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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES
OF SMALL BUSINESS ISSUERS
UNDER SECTION 12(b) OR 12(g) OF
THE SECURITIES EXCHANGE ACT OF 1934
THE FINANCIAL COMMERCE NETWORK, INC.
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(Exact name of the registrant as specified in its charter)
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(SEC Registration Number)
NEVADA 22-2582276
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(State or other jurisdiction of (I.R.S. employer
Incorporation or Organization) identification no.)
63 Wall Street
NEW YORK, NY 10005
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(Address of principal executive offices) (Zip code)
Registrant's Telephone number, including area code (212) 742-9870
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Securities to be registered pursuant to Section 12(b) of the Act:
Title of each class Names of each exchange on which
to be so registered each class is to be registered
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NONE N/A
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Securities to be registered pursuant to Section 12(g) of the Act:
COMMON STOCK, $.001 PAR VALUE
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(Title of Class)
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ITEM 1: BUSINESS
(a) BUSINESS DEVELOPMENT
The Company was organized as a corporation in Washington on July 11,
1969. Effective February 16, 1999 the Company effected a 1 for 25 reverse stock
split.
On March 11, 1999, a majority interest in the Company was acquired by a
private investor. Subsequently, as set forth below, Alexander, Wescott Holdings,
Inc., a Delaware corporation, acquired a controlling interest in the Company in
exchange for the sale of its wholly-owned broker-dealer subsidiary. Pursuant to
the approval of the Company's shareholders at a Shareholders Meeting held on May
13, 1999, the Company re-incorporated in Nevada effective May 19, 1999. The
Company maintains its principal office at 63 Wall Street, New York, New York
10005. The Company did not have any active operations prior to March 11, 1999.
The Company is developing a comprehensive high-end financial and
information services portal on the Internet for accredited investors and
institutions. The portal was launched on September 30, 1999. The portal is
intended to be fully interactive and will be an expansion on the services
presently offered by on-line investment sites such as those provided by Siebert
Financial Corp., E*Trade Group and Ameritrade Holding Corp. It is intended that
a user of the portal would be afforded many products and services such as
on-line trading, block trades, private placements, IPOs, bond offerings, equity
research and other matters.
On March 29, 1999, the Company acquired Alexander, Wescott & Co., Inc.
("ALWC") as a wholly-owned subsidiary. ALWC is a registered broker-dealer with
the United States Securities and Exchange Commission (the "SEC") and a member of
the National Association of Securities Dealers, Inc. (the "NASD"). ALWC was a
wholly-owned subsidiary of Alexander, Wescott Holdings, Inc., a holding company
predominately owned by Richard H. Bach, the present chairman and chief executive
officer of the Company. The acquisition was in exchange of 13.5 million shares
of common stock of The Financial Commerce Network issued to the holding company.
(b) BUSINESS OF ISSUER
The Company is developing a comprehensive high-end financial and
information services portal on the Internet for accredited investors and
institutions. The portal was launched on September 30, 1999. The portal is
intended to be fully interactive and will be an expansion on the services
presently offered by on-line investment sites such as those provided by Siebert
Financial Corp., E*Trade Group and Ameritrade Holding Corp. It is intended that
a user of the portal would be afforded many products and services such as
on-line trading, block trades, private placements, IPOs, bond offerings, equity
research and other matters.
The Company's comprehensive, financial and information services Web
portal is aimed at providing institutional investors and accredited private
investors with comprehensive and seamless access to a broad array of
informational and transactional services.
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This fully interactive financial services portal, called 'The Financial
Commerce Network' or TFCN.com, was launched on September 30th, 1999. TFCN.com
will be a 'private club,' offering members an array of services typically only
available through a private banking relationship.
Focusing on active, sophisticated investors and capitalizing on the
growing popularity of online brokerage, TFCN.com aims to become the single
location that provides the most comprehensive mix of informational and
transactional services available through the Internet. TFCN.com's new level of
services will expand significantly on the offerings currently available through
online investment sites such as Wit Capital, Merrill Lynch, E*Trade and
Ameritrade and others
It is anticipated that TFCN.com will become the first online source to
offer all the following products and services:
PRODUCTS:
- - Online Prime Brokerage
- - Online trading
- - Online Block trading
- - Self-directed trade routing (if desired)
- - Private Placements
- - IPOs
- - Secondary Offerings
- - Asset Management
- - Foreign Equities
- - 'Hedgeworld,' which is an information location containing information
concerning hedge funds
- - 2-way connections to other broker-dealers, information vendors etc.
SERVICES:
- - Equity Research
- - Analytical tools
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- - Real-time quotes
- - News feeds
- - Information concerning news events, merger and acquisition activity in
the market, etc.
- - Concierge (hotel reservations; theater, concerts and sports tickets
etc.)
It is anticipated that customers will have direct access to market
makers and the New York Stock Exchange floor and will be able to execute trades
through several different sources while consolidating all transactions in a
single prime brokerage account that can be accessed from any location worldwide.
It is anticipated that customers will also be able to choose where and how to
route their orders, a level of control in trading currently unavailable through
normal broker-dealer relationships.
The Company believes that by merging the convenience and reach of the
Internet with the selection and simplicity of a prime brokerage account,
TFCN.com will provide a new type of service in online investing. In addition to
benefitting from online informational and transactional services, it is
anticipated that TFCN.com customers will be able to obtain individualized
assistance from a trained team of account managers of the Company, available day
and night, and reachable on the site and through a designated toll-free phone
number.
The Company currently has an existing revenue stream through its recent
acquisition of ALWC, which continues to operate as a registered broker dealer
and which generated in excess of $7 million in revenues in 1998.
The Company's online services will initially be limited to the
following products and services:
- - Trading in listed US Equities
- - Prime Brokerage
- - Private Placements
- - Listed Options
- - Limited concierge (hotel reservations; theater, concerts and sports
tickets etc.)
In the future, it is planned that other services will be added,
eventually enabling customers to customize their transactional interface with
TFCN.com. These products and services will include:
- - Fixed Income trading
- - Derivatives trading
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- - Restricted stock trading
- - IPOs
- - Self-directed trade routing (if desired)
- - Secondary Offerings
- - Asset Management
- - Foreign Equities
- - 'Hedgeworld'
- - 2-way connections to other broker-dealers, information vendors etc.
SERVICES:
- - Equity Research
- - Analytical tools
- - Real-time quotes
- - News feeds
- - Information concerning news events, merger and acquisition activity in
the market, etc.
- - Expanded concierge (hotel reservations; theater, concerts and sports
tickets etc.)
ALEXANDER, WESCOTT & CO, INC.:
ALWC is presently the principal subsidiary of the Company. It is a full
service broker/dealer which provides order execution, block trading and
investment banking services. ALWC is registered as a broker/dealer with the
Securities and Exchange Commission (SEC), the National Association of Securities
Dealers, Inc. (NASD), the Municipal Securities Rulemaking Board (MSRB) and the
Securities Investor Protection Corporation (SIPC).
Richard H. Bach acquired an option to purchase control of ALWC in July
1995 and subsequently exercised his option.
On March 29, 1999, ALWC was acquired by the Company as a wholly-owned
subsidiary. ALWC was a wholly-owned subsidiary of Alexander, Wescott Holdings,
Inc., a holding company
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predominately owned by Richard H. Bach, the present chairman and chief executive
officer of the Company. The acquisition was in exchange of 13.5 million shares
of common stock of The Financial Commerce Network issued to the holding company.
Mr. Bach is the Chairman and Chief Executive Officer of the Company and
Chairman of ALWC. Mr. Carl Walston is the President of the Company and President
and Chief Executive Officer of ALWC. Mr. Walston joined ALWC in March 1996.
Early in his career, he made major contributions to the growth of Walston & Co.,
Inc., then one of the nation's largest retail securities firms. More recently,
he was responsible for portfolio management, credit analysis and fixed income
investments for a group of public funds totaling more than $4 billion.
ALWC's approach to the securities business is similar to a private
bank. ALWC believes in looking after the needs of its clients, both institutions
and individuals, with the objective of establishing long-term relationships.
ALWC's staff of approximately 25 investment professionals, in two offices,
provide order execution, block trades and investment banking services. ALWC
executes client orders through its trading desk in New York and specializes in
block trades and third-market executions.
The firm assists Small and Micro capitalization companies in raising
funds through Private Placements and Bridge Loans. This sector of small, growing
businesses has difficulty raising capital and gaining access to "Wall Street".
ALWC introduces its clients on a fully disclosed basis to Wexford
Clearing Services Corporation, a wholly owned, fully guaranteed subsidiary of
Prudential Securities Incorporated.
ALWC TRADING DEPARTMENT: Based in New York City, ALWC's trading desk
executes orders for institutional clients and high net worth individuals. The
desk also specializes in block trades and third-market executions. The desk
executes both buy and sell orders, with the net cost usually being better than
the offer on the buy-side and better than the bid on the sell-side. The firm's
traders have developed an expertise in trading in the middle of the spread. By
trading in the middle of the spread, the department can generate profits while
still remaining highly competitive. The firm also operates as a "market maker"
in the securities of certain companies. This means that ALWC purchases and sells
such securities for the purpose of creating a market for the purchasers and
sellers of such securities. ALWC's status as a market maker requires it to
maintain a higher minimum net capital, as required under the federal securities
laws, than other broker dealers which do not make markets.
INSTITUTIONAL AND ACCREDITED INVESTOR SALES DEPARTMENT: Located in both
of the firm's offices, the sales department is compiled of approximately 10
registered representatives specializing in institutional and private client
sales. The firm primarily services clients that qualify as "accredited
investors" for the purposes of the federal securities laws. An accredited
investor is defined under the federal securities laws as an investor who meets
one or more of the following criteria:
* A natural person whose net worth with his spouse exceeds $1 million;
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* A natural person who had individual income in excess of $200,000 in
each of the two most recent years or joint income with his spouse in excess of
$300,000 in each of those years and who reasonably expects to reach the same
income level in the current year;
* A corporation, Massachusetts or similar business trust or partnership
or organization described in Section 501(c)(3) of the Internal Revenue Code,
with total assets in excess of $5 million;
* Either (i) a bank as described in Section 3(a)(2) of the Securities
Act of 1933, or any savings and loan association or other institution as defined
in Section 3(a)(5)(A) of the Securities Act of 1933 whether acting in its
individual or fiduciary capacity, or any broker or dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934, (ii) an insurance company as
defined in Section 2(13) of the Securities Act, (iii) an investment company
registered under the Investment Company Act of 1940 or a business development
company as defined in Section 2 (a)(48) of such Act, (iv) a Small Business
Investment Company licensed by the U.S. Small Business Administration under
Section 301 (c) or (d) of the Small Business Investment Act of 1958, or (v) an
employee benefit plan within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, if the investment decision is made by a plan
fiduciary, as defined in Section 3 (21) of such Act, which plan fiduciary is
either a bank, savings and loan association, insurance company or registered
investment advisor, or if the employee benefit plan has total assets in excess
of $5,000,000 or, if a self directed plan, with investment decisions made solely
by persons who are accredited investors;
* A private business development company as defined in Section
202(a)(22) of the Investment Advisors Act of 1940;
* A director, executive officer or general partner of the Company;
* A trust, with total assets in excess of $5 million whose purpose is
directed by a sophisticated person as described in Rule 506(b)(2)(ii) of
Regulation D of the Securities Act; or
* An entity in which all of the equity owners are accredited investors.
This department generates a significant percentage of the firm's total
revenues via commissions (both agency and principal) on brokerage transactions
resulting from the sale of equity and fixed income securities. Many of the
firm's clients are institutions, such as fund managers, banks and other
broker/dealers, and high net worth individuals. The firm focuses on hiring
seasoned brokers with an established book of clients who are located throughout
the U.S., Europe and other parts of the world. This reduces both the typical
production "start-up" delays associated with inexperienced salesmen and the
failure or attrition of those new recruits. Furthermore, by acquiring more
seasoned professionals, the firm can service its clients better and increase its
production faster with producing salesmen. The firm is currently registered in
40 states, and anticipates being registered in more as it continues to grow.
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CORPORATE FINANCE DEPARTMENT: ALWC's investment banking activities
encompass raising capital for small, growing public corporations through Private
Placements and Bridge Loans. ALWC's investment banking clients are carefully
selected, undervalued firms with strong growth potential. In connection with its
investment banking activities, ALWC provides a full compliment of services to
its corporate clients. In addition to the public or private financing of a
corporate client, these services may include participation in the corporation's
active development as an investment banker and consultant generating fee income.
CLEARING ACCOUNTS AND OPERATIONS: ALWC introduces its clients on a
fully disclosed basis to Wexford Clearing Services Corporation, a wholly owned,
fully guaranteed subsidiary of Prudential Securities, Inc. The firm chose to
clear its business since this results in substituting a variable cost for a
fixed cost. ALWC does not hold any funds or securities of its customers and does
not directly settle or clear either its own or its customers' securities
transactions. Wexford's clearing services include billing and credit control,
and receipt, custody and delivery of securities, on a fee basis. These services
relieve ALWC from most of the "back office" functions associated with brokerage
activities and free the firm from the need and expense of expanding its
operations department based in New York, New York.
COMPETITION
There are existing entities conducting business and competing with the
Company on various levels. Most of them have been in business for a far longer
period than the Company and are larger and more established than the Company,
such as Merrill Lynch & Co., PaineWebber, W.R. Hambrecht Inc. and Wit Capital.
There are also other competing companies that are relatively new to this
business, such as DLJDirect, Datek and E*Trade.
Existing competitors tend to focus on specific product lines or groups
of product lines. For the established firms, those services are primarily
delivered in person, through the mail or over the telephone. While the Internet
provides them with a complimentary communications channel it has a limited
product distribution capability in the manner in which such competitors use it.
For the newer companies, the Internet has become the primary communication and
distribution channel, but these firms tend to focus on a more main stream
customer.
For example, PaineWebber Global Prime Brokerage
(WWW.GLOBALPRIMEBROKER.COM) primarily serves institutional customers, providing
clearing and custody services, global institutional sales and trading services,
bridge financing and equity and economic research. Merrill Lynch's Internet
services (announced June 1, 1999 and anticipated to begin operations later this
year) focuses on online trading and asset management for wealthy individuals.
Wit Capital (WWW.WITCAPITAL.COM) is focused on underwriting securities offerings
through the Internet. W.R. Hambrecht Inc. (WWW.WRHAMBRECHT.COM) is focused on
underwriting securities offerings of emerging technology companies. E*Trade
provides online trading to any investor, but does not provide research and other
services to its customers
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The Company's strategy is to develop a Web portal site that will
provide the institutional and high net worth customer with a diverse number of
financial services and products in a unified site with the Internet as the
primary communication and product distribution channel.
Very few firms presently offer such a broad selection of products and
services, as is envisioned for the Company's Web portal site, for a
sophisticated customer.
GOVERNMENT REGULATIONS
Certain aspects of the Company's business, as that of its competitors
and the financial services industry in general, are subject to stringent
regulation by U.S. Federal and state regulatory agencies and securities
exchanges, each of which have been charged with the protection of the financial
markets and the interests of those participating in those markets. These
regulatory agencies in the United States include, among others, the Securities
and Exchange Commission ("SEC"), Municipal Securities Rulemaking Board ("MSRB"),
the National Association of Securities Dealers, Inc. ("NASD") and the NASD
Regulation, Inc. ("NASDR").
Additional legislation and regulations and changes in rules promulgated
by the SEC or other U.S. Federal and state governmental regulatory authorities
and self-regulatory organizations and by non-U.S. governments and governmental
regulatory agencies may directly affect the manner of operation and
profitability of ALWC.
ALWC is a registered as broker-dealer with the SEC and as such is
subject to regulation by the SEC and by self-regulatory organizations, such as
the NASD and any securities exchanges of which it may become a member.
ALWC is subject to Rule 15c3-1 under the Securities Exchange Act of
1934 which is designed to measure the general financial condition and liquidity
of a broker-dealer. Under this rule, they are required to maintain the minimum
net capital deemed necessary to meet broker-dealers' continuing commitments to
customers and others. Under certain circumstances, this rule limits the ability
of the Company to withdraw capital from such broker-dealers.
Broker-dealers are also subject to other regulations covering the
operations of their business, including sales and trading practices, use of
client funds and securities, and conduct of directors, officers, and employees.
Broker-dealers are also subject to regulation by state securities administrators
in those states where they do business. Violations of the stringent regulations
governing the actions of a broker-dealer can result in the revocation of
broker-dealer licenses, the imposition of censures or fines, the issuance of
cease and desist orders and the suspension or expulsion from the securities
business of a firm, its officers, or employees. The SEC and the national
securities exchanges emphasize in particular the need for supervision and
control by broker-dealers of their employees.
TRADEMARKS
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The Company is in the process of applying for a trademark for "TFCN."
PATENTS
The Company has no patents.
EMPLOYEES
The Company employs a full-time staff of approximately twenty-five, and
has made arrangements with independent contractors for various purposes,
including the development of the Web portal site discussed above. The Company
considers its relations with its employees to be satisfactory.
ITEM 2: FINANCIAL INFORMATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion covers only the operations of the operating
subsidiary, Alexander, Wescott & Co., Inc. ("ALWC") for the six months ended
June 30, 1998. The Financial Commerce Network, Inc. had no operations for this
period.
RESULTS OF OPERATIONS
Results of Operations for The Financial Commerce Network, Inc. prior to
March 29, 1999 were not material. Accordingly, the results reported below
pertain only to the Company's sole operating subsidiary ALWC prior to March 29,
1999. Both the Company's and ALWC's fiscal year ends on December 31st.
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
NET LOSSES
For the six-month periods ended June 30, 1999 and 1998, the Company
incurred a net loss of $1,089,931 and a net profit of $411,998, respectively.
Explanations of these results are set forth below.
REVENUE
For the six-month period ended June 30, 1999, the Company recorded
revenue of $1,163,133 as compared to $4,828,901 for the same period ended June
30, 1998.
The decline in revenues in 1999 and resulting losses were anticipated
when the decision was made to refocus the Company's business plan and to develop
the Internet portal in late 1998.
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During the latter half of 1998, ALWC decided to extricate itself from
the retail brokerage business. It sold one of its branch offices to another
registered broker dealer and closed two other offices. It ceased to do any
retail business at December 31, 1998. This had the effect of reducing revenues
approximately 20%.
Early in 1999,it was decided that ALWC should no longer continue
proprietary trading. This had been profitable in the past and accounted for
nearly one third of total revenues but placed ALWC's capital at risk.
Lastly, management recognized that the Company would have to devote a
substantial amount of time to launch the new Internet portal and to build a new
managerial team with the requisite technical expertise and experience to ensure
a successful outcome. This had the effect of reducing revenues from private
placement significantly. This has largely been completed and the Company has
returned to rebuilding its business and client base. The Company will primarily
concentrate on execution services for its clients, private placements and third
market executions for other broker dealers.
EXPENSES
On March 29, 1999, ALWC was acquired by the Company from Alexander,
Wescott Holdings, Inc. This acquisition had a profound but temporary effect on
the Company's operating results as explained above.
GENERAL AND ADMINISTRATIVE
General and administrative costs consist primarily of employee
compensation and benefits and occupancy costs. Significant costs are attributed
to the Company becoming a reporting public company. This status will increase
audit and legal costs significantly. In relation to the Company becoming a
public company, the cost of corporate relations will also increase as quarterly
reports and other investor information is required. The Company anticipates that
its General and Administrative costs (as a percentage of costs) will decline as
the Company's operations expand.
General and administrative expenses decreased to $2,253,064 for the
six-month period ended June 30, 1999 compared to $4,131,913 for the six-month
period ended June 30, 1998, a decrease which was mostly attributable to a
decline in employee compensation and benefits as a result of reduced revenues.
FISCAL YEARS ENDED DECEMBER 31, 1998 AND 1997
The following discussion covers only the operations of ALWC for the
years ended December 31, 1998 and 1997 as The Financial Commerce Network, Inc.
had no operations during these periods.
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NET LOSSES AND PROFITS
For the year ended December 31, 1998, ALWC incurred a net loss of
$85,331. For the 1997 fiscal period ALWC had a net profit of $443,493.
Explanations of these results are set forth below.
REVENUE
For fiscal 1998 and the 1997 fiscal period ALWC's revenue was
$7,117,676 and $5,862,216, respectively. During fiscal 1998, ALWC's trading and
commission revenue was $3,438,171 and revenue from investment banking was
$3,502,903. During fiscal 1997, revenue from trading and commissions was
$3,050,175 and revenue from investment banking was $2,784,727. The increase in
revenues during 1998 over 1997 was primarily attributable to normal growth of
ALWC and increased investment banking and trading commissions.
EXPENSES
GENERAL AND ADMINISTRATIVE
General and administrative expenses increased to $7,260,007 for fiscal
1998 compared to $5,163,723 for fiscal 1997, an increase of $2,096,284. This
increase was primarily attributable to increases in compensation and benefits
and clearance and communication charges. These increases were partly the result
of increased revenues as described above.
