As filed with the Securities and Exchange Commission on September 20, 2000
Registration No. ___________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
E-City Software, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Nevada 88-0461317
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
7372
(Primary Standard Industrial
(Classification Code Number)
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 264-9715 Tel
(206) 264-9716 Fax
(Address,including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
Anis Jessa
Chief Executive Officer
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 264-9715 Tel
(206) 264-9716 Fax
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With a copy to:
Jonathan Dariyanani, Esq.
2035 Monroe Street
Hollywood, Florida 33020
(954) 401-4994 Tel
(520) 441-8755 Fax
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering [ ].
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box [ ].
CALCULATION OF REGISTRATION FEE
Proposed Maximum Aggregate Amount of Title of Each Class of Securities to
be Registered Offering Price Registration Fee (1)
Title of
Each Class
of Amount of
Securities Shares to Proposed Maximum Proposed Maximum Amount of
to be be Offering Price Aggregate Registration
Registered Registered Per Unit Offering Price Fee
----------- ----------- ------------- ------------- ------------
Common shares, 3,853,000 $ 5.00 $ 19,265,000 $ 5086.00
$0.0001
par value
(1) Estimated solely for the purpose of computing the amount of the
registration fee pursuant to Rule 457(o) promulgated under the Securities Act of
1933, as amended. The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to such
Section 8(a), may determine.
<PAGE>
PROSPECTUS (Subject to Completion)
Issued [to be dated upon printing of prospectus] 2000
3,853,000 Shares
E-CITY SOFTWARE, INC.
COMMON STOCK
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is a
criminal offense. Certain of our security holders are offering for sale a
maximum of 3,853,000 shares of common stock, at a purchase price of $5.00 per
share. We have prepared this prospectus to allow these security holders, or
their respective pledgees,donees, transferees or other successors in interest
to sell up to 3,853,000 shares of our common stock that they own. We refer to
these security holders,pledgees,donees and transferees as "selling
stockholders." We will receive no proceeds from the sale of shares by selling
stockholders. The maximum offering or proceeds to be raised is $19,265,000. We
have agreed to pay the costs of registering the common stock, excluding
commissions, transfer taxes and other expenses related to the resale of the
common stock by the selling stockholders.
Under SEC Rule 3a51-1(d), the securities being offered may constitute penny
stocks,and as such, certain sales restrictions apply to these securities.
No public market currently exists for our common stock. No public market may
ever develop. Even if a market develops, you may not be able to sell your
shares. This is a highly risky investment. We have described these risks under
the caption "Risk Factors" beginning on page 6. We intend to file an application
for our common stock to be quoted on the Over the Counter Bulletin Board Market
under the symbol "ECTY."
PRICE $5.00 A SHARE
Price to Sales Proceeds to
Public Commissions Selling Stockholders
Per Share..... $5.00 $0.00 $5.00
Total......... $19,265,000 $0.00 $19,265,000
The Securities and Exchange Commission and state securities regulators have
not approved or disapproved these securities, or determined if this prospectus
is truthful or complete. Any representation to the contrary is a criminal
offense.[to be dated upon printing of prospectus] 2000.
<PAGE>
TABLE OF CONTENTS
Page
Item 1. Front of Registration Statement 1
Item 2. Inside Front and Outside Back Cover Pages of Prospectus 2
Item 3. Summary Information and Risk Factors 6
Item 4. Use of Proceeds 12
Item 5. Determination of Offering Price 12
Item 6. Dilution 13
Item 7. Selling Security Holders 13
Item 8. Plan of Distribution 13
Item 9. Legal Proceedings 14
Item 10. Directors, Executive Officers, Promoters and Control Persons 14
Item 11. Security Ownership of Certain Beneficial Owners and Management 15
Item 12. Description of Securities 21
Item 13. Interest of Named Experts and Counsel 22
Item 14. Disclosure of Commission Position on Indemnification for 22
Securities Act Liabilities
Item 15. Organization Within Last Five Years 22
Item 16. Description of Business 22
Item 17. Plan of Operation 25
Item 18. Description of Property 26
Item 19. Certain Relationships and Related Transactions 27
Item 20. Market for Common Equity and Related Stockholder Matters 28
Item 21. Executive Compensation 30
Item 22. Financial Statements 33
Item 23. Changes In and Disagreements With Accountants on Accounting 54
And Financial Disclosure
Item 24. Indemnification of Directors and Officers 58
Item 25. Other Expenses of Issuance and Distribution 58
Item 26. Recent Sales of Unregistered Securities 58
Item 27. Exhibits Index 58
Item 28. Undertakings 59
<PAGE>
You should rely only on the information contained in this prospectus. We
have not authorized anyone to provide you with information different from that
contained in this prospectus. Our selling stockholders are offering to sell
shares of common stock and seeking offers to buy shares of common stock only in
jurisdictions where offers and sales are permitted. The information contained in
this prospectus is accurate only as of the date of this prospectus, regardless
of the time of delivery of this prospectus or of any sale of the common stock.
Until [date will be determined pursuant to Rule 174], all dealers that buy,
sell or trade our common stock, whether or not participating in this offering,
may be required to deliver a prospectus.
For investors outside the United States: We have not done anything that
would permit this offering or possession or distribution of this prospectus in
any jurisdiction where action for that purpose is required, other than in the
United States. You are required to inform ourself about and to observe any
restrictions relating to this offering and the distribution of this prospectus.
<PAGE>
ITEM 3. SUMMARY INFORMATION AND RISK FACTORS
PROSPECTUS SUMMARY
You should read the following summary together with the more detailed
information regarding our company and the common stock being sold in this
offering and our financial statements and notes appearing elsewhere in this
prospectus.
THE COMPANY
E-City Software, Inc. is a software company that specializes in the design,
development and maintenance of animated or interactive mapping software products
for use on the World Wide Web or in CD ROM format.Our products aredeveloped in a
semi-custom fashion using the specifications of individual customers with whom
we have software development contracts. We also pursue licensing arrangements
with customers in which existing E-City interactive mapping technology is
licensed for use on websites. In addition to the software field of interactive
mapping, we are continuing to explore opportunities related to our core
competency of building highly labor intensive,highly visual software products
designed to augment the content of business to consumer and business to business
driven websites on the internet. We generally price our development services on
a per contract or per job basis. We generally price our software licenses on a
yearly basis, with additional fees for each city orcountry covered in the
license. We currently have 16 full time developers, four members of senior
management and two employees in administration and finance. We occupy a 6,000
square foot facility in Vancouver, British Columbia and have our headquarters in
Seattle, Washington.
We were incorporated in May 2000 for the purpose of developing software
products in the interactive mapping and other visually driven software segments
on the World Wide Web and in CD ROM format.In August 2000, we acquired
Butterfly Software, Inc., a British Columbia, corporation that was itself
incorporated in November 1998 for the purpose of developing animated mapping and
city guide software. Collectively, the Butterfly and E-City development teams
have completed or substantially completed proprietary, interactive, animated
maps of Las Vegas, San Francisco, eattle, Washington DC, Chicago and Los
Angeles. We expect to complete similar maps for many of the other major
metropolitan areas of the United States and Canada within the next six months.
We have also substantially completed a non-animated mapping system for the
entire United States.
The selling stockholders, which include the principal stockholders and
officers of E-City, are offering for sale 3,853,000 common shares to the
public at $5.00 per share.
<PAGE>
THE OFFERING
Common stock offered...3,853,000 shares
Common stock to be
outstanding
after this
offering.............. 4,965,000 shares
Use of proceeds...... We will not receive any of the proceeds from the sale
of the common stock by the stockholders who will sell
shares pursuant to this prospectus.
Proposed Over the
Counter Bulletin
Board Symbol.......... ECTY
The foregoing information is based on the number of shares of common stock
outstanding as of September 20, 2000. No option shares have been authorized,
issued or granted to date.
<PAGE>
RISK FACTORS
You should carefully consider the following risk factors and all other
information contained in this prospectus before purchasing our common stock.
Investing in our common stock involves a high degree of risk. Risks and
uncertainties, in addition to those we describe below, that are not presently
known to us or that we currently believe are immaterial may also impair our
business operations. If any of the following risks occur,our business could be
harmed, the price of our common stock could decline and you may lose all or part
of your investment.
