus is filed as a part of that registration
statement and does not contain all of the information contained in
the registration statement and exhibits. Statements made in the
registration statement are summaries of the material terms of
contracts, agreements or documents of the company. We refer you to
our registration statement and each exhibit attached to it for a more
complete description of matters involving the company, and the
statements we have made in this prospectus are qualified in their
entirety by reference to these additional materials. You may inspect
the registration statement and exhibits and schedules filed with the
Securities and Exchange Commission at the Commission's principle
office in Washington, D.C. Copies of all or any part of the
registration statement may be obtained from the Public Reference
Section of the Securities and Exchange Commission, 450 Fifth Street,
N.W., Washington, D.C. 20549 and at the regional offices of the
Commission located at Seven World Trade Center, 13th Floor, New York,
NY 10048 and 500 West Madison Street, Suite 1400, Chicago, IL 60661.
Please call the Commission at 1-800-SEC-0330 for further information
on the operation of the public reference rooms. The Securities and
Exchange Commission also maintains a web site (http://www.sec.gov)
that contains reports, proxy statements and information regarding
registrants that file electronically with the Commission. Our
registration statement and the referenced exhibits can also be found
on this site.
40
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Our officers and directors are indemnified as provided by the Nevada
Revised Statutes and our bylaws.
Under the NRS, director immunity from liability to a company or its
shareholders for monetary liabilities applies automatically unless it
is specifically limited by a company's Articles of Incorporation
(which is not the case with our Articles of Incorporation). Excepted
from that immunity are: (i) a willful failure to deal fairly with the
company or its shareholders in connection with a matter in which the
director has a material conflict of interest; (ii) a violation of
criminal law (unless the director had reasonable cause to believe
that his or her conduct was lawful or no reasonable cause to believe
that his or her conduct was unlawful); (iii) a transaction from which
the director derived an improper personal profit; and (iv) willful
misconduct.
Our bylaws provide that we will indemnify our directors and officers
to the fullest extent not prohibited by Nevada law; provided,
however, that we may modify the extent of such indemnification by
individual contracts with our directors and officers; and, provided,
further, that we shall not be required to indemnify any director or
officer in connection with any proceeding (or part thereof) initiated
by such person unless such indemnification: (i) is expressly required
to be made by law, (ii) the proceeding was authorized by our Board of
Directors, (iii) is provided by us, in our sole discretion, pursuant
to the powers vested us under Nevada law or (iv) is required to be
made pursuant to the bylaws.
Our bylaws provide that we will advance to any person who was or is a
party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he is or
was a director or officer, of the company, or is or was serving at
the request of the company as a director or executive officer of
another company, partnership, joint venture, trust or other
enterprise, prior to the final disposition of the proceeding,
promptly following request therefor, all expenses incurred by any
director or officer in connection with such proceeding upon receipt
of an undertaking by or on behalf of such person to repay said
amounts if it should be determined ultimately that such person is not
entitled to be indemnified under our bylaws or otherwise.
Our bylaws provide that no advance shall be made by us to an officer
of the company (except by reason of the fact that such officer is or
was a director of the company in which event this paragraph shall not
apply) in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, if a determination is reasonably and
promptly made (i) by the Board of Directors by a majority vote of a
quorum consisting of directors who were not parties to the
proceeding, or (ii) if such quorum is not obtainable, or, even if
obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, that the facts known
to the decision-making party at the time such determination is made
demonstrate clearly and convincingly that such person acted in bad
faith or in a manner that such person did not believe to be in or not
opposed to the best interests of the company.
41
<PAGE>
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated costs of this offering are as follows:
Securities and Exchange Commission registration fee(*) $ 1,002
Federal Taxes $ NIL
State Taxes and Fees $ NIL
Transfer Agent Fees $ 500
Accounting fees and expenses $ 2,500
Legal fees and expenses $30,000
Blue Sky fees and expenses $ 5,000
Miscellaneous $ 1,500
----------
Total $40,002
==========
- --------------------------------------------------------------------------
(*) All amounts are estimates other than the Commission's
registration fee.
We will pay all expenses of the offering listed above.
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
We issued 7,000,000 common shares of our common stock on July 24,
1999 to Mr. Logan Anderson, Mr. Jost Steinbruchel and Mr. Elliott.
Mr. Anderson, Mr. Steinbruchel and Mr. Elliott are each directors of
our company. Mr. Elliott is our President and Chief Executive
Officer. These shares were issued pursuant to Section 4(2) of the
Securities Act of 1933. The 7,000,000 shares of common stock are
"restricted" shares, as defined in the Act. Mr. Elliott was issued
3,000,000 shares and Mr. Steinbruchel was issued 200,000. Mr.
Anderson was issued 3,800,000 shares and subsequently transferred
2,000,000 shares to Mr. Yogesh Parekh, a director and our Chief
Operating Officer.
We completed an offering of 2,000,000 shares of our common stock to
nine (9) purchasers at a price of $0.02 per share on November 15,
1999. We completed the offering pursuant to Regulation S of the Act.
Each purchaser represented to the Company that he was a Non-U.S.
Person as defined in the regulation. We did not engage in a
distribution of this offering in the United States. Each purchaser
represented his intention to acquire the securities for investment
only and not with a view toward their distribution. Appropriate
legends were affixed to the stock certificate issued to each
purchaser in accordance with Regulation S. Each investor was given
adequate access to sufficient information about us to make an
informed investment decision. None of the securities were sold
through an underwriter and accordingly, there were no underwriting
discounts or commissions involved. No registration rights were
granted to any of the purchasers.
The Registrant completed the issue of 1,000,000 common shares to a
total of nine (9) purchasers pursuant to Regulation S Act on December
31, 1999. Each purchaser represented to the Company that the
purchaser was a Non-U.S. Person as defined in the regulation. The
Company did not engage in distribution of this offering in the United
States. Each purchaser represented their intention to acquire the
securities for investment only and not with a view to their
distribution. Appropriate legends were affixed to the stock
certificates issued in accordance with Regulation S. All purchasers
were given adequate access to sufficient information about us to make
an informed investment decision. None of
42
<PAGE>
the securities were sold through an underwriter and accordingly, there
were no underwriting discounts or commissions involved. No registration
rights were granted to any of the purchasers.
ITEM 27. EXHIBITS.
EXHIBIT
NUMBER DESCRIPTION
- ------- --------------------
3.1 Articles of Incorporation
3.2 By-Laws
4.1 Share Certificate
4.2 Form of Subscription Agreement
5.1 Opinion of Cane & Company, LLC, with consent to use
10.1 Consulting Contract between the Company and Mr. Bruce
Elliott
10.2 Consulting Contract between the Company and Mr. Logan
Anderson
10.3 Consulting Contract between the Company and Mr. Howard
Thomson
10.4 Consulting Contract between the Company and Mr. Yogesh
Parekh
10.5 Consulting Contract between the Company and Lord
Meghnad Jagdishandra Desai
23.1 Consent of Sarna & Company for use of Audited Financial
Statements
27.1 Financial Data Schedule
ITEM 28. UNDERTAKINGS.
The undersigned registrant hereby undertakes:
1. To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
* To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
* To reflect in the prospectus any facts or events arising
after the effective date of this registration statement, or
most recent post-effective amendment, which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this registration statement; and
* To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement.
2. That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
43
<PAGE>
3. To remove from registration by means of a post-effective amendment
any of the securities being registered hereby which remain unsold
at the termination of the offering.
Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and
controlling persons pursuant to the provisions above, or otherwise,
we have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Securities Act, and is, therefore, unenforceable.
In the event that a claim for indemnification against such
liabilities, other than the payment by us of expenses incurred or
paid by one of our directors, officers, or controlling persons in the
successful defense of any action, suit or proceeding, is asserted by
one of our directors, officers, or controlling person sin connection
with the securities being registered, we will, unless in the opinion
of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether
such indemnification is against public policy as expressed in the
Securities Act, and we will be governed by the final adjudication of
such issue.
44
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form SB-2 and
authorized this registration statement to be signed on its behalf by
the undersigned, in the City of Geneva, Country of Switzerland on
April 28, 2000.
CROSSNET VENTURES, INC.
/s/ Bruce Elliott
By: __________________________
Bruce Elliott, President
POWER OF ATTORNEY
ALL MEN BY THESE PRESENT, that each person whose signature appears
below constitutes and appoints Bruce Elliott, his true and lawful
attorney-in-fact and agent, with full power of substitution and re-
substitution, for him and in his name, place and stead, in any and
all capacities, to sign any and all pre- or post-effective amendments
to this Registration statement, and to file the same with all
exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, granting unto said attorneys-
in-fact and agents, and each of them, full power and authority to do
and perform each and every act and thing requisite or necessary to be
done in and about the premises, as fully to all intents and purposes
as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any one of them, or
their or his substitutes, may lawfully do or cause to be done by
virtue hereof.
In accordance with the requirements of the Securities Act of 1933,
this registration statement was signed by the following persons in
the capacities and on the dates stated.
SIGNATURE CAPACITY IN WHICH SIGNED DATE
/s/ Bruce Elliott President and Chief Executive April 28, 2000
- ------------------ Officer (Principal Executive
Bruce Elliott Officer) and Director
/s/ Howard Thomson Chief Financial Officer (Principal April 28, 2000
- ------------------ Financial/Accounting Officer) and
Howard Thomson Director
/s/ Yogesh Parekh Chief Operating Officer and April 28, 2000
- ------------------ Director
Yogesh Parekh
/s/ Logan Anderson April 28, 2000
- ------------------- Director
Logan Anderson
/s/ Jost Steinbruchel April 28, 2000
- ------------------- Director
Jost Steinbruchel
<PAGE>
FILED Filing Fee:
IN THE OFFICE OF THE Receipt #:
SECRETARY OF STATE OF THE Articles of Incorporation
STATE OF NEVADA (PURSUANT TO NRS 78)
STATE OF NEVADA
NOV 10 1998 Secretary of State
No. C26175-98
Dean Heller
DEAN HELLER, SECRETARY OF STATE
(For filing office use) (For filing office use)
- ----------------------------------------------------------------------------
- ----------------------------------------------------------------------------
IMPORTANT: Read instructions on reverse side before completing this form.
TYPE OR PRINT (BLACK INK ONLY)
1. NAME OF CORPORATION: Crossnet Ventures, Inc.
2. RESIDENT AGENT: (designated resident agent and his STREET
ADDRESS in Nevada where process may be served)
Name of Resident Agent: Michael A. Cane
Street Address: 101 Convention Center Dr., Suite 1200, Las Vegas, NV 89109
----------------------------------------------------------
Street No. Street Name City Zip
3. SHARES: (number of shares the corporation is authorized to issue)
Number of shares with par value: 100 Million Par value: $ .001
No. without par value: _________
4. GOVERNING BOARD: shall be styled as (check one):
X Directors ______ Trustees
The FIRST BOARD OF DIRECTORS shall consist of 1 member(s) and
the names and addresses are as follows:
Logan Anderson Locavia Condominium, Unit 45, Seven Mile Beach
- -------------- -----------------------------------------------
Name Address
Cayman Islands, British West Indies
-----------------------------------------------
City/State/Zip
5. PURPOSE: (optional) : The purpose of the corporation shall be:
6. OTHER MATTERS: This form includes the minimal statutory
requirements to incorporate under NRS 78. You may attach
additional information pursuant to NRS 78.037 or any other
information you deem appropriate. If any of the additional
information is contradictory to this form it cannot be filed and
will be returned to you for correction. Number of pages attached 0.
7. SIGNATURES OF INCORPORATORS: The names and addresses of each of
the incorporators signing the articles.
Michael A. Cane
- -----------------
Name (print)
P.O. Box 12927, Las Vegas, NV 89112
- -----------------------------------
Address City/State/Zip
/S/ Michael A. Cane
- -------------------
Signature
State of Nevada, County of Clark
------ -----
This instrument was acknowledged before me on
November 2, 1998 by
- ---------- -
Michael A. Cane
- -------------------
Name of Person
as incorporator of Crossnet Ventures, Inc.
-----------------------
/S/Lorrie A. Azure
- -----------------------------------
Notary Public Signature
(affix notary stamp or seal)
/s/ NOTARY PUBLIC
STATE OF NEVADA
COUNTY OF CLARK
LORRIE A. AZURE
8. CERTIFICATE OF ACCEPTANCE OF APPOINTMENT OF RESIDENT AGENT:
I, Michael A. Cane hereby accept appointment as Resident
Agent for the above named corporation.
/S/ Michael A. Cane 11-2-98
- --------------------------- -------
Signature of Resident Agent Date
<PAGE>
BYLAWS
OF
CROSSNET VENTURES, INC.
(A NEVADA CORPORATION)
ARTICLE I
OFFICES
Section 1. Registered Office. The registered office of the
corporation in the State of Nevada shall be in the City of Las
Vegas, State of Nevada.
Section 2. Other Offices. The corporation shall also have
and maintain an office or principal place of business at such place
as may be fixed by the Board of Directors, and 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 II
CORPORATE SEAL
Section 3. Corporate Seal. The corporate seal shall consist
of a die bearing the name of the corporation and the inscription,
"Corporate Seal-Nevada." Said seal may be used by causing it or a
facsimile thereof to be impressed or affixed or reproduced or
otherwise.
ARTICLE III
STOCKHOLDERS' MEETINGS
Section 4. Place of Meetings. Meetings of the stockholders
of the corporation shall be held at such place, either within or
without the State of Nevada, as may be designated from time to time
by the Board of Directors, or, if not so designated, then at the
office of the corporation required to be maintained pursuant to
Section 2 hereof.
Section 5. Annual Meeting.
(a) The annual meeting of the stockholders of the
corporation, for the purpose of election of directors and for such
other business as may lawfully come before it, shall be held on
such date and at such time as may be designated from time to time
by the Board of Directors.
(b) At an annual meeting of the stockholders, only such
business shall be conducted as shall have been properly brought
before the meeting. To be properly brought before an annual
meeting, business must be: (A) specified in the notice of meeting
(or any supplement thereto) given
<PAGE>
by or at the direction of the
Board of Directors, (B) otherwise properly brought before the
meeting by or at the direction of the Board of Directors, or (C)
otherwise properly brought before the meeting by a stockholder.
For business to be properly brought before an annual meeting by a
stockholder, the stockholder must have given timely notice thereof
in writing to the Secretary of the corporation. To be timely, a
stockholder's notice must be delivered to or mailed and received at
the principal executive offices of the corporation not later than
the close of business on the sixtieth (60th) day nor earlier than
the close of business on the ninetieth (90th) day prior to the
first anniversary of the preceding year's annual meeting; provided,
however, that in the event that no annual meeting was held in the
previous year or the date of the annual meeting has been changed by
more than thirty (30) days from the date contemplated at the time
of the previous year's proxy statement, notice by the stockholder
to be timely must be so received not earlier than the close of
business on the ninetieth (90th) day prior to such annual meeting
and not later than the close of business on the later of the
sixtieth (60th) day prior to such annual meeting or, in the event
public announcement of the date of such annual meeting is first
made by the corporation fewer than seventy (70) days prior to the
date of such annual meeting, the close of business on the tenth
(10th) day following the day on which public announcement of the
date of such meeting is first made by the corporation. A
stockholder's notice to the Secretary shall set forth as to each
matter the stockholder proposes to bring before the annual meeting:
(i) a brief description of the business desired to be brought
before the annual meeting and the reasons for conducting such
business at the annual meeting, (ii) the name and address, as they
appear on the corporation's books, of the stockholder proposing
such business, (iii) the class and number of shares of the
corporation which are beneficially owned by the stockholder, (iv)
any material interest of the stockholder in such business and (v)
any other information that is required to be provided by the
stockholder pursuant to Regulation 14A under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), in his capacity
as a proponent to a stockholder proposal. Notwithstanding the
foregoing, in order to include information with respect to a
stockholder proposal in the proxy statement and form of proxy for a
stockholder's meeting, stockholders must provide notice as required
by the regulations promulgated under the 1934 Act. Notwithstanding
anything in these Bylaws to the contrary, no business shall be
conducted at any annual meeting except in accordance with the
procedures set forth in this paragraph (b). The chairman of the
annual meeting shall, if the facts warrant, determine and declare
at the meeting that business was not properly brought before the
meeting and in accordance with the provisions of this paragraph
(b), and, if he should so determine, he shall so declare at the
meeting that any such business not properly brought before the
meeting shall not be transacted.