LIQUIDITY AND CAPITAL RESOURCES
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
During the six months ended June 30, 1999, the Company used cash for
operating activities of approximately $494,000 compared to cash generated from
operations for the six months ended June 30, 1998 of approximately $168,000.
Cash used for operations for the six months ended June 30, 1999 resulted from
the Company's net loss of approximately $1,090,000 partially offset by a
decrease in investments owned. Cash provided by operations for the six months
ended June 30, 1998 resulted from the Company's net income partially offset by
an increase in investments owned.
During the six months ended June 30, 1999 the Company generated cash
from financing activities of approximately $517,000 compared to cash used in
financing activities of approximately $167,000 for the six months ended June 30,
1998. The cash generated during the six months ended June 30, 1999 was
attributable to sales of common stock reduced by advances to affiliates. The
cash used during the six months ended June 30, 1998 was attributable to advances
to affiliates reduced by capital contributions.
ALWC has funded a portion of its activities through June 30, 1999 from
the net proceeds of private placement of its securities and, to a lesser extent,
from cash flow from operations.
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At June 30, 1999, ALWC had current assets of $2,323,010 and current
liabilities of $1,480,399.
In addition, implementation of the Company's business plan requires
capital resources substantially greater than those currently available to the
Company. The Company may determine, depending on the opportunities available to
it, to seek additional debt or equity financing to fund the cost of continuing
expansion. There can be no assurance that additional equity financing will be
available. If neither additional debt or equity financing is available, the
Company might seek loans. In addition, the Company might seek some sort of
strategic alliance with another company that would provide equity to the
Company.
To the extent that the Company finances expansion through the issuance
of additional equity securities, any such issuance would result in dilution of
the interests of the Company's stockholders. Additionally, to the extent that
the Company incurs indebtedness or issues debt securities to finance expansion
activities, it will be subject to all of the risks associated with incurring
substantial indebtedness, including the risks that interest rates may fluctuate
and cash flow may be insufficient to pay the principal of, and interest on, any
such indebtedness.
The Company has no current arrangements with respect to, or sources of,
additional financing, and it is not contemplated that its existing stockholders
will provide any portion of the Company's future financing requirements. There
can be no assurance that any additional financing will be available to the
Company on acceptable terms, or at all. The inability of the Company to obtain
financing when needed will have a material adverse effect on the Company.
FISCAL YEARS ENDED DECEMBER 31, 1998 AND 1997
During the year ended December 31, 1998 the Company used cash for
operations of approximately $469,000 compared with cash used for operations of
approximately $30,000 for the year ended December 31, 1997. Cash used for
operations for the 1998 year resulted from the Company's net loss of
approximately $85,000, increases in investments owned of approximately $139,000,
unrealized appreciation on investments of approximately $141,000, decreases in
securities sold, not yet purchased, of approximately $119,000 and commissions
payable of $165,000 partially offset by increases in accounts payable and
accrued expenses of $156,000 and amounts due to the clearing broker of $108,000.
Cash used for operations for the 1997 year resulted from increases in
investments owned of approximately $662,000 and other current assets of
approximately $285,000 partially offset by the Company's net income of
approximately $443,000 and increases in securities sold, not yet purchased, of
approximately $148,000 and commissions payable of approximately $278,000.
During the year ended December 31, 1998 cash used in investing
activities amounted to approximately $204,000 compared to cash provided by
investing activities of approximately $204,000 for the year ended December 31,
1997. In 1998 the cash used was attributable to advances to affiliates and in
1997 the cash provided was attributable to advances from affiliates.
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During the year ended December 31, 1998 cash provided by financing
activities of approximately $535,000 was attributable to capital contributions.
YEAR 2000 ISSUES
BACKGROUND. Some computers, software, and other equipment include programming
code in which calendar year data is abbreviated to only two digits. As a result
of this design decision, some of these systems could fail to operate or fail to
produce correct results if "00" is interpreted to mean 1900, rather than 2000.
These problems are widely expected to increase in frequency and severity as the
year 2000 approaches, and are commonly referred to as the "Year 2000 Problem."
ASSESSMENT. The Year 2000 Problem could affect computers, software, and other
equipment used, operated, or maintained by the Company. Accordingly, ALWC is
reviewing its internal computer programs and systems to ensure that the programs
and systems will be Year 2000 compliant. The Company presently believes that its
computer systems will be Year 2000 compliant in a timely manner. However, while
the estimated cost of these efforts are not expected to be material to the
Company's financial position or any year's results of operations, there can be
no assurance to this effect.
ALWC has obtained certification of its processes to assess Year 2000
Problems from the National Association of Securities Dealers. The NASD has
required all member firms to conduct extensive testing of their systems to
ensure Y2K compliancy prior to December 31, 1999.
SUPPLIERS. The Company has initiated communications with third party suppliers
of the major computers, software, and other equipment used, operated, or
maintained by the Company to identify and, to the extent possible, to resolve
issues involving the Year 2000 Problem. However, the Company has limited or no
control over the actions of these third party suppliers. Thus, while the Company
expects that it will be able to resolve any significant Year 2000 Problems with
these systems, there can be no assurance that these suppliers will resolve any
or all Year 2000 Problems with these systems before the occurrence of a material
disruption to the business of the Company or any of its customers. Any failure
of these third parties to resolve Year 2000 problems with their systems in a
timely manner could have a material adverse effect on the Company's business,
financial condition, and results of operation.
MOST LIKELY CONSEQUENCES OF YEAR 2000 PROBLEMS. The Company expects to identify
and resolve all Year 2000 Problems that could materially adversely affect its
business operations. However, management believes that it is not possible to
determine with complete certainty that all Year 2000 Problems affecting the
Company have been identified or corrected. The number of devices that could be
affected and the interactions among these devices are simply too numerous. In
addition, one cannot accurately predict how many Year 2000 Problem-related
failures will occur or the severity, duration, or financial consequences of
these perhaps inevitable failures. As a result, management expects that the
Company could likely suffer the following consequences:
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1. a significant number of operational inconveniences and inefficiencies
for the Company and its clients that may divert management's time and
attention and financial and human resources from its ordinary business
activities; and
2. a lesser number of serious system failures that may require significant
efforts by the Company or its clients to prevent or alleviate material
business disruptions.
CONTINGENCY PLANS. ALWC is currently developing contingency plans to be
implemented as part of its efforts to identify and correct Year 2000 Problems
affecting its internal systems. ALWC completed its contingency plans by
September 1999. Depending on the systems affected, these plans could include
accelerated replacement of affected equipment or software, short to medium-term
use of backup equipment and software, increased work hours for Company personnel
or use of contract personnel to correct on an accelerated schedule any Year 2000
Problems that arise or to provide manual workarounds for information systems,
and similar approaches. If ALWC is required to implement any of these
contingency plans, it could have a material adverse effect on ALWC's financial
condition and results of operations.
Based on the activities described above, the Company does not believe
that the Year 2000 Problem will have a material adverse effect on the Company's
business or results of operations.
DISCLAIMER. The discussion of the Company's efforts, and management's
expectations, relating to Year 2000 compliance are forward-looking statements.
The Company's ability to achieve Year 2000 compliance and the level of
incremental costs associated therewith, could be adversely impacted by, among
other things, the availability and cost of programming and testing resources,
vendors' ability to modify proprietary software, and unanticipated problems
identified in the ongoing compliance review.
INFLATION
The Company believes that the impact of inflation and changing prices
on its operations since commencement of operations has been negligible.
SEASONALITY
The Company does not deem its revenues to be seasonal and any effect
would be immaterial.
ITEM 3: PROPERTIES
The Company leases office space on the 21st Floor at 63 Wall Street,
New York, New York at a current monthly rental of $11,200. This lease expires
January 31, 2003. The Company also leases space at 258 Genesee Street, Suite
307, Utica, New York 13502 at a monthly rental of $900 a month.
15
<PAGE>
ITEM 4: SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the date of this filing, the
number of shares of the Company's outstanding Common Stock, $.001 par value,
beneficially owned (as such term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934) by each director of the Company, by each named executive
officer of the Company, by each beneficial owner of more than 5% of the
Company's Common Stock and by all of the Company's officers and directors as a
group.
<TABLE>
<CAPTION>
NAME AND ADDRESS AMOUNT AND NATURE OF PERCENTAGE
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP (1) OF CLASS (2)
------------------- ------------------------ ------------
<S> <C> <C>
Alexander, Wescott Holdings, Inc. 2,372,720 7%
63 Wall Street
New York, New York
Richard Bach 20,312,985 60%
1039 Robinson Road
Mohawk, New York 13407
Carl Walston 2,372,399 7%
7 Oakwood Lane
Greenwich, Connecticut 06830
Laurence Lentchner 0 0%
68 Mattison Road
Branchville, New Jersey 07826
Ara Proudian 1,941,896 6%
c/o Alexander, Wescott & Co., Inc.
63 Wall Street
New York, New York 10005
All officers and directors as a group
25,626,780 76%
</TABLE>
- -----------------------------
(1) Unless otherwise noted, all shares are beneficially owned and the sole
voting and investment power is held by the person indicated.
(2) Based on 20,381,826 shares outstanding as of September 7, 1999 and
13,500,000 options to purchase shares. Each beneficial owner's
percentage ownership is determined by assuming that options or warrants
that are held by such person and which are convertible or exercisable
within sixty (60) days of the date hereof (pursuant to Rule 13d-3 under
the Securities Exchange Act of 1934) have been converted or exercised.
16
<PAGE>
ITEM 5: DIRECTORS AND EXECUTIVE OFFICERS
Set forth below are the names of all directors and executive officers
of the Company along with certain information relating to the business
experience of each of the listed officers.
<TABLE>
<CAPTION>
NAME AGE POSITION
--------------------------- ----- -------------------------
<S> <C> <C>
RICHARD BACH 47 CHIEF EXECUTIVE OFFICER AND CHAIRMAN
CARL WALSTON 67 PRESIDENT AND DIRECTOR
JIM MULLEN 39 SECRETARY AND DIRECTOR
LAURENCE LENTCHNER 57 DIRECTOR
ARA PROUDIAN 29 DIRECTOR
</TABLE>
Directors are elected to serve until the next annual meeting of
stockholders or until their successors are elected and qualified. Officers serve
at the discretion of the Board of Directors subject to any contracts of
employment.
Richard Hans Bach: Mr. Bach is the Chairman of the Board of Directors
and Chief Executive Officer of the Company. He was previously the Chairman of
Alexander, Wescott Holdings, Inc., which was the parent of ALWC. Before he
joined Alexander Wescott Holdings Co., Inc., Mr. Bach was President of Traubner,
Bach & Co., a registered broker-dealer specializing in "third-market" and
institutional executions. Mr. Bach also served as President of Investors
Financial Services, which was a registered commodities dealer.
Carl R. Walston: Mr. Walston is the President and a member of the Board
of Directors. He is also President and Chief Executive Officer of ALWC. prior to
joining alwc in 1996, mr. walston served as executive vice president of cadre
consulting services, a firm that provided administrative and advisory services
to liquid asset funds for public agencies. prior to joining alwc, mr. walston
was a senior vice president with walston & co. inc. where he was also a member
of the board of directors and the executive committee of the firm.
Jim Mullen: Mr. Mullen is the Mr. Mullen is Secretary of the Company
and a member of the Board of Directors. He is also Manager of the Investment
Banking Division of ALWC. Prior to joining ALWC in 1996, Mr. Mullen was the
Foreign Operations Supervisor for the Harvard Management Company, which is
responsible for Harvard University's Endowment Fund.
Laurence H. Lentchner: Dr. Lentchner Is a member of the Board of
directors of the Company. He has been a practicing psychologist in northern New
jersey for thirty years. He Often consults in the area of business psychology.
He has a Doctor of Philosophy from New York University.
17
<PAGE>
Ara Proudian: Mr. Proudian is head of over-the-counter trading at ALWC.
Prior to 1996, Mr. Proudian was a co-founder and owner of Investor's Depot, a
registered broker-dealer specializing in fixed income securities. Prior to that
Mr. Proudian was a proprietary trader with Alltech Securities, an New York Stock
Exchange member firm.
ITEM 6: EXECUTIVE COMPENSATION
The following table sets forth all compensation awarded to, earned by,
or paid for all services rendered to the Company by the Company's Chief
Executive Officer. No other executive officer of the company received total
compensation in excess of $100,000 during the last three years.
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG TERM COMPENSATION
------------------- ----------------------
PAYOUTS AWARDS
------- ------
(a) (b) (c) (d) (e) (f) (g) (h) (i)
LONG-
TERM
OTHER RESTRICT- INCEN-
NAME ANNUAL ED TIVE ALL
AND COMPEN- STOCK OPTIONS/ PLAN OTHER
PRINCIPAL SATION AWARD(S) SARS PAYOUTS COM-
POSITION YEAR SALARY ($) BONUS ($) ($) ($) (#) ($) PENSATION(1)
--------- ---- ---------- --------- ------- --------- ----- ------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Richard Bach, 1998 $ 250,000(2) $ 0 0 0 0 0 5,825
Chief Executive 1997 $0(3) $ 0 0 1,715,350(4) 0 0 5,825
Officer and 1996 $0(3) $ 0 0 0 0 0 5,825
Chairman of the
Board of Directors
Carl Walston, 1998 $175,000(2) $ 0 0 0 0 0 5,825
President and Director 1997 $175,000(2) $ 0 0 0230(4) 0 0 5,825
1996 $120,000(2) $ 0 0 0 0 0 5,825
Todd Nesbit 1999(5) $150,000 $ 0 0 0 0 0 0
Chief Operations
Officer
Brian Kelly 1999(5) $140,000 $ 0 0 0 0 0 0
Chief Information
Officer
</TABLE>
- --------------------------------
(1) Constitutes payment of insurance benefits.
(2) Both Mr. Bach and Mr. Walston are paid by Alexander, Wescott & Co.,
Inc., the wholly owned subsidiary of the Company.
(3) Mr. Bach was paid no salary in 1997 and 1996 because he acted as a
trader for Alexander, Wescott & Co., Inc. and was paid commissions from
the customers of Alexander, Wescott & Co., Inc. on whose behalf he
traded.
(4) Mr. Bach was given a bonus in 1997 of 343,070 shares of Alexander,
Wescott Holdings, Inc, which had a value of $1,715,350. Mr. Walston was
given a stock bonus in 1997 of 36,446 shares of Alexander, Wescott
Holdings, Inc., which had a value of $182,230. All of these
18
<PAGE>
shares were exchanged for shares of the Company in connection with a
self tender offer made by Alexander, Wescott Holdings, Inc. to its
shareholders.
(5) Neither Mr. Nisbet nor Mr. Kelly were officers of the Company at the
end of the last fiscal year.
COMPENSATION OF DIRECTORS
No compensation is paid currently by the Company to any of its
Directors, who are not employees of the Company. However, each Director is
entitled to receive reimbursement for travel expenses for attendance at meetings
of the Board.
ITEM 7: CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Company has no related party transactions.
ITEM 8: DESCRIPTION OF SECURITIES
The Company is authorized to issue up to 50,000,000 shares of Common
Stock, par value, $.001 per share and 10,000,000 shares of preferred stock.. As
of September 7, 1999, 20,381,826 shares of Common Stock were issued and
outstanding and 130,500 shares of preferred stock were issued and outstanding.
Each share of Common Stock is entitled to one vote per outstanding
share held on each matter submitted to a vote at a meeting of shareholders. Each
shareholder may exercise such vote either in person or by proxy. Shareholders
are not entitled to cumulate their votes for the election of Directors. There
are no preemptive or other preferential rights to purchase additional shares of
Common Stock. Upon liquidation, dissolution or winding-up of the Company, the
holders of Common Stock are entitled to receive, pro rata, the assets of the
Company which are legally available for distribution to shareholders subject to
the prior rights on liquidation of creditors and the holders of shares of
Preferred Stock, if any. All of the issued and outstanding shares of Common
Stock are validly authorized, fully paid and non-assessable.
DIVIDENDS
The Company has not paid any cash dividends on its Common Stock. The
present policy of the Board of Directors is to retain earnings to finance the
operations and development of the Company's business. Accordingly, it is
anticipated that no cash dividends will be paid in the foreseeable future.
TRANSFER AGENT
The transfer agent for the Common Stock is United Stock Transfer, Inc.,
3615 South Huron Street, Suite 104, Engelwood, CO 80110.
19
<PAGE>
REPORTS TO STOCKHOLDERS
The Company, by filing this Registration Statement, is registering its
Common Stock under the provisions of Section 12(g) of the Securities Exchange
Act of 1934, as amended. Such registration requires the Company to comply with
periodic reporting, proxy solicitation and certain other requirements of the
Securities Exchange Act of 1934, as amended.
PART II
ITEM 1: MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
The Company's Common Stock is traded in the over-the-market and
reported on the NASD electronic bulletin board, under the symbol "FCNI". The
following table sets forth the high and low bid prices of the Company's Common
Stock as reported on the over-the-counter market for the periods indicated. The
prices represent inter-dealer quotations, without retail mark-up, mark-down or
commission, and may not necessarily represent actual transactions.
<TABLE>
<CAPTION>
BID PRICES
PERIOD HIGH LOW
- ------ ---- ---
<S> <C> <C>
Calendar Year 1998 $1.39 $0.44
First Quarter $2.50 $0.75
(January 1, 1999 to
March 30, 1999)
Second Quarter
(March 30, 1999 to
June 30, 1999) $7.25 $2.06
</TABLE>
As of September 7, 1999, there were approximately 493 record holders of
the Company's Common Stock.
The Company has never paid any cash dividends on its Common Stock and
has no present intention to do so. The Company intends to retain all of its
earnings for use in its business.
ITEM 2: LEGAL PROCEEDINGS
The Company is a party to only one legal proceeding. Dwarf Holding,
Inc. commenced an arbitration proceeding against the Company alleging that the
Company breached the terms of a contract between the parties under which, Dwarf
Holdings, Inc. claims that the Company was obligated to issue it freely
tradeable shares. No specific amount of damages are alleged.
20
<PAGE>
The subsidiary of the Company, Alexander, Wescott & Co., Inc. ("ALWC")
is named as a defendant in three legal proceedings.
Mellon Bank, F.S.B. v. Alexander, Wescott & Co., Inc., 98 Civ. 2650
(S.D.N.Y.) - This lawsuit alleges that ALWC was paid $326,000 more than it was
owed in connection with acting as a placement agent in a private offering of
securities. The plaintiff seeks damages of $326,000.
Balmore Funds, S.A. v. NCT Audio, Inc., et al., 99 Civ. 281 (S.D.N.Y.)
- - ALWC is a third party defendant in which the third party plaintiff alleges
that ALWC committed fraud, made negligent misrepresentations, exercised
deceptive trade practices, breached its fiduciary duty and breached its
contractual obligations in connection with the private offering referred to
above. Damages are not specified.
Pedrazzi v. Bishop Rosen & Co., Inc., et al., Arb. No. 99-02175
(N.A.S.D.) - a customer of ALWC alleges churning, unauthorized trading and a
failure to supervise by ALWC and its employees. The arbitration seeks $50,000
damages.
ITEM 3: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS.
Rothstein, Kass & Company, P.C. was engaged as the Company's principal
accountant to audit the Company's financial statements for the fiscal year ended
December 31, 1998. The Company has had no disagreements with its accountants.
ITEM 4: RECENT SALES OF UNREGISTERED SECURITIES.
On February 16, 1999, Company's Board authorized the issuance of an
option (the "Option") to purchase 15 million shares of Company common for a
conversion price of $5,000. The Option is authorized to be issued to Randy
McNeice, Phillip Carstens, William Ross, Gary Gottesman, Jerry Naccatato and
Terrence Dunne (the "Old Investors"). The consideration for the issuance was the
forgiving of certain loans made to Company by those individuals.
On February 24, 1999, the Old Investors entered into an agreement to
sell the option to David Weiss. On March 10th Mr. Weiss exercised the option and
became owner of 15 million shares of Company common stock. On March 29, 1999,
Mr. Weiss donated 13.5 million shares of common stock back to the Company in
order to allow it to purchase Alexander, Wescott & Co., Inc.
On February 26, 1999, the Company entered into a private placement
agreement in which the Company issued 4,347,826 shares of common stock at a
price of $.23 per share, pursuant to Rule 504.
On March 18, 1999, the Company issued 211,498 shares of common stock in
exchange for professional services rendered in connection with the provision of
legal services by Neil Liebman, Esq.
21
<PAGE>
On June 30, 1999, the Company issued 200,000 shares of common stock to
Dwarf Holdings, Inc. in connection with a consulting agreement.
ITEM 5: INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company's By-laws provide for indemnification of officers and
directors to the fullest extent permitted by Nevada law. In addition, under the
Company's By-laws, no director shall be liable personally to the Company or its
stockholders for monetary damages for breach of fiduciary duty as a director;
provided that the Certificate of Incorporation does not eliminate the liability
of directors for (i) any breach of the director's duty of loyalty to the Company
or its stockholders; (ii) acts of omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) acts or omissions in
respect of certain unlawful dividend payments or stock redemptions or
repurchases; or (iv) any transaction from which such director derives improper
personal benefit.