RISKS RELATED TO OUR BUSINESS
WE HAVE A LIMITED OPERATING HISTORY ON WHICH TO EVALUATE OUR POTENTIAL FOR
FUTURE SUCCESS.
We launched our current business model in May 2000 and have only a limited
operating history upon which you can evaluate our business and prospects, and
have yet to develop sufficient experience regarding actual revenues to be
received from our products and services. You must consider the risks and
uncertainties frequently encountered by early stage companies in new and rapidly
evolving markets. If we are unsuccessful in addressing these risks and
uncertainties, our business, results of operations and financial condition will
be materially and adversely affected.
WE HAVE EXTREMELY LIMITED CAPITAL,
AND WE MAY BE UNABLE TO MEET OUR FUTURE CAPITAL REQUIREMENTS.
As of June 30,2000, we had $424,939 in assets and $525,464 in liabilities.
We had $27,489 available in cash as of June30, 2000. Weintend to raise
additional capital privately and will not receive any of the proceeds of this
offering. If we are successful in our planned undraising efforts, we expect
that such investment, cash on hand, cash equivalents and commercial credit
facilities will be sufficient to meet our working capital and capital
expenditure needs or the oreseeable future. However, we may need to raise
additional funds on an ongoing basis in the future, and we cannot be certain
that we would be able to obtain additional financing on favorable terms, if at
all. Further, if we issue equity securities, stockholders may experience
additional dilution, or the new equity securities may have rights, preferences
or privileges senior to those of existing holders of common stock. If we cannot
raise required funds on acceptable terms, we may not be able to develop or
enhance our products, take advantage of future opportunities or respond to
competitive pressures or unanticipated requirements, which could harm our
business, financial condition and results of operations.
OUR FAILURE TO INCREASE OUR REVENUES WOULD PREVENT US FROM ACHIEVING AND
MAINTAINING PROFITABILITY.
We have incurred netlosses since we commenced operations. We have not
achieved profitability, and may incur net losses for the foreseeable future. To
date, we have funded our operations from the sale of equity securities and have
not generated substantial cash from operations. As of June 30, 2000, we had an
accumulated deficit of $97,677. We expect to continue to incur significant
product development, sales and marketing, and administrative expenses. As a
result, we will need to generate significant revenues to achieve and maintain
profitability. If we do achieve profitability, we cannot be certain that we can
sustain or increase profitability on a quarterly or annual basis in the future.
See "Plan of Operation" for more information.
IF WE FAIL TO EXPAND OUR SALES OPERATIONS AND STRATEGIC PARTNERSHIPS,
WE MAY NOT BE ABLE TO INCREASE REVENUES FROM OUR PRODUCTS.
We need to expand our direct and indirect sales operations and strategic
alliances to increase market awareness of our products and services in order to
increase revenues. The demand for sales and business development personnel is
very ompetitive in our industry. We annot be certain that we will be
successful in our efforts to hire qualified sales and business development
personnel. If we are unable to expand our sales and strategic operations, we may
not be able to increase sales of our roducts and grow our revenues, which,
would in turn, eriously harm our business, financial condition and results of
operations.
OUR LIMITED OPERATING HISTORY MAKES FORECASTING DIFFICULT.
E-City commenced operations in May 2000, and, as a result of our limited
operating history, e have limited meaningful historical inancial data upon
which to plan revenues and operatingexpenses. ur Canadian subsidiary,
Butterfly Software, commenced operations in November of 1998 and therefore also
has a limited operating history. We will plan our expenses in part on future
revenue projections. Most of our expenses are fixed in the short-term, and we
may not be able to quickly reduce spending if our revenues are lower than
projected. If we do not achieve our expected revenues, our operating results
will be below our expectations and the expectations of investors and market
analysts, which could cause the price of our common stock to decline.
WE HAVE DERIVED ALL OF OUR REVENUE FROM A SINGLE CUSTOMER.
We have derived 100% of our revenues since nception from one customer,
Cityscape.com,Inc. Chief Executive, Anis Jessa formally held approximately
35%of the issued outstanding shares of Cityscape.com,Inc. Mr.Jessa also served
as a director of Cityscape until July, 2000. In July, 2000 Mr. Jessa resigned as
director of Cityscape and sold all of his shares in Cityscape. Mr. Jessa is no
longer a director or shareholder of Cityscape. Because of our dependence on
Cityscape for revenues, if we are unableto maintain our contract with
Cityscape, if Cityscape no longer requires our services in the future, or if we
are unable to expand our sources of revenue in the uture, our results of
operations will be impaired.
IF WE ARE UNABLE TO MEET THE RAPID CHANGES IN SOFTWARE TECHNOLOGY,
OUR EXISTING PRODUCTS COULD BECOME OBSOLETE.
The market for our products is characterized by rapid technological change,
frequent new product introductions and technological enhancements, changes in
customer demands and evolving industry standards. We cannot be certain that we
will be able to enhance our current products nd developnew products on a
timely basis to keep pace with technological developments and competitors. Any
failure to develop new products or product nhancements will substantially
decrease market acceptance and sales of our present and future products, which
will harm our business and financial results.
OUR MANAGEMENT TEAM HAS LIMITED EXPERIENCE.
We have only recently assembled our management team, several members of
whom have little or no experience in the software mapping area. If such members
of our management are ineffective in leading our operational efforts, and
we are not able to find replacements on a timely basis, our business and the
execution of our business plan may be harmed.
WE DEPEND ON OUR KEY PERSONNEL, AND IF WE LOSE KEY PERSONNEL,
WE MAY BE UNABLE TO EPLACE THEM, WHICH COULD DISRUPT OPERATIONS
AND HARM OUR FINANCIAL CONDITION.
Our success depends largely upon the skills, experience and performance of
our key employees, especially in the software development area. If we lose one
or more of our key employees, our business, financial condition and results of
operations could be armed. If our officers or employees terminate their
employment on short notice, we may not be able to replace them on a timely
basis, which could disrupt our operations. Our future success also depends
largely on our ability to continue attracting and retaining highly skilled
personnel, and we face intense competition from other software companies for
qualified personnel. We cannot be ertain that we will e successful in
attracting or retaining qualified personnel in the future, which could harm our
business, financial condition and results of operations.
THE UNPREDICTABILITY AND SEASONALITY OF OUR QUARTERLY RESULTS MAY ADVERSELY
AFFECT THE TRADING PRICE OF OUR COMMON STOCK.
Our revenues and results of operations will vary significantly from quarter
to quarter due to a number of factors, many of which are outside of our control
and any of which may cause our stock price to fluctuate. The primary factors
that may affect us include the following:
o the timing of sales of our products and services;
o the timing of recognizing revenue and deferred revenue
under U.S. GAAP;
o changes in our pricing policies or the pricing policies of our
competitors;
o increases in sales and marketing, product development
or administration expenses;
o our ability to attain and maintain quality levels for our products; and
o our expectation of seasonality in our results of operations.
WE FACE INTENSE COMPETITION THAT COULD REDUCE OUR MARKET SHARE.
Our industry is intensively ompetitive, ubject to rapid change and
significantly affected by new product introductions and other market activities
of industry participants. We expect competition to persist and intensify in the
future. While we face limited direct competition, our principal sources of
indirect competition include: Yahoo!, Maps, MapQuest, and Microsoft
Corporation in the non-custom mapping development space. In the future, we
may also ace competition from other sources that are poised to enter the
market. If we are unable to compete successfully against our current and future
competitors, we could experience price reductions, reduced gross margins and
loss of market share, any one of which could materially and adversely affect our
business, operating results nd financial condition.
IF WE ARE UNABLE TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS,
COMPETITORS MAY BE ABLE TO USE OUR TECHNOLOGY OR TRADEMARKS, WHICH
COULD WEAKEN OUR COMPETITIVE POSITION, REDUCE OUR REVENUES AND INCREASE COSTS.