(c) Only persons who are confirmed in accordance with the
procedures set forth in this paragraph (c) shall be eligible for
election as directors. Nominations of persons for election to the
Board of Directors of the corporation may be made at a meeting of
stockholders by or at the direction of the Board of Directors or by
any stockholder of the corporation entitled to vote in the election
of directors at the meeting who complies with the notice procedures
set forth in this paragraph (c). Such nominations, other than
those made by or at the direction of the Board of Directors, shall
be made pursuant to timely notice in writing to the Secretary of
the corporation in accordance with the provisions of paragraph (b)
of this Section 5. Such stockholder's notice shall set forth (i)
as to each person, if any, whom the stockholder proposes to
nominate for election or re-election as a director: (A) the name,
age, business address and residence address of such person, (B)
the principal occupation or employment of such person, (c) the class
and number of shares of the
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corporation which are beneficially
owned by such person, (D) a description of all arrangements or
understandings between the stockholder and each nominee and any
other person or persons (naming such person or persons) pursuant to
which the nominations are to be made by the stockholder, and (E)
any other information relating to such person that is required to
be disclosed in solicitations of proxies for election of directors,
or is otherwise required, in each case pursuant to Regulation 14A
under the 1934 Act (including without limitation such person's
written consent to being named in the proxy statement, if any, as a
nominee and to serving as a director if elected); and (ii) as to
such stockholder giving notice, the information required to be
provided pursuant to paragraph (b) of this Section 5. At the
request of the Board of Directors, any person nominated by a
stockholder for election as a director shall furnish to the
Secretary of the corporation that information required to be set
forth in the stockholder's notice of nomination which pertains to
the nominee. No person shall be eligible for election as a
director of the corporation unless nominated in accordance with the
procedures set forth in this paragraph (c). The chairman of the
meeting shall, if the facts warrant, determine and declare at the
meeting that a nomination was not made in accordance with the
procedures prescribed by these Bylaws, and if he should so
determine, he shall so declare at the meeting, and the defective
nomination shall be disregarded.
(d) For purposes of this Section 5, "public announcement"
shall mean disclosure in a press release reported by the Dow Jones
News Service, Associated Press or comparable national news service
or in a document publicly filed by the corporation with the
Securities and Exchange Commission pursuant to Section 13, 14 or
15(d) of the Exchange Act.
Section 6. Special Meetings.
(a) Special meetings of the stockholders of the corporation
may be called, for any purpose or purposes, by (i) the Chairman of
the Board of Directors, (ii) the Chief Executive Officer, or (iii)
the Board of Directors pursuant to a resolution adopted by a
majority of the total number of authorized directors (whether or
not there exist any vacancies in previously authorized
directorships at the time any such resolution is presented to the
Board of Directors for adoption), and shall be held at such place,
on such date, and at such time as the Board of Directors, shall
determine.
(b) If a special meeting is called by any person or persons
other than the Board of Directors, the request shall be in writing,
specifying the general nature of the business proposed to be
transacted, and shall be delivered personally or sent by registered
mail or by telegraphic or other facsimile transmission to the
Chairman of the Board of Directors, the Chief Executive Officer, or
the Secretary of the corporation. No business may be transacted at
such special meeting otherwise than specified in such notice. The
Board of Directors shall determine the time and place of such
special meeting, which shall be held not less than thirty-five (35)
nor more than one hundred twenty (120) days after the date of the
receipt of the request. Upon determination of the time and place
of the meeting, the officer receiving the request shall cause
notice to be given to the stockholders entitled to vote, in
accordance with the provisions of Section 7 of these Bylaws. If
the notice is not given within sixty (60) days after the receipt of
the request, the person or persons requesting the meeting may set
the time and place of the meeting and give the notice. Nothing
contained in this paragraph (b) shall be construed as limiting,
fixing, or affecting the time when a meeting of stockholders
called by action of the Board of Directors may be held.
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Section 7. Notice of Meetings. Except as otherwise provided
by law or the Articles of Incorporation, written notice of each
meeting of stockholders shall be given not less than ten (10) nor
more than sixty (60) days before the date of the meeting to each
stockholder entitled to vote at such meeting, such notice to
specify the place, date and hour and purpose or purposes of the
meeting. Notice of the time, place and purpose of any meeting of
stockholders may be waived in writing, signed by the person
entitled to notice thereof, either before or after such meeting,
and will be waived by any stockholder by his attendance thereat in
person or by proxy, except when the stockholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. Any stockholder so waiving notice
of such meeting shall be bound by the proceedings of any such
meeting in all respects as if due notice thereof had been given.
Section 8. Quorum. At all meetings of stockholders, except
where otherwise provided by statute or by the Articles of
Incorporation, or by these Bylaws, the presence, in person or by
proxy duly authorized, of the holder or holders of not less than
one percent (1%) of the outstanding shares of stock entitled to
vote shall constitute a quorum for the transaction of business. In
the absence of a quorum, any meeting of stockholders may be
adjourned, from time to time, either by the chairman of the meeting
or by vote of the holders of a majority of the shares represented
thereat, but no other business shall be transacted at such meeting.
The stockholders present at a duly called or convened meeting, at
which a quorum is present, may continue to transact business until
adjournment, notwithstanding the withdrawal of enough stockholders
to leave less than a quorum. Except as otherwise provided by law,
the Articles of Incorporation or these Bylaws, all action taken by
the holders of a majority of the votes cast, excluding abstentions,
at any meeting at which a quorum is present shall be valid and
binding upon the corporation; provided, however, that directors
shall be elected by a plurality of the votes of the shares present
in person or represented by proxy at the meeting and entitled to
vote on the election of directors. Where a separate vote by a
class or classes or series is required, except where otherwise
provided by the statute or by the Articles of Incorporation or
these Bylaws, a majority of the outstanding shares of such class or
classes or series, present in person or represented by proxy, shall
constitute a quorum entitled to take action with respect to that
vote on that matter and, except where otherwise provided by the
statute or by the Articles of Incorporation or these Bylaws, the
affirmative vote of the majority (plurality, in the case of the
election of directors) of the votes cast, including abstentions, by
the holders of shares of such class or classes or series shall be
the act of such class or classes or series.
Section 9. Adjournment and Notice of Adjourned Meetings. Any
meeting of stockholders, whether annual or special, may be
adjourned from time to time either by the chairman of the meeting
or by the vote of a majority of the shares casting votes, excluding
abstentions. When a meeting is adjourned to another time or place,
notice need not be given of the adjourned meeting if the time and
place thereof are announced at the meeting at which the adjournment
is taken. At the adjourned meeting, the corporation may transact
any business which might have been transacted at the original
meeting. If the adjournment is for more than thirty (30) days or
if after the adjournment a new record date is fixed for the
adjourned meeting, a notice of the adjourned meeting shall be given
to each stockholder of record entitled to vote at the meeting.
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Section 10. Voting Rights. For the purpose of
determining those stockholders entitled to vote at any meeting of
the stockholders, except as otherwise provided by law, only persons
in whose names shares stand on the stock records of the corporation
on the record date, as provided in Section 12 of these Bylaws,
shall be entitled to vote at any meeting of stockholders. Every
person entitled to vote shall have the right to do so either in
person or by an agent or agents authorized by a proxy granted in
accordance with Nevada law. An agent so appointed need not be a
stockholder. No proxy shall be voted after three (3) years from
its date of creation unless the proxy provides for a longer period.
Section 11. Joint Owners of Stock. If shares or other
securities having voting power stand of record in the names of two
(2) or more persons, whether fiduciaries, members of a partnership,
joint tenants, tenants in common, tenants by the entirety, or
otherwise, or if two (2) or more persons have the same fiduciary
relationship respecting the same shares, unless the Secretary is
given written notice to the contrary and is furnished with a copy
of the instrument or order appointing them or creating the
relationship wherein it is so provided, their acts with respect to
voting shall have the following effect: (a) if only one (1) votes,
his act binds all; (b) if more than one (1) votes, the act of the
majority so voting binds all; (c) if more than one (1) votes, but
the vote is evenly split on any particular matter, each faction may
vote the securities in question proportionally, or may apply to the
Nevada Court of Chancery for relief as provided in the General
Corporation Law of Nevada, Section 217(b). If the instrument filed
with the Secretary shows that any such tenancy is held in unequal
interests, a majority or even-split for the purpose of subsection
(c) shall be a majority or even-split in interest.
Section 12. List of Stockholders. The Secretary shall
prepare and make, at least ten (10) days before every meeting of
stockholders, a complete list of the stockholders entitled to vote
at said meeting, arranged in alphabetical order, showing the
address of each stockholder and the number of shares registered in
the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the
meeting, during ordinary business hours, for a period of at least
ten (10) days prior to the meeting, either at a place within the
city where the meeting is to be held, which place shall be
specified in the notice of the meeting, or, if not specified, at
the place where the meeting is to be held. The list shall be
produced and kept at the time and place of meeting during the whole
time thereof and may be inspected by any stockholder who is
present.
Section 13. Action Without Meeting. No action shall be
taken by the stockholders except at an annual or special meeting of
stockholders called in accordance with these Bylaws, or by the
written consent of all stockholders.
Section 14. Organization.
(a) At every meeting of stockholders, the Chairman of the
Board of Directors, or, if a Chairman has not been appointed or is
absent, the President, or, if the President is absent, a chairman
of the meeting chosen by a majority in interest of the stockholders
entitled to vote, present in person or by proxy, shall act as chairman.
The Secretary, or, in his absence, an Assistant Secretary directed to
do so by the President, shall act as secretary of the meeting.
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(b) The Board of Directors of the corporation shall be
entitled to make such rules or regulations for the conduct of
meetings of stockholders as it shall deem necessary, appropriate or
convenient. Subject to such rules and regulations of the Board of
Directors, if any, the chairman of the meeting shall have the right
and authority to prescribe such rules, regulations and procedures
and to do all such acts as, in the judgment of such chairman, are
necessary, appropriate or convenient for the proper conduct of the
meeting, including, without limitation, establishing an agenda or
order of business for the meeting, rules and procedures for
maintaining order at the meeting and the safety of those present,
limitations on participation in such meeting to stockholders of
record of the corporation and their duly authorized and constituted
proxies and such other persons as the chairman shall permit,
restrictions on entry to the meeting after the time fixed for the
commencement thereof, limitations on the time allotted to questions
or comments by participants and regulation of the opening and
closing of the polls for balloting on matters which are to be voted
on by ballot. Unless and to the extent determined by the Board of
Directors or the chairman of the meeting, meetings of stockholders
shall not be required to be held in accordance with rules of
parliamentary procedure.
ARTICLE IV
DIRECTORS
Section 15. Number and Qualification. The authorized
number of directors of the corporation shall be not less than one
(1) nor more than twelve (12) as fixed from time to time by
resolution of the Board of Directors; provided that no decrease in
the number of directors shall shorten the term of any incumbent
directors. Directors need not be stockholders unless so required
by the Articles of Incorporation. If for any cause, the directors
shall not have been elected at an annual meeting, they may be
elected as soon thereafter as convenient at a special meeting of
the stockholders called for that purpose in the manner provided in
these Bylaws.
Section 16. Powers. The powers of the corporation shall
be exercised, its business conducted and its property controlled by
the Board of Directors, except as may be otherwise provided by
statute or by the Articles of Incorporation.
Section 17. Election and Term of Office of Directors.
Members of the Board of Directors shall hold office for the terms
specified in the Articles of Incorporation, as it may be amended
from time to time, and until their successors have been elected as
provided in the Articles of Incorporation.
Section 18. Vacancies. Unless otherwise provided in the
Articles of Incorporation, any vacancies on the Board of Directors
resulting from death, resignation, disqualification, removal or
other causes and any newly created directorships resulting from any
increase in the number of directors, shall unless the Board of
Directors determines by resolution that any such vacancies or newly
created directorships shall be filled by stockholder vote, be
filled only by the affirmative vote of a majority of the directors
then in office, even though less than a quorum of the Board of
Directors. Any director elected in accordance with the preceding
sentence shall hold office for the remainder of the full term of
the director for which the vacancy was
created or occurred and until such director's successor shall have been
elected and qualified. A vacancy in the Board of Directors
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shall be
deemed to exist under this Bylaw in the case of the death, removal or
resignation of any director.
Section 19. Resignation. Any director may resign at any
time by delivering his written resignation to the Secretary, such
resignation to specify whether it will be effective at a particular
time, upon receipt by the Secretary or at the pleasure of the Board
of Directors. If no such specification is made, it shall be deemed
effective at the pleasure of the Board of Directors. When one or
more directors shall resign from the Board of Directors, effective
at a future date, a majority of the directors then in office,
including those who have so resigned, shall have power to fill such
vacancy or vacancies, the vote thereon to take effect when such
resignation or resignations shall become effective, and each
director so chosen shall hold office for the unexpired portion of
the term of the director whose place shall be vacated and until his
successor shall have been duly elected and qualified.
Section 20. Removal. Subject to the Articles of
Incorporation, any director may be removed by:
(a) the affirmative vote of the holders of a majority of the
outstanding shares of the Corporation then entitled to vote, with
or without cause; or
(b) the affirmative and unanimous vote of a majority of the
directors of the Corporation, with the exception of the vote of the
directors to be removed, with or without cause.
Section 21. Meetings.
(a) Annual Meetings. The annual meeting of the Board of
Directors shall be held immediately after the annual meeting of
stockholders and at the place where such meeting is held. No
notice of an annual meeting of the Board of Directors shall be
necessary and such meeting shall be held for the purpose of
electing officers and transacting such other business as may
lawfully come before it.
(b) Regular Meetings. Except as hereinafter otherwise
provided, regular meetings of the Board of Directors shall be held
in the office of the corporation required to be maintained pursuant
to Section 2 hereof. Unless otherwise restricted by the Articles
of Incorporation, regular meetings of the Board of Directors may
also be held at any place within or without the state of Nevada
which has been designated by resolution of the Board of Directors
or the written consent of all directors.
(c) Special Meetings. Unless otherwise restricted by the
Articles of Incorporation, special meetings of the Board of
Directors may be held at any time and place within or without the
State of Nevada whenever called by the Chairman of the Board, the
President or any two of the directors.
(d) Telephone Meetings. Any member of the Board of
Directors, or of any committee thereof, may participate in a
meeting by means of conference telephone or similar communications
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equipment by means of which all persons participating in the
meeting can hear each other, and participation in a meeting by such
means shall constitute presence in person at such meeting.