PART F/S
<TABLE>
<CAPTION>
INDEX TO FINANCIAL STATEMENTS AND EXHIBITS PAGE
------------------------------------------ ----
<S> <C>
Independent Auditors' Report............................................................ F-1
Consolidated Balance Sheets as of December 31, 1998..................................... F-2
Consolidated Statement of Operations for the years ended December 31,
1997 and 1998...................................................................... F-3
Consolidated Statement of Stockholders' Equity for the years ended
December 31, 1997 and 1998......................................................... F-4
Consolidated Statement of Cash Flows for the years ended December 31, 1997
and 1998........................................................................... F-5-6
Notes to the Financial Statements....................................................... F-7-13
</TABLE>
EXHIBITS
--------
2.1 Articles of Incorporation of The Financial Commerce Network,
Inc., f/k/a Intrex.com, Inc. and Amended Articles
2.2 By-laws of The Financial Commerce Network, Inc., f/k/a
Intrex.com, Inc.
3 Certificate of Designations, Preferences and Rights of Series A
Convertible Preferred Stock of The Financial Commerce Network,
Inc., f/k/a Intrex.com, Inc.
6 Material Contracts
Team Systems, Inc.
Hardware Sale and Purchase Agreement
Maintenance Agreement
Consulting Services Agreement
Program Product License Agreement
22
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange
Act of 1934, the registrant has caused this registration statement to be signed
on its behalf by the undersigned, thereunto duly authorized.
THE FINANCIAL COMMERCE NETWORK, INC.
(Registrant)
Date: September 10, 1999 By: /S/ CARL WALSTON
-----------------------
Carl Walston, President
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONSOLIDATED FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITORS' REPORT
DECEMBER 31, 1998
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONTENTS
<TABLE>
<S> <C>
Independent Auditors' Report 1
Consolidated Financial Statements
Consolidated Balance Sheets 2
Consolidated Statements of Operations 3
Consolidated Statements of Stockholders' Equity 4
Consolidated Statements of Cash Flows 5-6
Notes to Consolidated Financial Statements 7-13
</TABLE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
Board of Directors
The Financial Commerce Network, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheet of The Financial
Commerce Network, Inc. and Subsidiary as of December 31, 1998, and the related
consolidated statements of operations, stockholders' equity, and cash flows for
the years ended December 31, 1998 and 1997. These consolidated financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these consolidated 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 audits 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 consolidated financial statements referred to above present
fairly, in all material respects, the consolidated financial position of The
Financial Commerce Network, Inc. and Subsidiary as of December 31, 1998, and the
results of their operations and their cash flows for the years ended December
31, 1998 and 1997, in conformity with generally accepted accounting principles.
/s/ Rothstein Kass & Company
Roseland, New Jersey
March 29, 1999
1
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
December 31, June 30,
1998 1999
- -----------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 90,959 $ 93,381
Investments owned, at market 730,138 97,359
Investments owned, at fair value 289,880 366,592
Due from affiliate 482,307
Deferred income taxes 57,000 57,000
Other current assets 428,866 1,226,371
---------- ----------
Total current assets 1,596,843 2,323,010
Office equipment, net of accumulated depreciation of $2,678 13,389 17,031
at December 31, 1998 and $4,076 at June 30, 1999 (unaudited)
Deferred registration costs 78,000
Other assets 25,100 29,216
---------- ----------
$ 1,635,332 $ 2,447,257
---------- ----------
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Equity securities sold, not yet purchased $ 32,425 $ --
Accounts payable and accrued expenses 248,889 1,277,800
Commissions payable 140,075 125,359
Bank loan payable 77,240
Due to affiliate 15,880
Due to clearing broker 108,419 --
---------- ----------
Total current liabilities 545,688 1,480,399
---------- ----------
Commitments and contingencies
Stockholders' equity
Common stock, $.001 par value, authorized 50,000,000 shares, issued and
outstanding 622,502 shares at December 31, 1998
and 20,381,826 shares at June 30, 1999 (unaudited) 623 20,382
Preferred stock, $.001 par value, authorized 10,000,000 shares,
none issued
Additional paid-in capital 897,270 1,844,656
Retained earnings (accumulated deficit) 191,751 (898,180)
---------- ----------
1,089,644 966,858
---------- ----------
$ 1,635,332 $ 2,447,257
---------- ----------
---------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 2
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
Years Ended Six Months Ended
December 31, June 30,
1997 1998 1998 1999
- --------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Revenues
Trading and commissions $ 3,050,175 $ 3,438,171 $ 2,234,031 $ 804,343
Investment banking 2,784,727 3,502,903 2,386,820 355,951
Interest 4,632 10,912 6,503 18,481
Unrealized appreciation
(depreciation) on investments (37,318) 140,690 176,690 (45,412)
Other 25,000 24,857 29,770
----------- ---------- ---------- -----------
5,802,216 7,117,676 4,828,901 1,163,133
----------- ---------- ---------- -----------
Expenses
Employee compensation
and benefits 3,221,878 4,716,421 3,035,693 1,082,266
Clearance 897,931 971,524 465,133 430,628
Occupancy 183,208 280,277 129,740 71,791
Communications 157,827 263,628 240,250 115,036
Insurance 49,634 131,160 15,330 7,100
Other 653,245 896,997 245,767 546,243
----------- ---------- ---------- -----------
5,163,723 7,260,007 4,131,913 2,253,064
----------- ---------- ---------- -----------
Income (loss) before income taxes 638,493 (142,331) 696,988 (1,089,931)
Income taxes 195,000 (57,000) 285,000
----------- ---------- ---------- -----------
Net income (loss) $ 443,493 $ (85,331) $ 411,988 $ (1,089,931)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
Basic and diluted income (loss)
per common share $ 0.71 $ (0.14) $ 0.66 $ (0.09)
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
Weighted average number of
common shares used in
computing basic and diluted
income (loss) per common share 622,502 622,502 622,502 12,280,287
----------- ---------- ---------- -----------
----------- ---------- ---------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 3
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended December 31, 1997 and 1998 and the Six Months Ended June 30, 1999
(Unaudited)
<TABLE>
<CAPTION>
Retained
Additional Earnings
Common stock Paid-in (Accumulated Treasury
Shares Amount Capital Deficit) Stock
<S> <C> <C> <C> <C> <C>
Balances, January 1, 1997 622,502 $ 623 $ 362,270 $ (166,411) $ --
Net income 443,493
---------- ----------- ----------- ----------- ----------
Balances, December 31, 1997 622,502 623 362,270 277,082
Capital contributions 535,000
Net loss (85,331)
---------- ----------- ----------- ----------- ----------
Balances, December 31, 1998 622,502 623 897,270 191,751
Issuance of common stock for
for private placement (unaudited) 4,559,324 4,559 995,441
Issuance of common stock
(unaudited) 15,000,000 15,000 (10,000)
Purchase of treasury stock,
(13,500,000 shares) (unaudited) 90,000
Assumption of liabilities related
to acquisition (unaudited) (572,230)
Issuance of common stock
from treasury (unaudited) (90,000) (90,000)
Issuance of common stock
for services (unaudited) 200,000 200 624,175
Net loss (unaudited) (1,089,931)
---------- ----------- ----------- ----------- ----------
Balances, June 30, 1999
(unaudited) 20,381,826 $ 20,382 $ 1,844,656 $ (898,180) $ --
---------- ----------- ----------- ----------- ----------
---------- ----------- ----------- ----------- ----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 4
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Years Ended Six Months Ended
December 31, June 30,
1997 1998 1998 1999
- --------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Cash flows from operating activities
Net income (loss) $ 443,493 $ (85,331) $ 411,988 $(1,089,931)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Deferred income taxes (57,000) 110,000
Common stock issued for professional services 78,750
Depreciation 2,678 2,678 1,398
Unrealized depreciation (appreciation)
on investments 37,318 (140,690) (176,690) 45,412
Changes in operating assets and liabilities:
Investments owned, at cost (279,739) (138,556) (276,337) 510,655
Investments owned, at cost (382,170) 38,635 (91,721)
Other current assets (285,237) (62,883) 90,248 (251,880)
Other assets 10,668 (6,100) (6,000) (4,116)
Equity securities sold, not yet purchased 147,675 (119,034) (70,782) (32,425)
Accounts payable and accrued expenses 31,510 156,100 158,905 371,681
Commissions payable 278,017 (164,937) 16,069 (14,716)
Due to clearing broker (31,448) 108,419 (108,419)
----------- ----------- ----------- -----------
Net cash provided by (used in) operating
activities (29,913) (468,699) 168,358 (493,591)
----------- ----------- ----------- -----------
Cash flows from investing activities
Advances from (repayments to) affiliate 220,249 (204,369) (15,880) (15,880)
Purchases of office equipment (16,067) (5,040)
----------- ----------- ----------- -----------
Net cash provided by (used in)
investing activities 204,182 (204,369) (15,880) (20,920)
----------- ----------- ----------- -----------
Cash flows from financing activities
Sales of common stock 1,000,000
Advances from (repayments to) affiliate (386,511) (482,307)
Proceeds from bank loan 82,022
Payments on bank loan (4,782)
Capital contributions 535,000 220,000
Payment for deferred registration costs (78,000)
----------- ----------- ----------- -----------
Net cash provided by financing activities 535,000 (166,511) 516,933
----------- ----------- ----------- -----------
Net increase (decrease) in cash and
cash equivalents 174,269 (138,068) (14,033) 2,422
Cash and cash equivalents, beginning of period 54,758 229,027 229,027 90,959
----------- ----------- ----------- -----------
Cash and cash equivalents, end of period $ 229,027 $ 90,959 $ 214,994 $ 93,381
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 5
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<TABLE>
<CAPTION>
Years Ended Six Months Ended
December 31, June 30,
1997 1998 1998 1999
- -----------------------------------------------------------------------------------------------------------------------
(Unaudited)
<S> <C> <C> <C> <C>
Supplemental schedule of non-cash investing
and financing activities
Common stock issued for professional
services (411,498 shares)(unaudited) $ - $ - $ - $ 673,022
-------- -------- ---------- --------------
During the six months ended June 30,
1999, the Company assumed liabilities of
$662,230 as part of the acquisition of
Alexander Wescott & Co., Inc. (unaudited)
</TABLE>
SEE ACCOMPANYING NOTES TO CONSOLIDATED FINANCIAL STATEMENTS. 6
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. NATURE OF BUSINESS The Financial Commerce Network, Inc. ( "TFCN")
was incorporated in the State of Washington in
July 1969 for the purpose of acquiring other
corporations. Alexander, Wescott & Co., Inc.
("ALWC"), the sole subsidiary of TFCN, is a
broker-dealer registered with the Securities
and Exchange Commission (SEC) and an
introducing broker registered with the
Commodity Futures Trading Commission (CFTC).
ALWC is also a member of the National
Association of Securities Dealers, Inc. (NASD)
and the National Futures Association (NFA).
ALWC's operations consist primarily of engaging
in principal transactions and providing
investment banking services.
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include
the accounts of TFCN and its wholly-owned
subsidiary, ALWC (collectively the Company).
All significant intercompany transactions and
balances have been eliminated in consolidation.
ACQUISITION
Effective March 29, 1999, Alexander, Wescott
Holdings, Inc. (Holdings), the parent company
of ALWC entered into an agreement with TFCN.
The agreement provided for TFCN to issue
13,500,000 shares of its common stock and
assume liabilities of approximately $572,000,
in exchange for all of Holdings' outstanding
shares of ALWC in a transaction accounted for
as a reverse acquisition. As a result, ALWC is
considered to be the acquiring company since
the stockholders of ALWC acquired more than 50%
of the issued and outstanding stock of TFCN.
For the years ended December 31, 1998 and 1997
TFCN had no revenues, costs and expenses were
approximately $2,000, and other income was
approximately $4,000 in 1998. At December 31,
1998, assets consisted of cash of $802. The
accompanying financial statements give effect
to this acquisition.
CASH AND CASH EQUIVALENTS
The Company considers money market accounts to
be cash equivalents.
OFFICE EQUIPMENT
Office equipment is stated at cost less
accumulated depreciation. The Company provides
for depreciation using the straight-line method
over an estimated useful life of 6 years.
7
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED) SECURITIES TRANSACTIONS
Securities transactions and the related
revenues and expenses are recorded on the trade
date.
INVESTMENT BANKING REVENUES
Investment banking revenues are recorded in
accordance with the terms of the investment
banking agreements.
INVESTMENTS OWNED AND EQUITY SECURITIES SOLD,
NOT YET PURCHASED
All investments owned and equity securities
sold, not yet purchased are valued at market
and unrealized gains and losses are reflected
in revenues.
INVESTMENTS OWNED, AT FAIR VALUE
Investments owned, at fair value include
restricted equity securities which are valued
using appropriate reductions from market to
provide for restrictions on marketability and
warrants received in connection with investment
banking services, which are priced using the
Black-Scholes Options pricing model.
INCOME (LOSS) PER COMMON SHARE
The Company complies with Statement of
Financial Accounting Standards No. 128,
"Earnings Per Share" (SFAS 128). SFAS No. 128
requires dual presentation of basic and diluted
earnings per share for all periods presented.
Basic earnings per share excludes dilution and
is computed by dividing income (loss) available
to common shareholders by the weighted average
number of common shares outstanding for the
period. Diluted earnings per share reflects the
potential dilution that could occur if
securities or other contracts to issue common
stock were exercised or converted into common
stock or resulted in the issuance of common
stock that then shared in the earnings of the
entity. Basic and diluted income (loss) per
common share were the same for all periods
presented since there were no dilutive
securities outstanding.
INCOME TAXES
ALWC filed its 1997 and will file its 1998
federal income tax return on a consolidated
basis with Holdings. Income tax expense is
allocated pursuant to the separate tax
attributes of each company. There were no
significant income taxes for TFCN for any of
the periods presented.
8
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
2. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
(CONTINUED) The Company complies with Statement of
Financial Accounting Standards No. 109 (SFAS
109), "Accounting for Income Taxes". SFAS 109
requires the recognition of deferred tax assets
and liabilities for both the expected future
tax impact of differences between the financial
statement and tax bases of assets and
liabilities, and for the expected future tax
benefit to be derived from tax loss
carryforwards. Valuation allowances are
established, when necessary, to reduce deferred
tax assets to the amount expected to be
realized.
DEFERRED REGISTRATION COSTS
The Company has deferred professional and other
fees incurred in connection with a proposed
public offering. If the offering is sucessful,
these costs will be charged to additional
paid-in capital; otherwise the costs will be
charged to operations.
UNAUDITED FINANCIAL STATEMENTS
The financial statements as of June 30, 1999
and for the six months ended June 30, 1999 and
1998 are unaudited. These financial statements
reflect all adjustments which are, in the
opinion of management, necessary for a fair
presentation of the results for the interim
periods. All such adjustments, if any, are of a
normal and recurring nature.
USE OF ESTIMATES
The preparation of financial statements in
conformity with generally accepted accounting
principles requires management to make
estimates and assumptions that affect the
reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities
at the date of the financial statements and the
reported amounts of revenues and expenses
during the reporting period. Actual results
could differ from those estimates.
9
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3. NET CAPITAL REQUIREMENT ALWC, as a member of the NASD, is subject to
the SEC Uniform Net Capital Rule 15c3-1. This
Rule requires the maintenance of minimum net
capital and that the ratio of aggregate
indebtedness to net capital, both as defined,
shall not exceed 15 to 1 and that equity
capital may not be withdrawn, or cash dividends
paid, if the resulting net capital ratio would
exceed 10 to 1. ALWC is also subject to the
CFTC's minimum financial requirements which
require that ALWC maintain net capital, as
defined, equal to the greater of its
requirements under Regulation 1.17 under the
Commodity Exchange Act or Rule 15c3-1. At
December 31, 1998, ALWC's net capital was
approximately $216,000, which was approximately
$116,000 in excess of its minimum requirement
of $100,000. At June 30, 1999 (UNAUDITED), ALWC
was in violation of its minimum net capital
requirement. This violation was caused by an
error in the computation and was cured in early
July as soon as ALWC became aware of the error.
4. OTHER CURRENT ASSETS Other current assets consist of the following
at December 31, 1998 and June 30, 1999
(unaudited)
<TABLE>
<CAPTION>
1998 1999
<S> <C> <C>
Prepaid expenses $ 31,502 $ 574,019
Receivable from clearing broker 127,262 287,057
Advances against commissions 145,339 250,214
Other receivables 72,405 62,723
Promissory note 52,358 52,358
---------- ----------
$ 428,866 $1,226,371
---------- ----------
---------- ----------
</TABLE>
The promissory note from a former employee of
approximately $52,000, plus interest at 9% per
annum, is due on or before December 31, 1999.
5. BANK LOAN PAYABLE The bank loan, assumed in connection with the
(UNAUDITED) acquisition of ALWC, is a variable rate
Commercial Promissory Note, with an interest
rate of 2% over the Wall Street Journal Prime
Rate. The loan is repayable in 60 monthly
payments of principal and interest through
October 2002.
10
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
6. INCOME TAXES The provision for income taxes consists of the
following:
<TABLE>
<CAPTION>
DECEMBER 31, JUNE 30,
1997 1998 1998 1999
(UNAUDITED)
<S> <C> <C> <C> <C>
CURRENT
Federal $ 145,000 $ -- $ 56,000 $ --
State 50,000 229,000
--------- -------- --------- ---------
195,000 285,000
--------- -------- --------- ---------
DEFERRED
Federal (44,000) (349,000)
State (13,000) (87,000)
--------- -------- --------- ---------
(57,000) (436,000)
LESS VALUATION
ALLOWANCE 436,000
--------- -------- --------- ---------
(57,000)
--------- -------- --------- ---------
$ 195,000 $(57,000) $ 285,000 $ --
--------- -------- --------- ---------
--------- -------- --------- ---------
</TABLE>
The deferred income tax benefit of
approximately $57,000 for the year ended
December 31, 1998 results from the 1998
operating loss. The deferred income tax asset
of $436,000 resulting from the loss sustained
in the six months ended June 30, 1999, has been
fully reserved as management has no assurance
that the benefits will be realized. The
deferred tax asset balance consists of a
deferred federal tax asset of approximately
$44,000 and a state deferred tax asset of
approximately $13,000 at December 31, 1998. In
1997, income tax expense does not bear a normal
relationship to income before income taxes due
to the utilization of previously reserved
deferred tax assets relating to net operating
loss carryforwards of approximately $166,000.
7. RELATED PARTY
TRANSACTIONS On March 11, 1999, an officer of TFCN exercised
an option to purchase 15,000,000 shares of the
Company's common stock for $5,000.
8. TREASURY STOCK On March 29, 1999, the Company paid $90,000 to
certain creditors of an officer of the Company
in exchange for the creditors releasing their
security interest in 13,500,000 shares of the
Company's common stock. Simultaneous with the
release of the security interest, the officer
contributed to the Company's treasury the
13,500,000 shares of common stock which were
then issued to acquire all of the outstanding
shares of ALWC.
11
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
9. OFF-BALANCE SHEET RISK Pursuant to clearance agreements, ALWC
introduces all of its securities transactions
to clearing brokers on a fully-disclosed basis.
All of the customers' money balances and long
and short security positions are carried on the
books of the clearing brokers. In accordance
with the clearance agreements, ALWC has agreed
to indemnify the clearing brokers for losses,
if any, which the clearing brokers may sustain
from carrying securities transactions
introduced by ALWC. In accordance with industry
practice and regulatory requirements, ALWC and
the clearing brokers monitor collateral on the
customers' accounts. In addition, the
receivables from the clearing brokers are
pursuant to these clearance agreements.
10. EXEMPTION FROM
RULE 15c3-3 At December 31, 1998 and 1997 and June 30,
1999 (UNAUDITED), ALWC was exempt from the
Securities and Exchange Commission Rule 15c3-3
and, therefore, is not required to maintain a
"Special Reserve Bank Account for the Exclusive
Benefit of Customers".
11. RETIREMENT PLAN ALWC has a 401(k) plan (the Plan), which was
implemented during 1998, covering all employees
who meet certain eligibility requirements. ALWC
makes a matching contribution to the Plan,
which is at the discretion of ALWC and is
determined annually. There were no matching
contributions for the years ended December 31,
1998 and 1997 or for the six months ended June
30, 1999 and 1998 (UNAUDITED).
12. COMMITMENTS (UNAUDITED) The Company is obligated under various
operating leases for office space which
expire through January 2003.
13. CONTINGENCIES In the normal course of business, ALWC has been
named as a defendant in various matters.
Management of ALWC, after consultation with
legal counsel, believes that the resolution of
these matters will not have a material adverse
effect on the financial condition, results of
operations or cash flows of ALWC.
14. SALE OF BUSINESS On December 31, 1998 ALWC sold its Mineola, New
York retail business for $25,000. At December
31, 1998 and June 30, 1999 (UNAUDITED), $25,000
is included in other assets as a receivable
from the buyer.
12
<PAGE>
THE FINANCIAL COMMERCE NETWORK, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
15. SUBSEQUENT EVENTS Effective February 16, 1999, TFCN entered into
a 1 for 25 reverse stock split, thereby
reducing the number of outstanding shares of
the Company's common stock to 622,502. The
financial statements give retroactive effect to
the reverse stock split.