We rely on a combination of copyright, trademark and trade secret laws and
restrictions on disclosure to protect our intellectual property rights. We also
enter into confidentiality or license agreements with our employees, consultants
and customers, and control access to and distribution of our software,
documentation and other proprietary information. Despite our efforts to protect
our proprietary rights, unauthorized parties may attempt to copy or otherwise
obtain and use our products or technology. Monitoring unauthorized use of our
products is difficult, and we cannot be certain that the steps we have taken
will prevent unauthorized use of our technology, particularly in foreign
countries where the laws may not protect our proprietary rights as fully as in
the United States. In recent years, there has been significant litigation in the
United States involving patents and other intellectual property rights. Although
we have never been involved in any intellectual property litigation, we may be a
party to litigation in the future to protect our intellectual property or as a
result of alleged infringement of others' intellectual property. These claims
and any resulting lawsuits could subject us to significant liability for damages
and invalidation of our proprietary rights. Any potential intellectual property
litigation also could force us to do one or more of the following:
o stop selling, incorporating or using our products or services that use
the challenged intellectual property;
o obtain from the owner of the infringed intellectual property right a
license to sell or use the relevant technology, which license
may not be available on reasonable terms, or at all; or
o redesign those products or services that use such technology.
If we are forced to take any of the foregoing actions, we may be unable to
manufacture and sell our products, which would reduce our revenues.
To date, we have not been notified that our products infringe the
proprietary rights of third parties, but there can be no assurance that third
parties will not claim infringement with respect to our current or future
products. We expect that developers of software products will increasingly be
subject to infringement claims as the number of products and competitors in our
industry segment grows and as the functionality of products increasingly
overlaps. Any such claims, with or without merit, could be time-consuming to
defend, result in costly litigation, divert management's attention and
resources, cause product shipment delays or require us to enter into royalty or
licensing agreements. Such royalty or licensing agreements, if required, may not
be available on terms acceptable to us or at all.
OUR SOFTWARE PRODUCTS MAY HAVE UNKNOWN DEFECTS,
WHICH COULD HARM OUR REPUTATION OR IMPEDE MARKET ACCEPTANCE OF OUR PRODUCTS.
Although we conduct testing of our products, we may not discover software
defects that affect our current or new products until after they are sold. In
addition, any defect in other software or hardware with which our software
interacts could be mistakenly attributed to our software by our customers or
their end-users. These defects or perceptions of defects could cause our
customers and their end-users to experience service interruptions. Service
interruptions could damage our reputation or increase our product development
costs, divert our product development resources, cause us to lose revenue, or
delay market acceptance of our products, any of which could harm our business,
financial condition and results of operations.
WE MAY BE SUBJECT TO PRODUCT LIABILITY CLAIMS THAT COULD RESULT IN SIGNIFICANT
COSTS TO US.
We may be subject to product liability claims for defects in our products.
Although we believe that our product liability coverage is currently adequate,
it is limited. A successful liability claim brought against us in excess of
relevant insurance coverage could be costly, which could harm our business,
financial condition and results of operations.
RISKS RELATED TO THE INTERNET
WE ARE DEPENDENT ON THE CONTINUED DEVELOPMENT OF INTERNET INFRASTRUCTURE AND
MARKET ACCEPTANCE OF STARTUP COMPANIES.
Our industry is new and rapidly evolving. Our business would be adversely
affected if usage or the World Wide Web does not continue to grow. Web usage may
be inhibited for a number of reasons, including:
o inadequate internet infrastructure;
o security concerns;
o inconsistent quality of service; or
o unavailability of cost-effective, high-speed service.
If Web usage grows, the existing internet infrastructure may not be able to
support the demands placed on it by this growth, or its performance and
reliability may decline. In addition, websites have experienced a variety of
interruptions in their service as a result of outages and other delays occurring
throughout the internet network infrastructure. If these outages or delays
frequently occur in the future, Web usage could grow slowly or decline.
Moreover, the publicly traded stock of startup companies has been recently
extremely volatile, and numerous newly traded issues have lost much of their
value. Our plan of operations depends on the continued acceptance of startup
companies that rely on the internet and its infrastructure for marketability. A
loss of confidence by investors could harm our financial condition and adversely
affect our stock price.
WE COULD FACE ADDITIONAL BURDENS ASSOCIATED WITH GOVERNMENT REGULATION OF AND
LEGAL UNCERTAINTIES RELATED TO THE INTERNET.
New internet legislation or regulation, or the application of existing laws
and regulations to the internet, could harm our business, financial condition
and results of operations. We are subject to regulations applicable to
businesses generally and laws or regulations directly applicable to
communications over the internet. Although there are currently few laws and
regulations directly applicable to the internet, it is possible that a number of
laws and regulations may be adopted with respect to the internet, covering
issues such as user privacy, pricing, content, copyrights, distribution,
antitrust, taxation and characteristics and quality of products and services.
For example, the United States Congress recently enacted internet laws regarding
children's privacy, copyrights and the transmission of sexually explicit
material. In addition, the European Union recently enacted its own internet
privacy regulations. The burden of compliance with any additional laws or
regulations regarding the internet may decrease the growth of the internet,
which could, in turn, decrease the demand for our products and services and
increase our costs of doing business.
RISKS RELATED TO THIS OFFERING
THERE HAS BEEN NO PRIOR MARKET FOR OUR COMMON STOCK AND A PUBLIC MARKET FOR OUR
SECURITIES MAY NOT DEVELOP OR BE SUSTAINED.
Prior to this offering, you could not buy or sell our common stock
publicly. An active public market for our common stock may not develop or be
sustained after the offering. The initial public offering price could decline
below the initial public offering price. The market price of our common stock
may fluctuate significantly in response to the following factors, many of which
are beyond our control:
o changes in market valuations of internet software companies;
o announcements by us or our competitors of significant contracts,
acquisitions,strategic partnerships,joint ventures or capital commitments;
o loss of a major customer or failure to complete significant product license
transactions;
o additions or departures of key personnel; and
o sales of our common stock in the future.
OUR DETERMINATION OF THE OFFERING PRICE IS ARBITRARY.
The offering price of $5.00 per share has been arbitrarily determined by
us. This price bears no relation to our assets, book value, or any other
customary investment criteria, including our prior operating history. The price
per share in this offering is substantially above its net tangible book value,
and we cannot assure you that the price will accurately reflect a market price
for the shares. See "Determination of Offering Price" for more information.
OUR STOCK PRICE IS SUBJECT TO SIGNIFICANT VOLATILITY.
The price of shares sold in an initial public offering is frequently subject to
significant volatility for a period of time following the initial public
offering. Moreover, the stock markets have from time to time experienced
significant price and volume fluctuations, which have particularly affected the
market prices of the stock of software and emerging growth companies and which
may be unrelated to the operating performance of such companies. These broad
market fluctuations could adversely affect the price of our common stock.
INSIDERS WILL CONTINUE TO HAVE SUBSTANTIAL CONTROL OVER OUR COMPANY AFTER THE
OFFERING AND COULD DELAY OR PREVENT A CHANGE IN CORPORATE CONTROL.
We anticipate that the executive officers, directors and entities affiliated
with them will, in the aggregate, beneficially own approximately 22% of our
outstanding common stock following the completion of this offering. If these
stockholders acted together, they would be able to exercise significant control
over all matters requiring approval by our stockholders, including the election
of directors and the approval of mergers or other business combination
transactions, which may have the effect of delaying or preventing a third party
from acquiring control over us. For information regarding stockholdings by our
officers, directors and 5% stockholders, see "Principal and Selling
Stockholders."
ANTI-TAKEOVER PROVISIONS AND OUR RIGHT TO ISSUE PREFERRED STOCK COULD MAKE A
THIRD-PARTY ACQUISITION OF US DIFFICULT.
We are a Nevada corporation. Anti-takeover provisions of Nevada law could make
it more difficult for a third party to acquire control of us, even if such
change in control would be beneficial to stockholders. Our articles of
incorporation provide that our Board of Directors may issue preferred stock
without stockholder approval. The issuance of preferred stock could make it more
difficult for a third party to acquire us. All of the foregoing could adversely
affect prevailing market prices for our common stock.
THERE MAY BE SALES OF A SUBSTANTIAL AMOUNT OF OUR COMMON STOCK AFTER THIS
OFFERING THAT COULD CAUSE OUR STOCK PRICE TO FALL.
Our current stockholders hold a substantial number of shares, which they will be
able to sell in the public market in this offering. Sales of a substantial
number of shares of our common stock after this offering could cause our stock
price to fall. In addition, the sale of these shares could impair our ability to
raise capital through the sale of additional stock.
THE OTC BULLETIN BOARD MARKET HAS A LIMITED OPERATING HISTORY
CHARACTERIZED BY HIGH VOLATILITY THAT MAY NEGATIVELY AFFECT OUR STOCK PRICE.