(e) Notice of Meetings. Notice of the time and place of all
special meetings of the Board of Directors shall be orally or in
writing, by telephone, facsimile, telegraph or telex, during normal
business hours, at least twenty-four (24) hours before the date and
time of the meeting, or sent in writing to each director by first
class mail, charges prepaid, at least three (3) days before the
date of the meeting. Notice of any meeting may be waived in
writing at any time before or after the meeting and will be waived
by any director by attendance thereat, except when the director
attends the meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened.
(f) Waiver of Notice. The transaction of all business at any
meeting of the Board of Directors, or any committee thereof,
however called or 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 shall sign a written waiver of
notice. All such waivers shall be filed with the corporate records
or made a part of the minutes of the meeting.
Section 22. Quorum and Voting.
(a) Unless the Articles of Incorporation requires a greater
number and except with respect to indemnification questions arising
under Section 43 hereof, for which a quorum shall be one-third of
the exact number of directors fixed from time to time in accordance
with the Articles of Incorporation, a quorum of the Board of
Directors shall consist of a majority of the exact number of
directors fixed from time to time by the Board of Directors in
accordance with the Articles of Incorporation provided, however, at
any meeting whether a quorum be present or otherwise, a majority of
the directors present may adjourn from time to time until the time
fixed for the next regular meeting of the Board of Directors,
without notice other than by announcement at the meeting.
(b) At each meeting of the Board of Directors at which a
quorum is present, all questions and business shall be determined
by the affirmative vote of a majority of the directors present,
unless a different vote be required by law, the Articles of
Incorporation or these Bylaws.
Section 23. Action Without Meeting. Unless otherwise
restricted by the Articles of Incorporation or these Bylaws, 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 all members of the Board of Directors or committee,
as the case may be, consent thereto in writing, and such writing or
writings are filed with the minutes of proceedings of the Board of
Directors or committee.
Section 24. Fees and Compensation. Directors shall be
entitled to such compensation for their services as may be approved
by the Board of Directors, including, if so approved, by resolution
of the Board of Directors, a fixed sum and expenses of attendance,
if any, for attendance at each regular or special meeting of the
Board of Directors and at any meeting of a committee of
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the Board of Directors. Nothing herein
contained shall be construed to preclude any director from serving the
corporation in any other capacity as an officer, agent, employee, or
otherwise and receiving compensation therefor.
Section 25. Committees.
(a) Executive Committee. The Board of Directors may by
resolution passed by a majority of the whole Board of Directors
appoint an Executive Committee to consist of one (1) or more
members of the Board of Directors. The Executive Committee, to the
extent permitted by law and provided in the resolution of the Board
of Directors shall have and may exercise all the powers and
authority of the Board of Directors in the management of the
business and affairs of the corporation, including without
limitation the power or authority to declare a dividend, to
authorize the issuance of stock and to adopt a certificate of
ownership and merger, and may authorize the seal of the corporation
to be affixed to all papers which may require it; but no such
committee shall have the power or authority in reference to
amending the Articles of Incorporation (except that a committee
may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the Board
of Directors fix the designations and any of the preferences or
rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the
conversion into, or the exchange of such shares for, shares of any
other class or classes or any other series of the same or any other
class or classes of stock of the corporation or fix the number of
shares of any series of stock or authorize the increase or decrease
of the shares of any series), adopting an agreement of merger or
consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property
and assets, recommending to the stockholders a dissolution of the
corporation or a revocation of a dissolution, or amending the
bylaws of the corporation.
(b) Other Committees. The Board of Directors may, by
resolution passed by a majority of the whole Board of Directors,
from time to time appoint such other committees as may be permitted
by law. Such other committees appointed by the Board of Directors
shall consist of one (1) or more members of the Board of Directors
and shall have such powers and perform such duties as may be
prescribed by the resolution or resolutions creating such
committees, but in no event shall such committee have the powers
denied to the Executive Committee in these Bylaws.
(c) Term. Each member of a committee of the Board of
Directors shall serve a term on the committee coexistent with such
member's term on the Board of Directors. The Board of Directors,
subject to the provisions of subsections (a) or (b) of this Bylaw
may at any time increase or decrease the number of members of a
committee or terminate the existence of a committee. The
membership of a committee member shall terminate on the date of his
death or voluntary resignation from the committee or from the Board
of Directors. The Board of Directors may at any time for any
reason remove any individual committee member and the Board of
Directors may fill any committee vacancy created by death,
resignation, removal or increase in the number of members of the
committee. The Board of Directors may designate one or more
directors as alternate members of any committee, who may replace
any absent or disqualified member at any meeting of the committee,
and, in addition, in the absence or disqualification of any member
of a committee, the member or members thereof present at any meeting
and not disqualified from voting, whether or not
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he or they constitute a quorum, may unanimously
appoint another member of the Board of Directors to act at the meeting
in the place of any such absent or disqualified member.
(d) Meetings. Unless the Board of Directors shall otherwise
provide, regular meetings of the Executive Committee or any other
committee appointed pursuant to this Section 25 shall be held at
such times and places as are determined by the Board of Directors,
or by any such committee, and when notice thereof has been given to
each member of such committee, no further notice of such regular
meetings need be given thereafter. Special meetings of any such
committee may be held at any place which has been determined from
time to time by such committee, and may be called by any director
who is a member of such committee, upon written notice to the
members of such committee of the time and place of such special
meeting given in the manner provided for the giving of written
notice to members of the Board of Directors of the time and place
of special meetings of the Board of Directors. Notice of any
special meeting of any committee may be waived in writing at any
time before or after the meeting and will be waived by any director
by attendance thereat, except when the director attends such
special meeting for the express purpose of objecting, at the
beginning of the meeting, to the transaction of any business
because the meeting is not lawfully called or convened. A majority
of the authorized number of members of any such committee shall
constitute a quorum for the transaction of business, and the act of
a majority of those present at any meeting at which a quorum is
present shall be the act of such committee.
Section 26. Organization. At every meeting of the
directors, the Chairman of the Board of Directors, or, if a
Chairman has not been appointed or is absent, the President, or if
the President is absent, the most senior Vice President, or, in the
absence of any such officer, a chairman of the meeting chosen by a
majority of the directors present, shall preside over the meeting.
The Secretary, or in his absence, an Assistant Secretary directed
to do so by the President, shall act as secretary of the meeting.
ARTICLE V
OFFICERS
Section 27. Officers Designated. The officers of the
corporation shall include, if and when designated by the Board of
Directors, the Chairman of the Board of Directors, the Chief
Executive Officer, the President, one or more Vice Presidents, the
Secretary, the Chief Financial Officer, the Treasurer, the
Controller, all of whom shall be elected at the annual
organizational meeting of the Board of Direction. The Board of
Directors may also appoint one or more Assistant Secretaries,
Assistant Treasurers, Assistant Controllers and such other officers
and agents with such powers and duties as it shall deem necessary.
The Board of Directors may assign such additional titles to one or
more of the officers as it shall deem appropriate. Any one person
may hold any number of offices of the corporation at any one time
unless specifically prohibited therefrom by law. The salaries and
other compensation of the officers of the corporation shall be
fixed by or in the manner designated by the Board of Directors.
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Section 28. Tenure and Duties of Officers.
(a) General. All officers shall hold office at the pleasure
of the Board of Directors and until their successors shall have
been duly elected and qualified, unless sooner removed. Any
officer elected or appointed by the Board of Directors may be
removed at any time by the Board of Directors. If the office of
any officer becomes vacant for any reason, the vacancy may be
filled by the Board of Directors.
(b) Duties of Chairman of the Board of Directors. The
Chairman of the Board of Directors, when present, shall preside at
all meetings of the stockholders and the Board of Directors. The
Chairman of the Board of Directors shall perform other duties
commonly incident to his office and shall also perform such other
duties and have such other powers as the Board of Directors shall
designate from time to time. If there is no President, then the
Chairman of the Board of Directors shall also serve as the Chief
Executive Officer of the corporation and shall have the powers and
duties prescribed in paragraph (c) of this Section 28.
(c) Duties of President. The President shall preside at all
meetings of the stockholders and at all meetings of the Board of
Directors, unless the Chairman of the Board of Directors has been
appointed and is present. Unless some other officer has been
elected Chief Executive Officer of the corporation, the President
shall be the chief executive officer of the corporation and shall,
subject to the control of the Board of Directors, have general
supervision, direction and control of the business and officers of
the corporation. The President shall perform other duties commonly
incident to his office and shall also perform such other duties and
have such other powers as the Board of Directors shall designate
from time to time.
(d) Duties of Vice Presidents. The Vice Presidents may
assume and perform the duties of the President in the absence or
disability of the President or whenever the office of President is
vacant. The Vice Presidents shall perform other duties commonly
incident to their office and shall also perform such other duties
and have such other powers as the Board of Directors or the
President shall designate from time to time.
(e) Duties of Secretary. The Secretary shall attend all
meetings of the stockholders and of the Board of Directors and
shall record all acts and proceedings thereof in the minute book of
the corporation. The Secretary shall give notice in conformity
with these Bylaws of all meetings of the stockholders and of all
meetings of the Board of Directors and any committee thereof
requiring notice. The Secretary shall perform all other duties
given him in these Bylaws and other duties commonly incident to his
office and shall also perform such other duties and have such other
powers as the Board of Directors shall designate from time to time.
The President may direct any Assistant Secretary to assume and
perform the duties of the Secretary in the absence or disability of
the Secretary, and each Assistant Secretary shall perform other
duties commonly incident to his office and shall also perform such
other duties and have such other powers as the Board of Directors
or the President shall designate from time to time.
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(f) Duties of Chief Financial Officer. The Chief Financial
Officer shall keep or cause to be kept the books of account of the
corporation in a thorough and proper manner and shall render
statements of the financial affairs of the corporation in such form
and as often as required by the Board of Directors or the
President. The Chief Financial Officer, subject to the order of
the Board of Directors, shall have the custody of all funds and
securities of the corporation. The Chief Financial Officer shall
perform other duties commonly incident to his office and shall also
perform such other duties and have such other powers as the Board
of Directors or the President shall designate from time to time.
The President may direct the Treasurer or any Assistant Treasurer,
or the Controller or any Assistant Controller to assume and perform
the duties of the Chief Financial Officer in the absence or
disability of the Chief Financial Officer, and each Treasurer and
Assistant Treasurer and each Controller and Assistant Controller
shall perform other duties commonly incident to his office and
shall also perform such other duties and have such other powers as
the Board of Directors or the President shall designate from time
to time.
Section 29. Delegation of Authority. The Board of
Directors may from time to time delegate the powers or duties of
any officer to any other officer or agent, notwithstanding any
provision hereof.
Section 30. Resignations. Any officer may resign at any
time by giving written notice to the Board of Directors or to the
President or to the Secretary. Any such resignation shall be
effective when received by the person or persons to whom such
notice is given, unless a later time is specified therein, in which
event the resignation shall become effective at such later time.
Unless otherwise specified in such notice, the acceptance of any
such resignation shall not be necessary to make it effective. Any
resignation shall be without prejudice to the rights, if any, of
the corporation under any contract with the resigning officer.
Section 31. Removal. Any officer may be removed from
office at any time, either with or without cause, by the
affirmative vote of a majority of the directors in office at the
time, or by the unanimous written consent of the directors in
office at the time, or by any committee or superior officers upon
whom such power of removal may have been conferred by the Board of
Directors.
ARTICLE VI
EXECUTION OF CORPORATE INSTRUMENTS AND VOTING
OF SECURITIES OWNED BY THE CORPORATION
Section 32. Execution of Corporate Instrument. The Board
of Directors may, in its discretion, determine the method and
designate the signatory officer or officers, or other person or
persons, to execute on behalf of the corporation any corporate
instrument or document, or to sign on behalf of the corporation the
corporate name without limitation, or to enter into contracts on
behalf of the corporation, except where otherwise provided by law
or these Bylaws, and such execution or signature shall be binding
upon the corporation.
Unless otherwise specifically determined by the Board of
Directors or otherwise required by law, promissory notes, deeds of
trust, mortgages and other evidences of indebtedness of the
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corporation, and other corporate instruments or documents requiring
the corporate seal, and certificates of shares of stock owned by
the corporation, shall be executed, signed or endorsed by the
Chairman of the Board of Directors, or the President or any Vice
President, and by the Secretary or Treasurer or any Assistant
Secretary or Assistant Treasurer. All other instruments and
documents requiting the corporate signature, but not requiring the
corporate seal, may be executed as aforesaid or in such other
manner as may be directed by the Board of Directors.
All checks and drafts drawn on banks or other depositaries on
funds to the credit of the corporation or in special accounts of
the corporation shall be signed by such person .or persons as the
Board of Directors shall authorize so to do.
Unless authorized or ratified by the Board of Directors or
within the agency power of an officer, no officer, agent or
employee shall have any power or authority to bind the corporation
by any contract or engagement or to pledge its credit or to render
it liable for any purpose or for any amount.
Section 33. Voting of Securities Owned by the
Corporation. All stock and other securities of other corporations
owned or held by the corporation for itself, or for other parties
in any capacity, shall be voted, and all proxies with respect
thereto shall be executed, by the person authorized so to do by
resolution of the Board of Directors, or, in the absence of such
authorization, by the Chairman of the Board of Directors, the Chief
Executive Officer, the President, or any Vice President.
ARTICLE VII
SHARES OF STOCK
Section 34. Form and Execution of Certificates.
Certificates for the shares of stock of the corporation shall be in
such form as is consistent with the Articles of Incorporation and
applicable law. Every holder of stock in the corporation shall be
entitled to have a certificate signed by or in the name of the
corporation by the Chairman of the Board of Directors, or the
President or any Vice President and by the Treasurer or Assistant
Treasurer or the Secretary or Assistant Secretary, certifying the
number of shares owned by him in the corporation. Any or all of
the signatures on the certificate may be facsimiles. In case any
officer, transfer agent, or registrar who has signed or whose
facsimile signature has been placed upon a certificate shall have
ceased to be such officer, transfer agent, or registrar before such
certificate is issued, it may be issued with the same effect as if
he were such officer, transfer agent, or registrar at the date of
issue. Each certificate shall state upon the face or back thereof,
in full or in summary, all of the powers, designations,
preferences, and rights, and the limitations or restrictions of the
shares authorized to be issued or shall, except as otherwise
required by law, set forth on the face or back a statement that the
corporation will furnish without charge to each stockholder who so
requests the powers, designations, preferences and relative,
participating, optional, or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Within a
reasonable time after the issuance or transfer of uncertificated
stock, the corporation shall send to the registered owner thereof a
written notice containing the information required to be
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set forth
or stated on certificates pursuant to this section or otherwise
required by law or with respect to this section a statement that
the corporation will furnish without charge to each stockholder who
so requests the powers, designations, preferences and relative
participating, optional or other special rights of each class of
stock or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights. Except as
otherwise expressly provided by law, the rights and obligations of
the holders of certificates representing stock of the same class
and series shall be identical.
Section 35. Lost Certificates. A new certificate or
certificates shall be issued in place of any certificate or
certificates theretofore issued by the corporation alleged to have
been lost, stolen, or destroyed, upon the making of an affidavit of
that fact by the person claiming the certificate of stock to be
lost, stolen, or destroyed. The corporation may require, as a
condition precedent to the issuance of a new certificate or
certificates, the owner of such lost, stolen, or destroyed
certificate or certificates, or his legal representative, to
advertise the same in such manner as it shall require or to give
the corporation a surety bond in such form and amount 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, stolen, or destroyed.
Section 36. Transfers.
(a) Transfers of record of shares of stock of the corporation
shall be made only upon its books by the holders thereof, in person
or by attorney duly authorized, and upon the surrender of a
properly endorsed certificate or certificates for a like number of
shares.