On February 26, 1999, the Company entered into
a private placement agreement in which the
Company issued 4,347,826 shares at a price of
$.23 per share and realized proceeds of
$1,000,000. Additionally, the Company issued
211,498 shares of common stock in exchange for
professional services rendered in connection
with this transaction.
16. SUBSEQUENT EVENTS
(UNAUDITED) In May 1999 the Company entered into agreements
with various internet consulting firms to begin
the development of its internet portal website.
On May 13, 1999 the Company reincorporated in
the State of Nevada and is now authorized to
issue a total of 60,000,000 shares consisting
of 10,000,000 shares of preferred stock with a
par value of $.001 and 50,000,000 shares of
common stock with a par value of $.001. In
addition to the reincorporation, the Company
changed its name to Intrex.com, Inc.
The Company is currently negotiating employment
contracts which will provide, in addition to
base salaries, options to purchase shares of
the Company's common stock.
In June 1999 the Company issued 200,000
restricted shares of common stock to a vendor
for services rendered and to be rendered to the
Company. These shares were valued using the
closing market price of the Company's stock on
the dates that the services were rendered, and
for the services to be rendered, the valuation
was based on the closing market price on the
date of issuance, less a 10% discount due to
lack of marketability. At June 30, 1999, other
current assets include approximately $546,000
of prepaid services under this vendor
arrangement.
During the third quarter of 1999 the Company
issued 130,500 shares of its $10, 6%
convertible preferred stock and received
proceeds of $1,174,500, net of expenses of
$130,500. In accordance with this private
placement agreement, the preferred stock is
convertible into common shares of TFCN as
prescribed in the agreement.
On August 17, 1999 the Company granted options
to purchase 13,500,000 shares of common stock
with an exercise price of $.875 to certain
officers and a director of the Company. The
options vest immediately and expire in five
years. Based on the underlying price of the
securities on the date of grant, approximately
$24,000,000 will be charged to operations
during the third quarter of 1999.
On September 8, 1999 the Company changed its
name to The Financial Commerce Network, Inc.
13
<PAGE>
Exhibit 2.1
ARTICLES OF INCORPORATION
OF
INTREX.COM,INC.
I, the person hereinafter named as Incorporator, for the purpose of
associating to establish a corporation, under the provisions and subject to the
requirements of Title 7, Chapter 78 of the Nevada Revised Statutes, and the acts
amendatory thereof, and hereinafter sometimes referred to as the General
Corporation Law of the State of Nevada, do hereby adopt and make the following
Articles of Incorporation:
FIRST: The name of the corporation (hereinafter called the Corporation)
is Intrex.com, Inc.
SECOND: The name of the Corporation's resident agent in the State of
Nevada is CSC Services of Nevada, Inc., and the street address of the said agent
where process may be served upon the corporation is 502 East John Street, Suite
E, Carson City, Nevada. The mailing address and the street address of the said
resident agent are identical.
THIRD: The Corporation is authorized to issue a total of 60,000,000
shares consisting of 10,000,000 shares of preferred stock having a par value of
$0.001 per share and 50,000,000 shares of common stock having a par value of
$0.001 per share. The powers, preferences, rights, qualifications, limitations,
or restrictions of the shares of stock of each class and series which the
Corporation is authorized to issue, is as follows:
PREFERRED STOCK. Shares of Preferred Stock may be issued from time to
time in one or more series as may be determined by the board of directors. Each
series shall be distinctly designated. All shares of any one series of the
Preferred Stock shall be alike in every particular, except that there may be
different dates from which dividends thereon, if any, shall be cumulative, if
made cumulative. The powers, preferences, participating, optional, and other
rights of each such series and the qualifications, limitations, or restrictions
thereof, if any, may differ from those of any and all other series at any time
outstanding. Except as hereinafter provided, the board of directors of this
Corporation is hereby expressly granted authority to fix by resolution or
resolutions adopted prior to the issuance of any shares of each particular
series of preferred Stock, the designation, powers, preferences, and relative
participating, optional, and other rights, and the
<PAGE>
qualifications, limitations, and restrictions thereof, if any, of such series,
including, without limiting the generality of the foregoing the following:
(i) The distinctive designation of, and the number of shares
of Preferred Stock which shall constitute, each series, which number may be
increased (except as otherwise fixed by the board of directors) or decreased
(but not below the number of shares thereof outstanding) from time to time by
action of the board of directors;
(ii) The rate and times at which, and the terms and conditions
upon which dividends, if any, on shares of the series shall be paid, the extent
of preferences or relations, if any, of such dividends to the dividends payable
on any other class or classes of stock of the Corporation or on any series of
Preferred Stock and whether such dividends shall be cumulative or
non-cumulative.
(iii) The right, if any, of the holders of shares of the same
series to convert the same into, or exchange the same for any other class or
classes of the Corporation and the terms and conditions of such conversion or
exchange;
(iv) Whether shares of the series shall be subject to
redemption, and the redemption price or prices including, without limitation, a
redemption price or prices payable in shares of any class or classes of stock of
the Corporation, cash or other property and the time or times at which, and the
terms and conditions on which, shares of the series may be redeemed;
(v) The rights, if any, of the holders of shares of the series
upon voluntary or involuntary liquidation, merger, consolidation, distribution,
or sale of assets, dissolution, or winding up of the Corporation;
(vi) The terms of any sinking fund or redemption or purchase
account, if any, to be provided for shares of the series; and
(vii) The voting powers, if any, of the holders of shares of
the series which may, without limiting the generality of the foregoing, include
(A) the right to more or less than one vote per share on any or all matters
voted on by the shareholders, and (B) the right to vote as a series by itself or
together with other series of preferred Stock or together with all series of
Preferred Stock as a class, on such matters, under such circumstances, and on
such conditions as the board of
2
<PAGE>
directors may fix, including, without limitation, the right, voting as a series
by itself or together with other series of Preferred Stock or together with all
series of Preferred Stock as a class, to elect one or more directors of the
Corporation in the event there shall have been a default in the payment of
dividends on any one or more series of Preferred Stock or under such other
circumstances and on such conditions as the board of directors my determine.
No holder of any of the shares of any class of the Corporation shall be
entitled as of right to subscribe for, purchase, or otherwise acquire any shares
of any class of the Corporation which the Corporation proposes to issue or any
rights or options which the Corporation proposes to grant for the purchase of
shares of any class of the Corporation or for the purchase of any shares, bonds,
securities, or obligations of the Corporation which are convertible into or
exchangeable for, or which carry any rights, to subscribe for, purchase, or
otherwise acquire shares of any class of the Corporation; and any and all of
such shares, bonds, securities, or obligations of the Corporation, whether now
or hereafter authorized or created, may be issued, or may be reissued or
transferred if the same have been reacquired and have treasury status, and any
and all of such rights and options may be granted by the Board of Directors to
such persons, firms, corporations, and associations, and for such lawful
consideration, and on such terms, as the Board of Directors in its discretion
may determine, without first offering the same, or any thereof, to any said
holder.
FOURTH: The governing board of the Corporation shall be styled as a
"Board of Directors," and any member of said Board shall be styled as a
"Director."
The number of members constituting the first Board of Directors of the
Corporation is five; and the names and the post office box or street address,
either residence or business, of said members are as follows:
Name Address
---- -------
Richard H. Bach 63 Wall Street, 21st Floor
New York, New York 10005
Carl R. Walston 63 Wall Street, 21st Floor
New York, New York 10005
David M. Weiss 63 Wall Street, 21st Floor
New York, New York 10005
Ara Proudian 63 Wall Street, 21st Floor
New York, New York 10005
Laurence H. Lentchner 63 Wall Street, 21st Floor
New York, New York 10005
3
<PAGE>
The number of directors of the Corporation may be increased or
decreased in the manner provided in the By-Laws of the Corporation; provided,
that the number of directors shall never be less than one. In the interim
between election of directors by stockholders entitled to vote, all vacancies,
including vacancies caused by an increase in the number of directors and
including vacancies resulting from the removal of directors by the stockholders
entitled to vote which are not filled by said stockholders, may be filled by the
remaining directors, though less than a quorum.
FIFTH: The name and the post office box or street address, either
residence or business, of the incorporator signing these Articles of
Incorporation are as follows:
Name Address
---- -------
Toni Srour Snow Becker Krauss P.C.
605 Third Avenue
New York, New York 10158
SIXTH: The Corporation shall have perpetual existence.
SEVENTH: The personal liability of the directors of the Corporation is
hereby eliminated to the fullest extent permitted by the General Corporation Law
of the State of Nevada, as the same may be amended and supplemented.
EIGHTH: The Corporation may, to the fullest extent permitted by the
General Corporation Law of the State of Nevada, as the same may be amended and
supplemented, indemnify any and all persons whom it shall have power to
indemnify under said Law from and against any and all of the expenses,
liabilities, or other matters referred to in or covered by said Law, and the
indemnification provided for herein shall not be deemed exclusive of any other
rights to which those indemnified may be entitled under any Bylaw, 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 such
office, and shall continue as to a person who has ceased to be a director,
officer, employee, or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
NINTH: The Corporation may engage in any lawful activity.
TENTH: The Corporation reserves the right to amend, alter, change, or
repeal any provision contained in these Articles of Incorporation in the manner
now or hereafter prescribed by statute, and all rights conferred upon
stockholders herein are granted subject to this reservation.
4
<PAGE>
IN WITNESS WHEREOF, I do hereby execute these Articles of
Incorporation on May 13, 1999.
------------------------------------
Toni Srour
STATE OF NEW YORK )
)ss.:
COUNTY OF NEW YORK )
On this 13th day of May 1999, personally appeared before me, a Notary
Public in and for the State and County aforesaid, Toni Srour, known to me to be
the person described in and who executed the foregoing Articles of
Incorporation, and who acknowledged to me that he executed the same freely and
voluntarily and for the uses and purposes therein mentioned.
WITNESS my hand and official seal, the day and year first above
written.
------------------------------------
Notary Public
(Notarial Seal)
5
<PAGE>
Exhibit 2.2
AMENDED AND RESTATED
BY-LAWS
INTREX.COM, INC.
(A Nevada Corporation)
ARTICLE I
OFFICES
SECTION 1. REGISTERED OFFICE. The registered office of the Corporation
within the State of Nevada shall be in Carson City, Nevada.
SECTION 2. OTHER OFFICES. The Corporation may also have an office or
offices other than said registered office at such place or places, either within
or without the State of Nevada, as the Board of Directors shall from time to
time determine or the business of the Corporation may require.
ARTICLE II
MEETINGS OF STOCKHOLDERS
SECTION 1. PLACE OF MEETINGS. All meetings of the stockholders for the
election of directors or for any other purpose shall be held at any such place,
either within or without the State of Nevada, as shall be designated from time
to time by the Board of Directors and stated in the notice of meeting or in a
duly executed waiver thereof.
SECTION 2. ANNUAL MEETING. The Annual Meeting of the Stockholders shall
be held at such place, either within or without the State of Nevada, and at such
date and time as shall be designated by the Board of Directors from time to time
subsequent to the year of incorporation and stated in the notice of meeting or
in a duly executed waiver thereof. At such Annual Meeting, the Stockholders
shall elect, by a plurality vote, that number of Directors equal to the number
of Directors of the Class whose term expires at such meeting (or, if fewer, the
number of Directors properly nominated and qualified for election) to hold
office until the second succeeding Annual Meeting of Stockholders after their
election, and may transact such other business as may properly be brought before
the meeting.
SECTION 3. SPECIAL MEETINGS. Special meetings of the stockholders,
unless otherwise prescribed by statute, may be called at any time by the Board
of Directors or the Chairman of the Board, if one shall have been elected, or
the President.
SECTION 4. NOTICE OF MEETINGS. Except as otherwise expressly required
by statute, written notice of each annual and special meeting of the
stockholders stating the date, place and hour of the meeting, and, in the case
of a special meeting, the purpose or purposes for which the meeting is
<PAGE>
called, shall be given to each stockholder of record entitled to vote thereat
not less than ten (10) or more than sixty (60) days before the date of the
meeting. Business transacted at any special meeting of stockholders shall be
limited to the purposes stated in the notice. Notice shall be given personally
or by mail and, if by mail, shall be sent in a postage prepaid envelope,
addressed to the stockholder at his address as it appears on the records of the
Corporation. Notice by mail shall be deemed given at the time when the same
shall be deposited in the United States mail, postage prepaid. Notice of any
meeting shall not be required to be given to any person who attends such
meeting, except when such person attends the meeting in person or by proxy 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, or who, either before or after the meeting, shall submit a signed
written waiver of notice, in person or by proxy. Neither the business to be
transacted at, nor the purpose of, an annual or special meeting of stockholders
need be specified in any written waiver of notice.
SECTION 5. LIST OF STOCKHOLDERS. The officer who has charge of the
stock ledger of the Corporation shall prepare and make, at least ten days before
each meeting of stockholders, a complete list of the stockholders entitled to
vote at the meeting, arranged in alphabetical order, showing the address of 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, town or village where
the meeting is to be held, which place shall be specified in the notice of
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 the meeting during the
whole time thereof, and may be inspected by any stockholder who is present.
SECTION 6. QUORUM, ADJOURNMENTS. The holders of a majority of the
voting power of the issued and outstanding stock of the Corporation entitled to
vote thereat, present in person or represented by proxy, shall constitute a
quorum for the transaction of business at all meetings of stockholders, except
as otherwise provided by statute or by the Certificate of Incorporation. If,
however, such quorum shall not be present or represented by proxy at any meeting
of stockholders, the stockholders entitled to vote thereat, present in person or
represented by proxy, shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until a quorum
shall be present or represented by proxy. At such adjourned meeting at which a
quorum shall be present or represented by proxy, any business may be transacted
which might have been transacted at the meeting as originally called. If the
adjournment is for more than thirty days, or, if after adjournment a new record
date is set, a notice of the adjourned meeting shall be given to each
stockholder of record entitled to vote at the meeting.
SECTION 7. ORGANIZATION. At each meeting of the stockholders, the
Chairman of the Board, if one shall have been elected, or in his absence or if
one shall not have been elected, the President shall act as chairman of the
meeting. The Secretary, or in his absence or inability to act, the person whom
the chairman of the meeting shall appoint secretary of the meeting, shall act as
secretary of the meeting and keep the minutes thereof.
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SECTION 8. ORDER OF BUSINESS. The order of business at all meetings of
the stockholders shall be as determined by the chairman of the meeting.
SECTION 9. VOTING. Except as otherwise provided by statute or the
Certificate of Incorporation, each stockholder of the Corporation shall be
entitled at each meeting of the stockholders to one vote for each share of
capital stock of the Corporation standing in his name on the record of
stockholders of the Corporation:
(a) on the date fixed pursuant to the provisions of Section 6 of
Article V of these By-Laws as the record date for the determination of the
stockholders who shall be entitled to notice of and to vote at such meeting; or
(b) if no such record date shall have been so fixed, then at the close
of business on the date next preceding the day on which notice thereof shall be
given, or, if notice is waived, at the close of business on the date next
preceding the day on which the meeting is held.
Each stockholder entitled to vote at any meeting of the stockholders
may authorize another person or persons to act for him by a proxy signed by such
stockholder or his attorney-in fact but no proxy shall be voted after three
years from its date, unless the proxy provides for a longer period. Any such
proxy shall be delivered to the secretary of the meeting at or prior to the time
designated in the order of business for so delivering such proxies. When a
quorum is present at any meeting, the vote of the holders of a majority of the
voting power of the issued and outstanding stock of the Corporation entitled to
vote thereon, present in person or represented by proxy, shall decide any
question brought before such meeting, unless the question is one upon which by
express provision of statute or of the Certificate of Incorporation or of these
By-Laws, a different vote is required, in which case such express provision
shall govern and control the decision of such question. Unless required by
statute, or determined by the chairman of the meeting to be advisable, the vote
on any question need not be by ballot. On a vote by ballot, each ballot shall be
signed by the stockholder voting, or by his proxy, if there be such proxy, and
shall state the number of shares voted.
SECTION 10. INSPECTORS. The Board of Directors may, in advance of any
meeting of stockholders, appoint one or more inspectors to act at such meeting
or any adjournment thereof. If any of the inspectors so appointed shall fail to
appear, the chairman of the meeting shall, or if inspectors shall not have been
appointed, the chairman of the meeting may, appoint one or more inspectors to
act at the meeting. Each inspector, before entering upon the discharge of his
duties shall take and sign an oath faithfully to execute the duties of inspector
at such meeting with strict impartiality and according to the best of his
ability. The inspectors shall determine the number of shares of capital stock of
the Corporation outstanding and the voting power of each, the number of shares
represented at the meeting, the existence of a quorum, the validity and effect
of proxies, and shall receive and count and tabulate all votes, ballots or
consents, hear and determine all challenges and questions arising in connection
with the right to vote, determine the results, and do such acts as are proper to
conduct the election or vote with fairness to all stockholders. The inspectors
shall determine and retain for a reasonable period of time a record of the
disposition of any challenges
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made to any determination by the inspectors. The inspectors shall certify their
determination as to the number of shares represented at the meeting, and their
count of all votes and ballots. Inspectors need not be stockholders.
SECTION 11. ACTION BY CONSENT. Whenever the vote of stockholders at a
meeting thereof is required or permitted to be taken for or in connection with
any corporate action, by any provision of any applicable statute or pursuant to
or in accordance with the Corporation's Certificate of Incorporation or of these
By-Laws, the meeting and vote of stockholders may be dispensed with, and the
action taken without such a meeting, without prior notice and without a vote, if
a consent or consents in writing, setting forth the action so taken, shall be
signed by the holders of outstanding stock having not less than the minimum
number of votes that would be necessary to authorize or take such action at a
meeting at which all shares of stock of the Corporation entitled to vote thereon
were present and voted.
ARTICLE III
BOARD OF DIRECTORS
SECTION 1. GENERAL POWERS. The business and affairs of the Corporation
shall be managed by or under the direction of the Board of Directors. The Board
of Directors may exercise all such authority and powers of the Corporation and
do all such lawful acts and things as are not by statute or the Certificate of
Incorporation directed or required to be exercised or done by the stockholders.
SECTION 2. NUMBER, QUALIFICATIONS, ELECTION AND TERM OF OFFICE. The
number of Directors may be fixed, from time to time, by the affirmative vote of
a majority of the entire Board of Directors. Any decrease in the number of
Directors in any Class shall be effective at the time of the next succeeding
Annual Meeting of Stockholders at which that Class shall next stand for
election. Directors need not be stockholders. Directors shall be elected at each
Annual Meeting of Shareholders by a plurality of the votes cast and shall hold
office until their respective successors have been duly elected and qualified or
until their earlier death, resignation or removal.
SECTION 2A. NOMINATIONS FOR THE BOARD. Nominations for the election of
directors may be made by the Board of Directors or by a stockholder entitled to
vote in the election of directors. A stockholder entitled to vote in the
election of directors, however, may make such a nomination only if written
notice of such stockholder's intent to do so has been given, either by personal
delivery or by United States mail, postage prepaid, and received by the
Corporation with respect to an election to be held at an annual meeting of
stockholders, not later than 120 nor more than 180 days prior to the first
anniversary of the preceding year's annual meeting (or, if the date of the
annual meeting is changed by more than twenty (20) days from such anniversary
date, within ten (10) days after the date the Corporation mails or otherwise
gives notice of the date of such meeting).
Each stockholder's notice of intent to make a nomination shall set
forth: (i) the name(s) and address(es) of the stockholder who intends to make
the nomination and of the person or persons to
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be nominated; (ii) a representation that the stockholder (a) is a holder of
record of stock of the Corporation entitled to vote at such meeting, (b) will
continue to hold such stock through the date on which the meeting is held, and
(c) intends to appear in person or by proxy at the meeting to nominate the
person or person specified in the notice; (iii) 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
nomination is to be made by the stockholder; (iv) such other information
regarding each nominee proposed by such stockholder as would be required to be
included in a proxy statement filed pursuant to Regulation 14A promulgated under
Section 14 of the Securities Exchange Act of 1934, as amended, as now in effect
or hereafter modified, had the nominee been nominated by the Board of Directors;
and (v) the consent of each nominee to serve as director of the Corporation if
so elected. The Corporation may require any proposed nominee to furnish such
other information as may reasonably be required by the Corporation to determine
the qualifications of such person to serve as a director.
SECTION 3. PLACE OF MEETINGS. Meetings of the Board of Directors shall
be held at such place or places, within or without the State of Nevada, as the
Board of Directors may from time to time determine or as shall be specified in
the notice of any such meeting.
SECTION 4. ANNUAL MEETING. The Board of Directors shall meet for the
purpose of organization, the election of officers and the transaction of such
other business, as soon as practicable after each annual meeting of the
stockholders, on the same day and at the same place where such annual meeting
shall be held. Notice of such meeting need not be given. In the event such
annual meeting is not so held, the annual meeting of the Board of Directors may
be held at such other time or place (within or without the State of Nevada) as
shall be specified in a notice thereof given as hereinafter provided in Section
7 of this Article III.