We intend to apply for admission to trading of our shares on the OTC
Bulletin Board. The Bulletin Board has a limited operating history and is
characterized by high volatility. Moreover, the shares offered pursuant to this
prospectus are not being offered through an underwriter. We cannot guarantee any
market for our shares. We cannot guarantee that any market for our shares will
develop or be sustained. We cannot predict the effect, if any, that future sales
of our shares, or the availability of our shares for future sale, will have on
the market price of our shares.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Some of the statements under "Prospectus Summary," "Risk Factors," "Plan of
Operation," "Business," and elsewhere in this prospectus constitute
forward-looking statements. These statements involve known and unknown risks,
uncertainties, and other factors that may cause our or our industry's actual
results, levels of activity, performance or achievements to be materially
different from any future results, levels of activity, performance or
achievements expressed or implied by these forward-looking statements. In some
cases, you can identify forward-looking statements by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential," "continue" or the negative of these terms or other
comparable terminology.
Although we believe that the expectations reflected in the forward-looking
statements are reasonable, we cannot guarantee future results, levels of
activity, performance or achievements. Moreover, neither we nor any other person
assumes responsibility for the accuracy and completeness of these statements. We
are under no duty to update any of the forward-looking statements after the date
of this prospectus to conform these statements to actual results.
ITEM 4. USE OF PROCEEDS
The proceeds from the sale of shares of our common stock will be received
directly by the selling stockholders. We will receive no proceeds from the sale
of the common stock offered pursuant to this prospectus.
ITEM 5. DETERMINATION OF THE OFFERING PRICE
We have arbitrarily determined the offering price of $5.00 per share for the
shares. This price bears no relation to our assets, book value, or any other
customary investment criteria, including our prior operating history. Among
factors considered by us in determining the offering price were:
o Estimates of our business potential;
o Our limited financial resources;
o The amount of equity desired to be retained by present stockholders;
o The amount of dilution to the public; and
o The general condition of the securities markets.
<PAGE>
ITEM 6. DILUTION
Our net tangible book value at June 30, 2000 was($100,525),or ($0.02)per share,
based on 4,740,000 shares of our common stock outstanding. We calculate net
tangible book value per share by our tangible assets less total liabilities by
the number of outstanding shares of common stock.
After giving effect to the sale of the 3,853,000 shares of common stock by us
at the initial public offering price of $ 5.00 per share, our net tangible book
value at June 30, 2000, would still be ($100,525), or ($0.02) per share as the
company is not receving any funds as a result of this offering.
This represents zero immediate dilution per share to new investors purchasing
shares of common stock in this offering.
THE ABOVE INFORMATION IS BASED ON SHARES OUTSTANDING AS OF JUNE 30, 2000.
NO OPTIONS HAVE YET BEEN ISSUED OR AUTHORIZED.
Item 7. SELLING SHAREHOLDERS
SEE PRINCIPAL AND SELLING STOCKHOLDERS TABLE UNDER ITEM 11.
Selling shareholders are advised that the Company has not made any
investigation, filing or other efforts to facilitate the sale of shares by
Selling Shareholers who are not residents of the United States with respect to
complance with any Non-United States securities law or other law. Selling
Shareholders who are not US residents are strongly advised to seek qualified
local legal counsel regarding legal issues involved in the sale of the shares.
In addition, there may be significant foreign tax consequences involved in the
sale of shares by Non-US redident selling shareholders. Such shareholders
are strongly advised to contact their tax advisor for information regarding the
tax consequences of such sales.
NEVADA LAW AND CERTAIN PROVISIONS OF OUR ARTICLES OF INCORPORATION AND BYLAWS
Certain provisions of Nevada law and our articles of incorporation and bylaws
could make it more difficult to aquire us by means of a tender offer, a proxy
contest or otherwise and the removal of incumbent officers and directors.
These provisions are expected to discourage certain types of coercive takeover
practices and inadequate takeover bids and to encourage persons seeking to
aquire control of us to first negotiate with us.We believe that the benefits of
increased protection of our potential ability to negotiate with the proponent
of an unfriendly or unsolicited proposal to aquire or restructure us outweigh
the disadvantages of discouraging takeover or acquisition proposals because,
among other things, negotiation of their proposals could result in an
improvement of their terms.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the common stock is Pacific Stock Transfer.
ITEM 8. PLAN OF DISTRIBUTION
This prospectus covers the sale of shares of common stock pursuant to the
exercise of outstanding options held by the selling stockholders, as well as the
resale by those selling stockholders of additional shares of our common stock
that they have already purchased from us. Selling stockholders may sell their
shares of common stock either directly or through a broker-dealer or other agent
at prices related to prevailing market prices or negotiated prices, in one or
more of the following kinds of transactions:
o Transactions in the over-the-counter market;
o Transactions on a stock exchange that lists our common stock; or
o Transactions negotiated between selling stockholders and purchasers,
or otherwise.
Broker-dealers or agents may purchase shares directly from a selling
stockholder or sell shares to someone else on behalf of a selling shareholder.
Broker-dealers may charge commissions to both selling stockholders selling
common stock, and purchasers buying shares sold by a selling stockholder. If a
broker buys shares directly from a selling stockholder, the broker may resell
the shares through another broker, and the other broker may receive compensation
from the selling stockholder for the resale. To the extent required by laws,
regulations or agreements we have made, we will use our best efforts to file a
prospectus supplement during the time the selling stockholders are offering or
selling shares covered by this prospectus in order to add or correct important
information about the plan of distribution for the shares. In addition to any
other applicable laws or regulations, selling stockholders must comply with
regulations relating to distributions by selling stockholders, including
Regulation M under the Securities Exchnage Act of 1934, as amended. Regulation M
prohibits selling stockholders from offering to purchase and purchasing our
common stock at certain periods of time surrounding their sales of shares of our
common stock under this prospectus. Some states may require that registration,
exemption from registration or notification requirements be met before sellig
stockholders may sell their common stock. Some states may also require selling
stockholders to sell their common stock only through broker-dealers.
ITEM 9. LEGAL PROCEEDINGS
We are not a party to any legal proceedings.
ITEM 10. EXECUTIVE OFFICERS AND DIRECTORS
Our executive officers and directors and their ages, as of September 20, 2000,
are as follows:
Executive Officers
Anis Jessa (2) (3) 47 Chief Executive Officer, Interim C.F.O.and Director
Salim Devji (2) (3) 29 Chief Technology Officer and Director
Robin Moulder (2) (3) 34 Chief Operating Officer and Director
Susan Polmar 32 Chief Marketing Officer
(1) All directors of the Company hold office until the next annual meeting of
stockholders of our company or until their successors are elected and
qualified.
(2) Member of Audit Committee.
(3) Member of Compensation Committee.
EXECUTIVE OFFICERS AND DIRECTORS:
ANIS JESSA, CHIEF EXECUTIVE OFFICER, INTERIM CHIEF FINANCIAL OFFICER
AND DIRECTOR
Mr. Jessa served as president and director of Cityscape.com from February,
1999 until July, 2000. As president of Cityscape.com, Mr. Jessa was responsible
for product development, strategic alliances and key account management. Mr.
Jessa helped guide the company from startup to its current state as a major
national portal city guide website. From June, 1997 until March, 1999, Mr. Jessa
served as president of Cabtop Media Inc., an outdoor media company that Mr.Jessa
was responsible for creating. Mr. Jessa continues to serve as a director of
Cabtop Media and has since June, 1997. From September of 1989 until June of
1997, Mr. Jessa was employed as leasing manager for Ocean Park Ford in British
Columbia.
SALIM DEVJI, CHIEF TECHNOLOGY OFFICER AND DIRECTOR
Mr. Devji has served as project manager for Butterfly Software since March,
1999. As project manager for Butterfly, Mr. Devji is responsible for overseeing
production of the company's interactive three dimensional city guides on CD-ROM
and managing the software development team. From 1997 until 1999, Mr. Devji
served as president of Web Spinner Multimedia, a company that specialized in
providing internet consulting services to businesses. From 1994 until 1997, Mr.
Devji served as network administrator for Delta View Habilitation Center. Mr.
Devji is proficient in many programming languages and has extensive knowledge of
hardware, software and networking. Mr. Devji has over five years experience in
software engineering and received his Bachelors of Science degree in Computer
Science from the University of British Columbia in 1999. Mr. Devji received his
diploma in Business Administration from B.C. Institute of Technology in 1992.