(b) The corporation shall have power to enter into and
perform any agreement with any number of stockholders of any one or
more classes of stock of the corporation to restrict the transfer
of shares of stock of the corporation of any one or more classes
owned by such stockholders in any manner not prohibited by the
General Corporation Law of Nevada.
Section 37. Fixing Record Dates.
(a) In order that the corporation may determine the
stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, the Board of Directors may
fix, in advance, a record date, which record date shall not precede
the date upon which the resolution fixing the record date is
adopted by the Board of Directors, and which record date shall not
be more than sixty (60) nor less than ten (10) days before the date
of such meeting. If no record date is fixed by the Board of
Directors, the record date for determining stockholders entitled to
notice of or to vote at a meeting of stockholders shall be at the
close of business on the day next preceding the day on which notice
is given, or if notice is waived, at the close of business on the
day next preceding the day on which the meeting is held. A
determination of stockholders of record entitled to notice of or to
vote at a meeting of stockholders shall apply to any adjournment of
the meeting; provided, however, that the Board of Directors may fix
a new record date for the adjourned meeting.
(b) In order that the corporation may determine the
stockholders entitled to receive payment of any dividend or other
distribution or allotment of any rights or the stockholders
entitled to exercise any rights in respect of any change,
conversion or exchange of stock, or for the purpose
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of any other
lawful action, the Board of Directors may fix, in advance, a record
date, which record date shall not precede the date upon which the
resolution fixing the record date is adopted, and which record date
shall be not more than sixty (60) days prior to such action. If no
record date is filed, the record date for determining stockholders
for any such purpose shall be at the close of business on the day
on which the Board of Directors adopts the resolution relating
thereto.
Section 38. Registered Stockholders. The corporation shall
be entitled to recognize the exclusive right of a person registered
on its books as the owner of shares to receive dividends, and to
vote as such owner, and shall not be bound to recognize 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 VIII
OTHER SECURITIES OF THE CORPORATION
Section 39. Execution of Other Securities. All bonds,
debentures and other corporate securities of the corporation, other
than stock certificates (covered in Section 34), may be signed by
the Chairman of the Board of Directors, the President or any Vice
President, or such other person as may be authorized by the Board
of Directors, and the corporate seal impressed thereon or a
facsimile of such seal imprinted thereon and attested by the
signature of the Secretary or an Assistant Secretary, or the Chief
Financial Officer or Treasurer or an Assistant Treasurer; provided,
however, that where any such bond, debenture or other corporate
security shall be authenticated by the manual signature, or where
permissible facsimile signature, of a trustee under an indenture
pursuant to which such bond, debenture or other corporate security
shall be issued, the signatures of the persons signing and
attesting the corporate seal on such bond, debenture or other
corporate security may be the imprinted facsimile of the signatures
of such persons. Interest coupons appertaining to any such
bond, debenture or other corporate security, authenticated by a
trustee as aforesaid, shall be signed by the Treasurer or an Assistant
Treasurer of the corporation or such other person as may be
authorized by the Board of Directors, or bear imprinted thereon the
facsimile signature of such person. In case any officer who shall
have signed or attested any bond, debenture or other corporate
security, or whose facsimile signature shall appear thereon or on
any such interest coupon, shall have ceased to be such officer
before the bond, debenture or other corporate security so signed or
attested shall have been delivered, such bond, debenture or other
corporate security nevertheless may be adopted by the corporation
and issued and delivered as though the person who signed the same
or whose facsimile signature shall have been used thereon had not
ceased to be such officer of the corporation.
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ARTICLE IX
DIVIDENDS
Section 40. Declaration of Dividends. 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 pursuant to law at any regular or special meeting.
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 41. Dividend Reserve. 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 Board
of Directors from time to time, in their absolute discretion, think
proper as a reserve or reserves to meet contingencies, or for
equalizing dividends, or for repairing or maintaining any property
of the corporation, or for such other purpose as the Board of
Directors shall think conducive to the interests of the
corporation, and the Board of Directors may modify or abolish any
such reserve in the manner in which it was created.
ARTICLE X
FISCAL YEAR
Section 42. Fiscal Year. The fiscal year of the corporation
shall be fixed by resolution of the Board of Directors.
ARTICLE XI
INDEMNIFICATION
Section 43. Indemnification of Directors, Executive Officers,
Other Officers, Employees and Other Agents.
(a) Directors Officers. The corporation shall indemnify its
directors and officers to the fullest extent not prohibited by the
Nevada General Corporation Law; provided, however, that the
corporation may modify the extent of such indemnification by
individual contracts with its directors and officers; and,
provided, further, that the corporation shall not be required to
indemnify any director or officer in connection with any proceeding
(or part thereof) initiated by such person unless (i) such
indemnification is expressly required to be made by law, (ii) the
proceeding was authorized by the Board of Directors of the
corporation, (iii) such indemnification is provided by the
corporation, in its sole discretion, pursuant to the powers vested
in the corporation under the Nevada General Corporation Law or (iv)
such indemnification is required to be made under subsection (d).
(b) Employees and Other Agents. The corporation shall have
power to indemnify its employees and other agents as set forth in
the Nevada General Corporation Law.
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(c) Expense. The corporation shall advance to any person who
was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason
of the fact that he 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 executive officer of another corporation,
partnership, joint venture, trust or other enterprise, prior to the
final disposition of the proceeding, promptly following request
therefor, all expenses incurred by any director or officer in
connection with such proceeding upon receipt of an undertaking by
or on behalf of such person to repay said mounts if it should be
determined ultimately that such person is not entitled to be
indemnified under this Bylaw or otherwise.
Notwithstanding the foregoing, unless otherwise determined
pursuant to paragraph (e) of this Bylaw, no advance shall be made
by the corporation to an officer of the corporation (except by
reason of the fact that such officer is or was a director of the
corporation in which event this paragraph shall not apply) in any
action, suit or proceeding, whether civil, criminal, administrative
or investigative, if a determination is reasonably and promptly
made (i) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the proceeding, or
(ii) if such quorum is not obtainable, or, even if obtainable, a
quorum of disinterested directors so directs, by independent legal
counsel in a written opinion, that the facts known to the decision-
making party at the time such determination is made demonstrate
clearly and convincingly that such person acted in bad faith or in
a manner that such person did not believe to be in or not opposed
to the best interests of the corporation.
(d) Enforcement. Without the necessity of entering into an
express contract, all rights to indemnification and advances to
directors and officers under this Bylaw shall be deemed to be
contractual rights and be effective to the same extent and as if
provided for in a contract between the
corporation and the director or officer. Any right to indemnification
or advances granted by this Bylaw to a director or officer shall be
enforceable by or on behalf of the person holding such right in any
court of competent jurisdiction if (i) the claim for indemnification
or advances is denied, in whole or in part, or (ii) no disposition of
such claim is made within ninety (90) days of request therefor. The
claimant in such enforcement action, if successful in whole or in part,
shall be entitled to be paid also the expense of prosecuting his
claim. In connection with any claim for indemnification, the
corporation shall be entitled to raise as a defense to any such
action that the claimant has not met the standard of conduct that
make it permissible under the Nevada General Corporation Law for
the corporation to indemnify the claimant for the amount claimed.
In connection with any claim by an officer of the corporation
(except in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that such
officer is or was a director of the corporation) for advances, the
corporation shall be entitled to raise a defense as to any such
action clear and convincing evidence that such person acted in bad
faith or in a manner that such person did not believe to be in or
not opposed in the best interests of the corporation, or with
respect to any criminal action or proceeding that such person acted
without reasonable cause to believe that his conduct was lawful.
Neither the failure of the corporation (including its Board of
Directors, independent legal counsel or its stockholders) to have
made a determination prior to the commencement of such action that
indemnification of the claimant is proper in the circumstances
because he has met the applicable standard of conduct set forth in
the Nevada General Corporation Law, nor an actual determination by
the corporation (including its
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Board of Directors, independent
legal counsel or its stockholders) that the claimant has not met
such applicable standard of conduct, shall be a defense to the
action or create a presumption that claimant has not met the
applicable standard of conduct. In any suit brought by a director
or officer to enforce a right to indemnification or to an
advancement of expenses hereunder, the burden of proving that the
director or officer is not entitled to be indemnified, or to such
advancement of expenses, under this Article XI or otherwise shall
be on the corporation.
(e) Non-Exclusivity of Rights. The rights conferred on any
person by this Bylaw shall not be exclusive of any other right
which such person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote
of stockholders or disinterested directors or otherwise, both as to
action in his official capacity and as to action in another
capacity while holding office. The corporation is specifically
authorized to enter into individual contracts with any or all of
its directors, officers, employees or agents respecting
indemnification and advances, to the fullest extent not prohibited
by the Nevada General Corporation Law.
(f) Survival of Rights. The rights conferred on any person
by this Bylaw shall continue as to a person who has ceased to be a
director, officer, employee or other agent and shall inure to the
benefit of the heirs, executors and administrators of such a
person.
(g) Insurance. To the fullest extent permitted by the Nevada
General Corporation Law, the corporation, upon approval by the
Board of Directors, may purchase insurance on behalf of any person
required or permitted to be indemnified pursuant to this Bylaw.
(h) Amendments. Any repeal or modification of this Bylaw
shall only be prospective and shall not affect the rights under
this Bylaw in effect at the time of the alleged occurrence of any
action or omission to act that is the cause of any proceeding
against any agent of the corporation.
(i) Saving Clause. If this Bylaw or any portion hereof shall
be invalidated on any ground by any court of competent
jurisdiction, then the corporation shall nevertheless indemnify
each director and officer to the full extent not prohibited by any
applicable portion of this Bylaw that shall not have been
invalidated, or by any other applicable law.
(j) Certain Definitions. For the purposes of this Bylaw, the
following definitions shall apply:
(i) The term "proceeding" shall be broadly construed and
shall include, without limitation, the investigation,
preparation, prosecution, defense, settlement, arbitration and
appeal of, and the giving of testimony in, any threatened,
pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative.
(ii) The term "expenses" shall be broadly construed and
shall include, without limitation, court costs, attorneys'
fees, witness fees, fines, amounts paid in settlement or
judgment and any other costs and expenses of any nature or
kind incurred in connection with any proceeding.
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(iii) The term the "corporation" shall include, in
addition to the resulting corporation, any constituent
corporation (including any constituent of a constituent)
absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to
indemnify its directors, officers, and employees or agents, so
that any person who is or was a director, officer, employee or
agent of such constituent corporation, or is or was serving at
the request of such constituent corporation as a director,
officer, employee or agent or another corporation,
partnership, joint venture, trust or other enterprise, shall
stand in the same position under the provisions of this Bylaw
with respect to the resulting or surviving corporation as he
would have with respect to such constituent corporation if its
separate existence had continued.
(iv) References to a "director," "executive officer,"
"officer," "employee," or "agent" of the corporation shall
include, without limitation, situations where such person is
serving at the request of the corporation as, respectively, a
director, executive officer, officer, employee, trustee or
agent of another corporation, partnership, joint venture,
trust or other enterprise.
(v) References to "other enterprises" shall include
employee benefit plans; references to "fines" shall include
any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the
request of the corporation" shall include any service as a
director, officer, employee or agent of the corporation which
imposes duties on, or involves services by, such director,
officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person
who acted
in good faith and in a manner he reasonably believed
to be in the interest of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interests of the corporation"
as referred to in this Bylaw.
ARTICLE XII
NOTICES
Section 44. Notices.
(a) Notice to Stockholders. Whenever, under any provisions
of these Bylaws, notice is required to be given to any stockholder,
it shall be given in writing, timely and duly deposited in the
United States mail, postage prepaid, and addressed to his last
known post office address as shown by the stock record of the
corporation or its transfer agent.
(b) Notice to directors. Any notice required to be given to
any director may be given by the method stated in subsection (a),
or by facsimile, telex or telegram, except that such notice other
than one which is delivered personally shall be sent to such
address as such director shall have filed in writing with the
Secretary, or, in the absence of such filing, to the last known
post office address of such director.
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(c) Affidavit of Mailing. An affidavit of mailing, executed
by a duly authorized and competent employee of the corporation or
its transfer agent appointed with respect to the class of stock
affected, specifying the name and address or the names and
addresses of the stockholder or stockholders, or director or
directors, to whom any such notice or notices was or were given,
and the time and method of giving the same, shall in the absence of
fraud, be prima facie evidence of the facts therein contained.
(d) Time Notices Deemed Given. All notices given by mail, as
above provided, shall be deemed to have been given as at the time
of mailing, and all notices given by facsimile, telex or telegram
shall be deemed to have been given as of the sending time recorded
at time of transmission.
(e) Methods of Notice. It shall not be necessary that the
same method of giving notice be employed in respect of all
directors, but one permissible method may be employed in respect of
any one or more, and any other permissible method or methods may be
employed in respect of any other or others.
(f) Failure to Receive Notice. The period or limitation of
time within which any stockholder may exercise any option or right,
or enjoy any privilege or benefit, or be required to act, or within
which any director may exercise any power or right, or enjoy any
privilege, pursuant to any notice sent him ill the manner above
provided, shall not be affected or extended in any manner by the
failure of such stockholder or such director to receive such
notice.
(g) Notice to Person with Whom Communication Is Unlawful.
Whenever notice is required to be given, under any provision of law
or of the Articles of Incorporation or Bylaws of the
corporation, to any person with whom communication is unlawful, the
giving of such notice to such person shall not be require and there
shall be no duty to apply to any governmental authority or agency for
a license or permit to give such notice to such person. Any action
or meeting which shall be taken or held without notice to any such
person with whom communication is unlawful shall have the same
force and effect as if such notice had been duly given. In the
event that the action taken by the corporation is such as to
require the filing of a certificate under any provision of the
Nevada General Corporation Law, the certificate shall state, if
such is the fact and if notice is required, that notice was given
to all persons entitled to receive notice except such persons with
whom communication is unlawful.
(h) Notice to Person with Undeliverable Address. Whenever
notice is required to be given, under any provision of law or the
Articles of Incorporation or Bylaws of the corporation, to any
stockholder to whom (i) notice of two consecutive annual meetings,
and all notices of meetings or of the taking of action by written
consent without a meeting to such person during the period between
such two consecutive annual meetings, or (ii) all, and at least
two, payments (if sent by first class mail) of dividends or
interest on securities during a twelve-month period, have been
mailed addressed to such person at his address as shown on the
records of the corporation and have been returned undeliverable,
the giving of such notice to such person shall not be required.
Any action or meeting which shall be taken or held without notice
to such person shall have the same force and effect as if such
notice had been duly given. If any such person shall deliver to
the corporation a written notice setting forth his then current
address, the requirement that notice be given to such
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person shall
be reinstated. In the event that the action taken by the
corporation is such as to require the filing of a certificate under
any provision of the Nevada General Corporation Law, the
certificate need not state that notice was not given to persons to
whom notice was not required to be given pursuant to this
paragraph.
ARTICLE XII
AMENDMENTS
Section 45. Amendments.
The Board of Directors shall have the power to adopt, amend,
or repeal Bylaws as set forth in the Articles of Incorporation.
ARTICLE XIV
LOANS TO OFFICERS
Section 46. Loans to Officers. The corporation may lend
money to, or guarantee any obligation of, or otherwise assist any
officer or other employee of the corporation or of its
subsidiaries, including any officer or employee who is a Director
of the corporation or its subsidiaries, whenever, in the judgment
of the Board of Directors, such loan, guarantee or assistance may
reasonably be expected to benefit the corporation. The loan,
guarantee or other assistance may be with or without interest and
may be unsecured, or secured in such manner as the Board of
Directors shall approve, including, without limitation, a pledge of
shares of stock of the corporation. Nothing in these Bylaws shall
be deemed to deny, limit or restrict the powers of guaranty or
warranty of the corporation at common law or under any statute.