SECTION 5. REGULAR MEETINGS. Regular meetings of the Board of Directors
shall be held at such time and place as the Board of Directors may fix. If any
day fixed for a regular meeting shall be a legal holiday at the place where the
meeting is to be held, then the meeting which would otherwise be held on that
day shall be held at the same hour on the next succeeding business day. Notice
of regular meetings of the Board of Directors need not be given except as
otherwise required by statute or these By-Laws.
SECTION 6. SPECIAL MEETINGS. Special meetings of the Board of Directors
may be called by the Chairman of the Board, if one shall have been elected, or
by two or more directors of the Corporation or by the President.
SECTION 7. NOTICE OF MEETINGS. Notice of each special meeting of the
Board of Directors (and of each regular meeting for which notice shall be
required) shall be given by the Secretary as hereinafter provided in this
Section 7, in which notice shall be stated the time and place of the meeting.
Except as otherwise required by these By-Laws, such notice need not state the
purpose of such meeting. Notice of each such meeting shall be mailed, postage
prepaid, to each director, addressed to him at his residence or usual place of
business, by first-class mail, at least two days
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before the day on which such meeting is to be held, or shall be sent addressed
to him at such place by telegraph, cable, telex, telecopier or other similar
means, or be delivered to him personally or be given to him by telephone, or
other similar means, at least twenty-four hours before the time at which such
meeting is to be held. Notice of any such meeting need not be given to any
director who shall, either before or after the meeting, submit a signed waiver
of notice or who shall attend such meeting, except when he shall attend 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.
SECTION 8. QUORUM AND MANNER OF ACTING. A majority of the entire Board
of Directors shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, and, except as otherwise expressly required
by statute or the Certificate of Incorporation or these ByLaws, the act of a
majority of the directors present at any meeting at which a quorum is present
shall be the act of the Board of Directors. In the absence of a quorum at any
meeting of the Board of Directors, a majority of the directors present thereat
may adjourn such meeting to another time and place. Notice of the time and place
of any such adjourned meeting shall be given to the directors unless such time
and place were announced at the meeting at which the adjournment was taken, in
which case such notice shall only be given to the directors who were not present
thereat. At any adjourned meeting at which a quorum is present, any business may
be transacted which might have been transacted at the meeting as originally
called. The directors shall act only as a Board and the individual directors
shall have no power as such, provided, however, that, in the event of a tied
vote, the Chairman, or in his absence the President, shall have the right to a
vote to break the tie.
SECTION 9. ORGANIZATION. At each meeting of the Board of Directors, the
Chairman of the Board, if one shall have been elected, or, in the absence of the
Chairman of the Board or if one shall not have been elected, the President (or,
in his absence, another director chosen by a majority of the directors present)
shall act as chairman of the meeting and preside thereat. The Secretary, or, in
his absence, any person appointed by the chairman shall act as secretary of the
meeting and keep the minutes thereof.
SECTION 10. RESIGNATIONS. Any director of the Corporation may resign at
any time by giving written notice of his resignation to the Corporation. Any
such resignation shall take effect at the time specified or, if the time when it
shall become effective shall not be specified therein, immediately upon its
receipt. Unless otherwise specified therein, the acceptance of such resignation
shall not be necessary to make it effective.
SECTION 11. VACANCIES. Any vacancy in the Board of Directors, whether
arising from death, resignation, removal, an increase in the number of Directors
or any other cause, may be filled by the vote of a majority of the Directors
then in office, though less than a quorum, or the sole remaining Director. Each
Director so elected shall hold office until the next Annual Meeting of
Stockholders at which the term of the Class to which such Director has been
elected expires and until his successor shall have been elected and qualified,
or until his earlier death, resignation or removal.
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SECTION 12. REMOVAL OF DIRECTORS. The Stockholders may remove a
Director only for cause, such removal to be effected at a Special Meeting of
Stockholders called for that purpose. A Director may not be removed by the Board
of Directors.
SECTION 13. COMMITTEES. The Board of Directors may, by resolution
passed by a majority of the entire Board of Directors, designate one or more
committees, including any executive committee, each committee to consist of one
or more of the directors of the Corporation. The Board of Directors may
designate one or more directors as alternate members of any committee, who may
replace any absent member at any meeting of the committee. Except to the extent
restricted by statute or the Certificate of Incorporation, each such committee,
to the extent provided in the resolution creating it, shall have and may
exercise all the authority of the Board of Directors. Each committee shall keep
regular minutes of its meetings and report the same to the Board of Directors.
SECTION 14. ACTION BY CONSENT. Unless restricted by the Certificate of
Incorporation, any action required or permitted to be taken by the Board of
Directors or any committee thereof may be taken without a meeting if all members
of the Board of Directors or such committee consent in writing to the adoption
of a resolution authorizing the action. The resolution and the written consents
thereto by the members of the Board of Directors or such committee shall be
filed with the minutes of the proceedings of the Board of Directors or such
committee.
SECTION 15. TELEPHONIC MEETING. Unless restricted by the Certificate of
Incorporation, any one or more members of the Board of Directors or any
committee thereof may participate in a meeting of the Board of Directors or such
committee by means of a conference telephone or similar communications equipment
allowing all persons participating in the meeting to hear each other at the same
time. Participation by such means shall constitute presence in person at a
meeting.
ARTICLE IV
OFFICERS
SECTION 1. NUMBER AND QUALIFICATIONS. The officers of the Corporation
shall be elected by the Board of Directors and shall include the President, one
or more Vice-Presidents, the Secretary, the Treasurer, and the Chairman of the
Board of Directors. If the Board of Directors wishes it may also elect other
officers (including one or more Assistant Treasurers and one or more Assistant
Secretaries), as may be necessary or desirable for the business of the
Corporation. Any two or more offices may be held by the same person. Each
officer shall hold office until the first meeting of the Board of Directors
following the next annual meeting of the stockholders, and until his successors
shall have been elected and shall have qualified, or until his death, or until
he shall have resigned or have been removed, as hereinafter provided in these
By-Laws.
SECTION 2. RESIGNATIONS. Any officer of the Corporation may resign at
any time by giving written notice of his resignation to the Board of Directors
or the Chairman of the Board or the President or the Chief Executive officer or
the Secretary. Any such resignation shall take effect at
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the time specified therein or, if the time when it shall become effective shall
not be specified therein, immediately upon its receipt. Unless otherwise
specified therein, the acceptance of any such resignation shall not be necessary
to make it effective.
SECTION 3. REMOVAL. Any officer of the Corporation may be removed,
either with or without cause, at any time, by the Board of Directors at any
meeting thereof.
SECTION 4. CHAIRMAN OF THE BOARD. The Chairman of the Board, if one
shall have been elected, shall be a member of the Board, an officer of the
Corporation and, if present, shall preside at each meeting of the Board of
Directors or of the stockholders. He shall advise and counsel with the
President, and in his absence with other executives of the Corporation, and
shall perform such other duties as may from time to time be assigned to him by
the Board of Directors.
SECTION 5. THE PRESIDENT. The President shall be the chief operating
officer of the Corporation. He shall, in the absence of the Chairman of the
Board or if a Chairman of the Board shall not have been elected, preside at each
meeting of the Board of Directors or the stockholders. He shall perform all
duties incident to the office of President and chief executive officer and such
other duties as may from time to time be assigned to him by the Board of
Directors.
SECTION 6. VICE-PRESIDENTS. Each Vice-President shall perform all such
duties as from time to time may be assigned to him by the Board of Directors,
the Chief Executive Officer or the President. At the request of the Chief
Executive Officer or President or in their absence or in the event of their
inability or refusal to act, the Vice-President, or if there shall be more than
one, the Vice-Presidents in the order determined by the Board of Directors (or
if there be no such determination, then the Vice-Presidents in the order of
their election), shall perform the duties of the President, and, when so acting,
shall have the powers of and be subject to the restrictions placed upon the
President in respect of the performance of such duties.
SECTION 7. TREASURER. The Treasurer shall:
(a) have charge and custody of, and be responsible for, all the funds
and securities of the Corporation;
(b) keep full and accurate accounts of receipts and disbursements in
books belonging to the Corporation;
(c) deposit all moneys and other valuables to the credit of the
Corporation in such depositories as may be designated by the Board of Directors
or pursuant to its direction;
(d) receive, and give receipts for, moneys due and payable to the
Corporation from any source whatsoever;
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(e) disburse the funds of the Corporation and supervise the investments
of its funds, taking proper vouchers therefor;
(f) render to the Board of Directors, whenever the Board of Directors
may require, an account of the financial condition of the Corporation; and
(g) in general, perform all duties incident to the office of Treasurer
and such other duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 8. SECRETARY. The Secretary shall:
(a) keep or cause to be kept in one or more books provided for the
purpose, the minutes of all meetings of the Board of Directors, the committees
of the Board of Directors and the stockholders;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws and as required by law;
(c) be custodian of the records and the seal of the Corporation and
affix and attest the seal to all certificates for shares of the Corporation
(unless the seal of the Corporation on such certificates shall be a facsimile,
as hereinafter provided) and affix and attest the seal to all other documents to
be executed on behalf of the Corporation under its seal;
(d) see that the books, reports, statements, certificates and other
documents and records required by law to be kept and filed are properly kept and
filed; and
(e) in general, perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to him by the Board
of Directors.
SECTION 9. COMPENSATION. The compensation of the officers of the
Corporation for their services as such officers shall be fixed from time to time
by the Board of Directors. An Officer of the Corporation shall not be prevented
from receiving compensation by reason of the fact that he is also a director of
the Corporation.
ARTICLE V
STOCK CERTIFICATES AND THEIR TRANSFER
SECTION 1. STOCK CERTIFICATES. Each holder of stock of the Corporation
shall be entitled to have a certificate, in such form as shall be approved by
the Board of Directors, certifying the number of shares of the Corporation owned
by him. The certificates representing shares shall be signed in the name of the
Corporation by the Chairman of the Board or the President or a Vice-
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President and by the Secretary, an Assistant Secretary, the Treasurer or an
Assistant Treasurer and sealed with the seal of the Corporation (which seal may
be a facsimile, engraved or printed); provided, however, that where any such
certificate is countersigned by a transfer agent, or is registered by a
registrar (other than the corporation or one of its employees), the signatures
of the Chairman of the Board, President, Vice President, Secretary, Assistant
Secretary, Treasurer or Assistant Treasurer upon such certificates may be
facsimiles, engraved or printed. In case any officer who shall have signed any
such certificate shall have ceased to be such officer before such certificate
shall be issued, it may nevertheless be issued by the Corporation with the same
effect as if such officer were still in office at the date of their issue.
SECTION 2. BOOKS OF ACCOUNT AND RECORD OF STOCKHOLDERS. There shall be
kept correct and complete books and records of account of all the business and
transactions of the Corporation. There shall also be kept, at the office of the
Corporation or at the office of its transfer agent, a record containing the
names and addresses of all stockholders of the Corporation, the number of shares
of stock held by each, and the dates when they became the holders of record
thereof.
SECTION 3. TRANSFER OF SHARES. Transfer of shares of the Corporation
shall be made on the records of the Corporation only upon authorization by the
registered holder thereof, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary or with a transfer agent,
and on surrender of the certificate or certificates for such shares properly
endorsed or accompanied by a duly executed stock transfer power and the payment
of all taxes thereon. The person in whose names shares shall stand on the record
of stockholders of the Corporation shall be deemed the owner thereof for all
purposes as regards the Corporation. Whenever any transfer of shares shall be
made for collateral security and not absolutely and written notice thereof shall
be given to the Secretary or to a transfer agent, such fact shall be noted on
the records of the Corporation.
SECTION 4. TRANSFER AGENTS AND REGISTRARS. The Board of Directors may
appoint, or authorize any officer or officers to appoint, one or more transfer
agents and one or more registrars and may require all certificates for shares of
stock to bear the signature of any of them.
SECTION 5. REGULATIONS. The Board of Directors may make such additional
rules and regulations, not inconsistent with these By-Laws, as it may deem
expedient concerning the issue, transfer and registration of certificates for
shares of the Corporation.
SECTION 6. FIXING OF RECORD DATE. The Board of Directors may fix, in
advance, a date not more than sixty (60) nor less than ten (10) days before the
date then fixed for the holding of any meeting of the stockholders of record of
voting shares of stock at such time, and no others, shall be entitled to notice
of and to vote at such meeting. The Board of Directors may fix, in advance, a
date not more than sixty (60) days preceding the date fixed for the payment of
any dividend or the making of any distribution or the allotment of any rights in
respect of any change, conversion or exchange of stock, as the record date for
the determination of the stockholders entitled to receive any such
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dividend, distribution, or allotment, and in such case only the stockholders of
record at the time so fixed shall be entitled to receive such dividend,
distribution, or allotment.
SECTION 7. LOST, DESTROYED OR MUTILATED CERTIFICATES. The holder of any
certificate representing shares of the Corporation shall immediately notify the
Corporation of any loss, destruction or mutilation of such certificate, and the
Corporation may issue a new certificate in the place of any certificate
theretofore issued by it which the owner thereof shall allege to have been lost
or destroyed or which shall have been mutilated. The Board of Directors may, in
its discretion, require such owner of his legal representatives to give to the
Corporation a bond in such sum, limited or unlimited, and in such form and with
such surety or sureties as the Board of Directors in its absolute discretion
shall determine, to indemnify the Corporation against any claim that may be made
against it on account of the alleged loss of destruction of any such
certificate, or the issuance of such new certificate.
ARTICLE VI
INDEMNIFICATION
SECTION 1. GENERAL. The Corporation shall indemnify and hold harmless,
to the fullest extent permitted by applicable law as it presently exists or may
hereafter be amended, 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 (other than an action
by or in the right of the Corporation) by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation, or is or was serving at
the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or upon a
plea of NOLO CONTENDRE or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
SECTION 2. DERIVATIVE ACTIONS. The Corporation shall indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Corporation to procure a judgment in its favor by reason of the fact that he is
or was a director, officer, employee or agent of the Corporation, or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorneys' fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in
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good faith and in a manner he reasonably believed to be in or not opposed to the
best interests of the Corporation and except that no indemnification shall be
made in respect of any claim, issue or matter as to which such person shall have
been adjudged to be liable to the Corporation unless and only to the extent that
the Court of Chancery of the State of Nevada or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper.
SECTION 3. PREPAYMENT OF EXPENSES. The Corporation shall pay the
expenses incurred in defending any proceeding in advance of its final
disposition, provided, however, that the payment of expenses incurred by a
director or officer in advance of the final disposition of the proceeding shall
be made only upon receipt of an undertaking by the director or officer to repay
all amounts advanced if it should be ultimately determined that the director or
officer is not entitled to be indemnified under this Article or otherwise.
SECTION 4. NON-EXCLUSIVITY OF RIGHTS. The rights conferred on any
person by this Article VI shall not be exclusive of any other rights which such
person may have or hereafter acquire under any statute, provision of the
Certificate of Incorporation, these By-Laws, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 5. AMENDMENT OR REPEAL. Any repeal or modification of the
foregoing provisions of this Article VI shall not adversely affect any right or
protection hereunder of any person in respect of any act or omission occurring
prior to the time of such repeal or modification.
SECTION 6. INSURANCE. The Corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of the
Corporation as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity, or arising out of
his status as such, whether or not the Corporation would have the power to
indemnify him against such liability under the provisions of this Article VI.
ARTICLE VII
GENERAL PROVISIONS
SECTION 1. SEAL. The seal of the Corporation shall bear the name of the
Corporation and shall be in such form as shall be approved by the Board of
Directors.
SECTION 2. FISCAL YEAR. The fiscal year of the Corporation shall
commence January 1, but may thereafter be changed by resolution of the Board of
Directors.
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SECTION 3. CHECKS, NOTES, DRAFTS, ETC. All checks, notes, drafts or
other orders for the payment of money of the Corporation shall be signed,
endorsed or accepted in the name of the corporation by such officer, officers,
person or persons as from time to time may be designated by the Board of
Directors or by an officer or officers authorized by the Board of Directors to
make such designation.
SECTION 4. EXECUTION OF CONTRACTS, DEEDS, ETC. The Board of Directors
may authorize any officer or officers, agent or agents, in the name and on
behalf of the Corporation to enter into or execute and deliver any and all
deeds, bonds, mortgages, contracts and other obligations or instruments, and
such authority may be general or confined to specific instances.
ARTICLE VIII
AMENDMENTS
These By-Laws may be amended or repealed or new By-Laws adopted (a) by
action of the stockholders entitled to vote thereon at any annual or special
meeting of stockholders or (b) by action of the Board of Directors at a regular
or special meeting thereof. Any By-Law made by the Board of Directors may be
amended or repealed by action of the stockholders at any annual or special
meeting of stockholders.
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TEAM SYSTEMS, INC.
HARDWARE SALE AND PURCHASE AGREEMENT
This Agreement made as of September 1, 1999 by and between TCAM Systems, Inc.,
("Seller"), with its principal office at 7 Hanover Square, New York, NY 10004
and Intrex.Com, Inc. ("Purchaser"), with its principal office at 181 Genesee
Street, 6th Floor, Utica, NY 13501.
1. DEFINITIONS
For purposes of this Agreement, the following definitions shall apply:
1.1 "Computer Hardware" shall mean the computer hardware (including Hardware
Software, as defined below) and devices listed on Schedule A, attached
hereto and made a part hereof.
1.2 "Hardware Software" shall mean such software that is included with the
hardware and delivered by the manufacturer as part of such hardware.
1.3 "Installation Services" shall mean the installation, set-up, test and
related services for the Computer Hardware.
1.4 "User Documentation" shall mean the documentation normally made available
by the manufacturer(s) of Computer Hardware relating to the use of the
Computer Hardware.
2. TITLE
2.1 Seller hereby sells to the Purchaser the Computer Hardware identified in
Schedule A hereof Upon payment to Seller of the purchase price set forth in
Schedule A, title to the Computer Hardware shall vest in the Purchaser.
2.2 Title in and to the User Documentation and Hardware Software shall remain
solely in the Seller (or the manufacturer of the Computer Hardware, as the
case may be), and, subject to the payment of the purchase price set forth
in Schedule A, Purchaser shall only obtain a personal, nonexclusive license
to use the User Documentation and Hardware Software in connection with
Purchaser's operation and use of the Computer Hardware. Purchaser shall not
copy or disclose outside of the Purchaser the User Documentation or
Hardware Software without the Seller's prior written consent.
3. SHIPMENT AND PACKAGING
3.1 The mode of shipment of the Computer Hardware shall be selected by Seller
and the cost of such shipment shall be added to the purchase price set
forth in Schedule A.
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3.2 The Computer Hardware shall be packaged in accordance with Seller's then
current packaging specifications for Computer Hardware for the mode of
shipment that the Seller selects, and the cost of such packaging shall be
included in the purchase price of Schedule A.
3.3 The Computer Hardware shall be delivered f.o.b. Seller's shipping point
(manufacturing facility or staging area), and the Purchaser assumes all
risk of loss therefor thereafter.
4. PURCHASE PRICE, TAXES AND TERMS
4.1 The purchase price for the Computer Hardware shall be as set forth in
Schedule A and shall be paid in United States Dollars. The purchase price,
together with all applicable shipping charges, other special charges and
taxes, including any and all penalties, shall be payable in full to the
Seller within thirty (30) days of the date of invoice issued by Seller. In
addition to any other rights Seller may have, Purchaser agrees to pay a
late payment fee of 1.5 percent (1.5%) per month (or part thereof,
calculated on the basis of the actual number of days during such month)
from the due date until payment has been made in full.
4.2 The Purchaser shall pay all taxes based on or in any way measured by this
Agreement, the Computer Hardware or any services related thereto, including
any personal property taxes but excluding taxes based on Seller's net
income. If the Purchaser elects to challenge the applicability of any such
taxes, the Purchaser shall pay such taxes to the Seller and the Purchaser
may thereafter challenge such taxes and seek refund thereof.
5. INSTALLATION SERVICES
Seller shall perform the Installation Services in accordance with the
Consulting Services Agreement entered into between the parties on August
18, 1999, and maintain the site for the Computer Hardware in accordance
with the Facility Management Agreement entered into between the parties on
August 18, 1999.
6. NEGATION OF WARRANTY
6.1 THE COMPUTER HARDWARE IS PROVIDED ON AN "AS IS" BASIS, WITHOUT ANY WARRANTY
OF ANY KIND. EXCEPT AND TO THE EXTENT EXPRESSLY PROVIDED IN THIS AGREEMENT,
THERE ARE NO WARRANTIES, EXPRESSED OR IMPLIED, INCLUDING, BUT NOT LIMITED
TO, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR PARTICULAR PURPOSE.
6.2 Except as provided for in the Facility Management Agreement entered into
between the parties on August 18, 1999, the Purchaser shall be solely
responsible for the selection, use, efficiency and suitability of the
Computer Hardware.