Mr. Devji has extensive experience and expertise in the areas of software
engineering, artificial intelligence, modeling systems, file transfer protocols,
file encryption and compression.
ROBIN MOULDER, CHIEF OPERATING OFFICER AND DIRECTOR
From January 2000 until June of 2000, Ms. Moulder served as President of Cubicle
8, a technology incubator in Santa Monica, California. As President of Cubicle
8, Ms. Moulder was responsible for the day-to-day operations and project
management. From September of 1997 until January of 2000, Ms. Moulder was
employed as a software engineer and project manger at Imaging Diagnostics, Inc.
From 1995 until 1997 she was employed an a senior software engineer at
Fibercorp, Inc., a telecommunications engineering corporation. She is a former
engineer for such companies as Motorola, Dow Corning Wright and Belzona. She has
knowledge of numerous operating systems, including Windows NT, OS/2, embedded
systems, and Macintosh, and has an in-depth focus on Macintosh, Windows GUI
programming, digital hardware design, Laser Tomography systems and embedded
systems development tools - including emulators, logic analyzer and other
equipment.
SUSAN POLMAR, CHIEF MARKETING OFFICER.
From September, 1999 until June of 2000, Ms. Polmar served as Marketing Manager
for All-Life.com, an Internet start-up. As Marketing Manager for All-Life.com,
Mrs. Polmar was responsible for advertising for the company's websites and print
magazine as well as developing strategic business partnerships for promotions
and magazine distribution. From 1993 until 1999, Ms. Polmar served in various
marketing capacities at the Daily Racing Forum. When she left the Daily Racing
Forum, Ms. Polmar was the promotions manager. Mrs. Polmar graduated from Arizona
State University with a degree in Journalism and Public Relations in 1992.
BOARD OF DIRECTORS
Our Board of Directors currently consists of 3 members. Each director holds
office until his or her term expires or until his or her successor is duly
elected and qualified.
Board Committees
The board of directors has established a compensation committee. The
compensation committee consists of Mr. Jessa, Ms. Moulder and Mr. Devji. The
compensation committee makes recommendations regarding our equity compensation
plans and makes decisions concerning salaries and incentive compensation for our
employees and consultants.
The board of directors has established an audit committee. The audit
committee consists of Directors Mr. Jessa, Ms. Moulder and Mr. Devji. The audit
committee makes recommendations to the board of directors regarding the
selection of independent auditors, reviews the results and scope of the audit
and other services provided by our independent auditors and reviews and
evaluates our audit and control functions.
DIRECTOR COMPENSATION
Our directors do not currently receive any cash compensation for services on the
board of directors or any committee thereof, but directors may be reimbursed for
expenses in connection with attendance at board and committee meetings.
LIMITATIONS ON DIRECTORS' AND OFFICERS' LIABILITY AND INDEMNIFICATION
Our amended and restated articles of incorporation to be filed upon completion
of this offering limits the liability of our directors to the maximum extent
permitted by Nevada law.
The limitation of our director's liability does not apply to liabilities arising
under the federal securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.
Our amended and restated articles of incorporation and bylaws also provide that
we shall indemnify our directors and executive officers and may indemnify our
other officers and employees and other agents to the fullest extent permitted by
law. We believe that indemnification under our bylaws covers at least negligence
and gross negligence on the part of indemnified parties. Our bylaws also permit
us to secure insurance on behalf of any officer, director, employee or other
agent for any liability arising out of his or her actions in such capacity,
regardless of whether our bylaws would permit indemnification.
We are entering into indemnification agreements with each of our officers and
directors containing provisions that require us to, among other things,
indemnify our officers and directors against liabilities that may arise by
reason of their status or service as directors or officers (other than
liabilities arising from willful misconduct of a culpable nature), to advance
their expenses incurred as a result of any proceeding against them for which
they could be indemnified, and to cover our directors and officers under any of
our liability insurance policies applicable to our directors and officers. We
believe that these provisions and agreements are necessary to attract and retain
qualified persons as directors and executive officers.
The limitation on liability and indemnification provisions in our articles of
incorporation and bylaws may discourage stockholders from bringing a lawsuit
against our directors for breach of their fiduciary duty and may reduce the
likelihood of derivative litigation against our directors and officers, even
though a derivative action, if successful, might otherwise benefit us and our
stockholders. A stockholder's investment in us may be adversely affected to the
extent we pay the costs of settlement or damage awards against our directors and
officers under these indemnification provisions.
At present, there is no pending litigation or proceeding involving any of our
directors, officers or employees in which indemnification is sought, nor are we
aware of any threatened litigation that may result in claims for
indemnification.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth information regarding the beneficial ownership of
our common stock as of September 20, 2000, and as adjusted to reflect the sale
of common stock offered by this prospectus, by:
o each named executive officer;
o each of our directors;
o each person (or group of affiliated persons) who is
known by us to own beneficially 5% or more of our common stock;
o all current directors and executive officers as a group; and
o each selling stockholder
Beneficial ownership is determined in accordance with the rules of the
Securities and Exchange Commission. In computing the number of shares
beneficially owned by a person and the percentage ownership of that person,
shares of common stock subject to options held by that person that are currently
exercisable or exercisable within 60 days of September 20, 2000, are deemed
outstanding. These shares, however, are not deemed outstanding for purposes of
computing percentage ownership of each other person. As of September 20, 2000,
no individual listed in the table below owned any options or warrants to
purchase any of our common or preferred stock.
Except as indicated in the footnotes to this table and pursuant to applicable
community property laws, each stockholder named in the table has sole voting and
investment power with respect to the shares shown as beneficially owned by them.
This table also includes shares owned by a spouse as community property.
Percentage of ownership is based on 4,965,000 shares of common stock outstanding
on September 20, 2000 and 4,965,000 shares of common stock outstanding after
completion of this offering. Unless otherwise indicated, the address of each of
the individuals named below is 1201 First Avenue South, Suite 330, Seattle, WA
98134.
This prospectus relates to the offering by the selling stockholders for
resale of shares of our common stock acquired by them in private placements and
other transactions. All of the shares of common stock offered by this prospectus
are being offered by the selling stockholders for their own accounts. The
following table also includes information with respect to the common stock
beneficially owned by the selling stockholders as of the date of this
prospectus. The selling stockholders provided us the information included in the
table below. To our knowledge, each of the selling stockholders has sole voting
and investment power over the shares of common stock listed in the table below.
Additionally, the following table assumes the sale of all shares of common stock
offered by this prospectus; however, as the selling stockholders can offer all,
some or none of their shares of common stock, no definitive estimate can be
given as to the number of shares that the selling stockholders will hold after
the offering.
Percentage
Number of of Shares
Shares Beneficially Number of Percentage of
Beneficially Owned Shares Shares
Owned Before Number of Beneficially Beneficially
Before Offering Shares to Owned After Owned After
Offering (%) be sold Offering Offering (%)
NAME AND ADDRESS
OF BENEFICIAL
OWNER OFFERING
EXECUTIVE
OFFICERS
Anis Jessa (1)
14213 SE 63rd St.
Bellevue, WA
98006 962,250 19.4 475,000 487,250 9.8
Salim Devji
3803 96th St.
Delta, B.C.
V6A 1A4 200,000 4.0 100,000 100,000 2.0
Robin Moulder
670 N. Wilton Pl.
Hollywood, CA
90004 20,000 0.4 10,000 10,000 0.2
Susan Polmar
28 Bucanneer
Ave.Apt B,
Marina Del Rey,
CA 90292 5,000 0.1 2,500 2,500 0.05
DIRECTORS
Anis Jessa (1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Salim Devji
3803 96th St.
Delta, B.C.
V6A 1A4 200,000 4.0 100,000 100,000 2.0
Robin Moulder
670 N. Wilton Pl.
Hollywood,
CA 90004 20,000 0.4 10,000 10,000 0.2
DIRECTORS,
EXECUTIVE
OFFICERS
AS A GROUP
Anis Jessa (1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Salim Devji
3803 96th St.
Delta,
B.C.V6A 1A4 200,000 4.0 100,000 100,000 2.0
Robin Moulder
670 N. Wilton Pl.
Hollywood,
CA 90004 20,000 0.4 10,000 10,000 0.2
Susan Polmar
28 Bucanneer
Ave.Apt B,
Marina Del Rey,
CA 90292 5,000 0.1 2,500 2,500 0.05
5% BENEFICIAL
OWNERS
Anis Jessa (1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Shabnam Jessa (1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Park Bench,
LLC(2)
#1077 5353 W.