Declared as the Amended By-Laws of CrossNet Ventures, Inc. as of
the 10th day of January, 2000.
/s/ Howard Thomson
Signature of Officer: ________________________
Name of Officer: HOWARD THOMSON
Position of Officer: DIRECTOR AND SECRETARY/ TREASURER
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CROSSNET VENTURES, INC.
NUMBER SHARES
[ ] INCORPORATED UNDER THE LAWS OF THE STATE OF NEVADA [ ]
100,000,000 SHARES COMMON STOCK AUTHORIZED
This
certifies
that [NAME OF SHAREHOLDER] CUSIP
SEE REVERSE FOR
CERTAIN DEFINITIONS
Is the owner of [NUMBER OF SHARES]
FULLY PAID AND NON-ASSESSABLE SHARES OF COMMON STOCK OF
CROSSNET VENTURES, INC.
transferable on the books of the corporation in person or by duly
authorized attorney upon surrender of this certificate properly endorsed.
This certificate and the shares represented hereby are subject to the
laws of the State of Nevada, and to the Certificate of Incorporation
and Bylaws of the Corporation, as now or hereafter amended. This
certificate is not valid unless countersigned by the Transfer Agent.
WITNESS the facsimile seal of the Corporation and the signature of
its duly authorized officers.
DATED [DATE]
/s/ Bruce Elliott /s/ Howard Thomson
PRESIDENT CORPORATE SEAL SECRETARY
<PAGE>
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933 (THE "ACT"), AND ARE PROPOSED TO BE
ISSUED IN RELIANCE UPON AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE ACT PROVIDED BY REGULATION S PROMULGATED
UNDER THE ACT. UPON ANY SALE, SUCH SECURITIES MAY NOT BE
REOFFERED FOR SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT
IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO
AN EFFECTIVE REGISTRATION UNDER THE ACT, OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE ACT. HEDGING
TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE CONDUCTED
UNLESS IN COMPLIANCE WITH THE ACT.
SUBSCRIPTION AGREEMENT
CROSSNET VENTURES, INC.
SUBSCRIPTION AGREEMENT made as of this _____ day of December, 1999
between CROSSNET VENTURES, INC., a Nevada corporation with its
registered office at 101 Convention Center Drive, Suite 1200, Las
Vegas, Nevada 89109 (the "Company") and the undersigned (the
"Subscriber").
WHEREAS:
A. The Company desires to issue a maximum of 1,000,000
shares of common stock of the Company at a price of $0.65
US per share (the "Offering") pursuant to Regulation S of
the United States Securities Act of 1933 (the "Act").
B. The Subscriber desires to acquire the number of shares of
the Offering set forth on the signature page hereof (the
"Shares") on the terms and subject to the conditions of
this Subscription Agreement.
C. The Subscriber has received and has had opportunity to
review the Company's disclosure statement dated December
20, 1999 (the "Disclosure Statement").
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants hereinafter set forth, the parties hereto do
hereby agree as follows:
1. SUBSCRIPTION FOR SHARES
1.1 Subject to the terms and conditions hereinafter set
forth, the Subscriber hereby subscribes for and agrees to purchase
from the Company such number of Shares as is set forth upon the
signature page hereof at a price equal to $0.65 US per Share. Upon
execution, the subscription by the Subscriber will be irrevocable.
1.2 The purchase price is payable by the Subscriber
contemporaneously with the execution and delivery of this
Subscription Agreement.
1.3 Upon execution by the Company, the Company agrees to sell
such Shares to the Subscriber for said purchase price subject to
the Company's right to sell to the Subscriber such lesser number of
Shares as it may, in its sole discretion, deem necessary or
desirable.
1.4 Any acceptance by the Company of the Subscriber is
conditional upon compliance with all securities laws and other
applicable laws of the jurisdiction in which the Subscriber is
resident. Each Subscriber will deliver to the Company all other
documentation, agreements, representations and requisite government
forms required by the lawyers for the Company as required to comply
with all securities laws and other applicable laws of the
jurisdiction of the Subscriber. The Company will not grant any
registration or other qualification rights to any Subscriber.
<PAGE>
2
2. REGULATION S AGREEMENTS OF THE SUBSCRIBER
2.1 The Subscriber agrees to resell the Shares only in
accordance with the provisions of Regulation S of the Act pursuant
to registration under the Act, or pursuant to an available
exemption from registration pursuant to the Act.
2.2 The Subscriber agrees not to engage in hedging
transactions with regard to the Shares unless in compliance with
the Act.
2.3 The Subscriber acknowledges and agrees that all
certificates representing the Shares will be endorsed with the
following legend in accordance with Regulation S of the Act:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
(THE "ACT"), AND HAVE BEEN ISSUED IN RELIANCE UPON
AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE ACT PROVIDED BY REGULATION S PROMULGATED UNDER
THE ACT. SUCH SECURITIES MAY NOT BE REOFFERED FOR
SALE OR RESOLD OR OTHERWISE TRANSFERRED EXCEPT IN
ACCORDANCE WITH THE PROVISIONS OF REGULATION S,
PURSUANT TO AN EFFECTIVE REGISTRATION UNDER THE ACT,
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM
REGISTRATION UNDER THE ACT. HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE CONDUCTED UNLESS
IN COMPLIANCE WITH THE ACT"
2.4 The Subscriber and the Company agree that the Company
will refuse to register any transfer of the Shares not made in
accordance with the provisions of Regulation S of the Act, pursuant
to registration under the Act, or pursuant to an available
exemption from registration.
3. REPRESENTATIONS AND WARRANTIES BY SUBSCRIBER
3.1 The Subscriber represents and warrants to the Company and
acknowledges that the Company is relying upon the Subscriber's
representations and warranties in agreeing to sell the Shares to
the Subscriber that:
(A) The Subscriber is not a "U.S. Person" as defined by
Regulation S of the Act and is not acquiring the Shares
for the account or benefit of a U.S. Person.
A "U.S. Person" is defined by Regulation S of the Act to
be any person who is:
(i) any natural person resident in the United States;
(ii) any partnership or corporation organized or
incorporated under the laws of the United States;
(iii) any estate of which any executor or administrator is
a U.S. person;
(iv) any trust of which any trustee is a U.S. person;
(v) any agency or branch of a foreign entity located in
the United States;
(vi) any non-discretionary account or similar account
(other than an estate or trust) held by a dealer or
other fiduciary organized, incorporate, or (if an
individual) resident in the United States; and
(vii) any partnership or corporation if:
1. organized or incorporated under the laws of any
foreign jurisdiction; and
<PAGE>
3
2. formed by a U.S. person principally for the
purpose of investing in securities not registered
under the Act, unless it is organized or
incorporated, and owned, by accredited investors [as
defined in Section 230.501(a) of the Act] who are
not natural persons, estates or trusts.
(B) The Subscriber recognizes that the purchase of Shares
involves a high degree of risk in that the Company has
only recently commenced its proposed business and may
require substantial funds in addition to the proceeds of
this private placement;
(C) An investment in the Company is highly speculative and
only investors who can afford the loss of their entire
investment should consider investing in the Company and
the Shares;
(D) The Subscriber has had full opportunity to review the
Company's Disclosure Statement and additional information
regarding the business and financial condition of the
Company with the Subscriber's legal and financial
advisers prior to execution of this Subscription
Agreement;
(E) The Subscriber has such knowledge and experience in
finance, securities, investments, including investment in
non-listed and non registered securities, and other
business matters so as to be able to protect its
interests in connection with this transaction.
(F) The Subscriber acknowledges that no market for the Shares
presently exists and none may develop in the future and
accordingly the Subscriber may not be able to liquidate
its investment.
(G) The Subscriber hereby acknowledges that this offering of
Shares has not been reviewed by the United States
Securities and Exchange Commission (the "SEC") and that
the Shares are being issued by the Company pursuant to an
exemption from registration provided by Regulation S
pursuant to the United States Securities Act.
(H) The Subscriber is acquiring the Shares as principal for
the Subscriber's own benefit;
(I) The Subscriber is not aware of any advertisement of the
Shares.
(J) The Subscriber is acquiring the Shares subscribed to
hereunder as an investment for the Subscriber's own
account, not as a nominee or agent, and not with a view
toward the resale or distribution of any part thereof,
and the Subscriber has no present intention of selling,
granting any participation in, or otherwise distributing
the same;
(K) The Subscriber does not have any contract, undertaking,
agreement or arrangement with any person to sell,
transfer or grant participation to such person, or to
any third person, with respect to any of the Shares sold
hereby;
(L) The Subscriber has full power and authority to enter into
this Agreement which constitutes a valid and legally
binding obligation, enforceable in accordance with its
terms;
(M) Subscriber can bear the economic risk of this investment,
and was not organized for the purpose of acquiring the
Shares;
(N) The Subscriber has satisfied himself or herself as to the
full observance of the laws of his or her jurisdiction in
connection with any invitation to subscribe for the
Shares and/or any use of this Agreement, including (i)
the legal requirements within his/her jurisdiction for
the purchase of the Shares, (ii) any foreign exchange
restrictions applicable to such purchase, (iii) any
governmental or other consents that may need to be
obtained, and (iv) the income tax and other tax
consequences, if any, that may be relevant to the
purchase, holding, redemption, sale, or transfer of the
Shares.
<PAGE>
4
4. REPRESENTATIONS BY THE COMPANY
4.1 The Company represents and warrants to the Subscriber
that:
(A) The Company is a corporation duly organized, existing and
in good standing under the laws of the State of Nevada
and has the corporate power to conduct the business which
it conducts and proposes to conduct.
(B) Upon issue, the Shares will be duly and validly issued,
fully paid and non-assessable common shares in the
capital of the Company.
(C) The issued and outstanding shares of the Company consists
of 9,000,000 shares of the Company's common stock prior
to the completion of the issue of any shares of the
Company's common stock pursuant to this Offering.
5. TERMS OF SUBSCRIPTION
5.1 Pending acceptance of this subscription by the Company,
all funds paid hereunder shall be deposited by the Company and
immediately available to the Company for the purposes set forth in
the disclosure statement. In the event the subscription is not
accepted, the subscription funds will constitute a non-interest
bearing demand loan of the Subscriber to the Company.
5.2 The Subscriber hereby authorizes and directs the Company
to deliver the securities to be issued to such Subscriber pursuant
to this Subscription Agreement to the Subscriber's address
indicated herein.
5.3 The Subscriber acknowledges and agrees that the
subscription for the Shares and the Company's acceptance of the
subscription is not subject to any minimum subscription for the
Offering.
6. MISCELLANEOUS
6.1 Any notice or other communication given hereunder shall
be deemed sufficient if in writing and sent by registered or
certified mail, return receipt requested, addressed to the Company,
at its registered office, at 101 Convention Center Drive, Suite
1200, Las Vegas, Nevada 89109, Attention: Mr. Bruce Elliott,
President, and to the Subscriber at his address indicated on the
last page of this Subscription Agreement. Notices shall be deemed
to have been given on the date of mailing, except notices of change
of address, which shall be deemed to have been given when received.
6.2 Notwithstanding the place where this Subscription
Agreement may be executed by any of the parties hereto, the parties
expressly agree that all the terms and provisions hereof shall be
construed in accordance with and governed by the laws of the State
of Nevada.
6.3 The parties agree to execute and deliver all such further
documents, agreements and instruments and take such other and
further action as may be necessary or appropriate to carry out the
purposes and intent of this Subscription Agreement.
7. REPRESENTATIONS BY BRITISH COLUMBIA RESIDENTS
7.1 If the Subscriber is a resident of Canada, the Subscriber
represents to the Company that the Subscriber is a resident of the
Province of British Columbia and the Subscriber is (Residents of
British Columbia must circle one, as appropriate, and add the name
of the senior officer or director of the Company):
<PAGE>
5
(i) a spouse, parent, brother, sister or child of
_______________________, a senior officer or director of
the Company ;
(ii) a close friend or business associate of
_________________________, a senior officer or director
of the Company , or
(iii) a company, all of the voting securities of which are
beneficially owned by one or more of a spouse, parent,
brother, sister, child or close personal friend or
business associate of ____________________, a senior
officer or director of the Company.
IN WITNESS WHEREOF, this Subscription Agreement is executed as of
the day and year first written above.
Number of Shares Subscribed For: common shares
Signature of Subscriber:
Name of Subscriber:
Address of Subscriber:
Subscriber's Social Security Number:
ACCEPTED BY:
CROSSNET VENTURES, INC.
Signature of Authorized Signatory:
Name of Authorized Signatory:
Position of Authorized Signatory:
Date of Acceptance:
<PAGE>
Cane & Company, LLC
Affiliated with O'Neill Ritchie Taylor Law Corporation
of Vancouver, British Columbia, Canada
Michael A. Cane* Stephen F.X. O'Neill**
Leslie L. Kapusianyk** Michael H. Taylor**
Telephone: (702) 312-6255
Facsimile: (702) 312-6249
E-mail: [email protected]
101 Convention Center Drive
Suite 1200
Las Vegas, NV 89109
April 28, 2000
Crossnet Ventures, Inc.
Unit #106107, Shah & Nahar,
Industrial Estate of Dr. E. Moses Road,
Mumbai, 400018, India
Attention: Bruce Elliott, President
Re: Crossnet Ventures, Inc. Registration Statement on Form SB-2
Ladies and Gentlemen:
We have acted as counsel for Crossnet Ventures, Inc., a Nevada
corporation (the "Company"), in connection with the preparation
of the registration statement on Form SB-2 (the "Registration
Statement") filed with the Securities and Exchange Commission
(the "Commission") pursuant to the Securities Act of 1933, as
amended (the "Act"), relating to the offering of certain shares
of the Company's common stock.
In rendering the opinion set forth below, we have reviewed: (a)
the Registration Statement and the exhibits attached thereto; (b)
the Company's Articles of Incorporation; (c) the Company's
Bylaws; (d) certain records of the Company's corporate
proceedings as reflected in its minute books; and (e) such
statutes, records and other documents as we have deemed relevant.
In our examination, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals, and conformity with the originals of all documents
submitted to us as copies thereof. In addition, we have made such
other examinations of law and fact as we have deemed relevant in
order to form a basis for the opinion hereinafter expressed.
Based upon the foregoing, we are of the opinion that the common
stock to be sold by the selling shareholders is validly issued,
fully paid and nonassessable.
Very truly yours,
CANE AND COMPANY, LLC
/s/ Michael A. Cane
_____________________________
Michael A. Cane, attorney and
Managing Member
*Licensed Nevada, California, Washington and Hawaii State Bars
** British Columbia Bar only
<PAGE>
Crossnet Ventures, Inc.
April 28, 2000
Page 2
We hereby consent to the use of this opinion as an Exhibit to the
Registration Statement and to all references to this Firm under
the caption "Interests of Named Experts and Counsel" in the
Registration Statement.
Very truly yours,
CANE AND COMPANY, LLC
/s/ Michael A. Cane
_____________________________
Michael A. Cane, attorney and
Managing Member
2
<PAGE>
MANAGEMENT CONSULTING CONTRACT
------------------------------
THIS AGREEMENT is made as of the 30th day of September, 1999.