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7. NEGATION OF PROPRIETARY RIGHTS INDEMNITY
THE COMPUTER HARDWARE IS PROVIDED ON AN "AS IS" BASIS AND THE SELLER SHALL
HAVE NO LIABILITY TO PURCHASER FOR THE INFRINGEMENT OF ANY PATENTS,
COPYRIGHTS, TRADE SECRETS, OR OTHER PROPRIETARY RIGHTS BY THE COMPUTER
HARDWARE OR ANY PORTION THEREOF.
8. TERMINATION/CANCELLATION
8.1 This Agreement may be terminated or cancelled by the Seller if-
(i) Purchaser falls to pay Seller the purchase price;
(ii) Purchaser is in default of any other provision of this Agreement and
such default has not been cured within thirty (30) days of written
notice thereof given by the Seller; or
(iii) Purchaser becomes insolvent or seeks protection, voluntarily or
involuntarily, under any bankruptcy laws.
8.2 In the event of any termination/cancellation of this Agreement, the Seller
may:
(i) Declare all amounts owed Seller to be immediately due and payable;
(ii) Enter the Purchaser's premises and repossess the Computer Hardware and
all other items supplied by Seller; and
(iii) Cease performance of all Seller's obligations hereunder without
liability to Purchaser.
8.3 The foregoing rights and remedies of Seller shall be cumulative and in
addition to all other rights and remedies available to the Seller in law
and in equity.
9. LIMITATION OF LIABILITY
9.1 IN NO EVENT SHALL SELLER BE LIABLE TO PURCHASER FOR ANY INDIRECT, SPECIAL
OR CONSEQUENTIAL DAMAGES OR LOST PROFITS, EVEN IF THE SELLER HAS BEEN
ADVISED OF THE POSSIBILITY THEREOF, ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE PERFORMANCE OR BREACH THEREOF. SELLER'S LIABILITY TO
PURCHASER HEREUNDER, IF ANY, SHALL IN NO EVENT EXCEED $10,000 OR THE TOTAL
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OF THE AMOUNTS PAID TO SELLER HEREUNDER BY THE PURCHASER, WHICHEVER IS
LESS.
9.2 IN NO EVENT SHALL SELLER BE LIABLE TO PURCHASER FOR ANY DAMAGES RESULTING
FROM OR RELATED TO ANY FAILURE OR DELAY OF THE SELLER IN THE DELIVERY OR
INSTALLATION OF THE COMPUTER HARDWARE OR IN THE PERFORMANCE OF INSTALLATION
SERVICES OR OTHER SERVICES UNDER THIS AGREEMENT.
9.3 NO ACTION, REGARDLESS OF FORM, ARISING OUT OF THE TRANSACTIONS UNDER THIS
AGREEMENT MAY BE BROUGHT BY CUSTOMER MORE THAN TWELVE (12) MONTHS FROM THE
CLAIMED ACT OR OMISSION GIVING RISE TO THE ACTION BY PURCHASER AGAINST
SELLER UNLESS APPLICABLE STATUE OF LIMITATIONS PROVIDES A SHORTER PERIOD,
IN WHICH CASE SUCH SHORTER PERIOD SHALL APPLY.
10. SOFTWARE
Any and all software (except the Hardware Software) provided by Seller to
Purchaser shall be subject to the terms and conditions set forth in the
respective License Agreements for such software.
11. GENERAL
11.1 This Agreement shall be deemed effective upon execution by both par-ties.
11.2 This Agreement is the exclusive agreement between the parties relating to
the subject matter hereof and supersedes all prior understandings,
writings, proposals, representations or communications, oral or written, of
either party. No modifications of this Agreement shall be valid or binding
on either party unless acknowledged in writing and signed by the duly
authorized officer of each party.
11.3 Any claim or dispute relating to this Agreement (including without
limitation, claims involving allegations in tort) shall be governed by the
laws of the State of New York. The parties hereby: (a) waive all right to
trial by jury; (b) consent to the jurisdiction of the Supreme Court of the
State of New York and of the United States District Court for the Southern
District of New York; and (c) consent that any process or notice of motion
or other application to the court or judge thereof may be served within or
without the State of New York by registered or certified mail, or by
personal service, provided a reasonable time for appearance is allowed.
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IN WITNESS WHEREOF, the parties as of the date first set forth above, have
caused this Agreement to be executed by their duly authorized representatives.
TCAM SYSTEMS, INC. INTREX.COM, INC.
BY:__________________________ BY:___________________________
NAME:________________________ NAME:_________________________
TITLE:_______________________ TITLE:________________________
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<PAGE>
HARDWARE SALE AND PURCHASE AGREEMENT
SCHEDULE A
- COMPUTER HARDWARE -
[TO BE ADDED]
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<PAGE>
TWIN SUN, INC.
MAINTENANCE AGREEMENT
Agreement made as of the 26th day of August, 1999 by and between Twin Sun,
Inc., with its principal office at 360 N. Sepulveda 131. #2055, El Segundo,
CA 90245 ("Twin Sun") and Intrex.Com, Inc. ("Customer") with its principal
office located at 181 Genesee Street, 6th Floor, Utica, NY 13501.
WHEREAS, Twin Sun has licensed to Customer such program products as specified
in the Program Product License Agreement ("License Agreement"), executed on
even date herewith and more particularly identified in Schedule A annexed
thereto ("Program Products"); and
WHEREAS, Customer wishes to have Twin Sun to perform Maintenance Services (as
defined below) with respect to the Program Products pursuant to the following
terms and conditions.
NOW THEREFORE, in consideration for the mutual promises the parties agree as
follows:
1. DEFINITIONS
As used in this document the following terms shall have the following meanings:
1.1 "AGREEMENT" Shall mean this document, any attached exhibits or schedules
and any amendments hereto which are in writing and signed by both parties.
1.2 "BUSINESS HOURS" Shall have the meaning stated in Section 3.2.
1.3 "CUSTOMER" Shall have the meaning stated in the preamble.
1.4 "ERROR" Shall mean program imperfections or failures that prevent the
Program Products from operating in all material respects in accordance with
the Specifications attached as Schedule C to the License Agreement.
1.5 "FUNCTIONAL ENHANCEMENT" Shall mean a new version of the Program Products,
which contains additional functions compared to the functions described in
Schedule C to the License Agreement.
1.6 "HARDWARE" Shall mean the hardware identified in Schedule D to the License
Agreement.
1.7 "LICENSE AGREEMENT" Shall have the meaning stated in the preamble.
1.8 "MAINTENANCE SERVICES" Shall have the meaning stated Article 3.
<PAGE>
1.9 "PROGRAM PRODUCTS" Shall have the meaning stated in the preamble.
1.10 "TECHNICAL ENHANCEMENT" Shall mean an updated version of a Program Product
which contain corrections to Errors, not reported by Customer or technical
enhancement to the functions described in Schedule C to the License
Agreement.
1.11 "TWIN SUN" Shall have the meaning stated in the preamble.
2. SOFTWARE COVERED
The software covered in this Agreement is limited to the Program Products
licensed by Customer and any modifications, changes, corrections, Technical
Enhancements or Functional Enhancements thereto performed by Twin Sun or
its agents.
3. MAINTENANCE SERVICES
The maintenance services to be provided hereunder (the "Maintenance
Services") shall consist of the services specified in Sections 3.2-3.7, to
be performed on a best effort basis.
3.2 Twin Sun will provide an agent in New York City who shall be available by
telephone between the hours of 9:00 A.M. through 5:00 P.M. (Eastern Time)
during business days in New York City ("Business Hours") for the purpose of
receiving reports of Errors from Customer. Twin Sun will notify Customer of
the name of such agent and the number where the agent can be reached. TCAM
Systems, Inc., located at 7 Hanover Square, New York, will initially act as
agent. TCAM Systems, Inc. can be reached at (212) 269 0200.
3.3 In response to a reported Error, which has been documented and duplicated
by Customer in reasonable detail and provided to Twin Sun's agent, Twin Sun
shall provide Customer with assistance and the necessary code to correct
the Error within reasonable time.
3.4 Corrections to Errors will be delivered to Customer on data carriers which
will be sent by courier services, accompanied by instructions for
transferring the data or programs to Customer's Hardware (as defined in the
License Agreement). Twin Sun may, however, at its option correct Errors by
patching, provided such method will cause the necessary correction.
3.5 Twin Sun may from time to time, at its discretion, offer to Customer
Technical Enhancements. If Customer accepts a Technical Enhancement, Twin
Sun may license its use by Customer at such additional license fees to be
determined by Twin Sun and subject to the same terms as are contained
herein and the License Agreement. Notwithstanding the foregoing, a
Technical Enhancement in the form of Error corrections shall be provided to
Customer at no charge.
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3.6 In the event that Customer does not accept a Technical Enhancement, Twin
Sun will provide the services described above in relation to the then
current version of such Program Product. Twin Sun may charge Customer Twin
Sun's current time and material rates for the correction of Errors which
would have been avoided had Customer installed the Technical Enhancement.
3.7 Twin Sun may from time to time offer to Customer Functional Enhancements.
If Customer accepts a Functional Enhancement, Twin Sun will license the use
of such Functional Enhancements to Customer at such additional license fees
to be determined by Twin Sun and subject to the same terms as are contained
herein and in the License Agreement.
3.8 Modifications to the Program Products requested by Customer beyond the
scope of the Maintenance Services set out in Sections 3.2 to 3.7, including
without limitation, modifications caused by changes to Customer's hardware
or operating systems environment, shall be performed by Twin Sun on a
reasonable efforts basis in accordance with Twin Sun's Consulting Services
Agreement on a time and material billing basis applying Twin Sun's then
current consulting rates.
4. CUSTOMER SUPPORT
Customer agrees to reasonably cooperate with Twin Sun and including without
limitation to provide Twin Sun with dumps, as requested, and with
sufficient support and test time on Customer's computer system to duplicate
any problem and certify that said problem has been corrected.
5. CUSTOMER RESPONSIBILITY
Customer shall implement and maintain backup and recovery procedures. In
the event Twin Sun is required to perform backup or recovery, Customer
shall pay Twin Sun's then current time and material rates therefor.
6. TELECOMMUNICATIONS
At Twin Sun's request, Customer shall install and maintain for the duration
of this Agreement, a modem and associated dial-up telephone line and/or
leased line providing Twin Sun access to the Program Products. Customer
shall pay for installation, maintenance and use of such equipment and
associated telephone line and/or leased line use charges. Twin Sun, at its
option, shall use this modem and telephone line and/or leased line in
connection with Error correction. Such access by Twin Sun shall be subject
to prior approval by Customer in each instance.
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<PAGE>
7. MAINTENANCE FEES AND OTHER REQUIRED PAYMENTS
7.1 All fees shall be paid in United States dollars by wire transfer to the
account specified by Twin Sun from time to time, unless otherwise agreed.
7.2 During the first full year of the term of this Agreement, Twin Sun shall
provide Maintenance Services to Customer for a yearly fee equal to US$
30,000. The annual maintenance fee for successive years during the term
hereof shall be subject to mutual agreement on or before ninety (90) days
prior to the end of the then current term but not to exceed by more than
ten percent (10%) of the immediately preceding year's maintenance fee.
Maintenance fees shall be payable in four (4) installments quarterly on the
first day of each calendar quarter in advance. Twin Sun will invoice sixty
(60) days in advance of each period.
7.3 In addition to the fees set forth in Section 7.2 above, Customer shall pay
an additional annual maintenance fee equal to seven and one half percent
(7.5%) of the amount of any fees charged by Twin Sun to Customer for
Technical Enhancements, Functional Enhancements or modifications to the
Program Products.
7.4 In the event that any failure of the Program Products to operate is due to
causes other than an Error and/or due to modifications made by Customer,
Customer shall pay Twin Sun Twin Sun's then current time and material
charges for Twin Sun's time spent in connection with such problem.
7.5 If Customer requests Twin Sun to provide Maintenance Services outside of
Business Hours, Customer shall pay Twin Sun, Twin Sun's then current time
and material consulting charges per man hour.
7.6 Customer shall reimburse Twin Sun for any out-of-pocket expenses incurred,
including travel to and from Customer site, lodging, meals, telephone,
facsimile and shipping, as may be necessary in connection with the duties
performed under this Agreement by Twin Sun. Customer shall pay Twin Sun's
then current time and material billing rates for time spent by Twin Sun
personnel in traveling between Twin Sun's office and Customer's office, if
Customer's office is beyond a fifteen (15) mile radius of Twin Sun's
office. For travel time outside of Business Hours, Customer shall pay Twin
Sun's then current time and material billing rates for time spent by Twin
Sun personnel in traveling between Twin Sun's office and Customer's office,
irrespective of the distance.
7.7 Invoices shall be payable within thirty (30) days of the date of invoice.
In addition to any other rights Twin Sun may have, Customer agrees to pay,
a late payment fee on any amount overdue for payment by Customer at the
rate of one and one-half percent (1.5%) per month (or part thereof
calculated on the basis of the actual number of days during such month)
from the due date until payment has been made in full.
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<PAGE>
7.8 Except for taxes on Twin Sun's income levied by the United States and New
York State Government, the charges and fees set forth herein do not include
national federal, state, county or local sales, property, investment use
and/or other applicable taxes however designated and whether levied or
based upon charges or fees arising under this Agreement. If any such taxes
are hereafter levied or charged retroactively or otherwise, such taxes
shall be the responsibility of Customer and shall be paid by Customer.
8. INSTALLATION
Customer shall be responsible for installing and testing any program code
delivered by Twin Sun hereunder. In the event that Twin Sun installs or
tests any program code delivered hereunder, Customer shall pay Twin Sun its
then current time and material rates therefor.
9. TITLE TO SOFTWARE SYSTEMS AND CONFIDENTIALITY
9.1 Any changes, corrections, modifications, Technical Enhancements or
Functional Enhancements in the form of new or partial programs or
documentation as may be provided under this Agreement shall remain
proprietary to Twin Sun and shall be subject to Articles and/or Sections 2,
3.2, 4, 8, 9, 10 and 15.6 of the License Agreement as if such changes,
corrections, Technical Enhancements and Functional Enhancements were part
of the Licensed Programs (as defined in the License Agreement).
9.2 Twin Sun shall not disclose to any third party or use for Twin Sun's own
purposes Customer's confidential inforination concerning Customer's
business, trade secrets, methods or processes, without the prior written
consent of Customer. Excluded from the foregoing confidentiality and
limitation obligation is inforination which: (a) is included into the
Licensed Programs; (b) at the time of disclosure is part of the public
domain other than through a breach of this Agreement; (c) at the time of
disclosure, is already known to Twin Sun; (d) subsequent to the time of
disclosure, becomes part of the public domain through no fault of Twin Sun;
or (e) is independently developed by Twin Sun without a breach of this
Agreement.
10. EXCLUSION OF LIABILITY
10.1 TWIN SUN WARRANTS THAT THE MAINTENANCE SERVICES PROVIDED HEREUNDER WILL BE
PERFORMED IN A GOOD AND WORKMANLIKE MANNER. EXCEPT AS EXPRESSLY STATED
HEREIN, TWIN SUN MAKES AND CUSTOMER RECEIVES NO WARRANTY, EXPRESS OR
IMPLIED, AND THERE IS EXPRESSLY EXCLUDED ALL WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
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<PAGE>
10.2 TWIN SUN SHALL HAVE NO LIABILITY WITH RESPECT TO ITS OBLIGATIONS UNDER THIS
AGREEMENT FOR CONSEQUENTIAL, SPECIAL, EXEMPLARY, OR INCIDENTAL DAMAGES EVEN
IF TWIN SUN HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10.3 TWIN SUN'S TOTAL LIABILITY TO CUSTOMER HEREUNDER SHALL IN NO EVENT EXCEED
THE AMOUNTS ACTUALLY PAID BY CUSTOMER TO TWIN SUN UNDER THIS AGREEMENT
DURING THE IMMEDIATELY PRECEDING SIX (6) MONTH PERIOD.
11. TERMINATION
11.1 The term of this Agreement shall be one (1) year commencing upon expiration
of the warranty period specified under the License Agreement, and shall
automatically continue for successive one year periods thereafter unless
written notice of non-renewal is given by either party to the other at
least ninety (90) days prior to the scheduled expiration of the then
current term.
11.2 In addition to what is set forth in Section 11.1, either party may
terminate this Agreement immediately by written notice in the event of any
breach by the other party under this Agreement which is not cured within
thirty (30) days after receipt of notice of such breach.
11.3 In the event the License Agreement is tenninated by either party this
Agreement shall automatically terminate.
11.4 In addition to Sections 11.1, 11.2 and 11.3, Twin Sun may terminate this
Agreement immediately if any modifications are made to the Program Products
by an entity other than Twin Sun or if the Program Products are not being
executed on the Hardware.
11.5 In the event of tennination of this Agreement, all maintenance fees or
charges payable, which have accrued as of the termination date, shall
become due and payable. Notwithstanding the foregoing, in the event of
termination by Customer on the grounds of Twin Sun's breach of and default
under this Agreement Customer shall be entitled to receive a pro-rata
refund of fees paid in advance prior to the effective date of termination.
Further, Twin Sun shall have the right to remove any Twin Sun provided
diagnostic software loaded on Customer's Hardware.
12. GENERAL
12.1 No modifications of this Agreement shall be valid or binding on either
party unless acknowledged in writing and signed by the duly authorized
officer of each party. All notices or other communications given under this
Agreement shall be in writing, sent to
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<PAGE>
the address set forth as principal office in the preamble or such other
addresses as Twin Sun or Customer may designate in writing.
12.2 Both parties understand and agree that violation of any provision of this
Agreement may cause damage to the other party in an amount which is
impossible or extremely difficult to ascertain. Accordingly, without
limitation to any other remedy available at law, the injured party shall be
entitled to seek injunctive relief restraining the other party from
continuing to violate the terms and provisions of this Agreement.
12.3 Neither party shall be liable to the other for any delay or failure to
perform its obligations under this Agreement (other than Customer's
obligation to remit payment hereunder) if such delay or failure arises from
any cause beyond the reasonable control of such party, including but not
limited to labor disputes, strikes, other labor or industrial disturbances,
acts of God, floods, lightning, shortages of materials, utility or
communication failures, earthquakes, casualty, war, riots, actions,
restrictions, regulations or orders of any government, agency or
subdivision thereof.
12.4 The parties acknowledge that each has read all the terms of this Agreement
and is authorized to enter into it. Further, both parties agree to be bound
by the tenns and that it represents the complete and exclusive statement of
the agreement between the parties which supersedes all prior communications
and agreements between the parties relating to the subject matter of this
Agreement.
12.5 If any provision of this Agreement shall be deemed invalid and/or
inoperative, under any applicable statute or rule of law, it is to that
extent to be deemed modified so as to provide the most similar enforceable
economic effect and shall have no effect as to any other provision
contained in this Agreement.
12.6 Both parties shall designate a responsible individual with adequate
authority to serve as interface with the other party hereto. The individual
designated by Customer shall be responsible for providing or coordinating
the provision of such information about Customer and its practice, external
and internal procedures and such other information as Twin Sun may
reasonably require from time to time in order to fulfill its obligations
under this Agreement.
12.7 Any forbearance or delay on the part of either party in enforcing any
provision of this Agreement or any of its rights hereunder shall not be
construed as a waiver of such provision or of a right to enforce it.
12.8 Upon prior written notice to Customer Twin Sun shall be entitled to assign
its rights, obligations and liabilities under this Agreement to any
affiliated company.
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12.9 This Agreement is for the sole and exclusive benefit of Twin Sun and
Customer and shall not be deemed to be for the direct or indirect benefit
of the clients or customers of Customer or Twin Sun or any entities
associated in any way with Customer or Twin Sun. Any entities associated
with Customer in any business relationship shall not be deemed to be third
party beneficiaries of this Agreement or have any other contractual
relationship with Twin Sun for any reason.
12.10 Twin Sun is an independent contractor to Customer and this Agreement does
not create a partnership, joint venture, employment, agency or other
similar relationship between the parties.
12.10 The provisions of Articles and/or Sections 7, 9, 10, 11.4 and 12.11 shall
survive termination of this Agreement or any portion hereof Furthermore,
any provision that is by implication intended to continue in force after
termination shall not be affected by termination of this Agreement or any
portion hereof.
12.11 Any claim or dispute relating to this Agreement (including without
limitation, claims involving allegations in tort) shall be governed by the
laws of the State of New York. The parties hereby: (a) waive all right to
trial by jury; (b) consent to the jurisdiction of the Supreme Court of the
State of New York and of the United States District Court for the Southern
District of New York; and (c) consent that any process or notice of motion
or other application to the court or judge thereof may be served within or
without the State of New York by registered or certified mail, or by
personal service, provided a reasonable time for appearance is allowed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
TWIN SUN, INC. INTREX.COM, INC.
BY:__________________________ BY: ___________________________
NAME:________________________ NAME:__________________________
TITLE:_______________________ TITLE: ________________________
DATE: _______________________ DATE:__________________________
<PAGE>
TWIN SUN, INC.
CONSULTING SERVICES AGREEMENT
Agreement made as of the 26th day of August, 1999 by and between Twin Sun,
Inc., with its principal office at 360 N. Sepulveda Bl. #2055, El Segundo, CA
90245 ("Twin Sun") and Intrex.Com, Inc. ("Customer") with its principal
office at 181 Genesee Street, 6th Floor, Utica, NY 13501.