Desert Inn Rd.
Las Vegas,
NV 89146 618,670 12.5 618,670 0 0
SELLING SHAREHOLDERS
Anis Jessa (1
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Salim Devji
3803 96th St.
Delta,
B.C.V6A 1A4 200,000 4.0 100,000 100,000 2.0
Robin Moulder
670 N. Wilton Pl.
Hollywood,
CA 90004 20,000 0.4 10,000 10,000 0.2
Susan Polmar
28 Bucanneer Ave.
Apt B,
Marina Del Rey,
CA 90292 5,000 0.1 2,500 2,500 0.05
Kirk Roberts(2)
#1012 5353
W. Desert Inn Rd.
Las Vegas, NV 200,000 4.0 200,000 0 0
Park Bench,
LLC (2)
#1077 5353
W. Desert Inn Rd.
Las Vegas, NV
89146 618,670 12.5 618,670 0 0
Pacific View
Holdings
16795 Fraser Hwy
Surrey, BC, Canada
V3S2X6 25,000 0.5 0 25,000 0.5
Gord Hartshorne(2)
2755 165th St. Surrey,
BC, Canada V4P2L8 10,000 0.2 10,000 0 0
Derek Radstaak(2)
6060 185th St. Surrey,
BC, Canada V3S5P7 2,500 0 2,500 0 0
CheryI Tingstad(2)
9462 205A St.
Langley, BC,
Canada V1M1Y9 8,500 0.2 8,500 0 0
Doug Miller(2)
9462 205A St.
Langley, BC,
Canada V1M1Y9 1,750 0 1,750 0 0
481331 B.C. Ltd.(2)
5857 152nd St.
Surrey, BC,
Canada V3S 3K4 22,000 0.4 22,000 0 0
Ranchland
Contracting Ltd.(2)
16795 Fraser Hwy.
Surrey, BC,
Canada V3S 2X6 67,500 1.4 67,500 0 0
Miranda Ronse(2)
21155 43A. Ave.
Langley, BC,
Canada V3A8L8 25,000 0.5 25,000 0 0
Leo Ronse(2)
21155 43A. Ave.
Langley, BC,
Canada V3A8L8 2,500 0 2,500 0 0
Rod Froehler(2)
21865 6th Ave.
Langley, BC,
Canada V3A7R2 30,900 0.6 30,900 0 0
Rod Farquharson(2)
20127 50th Ave.
Langley, BC,
Canada V3A3S8 1,000 0 1,000 0 0
Greg Phoenix(2)
15512 37A St.
Surrey, BC,
Canada V4B3G6 11,000 0.2 11,000 0 0
Derek Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 6,000 0.1 6,000 0 0
Elizabeth Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 6,000 0.1 6,000 0 0
Tracy Phoenix(2)
20206 43rd Ave.
Langley, BC,
Canada V3A7Z2 1,500 0 1,500 0 0
David Brown(2)
12736 14B Ave.
Surrey, BC,
Canada V4A1J9 500 0 500 0 0
Paul Thompson(2)
21123 45A Cres.
Langley, BC,
Canada V3A8P9 500 0 500 0 0
Kenneth Roberts(2)
9340 207A Ave.
Langley, BC,
Canada V1M2W7 2,000 0 2,000 0 0
Kristine Roberts(2)
9340 207A Ave.
Langley, BC, Canada
V1M2W7 5,000 0.1 5,000 0 0
Mike Dwyer(2)
8198 196th St.
Langley, BC,
Canada V3A6Y3 5,000 0.1 5,000 0 0
Patricia Dwyer(2)
8198 196th St.
Langley, BC,
Canada V3A6Y3 5,000 0.1 5,000 0 0
Garry Haverty(2)
5921 133rd St. Surrey,
BC, Canada V3X2N6 13,000 0.3 13,000 0 0
Kirby Helliwell(2)
5929 133rd St.
Surrey, BC,
Canada V3X2N6 13,000 0.3 13,000 0 0
Tony Miniaci(2)
8237 Haffner Terrace,
Mission,BC, Canada
V2V6T5 5,000 0.1 5,000 0 0
Michael Kelly(2)
1076 Jensen Cir.
Pittsburg,
CA 94565 110,000 2.2 110,000 0 0
George Shinbo(2)
2812 Boyer E.
Seattle,
WA 98102 15,000 3.0 15,000 0 0
Paul Kugler(2)
270 E. Flamingo
Unit#308, Las Vegas,
NV 89109 225,000 4.5 225,000 0 0
Shabnam Jessa(1)
14213 SE 63rd St.
Bellevue,
WA 98006 962,250 19.4 475,000 487,250 9.8
Mohamed Azim Jessa
Irrevocable Trust(1)
14213 SE 63rd St.
Bellevue, WA 98006 75,000 1.5 75,000 0 0
Irrevocable
Aliyah Jessa Trust(1)
14213 SE 63rd St.
Bellevue, WA 98006 75,000 1.5 75,000 0 0
Elle Holdings Ltd.(2)
P.O. Box 228 Temple
Building,
Leeward Hwy, Providenciales,
Turks & Caicos Island 50,000 1.0 50,000 0 0
Zinnat Alibhai(1)
7 Liphook Cres.
London, England
S.E. 23 12,500 0.3 12,500 0 0
3BN
Zehra Claire Visram(1)
81 Rue Des Sept Arpents,
Luxembourg 5,000 0.1 5,000 0 0
Fidahusein Jessa(1)
133 Marion Avenue,
Stanmore, Middlesex,
England 5,000 0.1 5,000 0 0
Al Sedgewick(2)
13698 Coldicutt Ave.
Whiterock, BC, Canada
V4B3A9 5,000 0.1 5,000 0 0
Martin Malus(2)
#6 2833 Oak St.
Vancouver, B.C.
V6H 2K4 10,000 0.2 10,000 0 0
Wynand Investments(2)
2035 Monroe St.
Hollywood, FL 33020 150,000 3.0 150,000 0 0
Kontiki Corp Ltd.(2)
Dehands House 2nd Terrace
W. P.O. Box. 233,180 0
N 7120 Nassau, Bahamas 233,180 4.7 233,180 0 0
Empire Builders,Inc.(2)
2035 Monroe St. Hollywood,
FL 33020 200,000 4.0 200,000 0 0
VCBM Ltd.(2)
Dehands House
2nd Terrace
W. P.O. Box.
N 7120 0
Nassau, Bahamas 200,000 4.0 200,000 0 0
MC Corp Ltd.(2)
Dehands House
2nd Terrace W. P.O.
Box. N 0
7120 Nassau, Bahamas 200,000 4.0 200,000 0 0
BAS Ltd.(2)
Dehands House
2nd Terrace W. P.O.
Box. N 7120 0
Nassau, Bahamas 50,000 1.0 50,000 0 0
Deklite Ltd.(2)
Dehands House
2nd Terrace W.
P.O. Box. N 0
7120 Nassau, Bahamas 50,000 1.0 50,000 0 0
Handsome Investments Ltd.(2)
Dehands House
2nd Terrace W. 0
P.O. Box. N 7120
Nassau, Bahamas 50,000 1.0 50,000 0 0
Monica Pulver(2)
2035 Monroe St.
Hollywood, FL 33020 5,000 0.1 5,000 0 0
Beatrice Stockwell(2)
19201 40th Ave W. Lynnwood,
WA 98036 1,000 0 1,000 0 0
(1) Affiliates of Anis Jessa
(2) Transferees and Donees of Anis Jessa
<PAGE>
ITEM 12. DESCRIPTION OF SECURITIES
CURRENT CAPITAL STRUCTURE
As of the date of this prospectus, we have 50,000,000 shares of common stock,
par value $0.0001, authorized, with 4,965,000 shares outstanding held of record
by 52 stockholders.
DESCRIPTION OF CAPITAL STOCK
Upon the closing of this offering, we will be authorized to issue 50,000,000
shares of common stock, $0.0001 par value. The following description of our
capital stock does not purport to be complete and is subject to and qualified by
our articles of incorporation and bylaws, which are included as exhibits to the
Registration Statement of which this prospectus forms a part, and by the
provisions of applicable Nevada law.