BETWEEN:
BRUCE ELLIOTT, of
(the "Consultant")
OF THE FIRST PART
AND:
CROSSNET VENTURES, INC.
a company incorporated pursuant to
the laws of the State of Nevada
("Crossnet")
OF THE SECOND PART
WHEREAS:
A. Crossnet desires to pursue the India.com Internet
business plan developed by Elliott which is attached to this
Agreement as Schedule A (the "India.com Business Plan").
B. Crossnet and Elliott desire to enter into this
agreement in order to enable Crossnet to develop the India.com
Business Plan and to set forth their respective agreement on the
consulting services to be provided by Elliott to Crossnet.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of
the mutual covenants herein contained, the parties hereto agree
as follows:
1. ENGAGEMENT
1.1 Appointment: Crossnet hereby contracts for the
services of Elliott and Elliott hereby agrees with Crossnet to
perform services for Crossnet in accordance with the terms and
conditions of this Agreement.
1.2 Scope of Duties: Elliott agrees to act as President
and Chief Operating Officer of Crossnet and to perform the
following responsibilities and duties to Crossnet to be provided
by Elliott to Crossnet as consulting services (the "Consulting
Services"):
<PAGE>
-2-
(a) Elliott will manage and supervise the development,
marketing, operations and implementation of the
"India.com" internet business to be developed by
Crossnet (the "India.com Business") in accordance with
the India.com Business Plan;
(b) Elliott will exercise general direction, supervision
and management over the business and financial affairs
of the Corporation;
(c) Elliott will report directly to board of directors of
Crossnet;
(d) Elliott will perform such other duties and observe
such instructions as may be reasonably assigned to him
from time to time by or on behalf of the board of
directors of Crossnet, provided such duties are within
the scope of the India.com Business and the financing
of the India.com Business.
Elliott acknowledges and agrees that the provision of the
Consulting Services will be on a full-time basis.
1.3 Best Efforts: Elliott shall at all times use its best
efforts to advance the interests of Crossnet, and shall
faithfully, industriously, and to the best of its abilities,
perform the responsibilities and duties described above.
1.4 Covenants and Restrictions: Elliott covenants and
agrees with Crossnet that Elliott will not engage in any
activities which would bring Crossnet's reputation into
disrepute.
1.6 Independent Contractor: Elliott will at all times be
an independent contractor and shall not at any time be or be
deemed to be an employee of Crossnet.
1.7 World Wide Web Institute: Elliott may continue to
attend to the further development and expansion of the business
of the World Wide Web Institute ("WWWI") during the term of this
Agreement, provided that (i) the business of WWWI is
complementary to and not adverse to or in competition with the
India.com Business; (ii) Elliott will not use or reveal any
confidential information or any trade secrets of Crossnet in
pursuing the business of WWWI; and (iii) the pursuit of the
business of WWWI will not prevent Elliott from performing his
duties under this Agreement in a satisfactory manner.
2. ASSIGNMENT OF BUSINESS CONCEPT
2.1 In consideration for the execution of this Agreement
by Crossnet, Elliott hereby sells, transfers and assigns to
Crossnet all of Elliott's right, title and interest in and to
all assets, property and undertaking, including intellectual
property, which comprise the India.com Business Plan and the
concept of the India.com Business (the "India.com
<PAGE>
-3-
Property"). Elliott represents and warrants to Crossnet that Elliott
is the owner of all right, title and interest in and to the India.com
Property. The transfer of the India.com Property to Crossnet is
absolute and will not revert to Elliott upon termination of this
Agreement for any reason, other than termination of this Agreement
in accordance with Section 7.2(b).
2.2 Elliott will refer to the Company any future
opportunities presented to Elliott to establish Internet portal
sites similar to the India.com Business during the term of this
Agreement. In the event that the Company determines not to
pursue the opportunity, Elliott will have the right to proceed
with the opportunity, provided that (i) the business pursued is
not adverse to or in competition with the India.com Business;
(ii) Elliott will not use or reveal any confidential information
or any trade secrets of Crossnet in pursuing the business; and
(iii) the pursuit of the business will not prevent Elliott from
performing his duties under this Agreement in a satisfactory
manner.
3. TERM
3.1 Initial Term: The initial term of this Agreement
shall be three (3) years, commencing on the date of this
Agreement, subject to earlier termination as hereinafter
provided.
3.2 Renewal: This Agreement may be renewed for further
terms of such duration and upon such terms and conditions as
Elliott and Crossnet may mutually agree upon in writing.
4. PAYMENT FOR CONSULTING SERVICES
4.1 Crossnet shall pay to Elliott a consultant fee in
consideration for the provision of the Consulting Services equal
to the sum of $6,000 US per month (the "Consultant Fee"),
subject to adjustment for the merit and performance of Elliott,
at the sole discretion of the board of directors of the Company.
4.2 The Consulting Fee shall be payable by Crossnet to
Elliott on the last business day of each month during the term
of this Agreement, with the first payment being due and payable
on October 31, 1999.
4.3 Elliott shall deliver to Crossnet at the end of each
month, a report detailing all activities and services provided
to Crossnet for that month, if requested by Crossnet.
4.4 Crossnet will pay to Elliott, in addition to the
Consultant Fee, the reasonable travel and promotional expenses
and other specific expenses incurred by Elliott with the prior
written approval of Crossnet.
4.5 Elliott may be granted, subject to the approval of
Crossnet's board of directors, incentive stock options to
purchase shares of Crossnet's common stock in such
<PAGE>
-4-
amounts and at such times as the Board of Directors of Crossnet,
in their absolute discretion, may from time to time determine.
Such options will be in an amount and of a nature similar to those
granted by Crossnet to its other directors and senior officers,
with adjustment for the merit and performance of Elliott.
5. CONFIDENTIALITY
5.1 Confidential Information and Non-Disclosure. Elliott
acknowledges and agrees with Crossnet that all information
connected with Crossnet's technology and business, including
without limitation, all information, computer code, data,
inventions, improvements, modifications, developments, technical
manuals, or process-flow manuals, customer information and
pricing information is confidential, and Elliott covenants and
agrees with Crossnet to use his best efforts to ensure that such
information does not become public knowledge and undertakes not
to use such information for any purpose other than the business
of the Company or to disclose such information or any part
thereof to any other person except as may be necessary to carry
out his rights and obligations under this Agreement. The
obligations referred to in this paragraph shall continue beyond
the termination of this Agreement.
6. ASSIGNMENT OF INVENTIONS
6.1 Assignment of Inventions. Any and all inventions,
discoveries, knowledge, information, developments and
improvements made or conceived by Elliott in the course of
management or development of the Business during the term of
this Agreement shall be the sole and exclusive property of
Crossnet, and Elliott will, whenever requested by Crossnet,
execute any and all applications, assignments and other
instruments which Crossnet shall deem necessary in order to
assign and convey to Crossnet the sole and exclusive right,
title and interest in and to the inventions, discoveries,
knowledge and information, developments or improvements. The
obligations referred to in this paragraph shall continue beyond
the termination of this Agreement.
7. TERMINATION
7.1 Termination by Crossnet for Default: Crossnet may
terminate this Agreement at any time in the event of any breach
of any material term of this Agreement, provided that written
notice of default has been delivered to Elliott and Elliott has
failed to remedy the default within thirty days of the date of
delivery of notice of default.
7.2 Termination by Crossnet without Cause. Crossnet may
terminate this Agreement at its option without cause or breach
of any material term of this Agreement by Elliott upon:
(a) the payment to Elliott of an amount equal to six
month's Consultant Fee; or
<PAGE>
-5-
(b) the delivery to Elliott of written notice by
Crossnet of Crossnet's determination not to pursue the
India.com Business.
In the event that Crossnet terminates this Agreement pursuant to
Section 7.2(b), Crossnet will concurrently with the delivery of
notice of termination transfer all of its right, title and
interest in and to all assets, property and undertaking,
including intellectual property, which comprise the India.com
Business as of the date of termination to Elliott.
Upon completion of the payment provided by Section 7.2(a) or the
transfer of the India.com Business provided by Section 7.2(b),
Crossnet will have no further liability or obligation to
Elliott.
7.3 Termination by Elliott for Default: Elliott may
terminate this Agreement at any time in the event of any breach
of any material term of this Agreement by Crossnet, provided
that written notice of default has been delivered to Crossnet
and Crossnet has failed to remedy the default within thirty days
of the date of delivery of notice of default.
8. OTHER PROVISIONS
8.1 Governing Law and Arbitration: This Agreement shall
be governed by and construed in accordance with the laws of the
State of Nevada and each party hereto adjourns to the
jurisdiction of the courts of the State of Nevada. Any dispute
or claim arising hereunder shall be settled by arbitration. Any
party may commence arbitration by sending a written notice of
arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be
commenced thirty (30) days following the date of delivery of
notice of arbitration by one party to the other, by the American
Arbitration Association ("AAA") as arbitrator. The arbitration
shall be conducted in Las Vegas, Nevada in accordance with the
commercial arbitration rules promulgated by AAA, and each party
shall retain the right to cross-examine the opposing party's
witnesses, either through legal counsel, expert witnesses or
both. The decision of the arbitrator shall be final, binding
and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part
of its decision, the arbitrator may allocate the cost of
arbitration, including fees of attorneys and experts, as he or
she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator
may be entered in any court of competent jurisdiction.
8.2 Notice: Any notice required or permitted to be given
under this Agreement shall be in writing and may be delivered
personally or by telex or telecopier, or by prepaid registered
post addressed to the parties at the above-mentioned addresses
or at such other address of which notice may be given by either
of such parties. Any notice shall be deemed to have been
received, if personally delivered or by telex or telecopier, on
the date of delivery and, if mailed as aforesaid, then on the
seventh business day after and excluding the day of mailing.
<PAGE>
-6-
8.3 Personal Nature: This Agreement is a contract for
services and may not be assigned in whole or in part by Elliott.
8.4 Amendments: This Agreement constitutes the entire
agreement between the parties and may only be amended in
writing.
8.5 Severability. In the event that any term of this
Agreement that is held to be unlawful or unenforceable is
severable and the remaining terms of the Agreement remain in
force and effect.
IN WITNESS WHEREOF the parties have executed this Agreement as
of the day first above written.
SIGNED, SEALED AND DELIVERED
BY BRUCE ELLIOTT
in the presence of:
/s/ Bruce Elliott
__________________________________ __________________________________
Signature BRUCE ELLIOTT
__________________________________
Name
__________________________________
Address
CROSSNET VENTURES, INC.
by its authorized signatory:
/s/ H. Thomson
________________________________
Authorized Signatory
<PAGE>
CONSULTANT AGREEMENT
--------------------
THIS AGREEMENT made as of the 1st day of January, 2000
BETWEEN:
CROSSNET VENTURES, INC.
- -----------------------
a Nevada corporation
(the "Corporation")
OF THE FIRST PART
AND:
LOGAN ANDERSON
(the "Consultant")
OF THE SECOND PART
WHEREAS:
A. The Consultant is a director of the Corporation.
B. The Consultant and the Corporation have agreed to enter
into this Consultant Agreement in order to set forth the terms and
conditions of the Consultant's engagement as a consultant with the
Corporation.
C. The Consultant has agreed to accept a consultant fee
below a competitive market consultant fee subject to the agreement
of the Corporation to increase the Consultant's consultant fee upon
the Corporation achieving specific financial milestones.
NOW THIS AGREEMENT WITNESSES that in consideration of the mutual
promises, covenants and agreements herein contained, the parties
hereto agree as follows:
1. Engagement as Consultant
1.1 The Corporation hereby engages the Consultant as a
consultant of the Corporation and the Consultant hereby accepts
such engagement on the terms and subject to the conditions of this
Agreement.
1.2 The Consultant will provide the following services to the
Corporation as consultant services (the "Consultant Services"):
(a) advising management of the Corporation on the business
and financial affairs of the Corporation;
(b) advising management on the overall direction of the
Corporation;
(c) performing such other duties and observing such
instructions as may be reasonably assigned by the Board
of Directors, provided such duties are
<PAGE>
-2-
within the scope
of the consultant services listed in sub-paragraphs (a)
and (b); and
(d) generally at all times abiding by all lawful directions
given to him by the Board of Directors of the
Corporation.
1.3 The Consultant shall at all times use its best efforts to
advance the interests of the Corporation, and shall faithfully,
industriously, and to the best of his abilities, provide the
Consultant Services the Corporation in accordance with the terms
and conditions of this Agreement.
1.4 The Consultant warrants and represents to the Corporation
that the Consultant is not party to any agreement or subject to any
court order which would prevent the Consultant from providing the
Consultant Services to the Corporation.
1.5 The Consultant will devote approximately 15% of the
Consultant's business time to the business of the Comopany until
such time as the Company completes a financing, after the date of
this Agreement, in which the Company realizes net proceeds equal to
or excess of $750,000. Upon completion of such a financing, the
amount of time which the Consultant will devote to the Consultant
Services will increase to approximately 50% of the Consultant's
business time and the Salary will be increased in accordance with
Section 2.1 of this Agreement.
2. Remuneration
2.1 The Corporation shall pay the Consultant a consultant fee
determined as follows (the "Consultant Fee") in consideration for
the Consultant Services:
(A) the Consultant Fee will equal $1,000 per month until such
time as the amount of time devoted by the Corporation
increases to 50% of the Consultant's business time, as
contemplated in Section 1.5 of this Agreement;
(B) the Consultant Fee will be increased to $5,000 per month
upon the amount of time devoted to the Corporation is
increased to 50% of the Consultant's business time, as
contemplated in Section 1.5 of this Agreement
The Corporation shall make all payments in respect of the
Consultant Fee to the Consultant on the last day of each month of
the term of this Agreement. For the purposes of this Agreement,
full business time is deemed not to exceed 35 hours per week.
2.2 The Corporation shall reimburse the Consultant for
reasonable travelling, business and other out of pocket expenses
actually and properly incurred by the Consultant in performing the
Consultant Services. The Consultant will provide proper receipts
and invoices at the request of the Corporation.
<PAGE>
-3-
3. Stock Options
3.1 The Consultant may be granted, subject to the approval of
the Corporation's board of directors, incentive stock options to
purchase shares of the Corporation's common stock in such amounts
and at such times as the Board of Directors of the Corporation, in
their absolute discretion, may from time to time determine. Such
options will be in an amount and of a nature similar to those
granted by the Corporation to its other directors and senior
officers, with adjustment for the merit and performance of the
Consultant.
4. Term of Consultant Agreement
4.1 The initial term of this Agreement shall be one (1) year,
commencing on the date of first written above, subject to earlier
termination as hereinafter provided.
4.2 This Agreement may only be renewed upon the written
agreement between the Corporation and the Consultant to renew the
Agreement for a successive term and agreement upon the Consultant
Fee to be paid to the Consultant during any successive term.
5. Confidentiality and Non-Competition
5.1 The Consultant will not, either during the term of this
Agreement or at any time thereafter, disclose to any person any
confidential information concerning the business or affairs of the
Corporation which the Consultant may have acquired in the course of
or incidental to his engagement as a consultant hereunder or
otherwise, and the Consultant shall not directly or indirectly use
(whether for his own benefit or the detriment or intended detriment
of the Corporation) any confidential information he may acquire
with respect to the business and affairs of the Corporation.