Twin Sun and Customer agree that Twin Sun shall provide consulting and
programming services and related software services ("Work") to Customer and that
such services shall be provided in accordance with the following terms and
conditions:
1. STATEMENT OF WORK
1.1 Twin Sun shall furnish (i) computer consulting, programming services and
related software services as described in Schedule A; and (ii) install the
software programs identified in Schedule B. Twin Sun shall use reasonable
efforts to perform the Work in accordance with the Project Plan set out in
Schedule C (the "Project Plan").
1.2 Additional consulting, programming services and related software services
(the "Additional Services") shall be provided pursuant to individual "Work
Orders" (an example which is enclosed as Schedule D) executed by both
parties and containing such terms and conditions as the parties mutually
agree. In the event of conflict between this Agreement and such Work Order,
the terrns of the Work Order shall prevail.
1.3 All code or software delivered hereunder shall be subject to the ternis and
conditions of the Program Product License Agreement between the parties of
even date herewith.
2. CHARGES
2.1 For the part of the Work described in Schedules A, B and C, as well as for
any Additional Services, Customer shall pay Twin Sun Twin Sun's then
current time and material charges. Twin Sun's current rate classifications
are based on a seven person hour day and are stated in United States
dollars as set forth in Schedule E. Twin Sun's rate classifications are
subject to change by Twin Sun upon three (3) months' prior written notice
to Customer.
2.2 Customer shall pay any reasonable expenses incurred by Twin Sun in
performing the Work, including without limitation, transportation, travel,
accommodations, meals, telephone and facsimile expenses.
2.3 Invoices shall be submitted monthly and are payable by Customer, in United
States dollars, within thirty (30) days from receipt. Without prejudice to
any rights and remedies Twin Sun may have under this Agreement or
otherwise, Twin Sun reserves the right to charge Customer and Customer
agrees to pay a late payment fee at the rate of one and one half
<PAGE>
percent (1.5%) per month (or part thereof) from the due date for payment
until payment in full has been made.
2.4 Except for taxes on Twin Sun's income levied by the United States and New
York State government, the charges and fees set forth herein do not include
national, federal, state, county or local sales, property, use and/or other
applicable taxes, however designated and whether levied or based upon this
Agreement, the Work rendered hereunder, its use, or any end product
resulting therefrom. If any such taxes are hereafter levied or charged
retroactively or otherwise, such taxes together with any interest and/or
penalties assessed thereon shall be the responsibility of Customer and
shall be paid by Customer.
3. PENALTIES
If the Installation is not completed within the time set out in the Project
Plan or if the installed software has been rejected on reasonable
grounds("Delay"), Twin Sun shall pay Customer a penalty of USS 500 per full
day of Delay up to a maximum of twenty (20) days, i.e. a maximum penalty of
US$ 10,000. The penalty shall be offset against the License fee due
according to the Program Product License Agreement between the parties of
even date herewith and shall be the exclusive remedy if Twin Sun does not
install the software in accordance with the Project Plan.
4. TERM
This Agreement is effective from the date hereof and shall remain in force
until either party tenninates the Agreement with three (3) months prior
written notice, provided that both parties first complete all obligations
under any then executed Work Orders.
5. CONFIDENTIALITY AND RIGHTS IN DATA
5.1 Twin Sun shall not disclose to any third party or use for any purposes
other than in connection with its obligations hereunder Customer's
confidential inforination concerning Customer's business, customers, trade
secrets, methods or processes, without the prior written consent of
Customer. Excluded from the foregoing confidentiality obligation is
information which: (a) at the time of disclosure is part of the public
domain other than through a breach of this Agreement; (b) at the time of
disclosure, is already known to Twin Sun; (c) subsequent to the time of
disclosure, becomes part of the public domain through no fault of Twin Sun;
or (d) is independently developed by Twin Sun without a breach of this
Agreement.
5.2 The Work and all related information received by Customer from Twin Sun,
whether written or oral, have been developed by Twin Sun at great
expenditures of time, resources and money. Therefore, Customer shall use a
high degree of care to preserve and safeguard the confidentiality of the
Work and all related information received from Twin Sun. The
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Work shall not be duplicated and/or disclosed to others, in whole or in
part, without Twin Sun's prior written consent. The foregoing restriction
shall not apply to employees of Customer to the extent that such
duplication or disclosure is reasonably necessary to Customer's use of the
Work. However, it is agreed that Customer will take precautions to insure
that all such employees are under an express obligation in writing to
maintain confidentiality with respect thereto. Customer shall enforce any
violation of its confidentiality agreement by its employees for the benefit
of Twin Sun. A copyright notice on any data does not by itself constitute
or evidence a publication or public disclosure.
5.3 Unless agreed otherwise in connection with a specific Work Order, all
ideas, concepts, inventions, designs, techniques, software programs, and
products conceived, designed or developed by Twin Sun or jointly with
Customer under this Agreement shall be the exclusive property of Twin Sun.
In furtherance of the foregoing, Customer shall without charge to Twin Sun
but at Twin Sun's expense, execute, acknowledge and/or deliver all papers
and documents as may be necessary or advisable to vest ownership of such
ideas, concepts, inventions, designs, techniques, software programs and
products in Twin Sun and to enable Twin Sun to obtain copyright, trademark
or patent registrations therefor. For avoidance of doubt, such ideas,
concepts, inventions, designs, techniques and products developed by the
Customer on its own, are the exclusive property of Customer and shall be
covered by Section 5.1 hereof.
6. NO WARRANTY
EXCEPT FOR WHEN TWIN SUN HAS PROVIDED AN EXPLICIT WARRANTY IN A WORK ORDER,
CUSTOMER AGREES THAT THE WORK (INCLUDING THE RESULTS AND OUTCOMES THEREOF)
IS PROVIDED WITHOUT ANY WARRANTY OF ANY KIND. TWIN SUN MAKES NO WARRANTY,
EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION THE IMPLIED WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT TO THE
WORK.
7. LIMITED LIABILITY
7.1 CUSTOMER AGREES THAT TWIN SUN'S LIABILITY HEREUNDER FOR ANY DAMAGES
INCLUDING LIABILITY FOR BREACH OF WARRANTY, NEGLIGENCE, STRICT LIABILITY IN
TORT, OR OTHERWISE, REGARDLESS OF FORM OF ACTION, SHALL BE LIMITED TO THE
TOTAL AMOUNT ACTUALLY PAID BY CUSTOMER TO TWIN SUN FOR WORK DURING THE SIX
(6) MONTH PERIOD IMMEDIATELY PRECEDING THE TIME THAT THE CAUSE OF ACTION
AROSE OR ONE HUNDRED THOUSAND DOLLARS ($100,000) WHICHEVER IS LESS.
CUSTOMER AGREES THAT THE FOREGOING SHALL BE ITS SOLE REMEDY AND EXPRESSLY
WAIVES ALL OTHERS.
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7.2 NO ACTION, REGARDLESS OF FORIN1, ARISING OUT OF THE TRANSACTIONS UNDER THIS
AGREEMENT MAY BE BROUGHT BY CUSTOMER MORE THAN TWELVE (12) MONTHS FROM THE
CLAIMED ACT OR OMISSION GIVING RISE TO THE ACTION BY CUSTOMER AGAINST TWIN
SUN, UNLESS THE APPLICABLE STATUTE OF LIMITATIONS PROVIDES A SHORTER
PERIOD, IN WHICH CASE SUCH SHORTER PERIOD SHALL APPLY.
7.3 IN NO EVENT SHALL TWIN SUN OR CUSTOMER BE LIABLE FOR INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
8. RESPONSIBILITIES OF CUSTOMER
8.1 Customer will designate prior to the commencement of Work under this
Agreement a project manager or administrator to whom all communications may
be addressed, and who shall have complete responsibility for Customer in
all aspects of this Agreement. (S)He shall be responsible for providing
Twin Sun's personnel with required inforination, data, and decisions
relative to technical requirements within three (3) working days from
receipt of Twin Sun's request, unless a mutually agreed upon extended
response date is established.
8.2 Customer will provide, at no charge to Twin Sun, the following:
(a) satisfactory office space and facilities for Twin Sun personnel when
assigned to Customer's premises for the perforinance of tasks under
this Agreement;
(b) telephone service, typing and data reproduction services necessary to
supportTwin Sun personnel while working on Customer premises; and
(c) necessary computer time, communication networks, computer operators
and tapes, terminal operators, disks and related supplies at
Customer's premises.
9. TERMINATION
In addition to what is set forth in Article 2, this Agreement shall
terminate immediately if Customer: (a) shall fail to comply with any term
or condition of this Agreement and such failure shall continue for a period
in excess of thirty (30) days after receipt of Twin Sun's notice advising
Customer of such failure; or (b) shall become insolvent or a party to any
bankruptcy or receivership proceeding or any similar action affecting the
affairs or the property of Customer. Customer shall upon such termination
return to Twin Sun the result of any Work for which Twin Sun has not been
paid together with all copies and modifications thereof in any form.
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10. GENERAL
10.1 No modifications of this Agreement shall be valid or binding on either
party unless acknowledged in writing and signed by the duly authorized
officer of each party. All notices or other communications given under this
Agreement shall be in writing, sent to the address hereinbefore set forth
as principal place of business or such other addresses as Twin Sun or
Customer may designate in writing.
10.2 Both parties understand and agree that violation of any provision of this
Agreement may cause damage to the other party in an amount which is
impossible or extremely difficult to ascertain. Accordingly, without
limitation to any other remedy available at law, the injured party shall be
entitled to seek injunctive relief restraining the other party from
continuing to violate the terms and provisions of this Agreement.
10.3 Neither party shall be liable to the other for any delay or failure to
perform its obligations under this Agreement (other than Customer's
obligation to remit Payment hereunder) if such delay or failure arises from
any cause beyond the reasonable control of such party, including but not
limited to labor disputes, strikes, other labor or industrial disturbances,
acts of God, floods, lightning, shortages of materials, utility or
communication failures, earthquakes, casualty, war, riots, actions,
restrictions, regulations or orders of any government, agency or
subdivision thereof
10.4 The parties acknowledge that each has read all the terms of this Agreement,
is authorized to enter into it, agrees to be bound by its terms and
conditions and that it is the complete and exclusive statement of the
agreement between the parties which supersedes all prior communications and
agreements relating to the subject matter of this Agreement.
10.5 If any provision of this Agreement shall be deemed invalid and/or
inoperative, under any applicable statute or rule of law, it is to that
extent to be deemed modified so as to provide the most similar enforceable
economic effect and shall have no effect as to any other provision
contained in this Agreement.
10.6 Any forbearance or delay on the part of either party in enforcing any
provision of this Agreement or any of its rights hereunder shall not be
construed as a waiver of such provision or of a right to enforce same.
10.7 This Agreement is for the sole and exclusive benefit of Twin Sun and
Customer and shall not be deemed to be for the direct or indirect benefit
of the clients or customers of Customer or Twin Sun or any entities
associated in any way with Customer or Twin Sun. Any entities associated
with Customer in any business relationship shall not be deemed to be third
party beneficiaries of this Agreement or have any other contractual
relationship with Twin Sun for any reason.
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10.8 The provisions of Articles and/or Sections 1.3, 5, 6, 7, and 10.8 shall
survive termination of this Agreement or any portion thereof Furthermore,
any provision that is by implication intended to continue in force after
termination shall not be affected by termination of this Agreement or any
portion hereof.
10.9 Any claim or dispute relating to this Agreement (including without
limitation, claims involving allegations in tort) shall be governed by the
laws of the State of New York. The parties hereby: (a) waive all right to
trial by jury; (b) consent to the jurisdiction of the Supreme Court of the
State of New York and of the United States District Court for the Southern
District of New York; and (c) consent that any process or notice of motion
or other application to the court or judge thereof may be served within or
without the State of New York by registered or certified mail, or by
personal service, provided a reasonable time for appearance is allowed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
* * *
TWIN SUN, INC. INTREX.COM, INC.
BY:__________________________ BY: ___________________________
NAME:________________________ NAME:__________________________
TITLE:_______________________ TITLE: ________________________
DATE: _______________________ DATE:__________________________
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CONSULTING SERVICES AGREEMENT
SCHEDULE A
- CONSULTING, PROGRAMMING SERVICES AND RELATED SOFTWARE SERVICES -
o HARDWARE AND DATABASE REQUIREMENT REVIEWS
o PROJECT PLANNING WITH MILESTONE REVIEWS
o INSTALLATION, ADAPTATION AND TRAINING
o CUSTOMER SYSTEM AMENDMENT REQUESTS
o DEVELOPMENT, MODIFICATIONS AND ENHANCEMENT OF SOFTWARE PROGRAMS
o INSTALLATION OF INTERNAL COMMUNICATION LINES
* * *
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CONSULTING SERVICES AGREEMENT
SCHEDULE B
- SOFTWARE PROGRAMS TO BE INSTALLED -
1. TWIN SUN'S WEBTRADE SYSTEM CONSISTING OF:
o Dynamic Perl-based HTML pages
o The Apache web server including mod-Perl
o Perl libraries for accessing TCAM's MA-Pl servers
o Custom graphics provided by the Customer for inclusion on
trading screens
Above software shall be installed at [ADDRESS]
2. STATIC HTML CONTENT PROVIDED BY INTREX. COM
Above software shall be installed at [ADDRESS]
* * *
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CONSULTING SERVICES AGREEMENT
SCHEDULE C
- PROJECT PLAN -
Day: Action:
- --------------------------------------------------------------------------------
September 10, 1999 The Installation shall have been completed
and the Licensed Program Products (as
defined in Schedule A to the Program
Product License Agreement of even date
herewith) shall have been accepted in
Accordance with Section 6.5 of the Program
Product License Agreement of even date
herewith.
- --------------------------------------------------------------------------------
* * *
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CONSULTING SERVICES AGREEMENT
SCHEDULED
- WORK ORDER -
Work Order #: _________________ Project Code ID #: ________________
Date of Order: _________________
Date Order
Received: _________________
Requested By: _________________ User Priority: ________________
Description of the work to be performed:
Analysis Performed By: ________________ Work Performed By: ________________
Date Analysis Performed: ________________ Date Completed: ________________
Estimated Number of Work to be
Days: ________________ Acceptance Tested: |_| Yes |_| No
CLIENT SIGNATURE:
_____________________________ Date: _____________________________
_____________________________ Date: _____________________________
TWIN SUN APPROVALS:
_____________________________ Date: _____________________________
_____________________________ Date: _____________________________
WORK RECEIVED AND ACCEPTED:
_____________________________ Date: _____________________________
* * *
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CONSULTING SERVICES AGREEMENT
SCHEDULE E
- DAILY CONSULTING SERVICES CHARGES -
PROJECT MANAGER/TEAM LEADER $1,500.00
CONSULTANT $1,000.00
The charges are based upon a person day comprised of seven (7) hours.
* * *
<PAGE>
TWIN SUN, INC.
PROGRAM PRODUCT LICENSE AGREEMENT
Agreement made as of the 26th day of August 1999 by and between Twin Sun, Inc.
("Twin Sun"), with its principal office at 360 N. Sepulveda Bl. #2055, El
Segundo, CA 90245 and Intrex.Com, Inc. ("Customer"), with its principal office
at 181 Genesee Street, 6th Floor, Utica, NY 13501.
1 . DEFINITIONS
As used in this document the following terms shall have the following meanings:
1.1 "ACCEPTANCE" shall mean that Customer shall have no further claims
under this
Agreement with respect to the function and performance of the Program
Products. (except claims under Articles 7 and 8).
1.2 "ACCEPTANCE TEST" shall mean the testing process for the Program
Products performed in accordance with the Test Plans.
1.3 "AGREEMENT" shall mean this agreement, any attached exhibits or
schedules and any amendments to this Agreement, which are in writing
and signed by both parties.
1.4 "CUSTOMER" shall have the meaning stated in the preamble.
1.5 "DOCUMENTATION" shall mean the standard technical and user operations
manuals for the Program Products.
1.6 "ERROR" shall mean an error in the code of the Program Products which
prevents the Program Products from operating in all material respects
in accordance with the Specifications.
1.7 "HARDWARE" shall mean Customer's hardware, identified in Schedule D to
this Agreement.
1.8 "LICENSE FEE" shall mean the license fee for each Licensed Program as
specified in Schedule B to this Agreement.
1.9 "LICENSED PROGRAMS" shall mean the Program Products and their
Documentation.
1.10 "OBJECT CODE FORMAT" shall mean the Program Products in a form which is
not convenient to human understanding of the respective program's logic
but which is appropriate for execution or interpretation by a computer.
1.11 "PROGRAM PRODUCTS" shall mean such software as identified in Schedule A
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1.12 "SOURCE CODE" shall mean a set of instructions expressed in a
non-machine language and from which the logic of a computer program can
be derived.
1.13 "SPECIFICATIONS" shall mean the functional description of the Program
Products identified in Schedule C to this Agreement.
1.14 "TEST PLANS" shall mean the objectives and procedures required to
demonstrate that the Program Products operate in all material respects
in accordance with the Specifications.
1.15 "TEST PERIOD" shall have the meaning stated in Section 6.2.
1.16 "TWIN SUN" shall mean Twin Sun, Inc., 360 N. Sepulveda Bl. #2055, El
Segundo, CA 90245.
1.17 "USE" shall mean to load, execute and display the Licensed Programs.
Additionally, Use shall include Customer's right to make one (1) copy
of the Licensed Programs for back-up or archival purposes.
2. LICENSE
2.1 Twin Sun hereby grants Customer a personal, nontransferable,
non-exclusive, and irrevocable license to Use one (1) copy of the
Program Products in its present normal business operation on the
Hardware. One copy of the Program Products may also be used on a
back-up computer during a reasonable, temporary period of inoperability
of the Hardware.
2.2 Customer shall not use the Licensed Programs in the operation of a
service bureau or any other manner which would result in the Use of the
Licensed Programs for processing transaction(s) to which Customer is
not a party. Notwithstanding the foregoing, Customer may let its
wholly-owned subsidiaries that are listed in Schedule E use the
Licensed Programs for processing their respective transactions.
Customer may upon written notice to Twin Sun add such new wholly-owned
subsidiary to the list that is incorporated or acquired in the future.
2.3 All Licensed Programs and modifications made to the Licensed Programs
shall remain the property of Twin Sun.
2.4 Customer shall not reverse engineer, decompile or disassemble the
Licensed Programs, which initially will be provided in Object Code
Format only.
2.5 The day.Twin Sun and all its affiliates stop offering maintenance of
the Licensed Programs, Customer shall be entitled to receive the Source
Code to the Licensed Programs, provided that Customer pays an
additional license fee corresponding to 50% of
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the License Fee paid by Customer at such day. The Source Code may be
used only in accordance with the terrns and conditions of this
Agreement.
3. DISCLOSURE
3.1 Twin Sun shall not disclose to any third party or use for Twin Sun's
own purposes Customer's confidential information concerning Customer's
business, trade secrets, methods or processes without the prior written
consent of Customer. Excluded from the foregoing confidentiality and
limitation obligation is information which: (a) is coded into the
Program Products; (b) at the time of disclosure is part of the public
domain other than through a breach of this Agreement; (c) at the time
of disclosure, is already known to Twin Sun; (d) subsequent to the time
of disclosure, becomes part of the public domain through no fault of
Twin Sun; or (e) is independently developed by Twin Sun without a
breach of this Agreement.
3.2 The Licensed Programs and all related information received by
Customer from Twin Sun, whether written or oral, have been developed
by Twin Sun at great expenditures of time, resources and money.
Therefore, Customer shall use a high degree of care to preserve and
safeguard the confidentiality of the Licensed Programs and all
related information received from Twin Sun. The Licensed Programs
shall not be duplicated and/or disclosed to others, in whole or in
part, without Twin Sun's prior written consent. The foregoing
restriction shall not apply to employees of Customer to the extent
that such duplication or disclosure is reasonably necessary to
Customer's Use of the Licensed Programs. However, it is agreed that
Customer will take precautions to insure that all such employees are
under an express obligation in writing to maintain confidentiality
with respect thereto. Customer shall enforce any violation of its
confidentiality agreement by its employees for the benefit of Twin
Sun.
3.3 The Licensed Programs, its logos, product names and other support
materials, if any, are either patented, copyrighted, trademarked, or
otherwise proprietary to Twin Sun. Customer agrees never to remove any
such notices and product identification. A copyright notice on the
Licensed Programs shall not be deemed in and of itself to constitute or
evidence a publication or public disclosure.
4. MODIFICATION
4.1 In the event that the Program Products later are provided to Customer
as Source Code, Customer, upon prior notice to Twin Sun, shall have the
night to modify and create derivative works of the Licensed Programs
through the services of its employees or independent contractors, who
shall prior to any such modification have entered into a written
confidentiality agreement with Customer reasonably satisfactory to Twin
Sun.