COMMON STOCK
As of September 20, 2000, there were 4,965,000 shares of common stock
outstanding. The holders of common stock are entitled to one vote per share on
all matters to be voted upon by the stockholders. Subject to preferences that
may be applicable to any outstanding preferred stock, the holders of common
stock are entitled to receive ratably dividends, if any, as may be declared from
time to time by the board of directors out of funds legally available for that
purpose. See "Dividend Policy." In the event of a liquidation, dissolution or
winding up of our company, the holders of common stock are entitled to share
ratably in all assets remaining after payment of liabilities, subject to prior
distribution rights of preferred stock, if any, then outstanding. There is no
cumulative voting with respect to the election of directors, with the result
that the holders of more than 50 percent of the shares voted for the election of
directors can elect all of the directors. The common stock has no preemptive or
conversion rights or other subscription rights. There are no redemption or
sinking fund provisions applicable to the common stock. All outstanding shares
of common stock are fully paid and non-assessable, and the shares of common
stock to be issued upon the closing of this offering will be fully paid and
non-assessable.
PREFERRED STOCK
The board of directors has the authority, without action by our stockholders, to
designate and issue preferred stock in one or more series and to designate the
rights, preferences and privileges of each series, any or all of which may be
greater than the rights of the common stock. The effect of the issuance of any
shares of preferred stock upon the rights of holders of the common stock might
include, among other things, restricting dividends on the common stock, diluting
the voting power of the common stock, impairing the liquidation rights of the
common stock and delaying or preventing a change in control of our company
without further action by the stockholders. We have no present plans to issue
any shares of preferred stock.
We have yet to authorize any preferred stock. Our board of directors is
empowered, without stockholder approval, to issue series of preferred stock with
any designations, rights and preferences as they may from time to time
determine. Thus, preferred stock, if issued, could have dividend, liquidation,
conversion, voting or other rights that could adversely affect the voting power
or other rights of the common stock. Preferred stock, if issued, could be
utilized, under special circumstances, as a method of discouraging, delaying or
preventing a change in control of our business.
REGISTRATION RIGHTS
None.
OPTIONS
We currently have no options exercisable for our common stock available for
grant. We do not presently have any warrants authorized. Our board of directors
may later determine to grant such options and authorize warrants.
DIVIDEND POLICY
We have not paid any cash dividends since our inception and do not intend to pay
any cash dividends in the foreseeable future.
CAPITALIZATION
The following table sets forth our capitalization as of June 30th, 2000:
o on an actual basis; and
o on an as adjusted to basis to give effect to the sale of 3,853,000 shares of
our common stock in this offering at an assumed initial public offering price
of $5.00 per share, after deducting estimated commissions and estimated
offering expenses payable by us.
The outstanding share information excludes:
o Option shares. No options have been issued or authorized to date.
You should read this table with "Plan of Operation" and the Financial Statements
and the related notes. See "Use of Proceeds" and "Management."
As of June 30, 2000
(Unaudited)
Actual As adjusted
--------------- ----------------
Long-term obligations,
less current portion................ $0 $0
Stockholders' equity:
Common stock, $.0001 par value,
50,000,000 shares authorized,
4,740,000 shares issued; 4,740,000
outstanding actual; ............... $474 $474
Additional paid-in capital......... $0 $0
Deferred stock compensation........ $0 $0
Additional paid-in capital......... $0 $0
Accumulated deficit................ ($97,677) $(97,677)
Accumulated other
comprehensive loss ................ ($3,322) $(3,322)
Total stockholders' equity......... ($100,525) $(100,525)
ITEM 13. INTEREST OF NAMED EXPERTS AND COUNSEL
The validity of the common stock offered hereby will be passed upon for us
by Jonathan Ram Dariyanani Esq., Miami, Florida. Mr. Dariyanani is a beneficial
owner of 150,000 common shares of E-City Software.
Hansen, Barnett & Maxwell,Certified Public Accountants have audited our
financial statements, for the years ended March 31, 2000 and 1999, as set forth
in their report. We have included our financial statements in the prospectus and
elsewhere in the registration statement in reliance on their report, given upon
the authority of such firm as experts in accounting and auditing. Hansen,
Barnett & Maxwell, Certified Public Accountants, will not receive any direct or
indirect interest in E-City Software.
ITEM 14. DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
The limitation of our director's liability does not apply to liabilities arising
under the federal securities laws and does not affect the availability of
equitable remedies such as injunctive relief or rescission.
Insofar as indemnification for liabilities arising under the Securities Act of
1933 (the "Act") may be permitted to directors, officers and controlling persons
of E-City Software pursuant to the foregoing provisions, or otherwise, E-City
Software has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable.
ITEM 15. ORGANIZATION WITHIN LAST FIVE YEARS
(PLEASE REFER TO ITEM 19.)
ITEM 16. DESCRIPTION OF BUSINESS
Overview and Industry Background
We are striving to become the premier electronic interactive mapping company in
the United States. Using interactive mapping technology, we intend to produce
three-dimensional interactive city guides made for both CD ROM and the internet.
Presently, the technology offered on the internet by competitors such as
MapQuest and others is not visually interactive, nor animated. Moreover, it does
not produce visual results that are easy-to-use. Our technology provides
websites with a visually interactive, unique mapping tool at a fraction of the
cost of internal development of a primitive mapping system. We intend to
capitalize upon the internet expansion of powerful brick and mortar businesses.
Moreover, by being an offline supplier of software technology and mapping
development and not an internet destination site, we are able to maintain the
advantages of an enabler of internet activity and e-commerce while
simultaneously developing products that enjoy public notoriety and strengthen
our consumer brand.
SOLUTION
Businesses migrating to the internet and current internet based businesses
are constantly challenged to find useful, visually interactive content that will
enhance user experiences and drive traffic. Brick and mortar businesses also
utilize an internet presence to assist customers in locating brick and mortar
facilities. We believe that the on-line mapping systems that are currently
available are clumsy, often based on outdated or circuitous routes, lack any
three-dimensional or interactive effect and often do not present full visual
driving directions. In addition, most available interactive mapping is limited
to driving directions and does not provide walking directions, important
landmarks or place of businesses within the visual context of a particular city.
Because E-City mapping solutions provide an animated, multi-faceted, landmark
rich visual environment for navigation, they make locating, walking to and
understanding the location context of a particular business significantly
easier. In addition, although there are a number of services that offer driving
directions, we believe that there is no present service that offers visual,
interactive, animated mapping complete with landmarks and prominent city
features with the level of detail and interactivity of the E-City technology.
STRATEGY
We generate revenue primarily by using cutting edge interactive mapping
technology to build semi-custom mapping solutions for large business to consumer
and business-to-business websites. We believe the growth potential for this
revenue is significant. We plan to continue to grow our marketing and business
development capabilities in order to continue the long-term expansion of our
core interactive mapping technology business. In addition, we intend to pursue
an aggressive acquisition strategy to secure complementary technologies in
global positioning system technologies, wireless application development and
other new markets for interactive mapping software.
We plan to launch our international presence in the first quarter of 2001 with
interactive mapping capabilities for China, Europe, Japan and India. We plan for
South and Central America and the rest of Asia to follow by the end of 2001. In
conjunction with strategic partners in the satellite mapping, interactive
broadcast andglobal positioning system fields, we will continue to grow our
capabilities as the interactive visual mapping provider of choice on a global
scale. In addition, we hope to have wireless deployment partners in place by the
first quarter of 2001, continuing to develop E-City software for the WAP
(wireless access protocal) market.
PRODUCTS AND SERVICES
We are in the process of completing our Interactive City Guides to 10 major
metropolitan areas in the United States pursuant to a major development contract
with Cityscape.com, Inc., an on-line city guide and a corporation in which our
Chief Executive Officer, Anis Jessa used to be a 35% owner. See "Related Party
Transactions." Consumers will be able to use these E-City branded maps to locate
businesses, restaurants, hotels and shops for travel and leisure.
In addition, as a value added element for smaller businesses that desire to
license or have developed an E-City mapping solution, we can simultaneously
produce e-commerce software that allows merchants to quickly and easily
establish virtual storefronts. These two products are complementary and can be
used together create a powerful software package that has several applications.
We are also in the process of licensing negotiations with a number of potential
licensees of the E-City metropolitan area maps. We have also been approached by
a number of international corporations with interactive mapping needs for
various cities throughout the world.