5.2 The Consultant agrees with the Corporation that he will
not, either alone or in conjunction with any individual, firm,
Corporation, association or other entity, whether as principal,
agent, director, officer, Consultant, shareholder or in any other
capacity whatsoever:
(a) during the term of this Agreement and for a six-month
period from the termination of this Agreement, carry on,
or be engaged in, concerned with or interested in,
directly or indirectly, any business which is in whole or
in part competitive with the business of the Corporation;
(b) during the term of this Agreement and for a six-month
period from the termination of this Agreement, attempt to
solicit any suppliers, customers or Consultants of the
business of the Corporation away from the Corporation;
(c) during the term of this Agreement and for a six-month
period from the termination of this Agreement, knowingly
take any act as a result of which the relations between
the Corporation and the suppliers or customers of the
business of the Corporation may be impaired or which may
otherwise be detrimental to the business of the
Corporation.
<PAGE>
-4-
6. Assignment of Inventions
6.1 Any and all intellectual property, inventions and
improvements on which the Consultant may conceive or make, during
the term of this Agreement, relating, or in any way, pertaining to
or connected with any of the matters which have been, are or may
become the subject of the Corporation's business, or in which the
Corporation has been, is, or may become interested, shall be the
sole and exclusive property of the Corporation, and the Consultant
will, whenever requested by the Corporation, execute any and all
applications, assignments and other instruments which the
Corporation shall deem necessary in order to apply for and obtain
letters of patent for U.S. or foreign countries for the inventions
or improvements and in order to assign and convey to the
Corporation the sole and exclusive right, title and interest in and
to the intellectual property, inventions or improvements, all
expenses in connection with them to be borne by the Corporation.
The Consultant's obligations to execute the papers referred to in
this paragraph shall continue beyond the termination of this
Agreement with respect to any and all intellectual property,
inventions or improvements conceived or made by him during the term
of this Agreement, and the obligations shall be binding on the
assigns, executors, administrators or other legal representatives
of the Consultant.
6.2 All intellectual property, inventions and discoveries
relating to the business of the Corporation and all knowledge and
information which the Consultant may acquire during his engagement
shall be held by the Consultant in trust for the benefit of the
Corporation.
7. Termination
7.1 The Corporation may terminate this Agreement at any time
for failure of the Consultant to provide the Consultant Services in
accordance with this Agreement, provided that reasonable warning
shall have been first given by the Corporation to the Consultant
and provided that those obligations of the Consultant in this
Agreement expressly stated to continue on termination shall
continue upon termination and shall not terminate upon termination
of this Agreement.
7.2 The Corporation may terminate this Agreement at any time
without cause upon delivery of written notice of termination to the
Consultant and upon payment to the Consultant of an amount equal to
the greater of $30,000 or an amount equal to six times the
Consultant's Consultant Fee at the date of termination. In the
event of termination by the Corporation without just cause, those
obligations of the Consultant in this Agreement expressly stated to
continue on termination shall continue upon termination and shall
not terminate upon termination of this Agreement.
7.3 The Consultant may terminate this Agreement at any time
upon three (3) months written notice to the Corporation, provided
that those obligations of the Consultant in this Agreement
expressly stated to continue on termination shall continue upon
termination and shall not terminate upon termination of this
Agreement.
7.4 The Corporation may terminate this Agreement at its
option if the Consultant ceases to act as a director of the
Corporation, provided that those obligations of the Consultant in
this Agreement expressly stated to continue on termination shall
continue upon termination and shall not terminate upon termination
of this Agreement.
<PAGE>
-5-
8. Indemnification and Insurance
8.1 The Corporation shall indemnify the Consultant against
all charges, costs and expenses, including an amount paid to settle
an action or satisfy a debt in civil, criminal or administrative
action or proceeding to which he is made a party by reason of
having been a director, officer, Consultant or consultant of the
Corporation provided the Consultant acted honestly and in good
faith in the interests of the Corporation or, in the case of a
criminal or administrative action or proceeding, he had reasonable
ground for believing his conduct was lawful.
8.2 The Corporation will use reasonable commercial efforts
purchase and maintain insurance for the benefit of the Consultant
against any liability incurred by the Consultant as a result of the
fulfilment by the Consultant of his obligations under this
Agreement, provided the Consultant has acted honestly and in good
faith in the interests of the Corporation or, in the case of a
criminal or administrative action or proceeding, he had reasonable
grounds for believing his conduct was lawful.
9. Notices
9.1 Any notice required or permitted to be given under this
Agreement shall be in writing and may be delivered personally or by
telecopier, or by pre-paid registered post addressed to the parties
at the above-mentioned addresses or at such address of which notice
may be given by either of such parties. Any notice shall be deemed
to have been received if personally delivered or by telex or
telecopier, on the date of delivery and, if mailed as aforesaid,
then on the fourth business day after and excluding the day of
mailing.
10. Assignment
10.1 This Agreement may not be assigned in whole or in part by
the Consultant without the prior written consent of the
Corporation.
10.2 This Agreement may not be assigned in whole or in part by
the Corporation without the prior written consent of the
Consultant.
<PAGE>
-6-
11. Interpretation
11.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
11.2 All headings used in this Agreement are for convenience
of reference only and are not to be used as an aid in the
interpretation of this Agreement.
11.3 This Agreement replaces and supercedes all other
agreements, including consultant agreements, between the Consultant
and the Corporation relating to the employment of the Consultant.
11.4 The Consultant acknowledges that O'Neill & Company has
acted solely for the Corporation in preparation of this Agreement
and the Consultant has been recommended to seek independent legal
advice prior to execution of this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of
the day and year first above written.
CROSSNET VENTURES, INC.
by its authorized signatory:
/s/ H. Thomson
_____________________________
Authorized Signatory
H. Thomson
_____________________________
Name of Authorized Signatory
SIGNED, SEALED AND DELIVERED )
BY LOGAN ANDERSON in the )
presence of: )
)
)
/s/ M. H. Taylor )
_____________________________ )
Signature )
)
M. H. Taylor ) /s/ Logan Anderson
_____________________________ ) _____________________________
Name ) LOGAN ANDERSON
)
)
_____________________________ )
Address )
<PAGE>
EMPLOYMENT AGREEMENT
--------------------
THIS AGREEMENT made as of the 1st day of January, 2000
BETWEEN:
CROSSNET VENTURES, INC.
a Nevada corporation
(the "Corporation")
OF THE FIRST PART
AND:
HOWARD THOMSON
(the "Employee")
OF THE SECOND PART
WHEREAS:
A. The Employee is Secretary, Treasurer and Chief Financial
Officer of the Corporation.
B. The Employee and the Corporation have agreed to enter
into this Employment Agreement in order to set forth the terms and
conditions of the Employee's employment with the Corporation.
C. The Employee has agreed to accept a salary below a
competitive market salary subject to the agreement of the
Corporation to increase the Employee's salary upon the Corporation
achieving specific financial milestones.
NOW THIS AGREEMENT WITNESSES that in consideration of the mutual
promises, covenants and agreements herein contained, the parties
hereto agree as follows:
1. Employment
1.1 The Corporation hereby engages the Employee as an
employee of the Corporation and the Employee hereby accepts such
employment on the terms and subject to the conditions of this
Agreement.
1.2 The Employee will perform all such acts and do all such
things as and when the same may be necessary to properly and
efficiently carry out the duties of Secretary, Treasurer and Chief
Financial Officer of the Corporation, which duties shall include
but shall not be limited to:
A. ensuring that proper records of the Corporation are
maintained in accordance with the by-laws of the
Corporation and the Corporation's governing statute,
Chapter 78 "Private Corporations" of the Nevada Revised
Statutes;
2
<PAGE>
B. supervising and advising on the conduct of the financial
affairs of the Company;
C. ensuring that proper financial and administrative records
are maintained by and for the Company; and
D. coordinating all auditing functions in respect of the
Company; and
E. generally at all times abiding by all lawful directions
given to him by the Board of Directors of the
Corporation.
1.3 The Employee shall at all times use its best efforts to
advance the interests of the Corporation, and shall faithfully,
industriously, and to the best of his abilities, act as an employee
of the Corporation in accordance with the terms and conditions of
this Agreement.
1.4 The Employee warrants and represents to the Corporation
that the Employee is not party to any agreement or subject to any
court order which would prevent the Employee from providing his
duties hereunder.
1.5 The Employee will devote approximately 15% of the
Employee's business time to the business of the Company until such
time as the Company completes a financing, after the date of this
Agreement, in which the Company realizes net proceeds equal to or
excess of $750,000. Upon completion of such a financing, the
amount of time which the Employee will devote to the business of
the Company will increase to approximately 50% of the Employee's
business time and the Salary will be increased in accordance with
Section 2.1 of this Agreement.
2. Remuneration
2.1 The Corporation shall pay the Employee a gross salary,
before statutory deductions, determined as follows (the "Salary"):
A. the Salary will equal $1,000 per month until such time as
the amount of time devoted to the Company increases to
50% of the Employee's business time, as contemplated in
Section 1.5 of this Agreement;
B. the Salary will be increased to $4,000 per month upon the
amount of time devoted by the Company is increased to 50%
of the Employee's business time, as contemplated in
Section 1.5 of this Agreement
The Corporation shall make all payments in respect of the Salary to
the Employee on the last day of each month of the term of this
Agreement. For the purposes of this Agreement, full business time
is deemed not to exceed 35 hours per week.
2.2 The Corporation shall reimburse the Employee for
reasonable travelling, business and other out of pocket expenses
actually and properly incurred by the Employee in carrying out his
duties hereunder. The Employee will provide proper receipts and
invoices at the request of the Corporation.
3
<PAGE>
3. Stock Options
3.1 The Employee may be granted, subject to the approval of
the Corporation's board of directors, incentive stock options to
purchase shares of the Corporation's common stock in such amounts
and at such times as the Board of Directors of the Corporation, in
their absolute discretion, may from time to time determine. Such
options will be in an amount and of a nature similar to those
granted by the Corporation to its other directors and senior
officers, with adjustment for the merit and performance of the
Employee.
4. Term of Employment
4.1 The initial term of this Agreement shall be one (1) year,
commencing on the date of first written above, subject to earlier
termination as hereinafter provided.
4.2 This Agreement may only be renewed upon the written
agreement between the Corporation and the Employee to renew the
Agreement for a successive term and agreement upon the Salary to be
paid to the Employee during any successive term.
5. Confidentiality and Non-Competition
5.1 The Employee will not, either during the term of this
Agreement or at any time thereafter, disclose to any person any
confidential information concerning the business or affairs of the
Corporation which the Employee may have acquired in the course of
or incidental to his employment hereunder or otherwise, and the
Employee shall not directly or indirectly use (whether for his own
benefit or the detriment or intended detriment of the Corporation)
any confidential information he may acquire with respect to the
business and affairs of the Corporation.
5.2 The Employee agrees with the Corporation that he will
not, either alone or in conjunction with any individual, firm,
Corporation, association or other entity, whether as principal,
agent, director, officer, employee, shareholder or in any other
capacity whatsoever:
A. during the term of this Agreement and for a one year
period from the termination of this Agreement, carry on,
or be engaged in, concerned with or interested in,
directly or indirectly, any business which is in whole or
in part competitive with the business of the Corporation;
B. during the term of this Agreement and for a one year
period from the termination of this Agreement, attempt to
solicit any suppliers, customers or employees of the
business of the Corporation away from the Corporation;
C. during the term of this Agreement and for a one year
period from the termination of this Agreement, knowingly
take any act as a result of which the relations between
the Corporation and the suppliers or customers of the
business of the Corporation may be impaired or which may
otherwise be detrimental to the business of the
Corporation.
6. Assignment of Inventions
<PAGE>
4
6.1 Any and all intellectual property, inventions and
improvements on which the Employee may conceive or make, during the
term of this Agreement, relating, or in any way, pertaining to or
connected with any of the matters which have been, are or may
become the subject of the Corporation's business, or in which the
Corporation has been, is, or may become interested, shall be the
sole and exclusive property of the Corporation, and the Employee
will, whenever requested by the Corporation, execute any and all
applications, assignments and other instruments which the
Corporation shall deem necessary in order to apply for and obtain
letters of patent for U.S. or foreign countries for the inventions
or improvements and in order to assign and convey to the
Corporation the sole and exclusive right, title and interest in and
to the intellectual property, inventions or improvements, all
expenses in connection with them to be borne by the Corporation.
The Employee's obligations to execute the papers referred to in
this paragraph shall continue beyond the termination of this
Agreement with respect to any and all intellectual property,
inventions or improvements conceived or made by him during the term
of this Agreement, and the obligations shall be binding on the
assigns, executors, administrators or other legal representatives
of the Employee.
6.2 All intellectual property, inventions and discoveries
relating to the business of the Corporation and all knowledge and
information which the Employee may acquire during his engagement
shall be held by the Employee in trust for the benefit of the
Corporation.
7. Termination
7.1 The Corporation may terminate this Agreement at any time
for just cause, provided that reasonable warning shall have been
first given by the Corporation to the Employee and provided that
those obligations of the Employee in this Agreement expressly
stated to continue on termination shall continue upon termination
and shall not terminate upon termination of this Agreement.
7.2 The Corporation may terminate this Agreement at any time
without just cause upon delivery of written notice of termination
to the Employee and upon payment to the Employee of an amount equal
to the greater of $30,000 or an amount equal to six times the
Employee's Salary at the date of termination. In the event of
termination by the Company without just cause, those obligations of
the Employee in this Agreement expressly stated to continue on
termination shall continue upon termination and shall not terminate
upon termination of this Agreement.
7.3 The Employee may terminate this Agreement at any time
upon three (3) months written notice to the Corporation, provided
that those obligations of the Employee in this Agreement expressly
stated to continue on termination shall continue upon termination
and shall not terminate upon termination of this Agreement.
8. Indemnification and Insurance
8.1 The Corporation shall indemnify the Employee against all
charges, costs and expenses, including an amount paid to settle an
action or satisfy a debt in civil, criminal or administrative
action or proceeding to which he is made a party by reason of
having been a director, officer, employee or consultant of the
Corporation provided the Employee acted honestly and in good faith
in the interests of the Corporation or, in the case of a criminal
5
<PAGE>
or administrative action or proceeding, he had reasonable ground
for believing his conduct was lawful.
8.2 The Corporation will use reasonable commercial efforts
purchase and maintain insurance for the benefit of the Employee
against any liability incurred by the Employee as a result of the
fulfilment by the Employee of his obligations under this Agreement,
provided the Employee has acted honestly and in good faith in the
interests of the Corporation or, in the case of a criminal or
administrative action or proceeding, he had reasonable grounds for
believing his conduct was lawful.
9. Notices
9.1 Any notice required or permitted to be given under this
Agreement shall be in writing and may be delivered personally or by
telecopier, or by pre-paid registered post addressed to the parties
at the above-mentioned addresses or at such address of which notice
may be given by either of such parties. Any notice shall be deemed
to have been received if personally delivered or by telex or
telecopier, on the date of delivery and, if mailed as aforesaid,
then on the fourth business day after and excluding the day of
mailing.
10. Assignment
11.1 This Agreement may not be assigned in whole or in part by
the Employee without the prior written consent of the Corporation.
11.2 This Agreement may not be assigned in whole or in part by
the Corporation without the prior written consent of the Employee.
12. Interpretation
12.1 This Agreement shall be governed by and construed in
accordance with the laws of the State of Nevada.
12.2 All headings used in this Agreement are for convenience
of reference only and are not to be used as an aid in the
interpretation of this Agreement.
12.3 This Agreement replaces and supercedes all other
agreements, including employment agreements, between the Employee
and the Corporation relating to the employment of the Employee.
<PAGE>
6
12.4 The Employee acknowledges that O'Neill & Company has
acted for the Corporation in preparation of this Agreement and the
Employee has been recommended to seek independent legal advice
prior to execution of this Agreement.
IN WITNESS WHEREOF the parties have executed this Agreement as of
the day and year first above written.