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<PAGE>
4.2 Customer's right to modify the Licensed Programs shall be subject to
the following conditions:
(a) prior to making any modifications or derivative works,
Customer shall first make an archive tape of the Program
Products which shall be maintained by Customer and at Twin
Sun's request, made available to Twin Sun at no charge;
(b) all modifications or derivative works shall be included in the
definition of Licensed Programs. Customer shall ensure that it
has executed agreements with its employees or independent
contractors to cause ownership of modifications to vest with
Twin Sun and shall perform any acts to cause ownership thereof
to vest in Twin Sun;
(c) no modification or derivative works shall allow Customer to
Use the Licensed Programs (or any portion thereof) to perform
functions other than those specified in the Specifications
without Twin Sun's prior written consent, which consent shall
not be unreasonably withheld, delayed or conditioned; and
(d) Customer shall defend, at its expense, any action brought
against Twin Sun which is based on any modification made by or
at the request of Customer to the Licensed Programs by an
entity other than Twin Sun which allegedly infringes a
copyright, patent or other proprietary right of a third party.
Customer shall pay all costs and damages awarded against Twin
Sun in such action which are attributable to such claim.
4.3 Any modification solely made by Customer in accordance with Section
4.1, may not be licensed to other parties by Twin Sun without prior
written approval by Customer, such approval not to be unreasonably
withheld, delayed or conditioned.
5. LICENSE FEES AND OTHER REQUIRED PAYMENTS
5.1 The License Fee shall be paid in United States dollars by wire transfer
to the account designated by Twin Sun from time to time or as otherwise
agreed.
5.2 Without duplication of any amount payable to Customer under the
Consulting Services Agreement between the parties of even date
herewith, Customer shall pay any expenses incurred by Twin Sun in
performing its obligations hereunder, including without limitation,
transportation, travel, accommodations, meals, telephone and facsimile
expenses, provided such expenses have been approved by Customer in
advance.
5.3 Customer shall in addition to the License Fees pay for any work
performed by Twin Sun to: (a) install the Program Products; (b) modify
the Program Products; or (c) maintain the Program Products (except
under the Warranty Section of this Agreement). Twin Sun shall
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<PAGE>
perform such work in accordance with Twin Sun's Consulting Services or
Maintenance Agreement, as applicable.
5.4 Invoices shall be issued as set out in Schedule B and shall be payable
within thirty (30) days of the date of invoice. In addition to any
other rights Twin Sun may have, Customer agrees to pay, a late payment
fee on any amount overdue for payment by Customer at the rate of one
and one-half percent (1.5%) per month (or part thereof calculated on
the basis of the actual number of days during such month) from the due
date until payment has been made in full.
5.5 Except for taxes on Twin Sun's income levied by the United States and
New York State Government, the charges and fees set forth herein do not
include national federal, state, county or local sales, property,
investment use and/or other applicable taxes however designated and
whether levied or based upon charges or fees arising under this
Agreement. If any such taxes are hereafter levied or charged
retroactively or otherwise, such taxes shall be the responsibility of
Customer and shall be paid by Customer.
6. TESTING AND CORRECTIONS
6.1 Customer shall within ten (10) days from signing or this Agreement
prepare Test Plans reasonably acceptable to Twin Sun and such data
necessary for performing the Acceptance Test. If requested by Customer,
TCAM will assist Customer in preparing the Test Plans. Such assistance
will be provided in accordance with the Consulting Services Agreement
of even date herewith.
6.2 Customer shall test the Program Products before it is put into a
production environment. Customer shall accept or reject the Program
Products following its tests in writing within five (5) days after
delivery of the Program Products to Customer or in the event
installation of the Program Products is performed by Twin Sun on
Customer's request, after notice from Twin Sun that the Program
Products or any portion thereof (if the Acceptance Test is performed in
stages) are ready to undergo the Acceptance Test ("Test Period").
6.3 Within two (2) days after perforinance of the Acceptance Test or
portion thereof (if the Acceptance Test is performed in stages),
Customer agrees either to give its Acceptance of each portion of the
Program Products on completion of the applicable Acceptance Test or to
disapprove such results and provide detailed written reasons for such
disapproval. If Customer does not accept the Program Products or the
respective portion thereof, it shall provide Twin Sun with sufficient
documentation supporting the Error giving rise to the non-acceptance
and shall duplicate the condition of the Program Products or portion
thereof which resulted in such non acceptance. Customer shall not
withhold its Acceptance for causes not attributable to Twin Sun.
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6.4 If the Program Products or any portion thereof fails to pass the
Acceptance Test, Twin Sun will correct all documented and duplicated
Errors. Within three (3) business days after such corrections have been
made, Customer will retest the Program Products or portion thereof
affected by the Errors. Such retest shall be completed within a time
period corresponding to the Test Period ("Retest Period"). Should a new
Error be detected the foregoing procedure will be repeated as necessary
until the Acceptance Test has been completed successfully. If, prior to
Acceptance by Customer, and after reasonable efforts by Twin Sun (which
shall not exceed one hundred twenty (120) days from Twin Sun's receipt
of sufficient documentation and duplication as specified in Section 6.3
relating to the respective Error), Twin Sun shall be unable to remedy
the respective Error in the Program Products, Customer, at its option,
shall be entitled to return the Licensed Programs to Twin Sun and Twin
Sun shall refund to Customer the License Fees actually paid to Twin Sun
by Customer. Upon such payment, this Agreement shall terminate with no
further obligation or liability on the part of either party.
6.5 Acceptance of the Program Products or any portion thereof shall be
deemed to have occurred upon the earlier to occur of the following: (a)
Customer's written acceptance of the applicable Acceptance Test
results; (b) at the end of the Test Period or Retest Period, as
applicable, if Customer has not given its written disapproval of the
test results, stating therein its reason for such disapproval in which
case Customer must duplicate the Errors within five (5) business days
of the date of its written disapproval; or (c) upon Customer's first
use of any portion of the Program Products in other than a test
environment.
6.6 Twin Sun shall be entitled to perforin all system diagnostics and error
corrections from Twin Sun's offices. Upon Acceptance Twin Sun shall
have the right to remove any by Twin Sun provided diagnostic software.
7. LIMITED WARRANTY
7.1 TWIN SUN WARRANTS THAT THE LICENSED PROGRAMS, UPON ACCEPTANCE AND FOR A
PERIOD OF THREE (3) MONTHS THEREAFTER, WILL OPERATE WITHOUT AN ERROR.
IN ORDER TO PROVIDE THE WARRANTY CONTEMPLATED BY THIS SECTION, CUSTOMER
SHALL DOCUMENT AND DUPLICATE ANY ERROR. CUSTOMER'S EXCLUSIVE REMEDY FOR
THE BREACH OF WARRANTY SHALL BE LIMITED TO THE CORRECTION OF THE ERROR
BY TWIN SUN AS PROMPTLY AS REASONABLY POSSIBLE AND IN A MANNER
DETERMINED BY TWIN SUN OR, AT THE OPTION OF TWIN SUN, TO REFUND PAYMENT
OF THE APPLICABLE LICENSED PROGRAM LICENSE FEE TO CUSTOMER UPON RETURN
OF THE LICENSED PROGRAM AND RELATED DOCUMENTATION BY CUSTOMER TO TWIN
SUN. EXCEPT FOR THE FOREGOING WARRANTY, TWIN SUN MAKES NO OTHER
WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, THE
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IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE.
7.2 THE WARRANTY PROVIDED HEREIN SHALL IMMEDIATELY TERMINATE UPON ANY
MODIFICATION MADE TO THE LICENSED PROGRAMS BY AN ENTITY OTHER THAN TWIN
SUN.
8. PATENT AND COPYRIGHT INDEMNIFICATION
Twin Sun will defend, at its expense, any lawsuit against Customer to
the extent that it is based on the claim that Customer's Use of the
Licensed Programs in the United States infringe a third party's
copyright, registered patent or other intellectual property right. Twin
Sun will pay any costs and damages finally awarded against Customer in
such action which directly result from such claim, provided that: (a)
Customer notifies Twin Sun immediately upon receiving notice that such
a claim has been threatened or instituted (whichever is first to occur)
in writing; (b) such claim is not based upon designs, information or
materials supplied to Twin Sun by Customer-, and (c) that such claim is
not based upon or attributable to any modifications made to the
Licensed Programs by or at the request of Customer. Twin Sun shall be
entitled to control the defense of any such claim, including without
limitation (a) the selection of counsel, (b) defense strategy, and (c)
settlement. Customer shall cooperate and assist Twin Sun (at Twin Sun's
expense) in the defense of such claim. If, as a result of any such
claim, litigation or threat thereof, Customer is permanently enjoined
from Using the Licensed Programs by a final, non-appealable decree,
Twin Sun at its option and expense may: (a) obtain for Customer the
right to continue to Use the Licensed Programs; or (b) may replace or
modify the Licensed Programs so as to settle such claim, litigation or
the threat thereof provided that such replacement contains
substantially the same functions. If such settlement, replacement or
modification of the Licensed Programs is not reasonably practical in
the opinion of Twin Sun, after giving due consideration to all factors
including financial expense, Twin Sun may discontinue and terminate
this Agreement upon written notice to Customer and shall refund to
Customer the unamortized portion of the License Fee actually paid
hereunder based upon a four (4) year straight-line depreciation. The
foregoing states the entire liability of Twin Sun with respect to any
infringement by the Licensed Programs or any parts thereof, and
Customer hereby expressly waives any other such liabilities.
9. LIMITED LIABILITY
9.1 TWIN SUN'S LIABILITY TO CUSTOMER INCLUDING LIABILITY FOR ANY BREACH OF
WARRANTY, NEGLIGENCE, STRICT LIABILITY IN TORT, OR OTHERWISE,
REGARDLESS OF FORM OF ACTION, SHALL BE LIMITED AS DESCRIBED IN ARTICLES
7 AND 8. TWIN SUN'S TOTAL LIABILITY (INCLUDING LIABILITY AS AFORESAID)
TO CUSTOMER OTHER THAN
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PURSUANT TO ITS OBLIGATIONS UNDER ARTICLE 8 SHALL NOT EXCEED HALF OF
THE LICENSE FEE ACTUALLY PAID BY CUSTOMER TO TWIN SUN FOR THE LICENSED
PROGRAM GIVING RISE TO SUCH LIABILITY.
9.2 NO ACTION, REGARDLESS OF FORM, ARISING OUT OF THE TRANSACTIONS UNDER
THIS AGREEMENT MAY BE BROUGHT BY CUSTOMER MORE THAN TWELVE (12) MONTHS
AFTER ACCEPTANCE OF THE LICENSED PROGRAMS EXCEPT TO THE EXTENT ALLOWED
UNDER ARTICLE 8 HEREOF FOR LIABILITY BASED ON PATENT OR COPYRIGHT
INFRINGEMENT.
9.3 IN NO EVENT SHALL TWIN SUN BE LIABLE FOR INCIDENTAL, SPECIAL OR
CONSEQUENTIAL DAMAGES (INCLUDING WITHOUT LIMITATION LOST PROFITS) EVEN
IF EITHER PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES.
10. NO SUBLICENSE
Customer shall not sublicense, assign or transfer the Licensed
Programs. Notwithstanding the prohibitions regarding sublicensing,
assignment or transfer of the Licensed Programs and/or to the extent an
entity other than Customer (including Customer's affiliates,
subsidiaries or corporate partners) is granted the right to Use or
access the Licensed Programs by Twin Sun (as done in Section 2.2),
Customer shall: (a) obtain an agreement in writing (for the benefit of
Twin Sun) wherein such entity agrees to be bound by the provisions of
this Agreement, to look solely to Customer for all warranty, training
and maintenance support and relief for any injury or damage resulting
from the use or inability to use the Licensed Programs; (b) defend at
its expense any action brought against Twin Sun by such entity based
upon any claim relating to the Licensed Programs; (c) pay any costs and
damages awarded against Twin Sun in any action brought by such entity;
(d) be fully responsible for any additional License Fee due because of
such Use; and (e) be fully responsible for any breach by such entity of
any obligations set out in this Agreement and indemnify Twin Sun for
such breach as if committed by Customer on its own account.
11. TERMINATION
In addition to what is set forth in Sections 6.4 and 8.1, this
Agreement shall terminate immediately if Customer: (a) shall fall to
comply with any term or condition of this Agreement and such failure
shall continue for a period in excess of thirty (30) days after receipt
of Twin Sun's notice advising Customer of such failure; or (b) shall
become insolvent or a party to any bankruptcy or receivership
proceeding or any similar action affecting the affairs or the property
of Customer. Customer shall upon such termination return to Twin Sun
the Licensed Programs together with all copies and modifications in
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any form. Customer shall not be entitled to any refund of the paid
License Fee in the event that this Agreement is tenninated in
accordance with this Article. Without limitation to the foregoing, Twin
Sun upon default by Customer as provided herein, shall have the right
to take immediate possession of the Licensed Programs wherever located
without notice or demand.
12. COOPERATION & SUPPORT
Customer agrees to cooperate with Twin Sun with respect to this
Agreement including without limitation, providing Twin Sun at no charge
and as requested reasonable: computer hardware, communication networks,
computer operators, terminal operators, test data and facilities, and
in general, Customer agrees to provide all information and access to
key personnel needed to develop and/or implement the Licensed Programs.
13. TRAINING
Twin Sun shall provide scheduled training to Customer in the use and
operation of the Licensed Programs. The training will be conducted in
not less than three (3) hour sessions. Such hours will be charged in
accordance with the Consulting Services Agreement but the materials
provided will be free of charge. If the training is held at Twin Sun's
offices in New York, Customer shall assume and be responsible for the
payment of all transportation, room and board expenses of its employees
attending such training
14. SITE PREPARATION
Except for what is agreed in the Consulting Services Agreement between
the parties of even date herewith, Customer shall ensure that it has
all the hardware, software, communications and other required elements
in order to install, test and place the Program Products into live
production use (including without limitation the items described in
Schedule D). Further, except for what is agreed in the Consulting
Services Agreement of even date herewith, Customer shall be responsible
for the design and management of its computer and communications
network.
15. GENERAL
15.1 No modifications of this Agreement shall be valid or binding on either
party unless acknowledged in writing and signed by the duly authorized
officer of each party. All notices or other communications given under
this Agreement shall be in writing, sent to the address herein before
set forth as principal place of business or such other addresses as
Twin Sun or Customer may designate in writing.
15.2 Both parties understand and agree that violation of any provision of
this Agreement may cause damage to the other party in an amount which
is impossible or extremely difficult to
9
<PAGE>
ascertain. Accordingly, without limitation to any other remedy
available at law, the injured party shall be entitled to seek
injunctive relief restraining the other party from continuing to
violate the tenris and provisions of this Agreement.
15.3 Neither party shall be liable to the other for any delay or failure to
perforrn its obligations under this Agreement (other than Customer's
obligation to remit payment hereunder) if such delay or failure arises
from any cause beyond the reasonable control of such party, including
but not limited to labor disputes, strikes, other labor or industrial
disturbances, acts of God, floods, lightning, shortages of materials,
utility or communication failures, earthquakes, casualty, war, riots,
actions, restrictions, regulations or orders of any government, agency
or subdivision thereof
15.4 The parties acknowledge that each has read all the terms of this
Agreement, is authorized to enter into it, agrees to be bound by its
terms and conditions and that it is the complete and exclusive
statement of the agreement between the parties which supersedes all
prior communications and agreements between the parties relating to the
subject matter of this Agreement.
If any provision of this Agreement shall be deemed invalid and/or
inoperative, under any applicable statute or rule of law, it is to that
extent to be deemed modified so as to provide the most similar
enforceable economic effect and shall have no effect as to any other
provision contained in this Agreement.
15.6 Customer shall not depict, refer to or in any other manner use the
Licensed Programs or any portion thereof in any advertisements, without
the prior written consent of Twin Sun. Any such advertisement must
state that Twin Sun is the owner of the copyright for the Licensed
Programs.
15.7 Twin Sun and Customer agree not to hire, attempt to hire, or retain as
consultants or otherwise, employees of the other party directly or
through any third party or entity, for a period of one (1) year
subsequent to employee's last day of work for employee's respective
employer regardless of the circumstances surrounding employee's cause
of tennination of employment.
15.8 Each of Customer and Twin Sun shall designate one responsible
individual with authority as Project Coordinator to serve as leaders of
the project. Customer's Project Coordinator shall provide or coordinate
the provision of information about Customer, its practice, external and
internal procedures and such other information as Twin Sun may
reasonably require in order to fulfill its obligations under this
Agreement.
15.9 Any forbearance or delay on the part of either party in enforcing any
provision of this Agreement or any of its rights hereunder shall not be
construed as a waiver of such provision or of a right to enforce same.
10
<PAGE>
15.10 This Agreement is for the sole and exclusive benefit of Twin Sun and
Customer and shall not be deemed to be for the direct or indirect
benefit of the clients or customers of Customer or Twin Sun or any
entities associated in any way with Customer or Twin Sun. Any entities
associated with Customer in any business relationship shall not be
deemed to be third party beneficiaries of this Agreement or have any
other contractual relationship with Twin Sun for any reason.
15.11 Twin Sun is an independent contractor to Customer and this Agreement
does not create a partnership, joint venture, employment, agency or
other similar relationship between the parties.
15.12 Twin Sun shall be entitled to perform all system diagnostics and error
corrections from Twin Sun's offices.
15.13 The provisions of Articles and/or Sections 3, 4, 5, 7, 8, 9, 15.13 and
15.14 shall survive termination of this Agreement or any portion
thereof. Furthermore, any provision that is by implication intended to
continue in force after tennination shall not be affected by
termination of this Agreement or any portion hereof.
15.13 Any claim or dispute relating to this Agreement (including without
limitation, claims involving allegations in tort) shall be governed by
the laws of the State of New York. The parties hereby: (a) waive all
right to trial by jury; (b) consent to the jurisdiction of the Supreme
Court of the State of New York and of the United States District Court
for the Southern District of New York; and (c) consent that any process
or notice of motion or other application to the court or judge thereof
may be served within or without the State of New York by registered or
certified mail, or by personal service, provided a reasonable time for
appearance is allowed.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized representatives.
* * *
TWIN SUN, INC. INTREX.COM, INC.
BY: ____________________________ BY: ____________________________
NAME: ____________________________ NAME: ____________________________
TITLE: ____________________________ TITLE: ____________________________
DATE: ____________________________ DATE: ____________________________
11
<PAGE>
SCHEDULE A TO PROGRAM PRODUCT LICENSE AGREEMENT
BETWEEN TWIN SUN, INC. ("TWIN SUN") AND
INTREX.COM, INC. ("CUSTOMER") DATED AUGUST 26,1999
- PROGRAM PRODUCTS -
Twin Sun's WebTrade product consisting of:
o Dynamic Perl-based HTML pages
o The Apache web server including mod-Perl
o Perl libraries for accessing TCAM's MAPI servers
12
<PAGE>
SCHEDULE B TO PROGRAM PRODUCT LICENSE AGREEMENT
BETWEEN TWIN SUN, INC. ("TWIN SUN") AND
INTREX.COM, INC. ("CUSTOMER") DATED AUGUST 26,1999
- LICENSE FEE -
1. FEE
Customer shall pay Twin Sun a license fee of $150,000.
2. DUE DATE
The License Fee is due with
a) $ 50,000 upon signing of this Agreement
b) $ 50,000 upon delivery
c) $ 50,000 upon Acceptance
* * *
13
<PAGE>
SCHEDULE C TO PROGRAM PRODUCT LICENSE AGREEMENT
BETWEEN TWIN SUN, INC. ("TWIN SUN") AND
INTREX.COM, INC. ("CUSTOMER") DATED AUGUST 26,1999
- SPECIFICATIONS -
WebTrade servers will allow Intrex.com's customers to perform the following
operations using a standard web browser:
o View their current positions
o Trade in equities
o View status of and cancel orders
o View their trading history
The above information will be retrieved from the AOM servers residing at TCAM.
14
<PAGE>
SCHEDULE D TO PROGRAM PRODUCT LICENSE AGREEMENT
BETWEEN TWIN SUN SYSTEMS, INC. ("TWIN SUN") AND
INTREX.COM, INC. ("CUSTOMER") DATED AUGUST 26,1999
-HARDWARE-
o 3 servers - Sun Enterprise 5, 360MHz, 256MB, 8AG13, A21UGEIZ9S-C256CR
o 3 ethernet cards - Fast Ethernet, 100 BaseT, X1033A
o 3 power cords for North America, X31 I L
o 2 Linksys Etherfast 8-port hubs - 100 BaseT
o 3 serial cables, NULL modems, female DB-9 to male D13-15, max 3 feet
o 2 Cisco 2500 series routers, which talk both TI and ethernet
o 1 Rack, sufficient to mount all the equipment
o 12 ethernet cables (100 BaseT) to connect equipment, this count
includes cables supplied by Sun with the machines
15
<PAGE>
SCHEDULE E TO PROGRAM PRODUCT LICENSE AGREEMENT
BETWEEN TWIN SUN SYSTEMS, INC. ("TWIN SUN") AND
INTREX.COM, INC. ("CUSTOMER") DATED AUGUST 26,1999
- SUBSIDIARIES -
1 . Alexander Wescott & Co, Inc.
16
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