CROSSNET VENTURES, INC.
by its authorized signatory:
/s/ Logan Anderson
_____________________________
Authorized Signatory
_____________________________
Name of Authorized Signatory
SIGNED, SEALED AND DELIVERED )
BY HOWARD THOMSON in the )
presence of: )
)
)
/s/ Stephen O'Neill )
_____________________________ )
Signature )
)
) /s/ Howard Thomson
_____________________________ ) _____________________________
Name ) HOWARD THOMSON
)
)
_____________________________ )
Address )
<PAGE>
MANAGEMENT CONSULTING CONTRACT
------------------------------
THIS AGREEMENT is made as of the 1st day of February, 2000.
BETWEEN:
YOGESH PAREKH, of 233 North Palo Cedro Drive,
Diamond Bar, California 91765
("Parekh")
OF THE FIRST PART
AND:
CROSSNET VENTURES, INC.
a company incorporated pursuant to the laws of the State
of Nevada
("Crossnet")
OF THE SECOND PART
WHEREAS:
A. Crossnet is engaged in the business of developing and
marketing an Internet Web site business for the Indian
community at the Company's [email protected] web sites.
B. Parekh been appointed as Chief Operating Officer of
Crossnet.
C. Crossnet desires to retain Parekh as a consultant to
provide his services as Chief Operating Officer of Crossnet
and to oversee the implementation of the Company's business
plan, a copy of which is attached to this Agreement (the
[email protected] Business Plan), on the terms and subject to the
conditions of this Agreement.
D. Parekh has agreed to provide his services to Crossnet as a
consultant on the terms and subject to the conditions of
this Agreement.
NOW THEREFORE THIS AGREEMENT WITNESSES THAT in consideration of the
mutual covenants herein contained, the parties hereto agree as
follows:
1. ENGAGEMENT
1.1 Appointment: Crossnet hereby contracts for the services
of Parekh and Parekh hereby agrees with Crossnet to perform
services for Crossnet as a consultant in accordance with the terms
and conditions of this Agreement.
<PAGE>
2
1.2 Scope of Duties: Parekh agrees to act as Chief Operating
Officer of Crossnet and to perform the following responsibilities
and duties to Crossnet to be provided by Parekh to Crossnet as
consulting services (the "Consulting Services"):
(a) Parekh will manage and supervise the development,
marketing, operations and implementation of the
"[email protected]" internet business to be developed and
marketed by Crossnet (the "[email protected] Business") in
accordance with the [email protected] Business Plan;
(b) Parekh will exercise management and supervision over
the day-to-day business operations of the Corporation;
(c) Parekh will report directly to board of directors of
Crossnet;
(d) Parekh will perform such other duties and observe such
instructions as may be reasonably assigned to him from
time to time by or on behalf of the board of directors
of Crossnet in his capacity as Chief Operating
Officer, provided such duties are within the scope of
the [email protected] Business and implementation of the
[email protected] Business Plan.
Parekh acknowledges and agrees that the provision of the
Consulting Services will be on a full-time basis, being
approximately 40 hours a week. Parekh may be engaged in other
activities not in competition with his duties to the Company or
in breach of this Agreement provided that these activities do
not derogate or impair the performance of his duties and
obligations to the Company under this Agreement.
1.3 Best Efforts: Parekh shall at all times use its best
efforts to advance the interests of Crossnet, and shall
faithfully, industriously, and to the best of its abilities,
perform the responsibilities and duties described above.
1.4 Covenants and Restrictions: Parekh covenants and
agrees with Crossnet that Parekh will not engage in any
activities which would bring Crossnet's reputation into
disrepute.
1.6 Independent Contractor: Parekh will at all times be
an independent contractor and shall not at any time be or be
deemed to be an employee of Crossnet.
2. TERM
2.1 Initial Term: The initial term of this Agreement
shall be two (2) years, commencing on the date of this
Agreement, subject to earlier termination as hereinafter
provided.
2.2 Renewal: This Agreement may be renewed for further
terms of such duration and upon such terms and conditions as
Parekh and Crossnet may mutually agree upon in writing.
<PAGE>
3
3. PAYMENT FOR CONSULTING SERVICES
3.1 Crossnet shall pay to Parekh a consultant fee in
consideration for the provision of the Consulting Services equal
to the sum of $10,000 US per month (the "Consultant Fee"),
subject to adjustment for the merit and performance of Parekh,
at the sole discretion of the board of directors of the Company.
3.2 The Consulting Fee shall be payable by Crossnet to
Parekh on the last business day of each month during the term of
this Agreement, with the first payment being due and payable on
February 29, 2000.
3.3 Parekh shall deliver to Crossnet at the end of each
month, a report detailing all activities and services provided
to Crossnet for that month, if requested by Crossnet.
3.4 Crossnet will pay to Parekh, in addition to the
Consultant Fee, the reasonable travel and promotional expenses
and other specific expenses incurred by Parekh in provision of
the Consulting Services, provided Parekh has obtained the prior
written approval of Crossnet.
3.5 Parekh may be granted, subject to the approval of
Crossnet's board of directors, incentive stock options to
purchase shares of Crossnet's common stock in such amounts and
at such times as the Board of Directors of Crossnet, in their
absolute discretion, may from time to time determine. Such
options will be in an amount and of a nature similar to those
granted by Crossnet to its other directors and senior officers,
with adjustment for the merit and performance of Parekh.
4. CONFIDENTIALITY
4.1 Confidential Information and Non-Disclosure. Parekh
acknowledges and agrees with Crossnet that all information
connected with the [email protected] Business, Crossnet's Web sites,
technology and business, including without limitation, all
business plans, Web sites, information, computer code, data,
inventions, improvements, modifications, developments, technical
manuals, or process-flow manuals, customer information and
pricing information is confidential, and Parekh covenants and
agrees with Crossnet to use his best efforts to ensure that such
information does not become public knowledge and undertakes not
to use such information for any purpose other than the business
of the Company or to disclose such information or any part
thereof to any other person except as may be necessary to carry
out his rights and obligations under this Agreement. The
obligations referred to in this paragraph shall continue beyond
the termination of this Agreement.
5. ASSIGNMENT OF INTELLECTUAL PROPERTY
5.1 Assignment of Intellectual Property. Any and all
copyright, trade secrets, inventions, discoveries, knowledge,
information, developments and improvements made or conceived by
Parekh in the course of management or development of the
[email protected] Business during the term of this Agreement shall be
the sole and exclusive
<PAGE>
4
property of Crossnet, and Parekh will,
whenever requested by Crossnet, execute any and all
applications, assignments and other instruments which Crossnet
shall deem necessary in order to assign and convey to Crossnet
the sole and exclusive right, title and interest in and to the
copyright, trade secrets, inventions, discoveries, knowledge and
information, developments or improvements. The obligations
referred to in this paragraph shall continue beyond the
termination of this Agreement.
6. TERMINATION
6.1 Termination by Crossnet for Default: Crossnet may
terminate this Agreement at any time in the event of any breach
of any material term of this Agreement, provided that written
notice of default has been delivered to Parekh and Parekh has
failed to remedy the default within thirty days of the date of
delivery of notice of default.
6.2 Termination by Crossnet without Cause. Crossnet may
terminate this Agreement at its option without cause or breach
of any material term of this Agreement by Parekh upon the
payment to Parekh of an amount equal to six month's Consultant
Fee. Upon completion of the payment provided by this Section
6.2, Crossnet will have no further liability or obligation to
Parekh.
6.3 Termination by Parekh for Default: Parekh may
terminate this Agreement at any time in the event of any breach
of any material term of this Agreement by Crossnet, provided
that written notice of default has been delivered to Crossnet
and Crossnet has failed to remedy the default within thirty days
of the date of delivery of notice of default.
7. OTHER PROVISIONS
7.1 Governing Law and Arbitration: This Agreement shall
be governed by and construed in accordance with the laws of the
State of Nevada and each party hereto adjourns to the
jurisdiction of the courts of the State of Nevada. Any dispute
or claim arising hereunder shall be settled by arbitration. Any
party may commence arbitration by sending a written notice of
arbitration to the other party. The notice will state the
dispute with particularity. The arbitration hearing shall be
commenced thirty (30) days following the date of delivery of
notice of arbitration by one party to the other, by the American
Arbitration Association ("AAA") as arbitrator. The arbitration
shall be conducted in Las Vegas, Nevada in accordance with the
commercial arbitration rules promulgated by AAA, and each party
shall retain the right to cross-examine the opposing party's
witnesses, either through legal counsel, expert witnesses or
both. The decision of the arbitrator shall be final, binding
and conclusive on all parties (without any right of appeal
therefrom) and shall not be subject to judicial review. As part
of its decision, the arbitrator may allocate the cost of
arbitration, including fees of attorneys and experts, as he or
she deems fair and equitable in light of all relevant
circumstances. Judgment on the award rendered by the arbitrator
may be entered in any court of competent jurisdiction.
<PAGE>
5
7.2 Notice: Any notice required or permitted to be given
under this Agreement shall be in writing and may be delivered
personally or by telex or telecopier, or by prepaid registered
post addressed to the parties at the above-mentioned addresses
or at such other address of which notice may be given by either
of such parties. Any notice shall be deemed to have been
received, if personally delivered or by telex or telecopier, on
the date of delivery and, if mailed as aforesaid, then on the
seventh business day after and excluding the day of mailing.
7.3 Personal Nature: This Agreement is a contract for
services and may not be assigned in whole or in part by Parekh.
7.4 Amendments: This Agreement constitutes the entire
agreement between the parties and may only be amended in
writing.
7.5 Severability. In the event that any term of this
Agreement that is held to be unlawful or unenforceable is
severable and the remaining terms of the Agreement remain in
force and effect.
IN WITNESS WHEREOF the parties have executed this Agreement as
of the day first above written.
SIGNED, SEALED AND DELIVERED
BY YOGESH PAREKH
in the presence of:
/s/ Bruce Elliott /s/ Yogesh Parekh
__________________________________ ______________________
Signature YOGESH PAREKH
Bruce Elliott
__________________________________
Name
Geneva, Switzerland
__________________________________
Address
CROSSNET VENTURES, INC.
by its authorized signatory:
/s/ Bruce Elliott
________________________________
Authorized Signatory
<PAGE>
CROSSNET VENTURES, INC.
- ---------------------------------------------------------------------
February 1, 2000
MEGHNAD JAGDISHANDRA DESAI
Dear Sir:
Re: CROSSNET VENTURES, INC. (the "Corporation")
- Consultant Agreement between the Corporation and Lord Desai
- ---------------------------------------------------------------------
We write to confirm the agreement of the Corporation to retain you
as a consultant to the Corporation on the following terms and
subject to the following conditions:
1. You agree to carry out the duties and perform the services
described in Schedule A attached to this Agreement. In
addition, you will perform such other duties and observe such
instructions as may be reasonably assigned to you by the
President of the Corporation which are within the scope of the
duties and services described in Schedule A.
2. The Corporation will pay to you a consultant fee of $2,100 US
per month (the "Consultant Fee") in consideration for your
services.
3. The Corporation will reimburse you for any reasonable travel
expenses actually and properly incurred by you in providing
your services. You will provide proper receipts and invoices
at the request of the Corporation.
4. The Corporation agrees to grant to you incentive stock options
to purchase a total of 50,000 shares of the Corporation's
common stock (the "Stock Options") which will be fully vested.
Each Stock Option will be for a three year term commencing on
the date of grant and will be exercisable at a price of $2.00
US per share. All Stock Options will be subject to the terms
and conditions of the Corporation's Stock Option Plan. You
acknowledge and agree that (i) you will only sell any shares
issued by the Corporation on exercise of any Stock Options in
accordance with all applicable securities laws, including the
Securities Act of 1933; and (ii) the shares issued upon
exercise of any Stock Options may be subject to restrictions
on resale imposed by applicable securities law; and (iii) the
Corporation may legend all stock certificates representing the
shares issued upon exercise of any Stock Options with
applicable resale restrictions, as reasonably advised by the
Corporation's legal counsel.
5. You agree not to disclose to any person any confidential
information concerning the business or affairs of the
Corporation which you may have acquire in the course of or
incidental to providing your services to the Corporation. You
will not directly or indirectly use (whether for your own
benefit or the detriment or intended detriment of the
Corporation) any confidential information you may acquire with
respect to the business and affairs of the Corporation. All
obligations with respect to confidential information will
survive termination of this Agreement.
6. You agree that you will not, either directly or indirectly,
during the term of this Agreement and for a one year period
from the termination of this Agreement carry on, be engaged
in, concerned with or interested in any business which is in
whole or in part competitive with the
<PAGE>
2
"[email protected]" Internet business of the Corporation.
7. The Corporation may terminate this Agreement at any time in
the event of a breach by you of your obligations under this
Agreement.
8. The Corporation may terminate this Agreement at any time in
the absence of any breach by you of your obligations under
this Agreement upon delivery of thirty days written notice to
you and upon payment to you of the Consultant Fee to the date
of termination.
9. You may terminate this Agreement at any time upon thirty days
written notice to the Corporation.
10. This Agreement may not be assigned in whole or in part by you
without the prior written consent of the Corporation.
11. This Agreement shall be governed by and construed in
accordance with the laws of the Province of British Columbia.
If you are in agreement with the terms and conditions of your
engagement, please execute a copy of this letter where indicated
below.
CROSSNET VENTURES, INC.
by its authorized signatory:
/s/ Howard Thomson
_________________________________
Howard Thomson, Secretary
The undersigned hereby accepts engagement as a consultant of the
Corporation on the terms and subject to the conditions as set forth
in this letter as of the 1st day of February, 2000.
SIGNED, SEALED AND DELIVERED )
BY MEGHNAD JAGDISHANDRA DESAI )
in the presence of: )
)
)
/s/ Joanne Hay ) /s/ Meghnad Jagdishandra Desai
__________________________________ ) __________________________________
Signature ) MEGHNAD JAGDISHANDRA DESAI
)
Joanne Hay )
__________________________________ )
Name )
)
Houghton Street, London )
__________________________________ )
Address )
SCHEDULE A
DESCRIPTION OF CONSULTANT SERVICES
<PAGE>
* To advise and provide input to the Corporation on the development
of the following categories for the [email protected] Web site:
* Finance
* Politics
* Sociology
* any other internal and external affairs that affect resident
and non-resident Indians on which you have expertise
* To advise and provide input to the Corporation on the development
and marketing of the Corporation's [email protected] business, at the
request of the Corporation.
* The consultant services to be provided to the Corporation will
account for approximately ten hours of your business time each
month.
<PAGE>
SARNA & COMPANY
Certified Public Accountants
310 N. Westlake Boulevard
Suite 270
Westlake Village, California 91362
805-371-8900
Fax 805-379-0140
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the inclusion of our audit report
dated January 20, 2000, on the financial statements of
Crossnet Ventures, Inc. ("the Company") for the period ended
December 31, 1999 in the Company's Form SB-2 registration
statement to be filed with the United States Securities
Exchange Commission. We also consent to the application of
such report to the financial information in the Form SB-2
registration statement, when such financial information
is read in conjunction with the financial statements
referred to in our report.
/s/ Sarna & Company
Sarna & Company
Certified Public Accountants
Westlake Village, California
May 3, 2000
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS CONTAINED IN
THE COMPANY'S REGISTRATION STATEMENT ON FORM SB-2 FOR THE YEAR ENDED
DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 341
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 341
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 343
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 4
<OTHER-SE> 396
<TOTAL-LIABILITY-AND-EQUITY> 343
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 57
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (57)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