Presently, we can also develop a variety of interactive, animated solutions for
websites throughout various industry segments on the Internet, including retail,
physicians and dentists, service providers, governmental offices and industrial
concerns. We intend to develop strategic relationships throughout these
industries to leverage the customer recognition and view time of the E-City
mapping solutions.
CUSTOMERS
To date, we have one development contract with Cityscape.com, Inc. This Software
Development Agreement,dated September 15, 1999, was originally between
3DCityGuide.com, Inc. (which subsequently changed its' name to Cityscape) and
Butterfly Software. The Agreement specifies payments of $2,000,000.00 from
Cityscape to Butterfly beginning August 1, 1999, with a term of two years. The
Agreement requires us to create interactive mapping solutions for 10 cities. We
have collected payments of approximately $600,000 to date under the Agreement.
The Agreement was assumed by E-City at the closing of the E-City purchase of
Butterfly Software, which occurred on August 15, 2000. The transaction between
Butterfly and E-City is further described in the section entitled "Related Party
Transactions."
There can be no assurance that E-City will be successful in gathering customers
other than Cityscape. E-City's potential customers include various industry
segments on the Internet, including retail, physicians and dentists, service
providers, governmental offices and industrial concerns. We intend to develop
strategic relationships throughout these industries to leverage the customer
recognition and view time of the E-City mapping solutions.
TECHNOLOGY
We use a proprietary animated mapping development process that utilizes new
films that our personnel shoot from helicopters over each city or metropolitan
area. These films are rendered by our animators into visual stills. The stills
are then encoded on to the E-City development platform. After encoding, full
animation and interactivity are added. Finally, we build the internet interface
into each city, providing an interactive visual data platform for which any
number of internet applications and websites may be found.
We will also strive to increase our market share by employing the latest
Geographical Information Systems and XML Technology in all of our mapping
software. Because the competitive environment has changed to focus on XML and
away from HTML, traditional companies in the interactive mapping space will have
to transition over and convert into an XML environment. We were founded on the
basis of an XML development strategy and are therefore poised to offer
e-businesses the most advanced XML development capability available. We intend
to produce software that is more functional and powerful than other existing
products.
SALES AND MARKETING
We intend to expand our sales capabilities by increasing the size of our direct
sales force and by establishing and broadening our third-party sales channels.
Currently, our direct sales organization includes two sales representatives. We
also intend to expand our business development organization, which currently
includes one representative.
Our marketing organization currently includes a staff of two individuals. We
intend to expand the marketing organization and target customers in markets that
involve the migration of brick and mortar businesses to the Internet. We intend
to advertise our products via trade shows, industry journals, strategic
partnering, search engine partners, traditional media advertising and web based
advertising. We will also promote our services via our company website and other
ongoing public relations efforts such as exhibiting at industry conferences and
events focused on e-commerce and the internet. The focus of our marketing
efforts is to establish our brand, generate new sales opportunities, and create
awareness of product offerings.
RESEARCH AND DEVELOPMENT
Other than the acquisition of Butterfly Software, E-City has not made an
investment to date in research and development. It is planned that the company
spend approximately $150,000 over the next twelve months to further develop the
foreign language and wireless access protocol functions of the E-City mapping
solutions.
COMPETITION
There is limited direct competition in our market place.
Our competition consists primarily of non-interactive, photo mapping
technologies, with little or no animation and no active animation. Competitors
with such non-interactive technology will be able to license the E-City
technology to improve their level of customer value. At present, our industry is
intensively competitive, subject to rapid change and significantly affected by
new product introductions and other market activities of industry participants.
Our principal sources of indirect competition include: Yahoo!,
MapQuest, Inc. and Microsoft Corporation in the non-custom mapping
development space. In the future, we may also face competition from other
sources that are poised to enter the market, but who remain presently unknown.
PROPRIETARY RIGHTS AND LICENSING
Our success and competitiveness are dependent to a significant degree on the
protection of our proprietary technology. We rely primarily on a combination of
copyrights, trademarks, licenses, trade secret laws and restrictions on
disclosure to protect our intellectual property and proprietary rights. We also
enter into confidentiality agreements with our employees and consultants, and
generally control access to and distribution of our internal documentation and
other proprietary information. Despite these precautions, others may be able to
copy or reverse engineer aspects of our applications, to obtain and use
information that we regard as proprietary or to independently develop similar
technology. Any such actions by competitors could have a material adverse effect
on our business, operating results and financial condition.
In addition, the laws of some foreign countries do not protect our proprietary
rights to the same extent as do the laws of the United States, and effective
patent, copyright, trademark and trade secret protection may not be available in
these jurisdictions.
We will pursue the registration of some of our trademarks in the United States
and in other countries.
REGULATORY ENVIRONMENT
Within the United States, the legal landscape for internet privacy is new and
rapidly evolving. Collectors and users of consumer information over the internet
face potential tort liability for public disclosure of private information; and
liability under federal and state fair trade acts when information sharing
practices do not mirror stated privacy policies. Due to the increasing
popularity and use of the internet, it is likely that a growing number of laws
and regulations will be adopted at the international, federal, state and local
levels relating to the internet covering issues such as user privacy, pricing,
content, copyrights, distribution, antitrust and characteristics and quality of
services. Further, the growth and development of the market for activity on the
internet may prompt calls for more stringent consumer protection laws that may
impose additional burdens on those companies conducting business online. The
adoption of any additional laws or regulations may impair the growth of the
internet, which could, in turn, decrease the demand for our services and
increase our cost of doing business. Moreover, the applicability to the internet
of existing laws in various jurisdictions governing issues such as property
ownership, sales and other taxes, libel and personal privacy is uncertain and
may take years to resolve. Any such new legislation or regulation, the
application of laws and regulations from jurisdictions whose laws do not
currently apply to our business or the application of existing laws and
regulations to the internet could harm our business.
EMPLOYEES AND CONSULTANTS
As of September 20, 2000, we had 16 employees and three consultants, 12 of who
were based at our offices in Vancouver, British Columbia. None of our employees
is subject to a collective bargaining agreement. We believe that our relations
with our employees and consultants are good.
WHERE YOU CAN FIND ADDITIONAL INFORMATION
We filed with the Securities and Exchange Commission a registration statement on
Form SB-2 under the Securities Act for the shares of common stock in this
offering. This prospectus does not contain all of the information in the
registration statement and the exhibits and schedule that were filed with the
registration statement. For further information with respect to us and our
common stock, we refer you to the registration statement and the exhibits and
schedule that were filed with the registration statement. Statements contained
in this prospectus about the contents of any contract or any other document that
is filed as an exhibit to the registration statement are not necessarily
complete, and we refer you to the full text of the contract or other document
filed as an exhibit to the registration statement. A copy of the registration
statement and the exhibits and schedule that were filed with the registration
statement may be inspected without charge at the public reference facilities
maintained by the Securities and Exchange Commission in Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and copies of all or any part of the
registration statement may be obtained from the SEC upon payment of the
prescribed fee. The Securities and Exchange Commission maintains a World Wide
Web site that contains reports, proxy and information statements and other
information regarding registrants that file electronically with the Securities
and Exchange Commission. The address of the site is http://www.sec.gov.
Upon completion of this offering, we will become subject to the information and
periodic reporting requirements of the Securities Exchange Act of 1934, and, in
accordance with the requirements of the Securities Exchange Act of 1934, will
file periodic reports, proxy statements and other information with the
Securities and Exchange Commission. These periodic reports, proxy statements and
other information will be available for inspection and copying at the regional
offices, public reference facilities and website of the Securities and Exchange
Commission referred to above.
ITEM 17. PLAN OF OPERATION
The following discussion and analysis of our financial condition and results of
our operations should be read in conjunction with our financial statements and
related notes appearing elsewhere in this prospectus. This discussion and
analysis contains forward-looking statements that involve risks, uncertainties
and assumptions. The actual results may differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including,
but not limited to, those set forth under "Risk Factors" and elsewhere in this
prospectus.
THE MARKET
The focus of our plan of operation over the next 12 months is to become the
premier electronic interactive mapping company in the United States. We intend
to produce three-dimensional interactive city guides made for both the CD-ROM
and internet. Because we believe the current technology offered on the internet
by competitors is not visually interactive, animated, or easy-to-use, we believe
our market opportunity as a provider of dynamic, interactive software is
substantial. We thus can provide a unique mapping tool at a fraction of the cost
of internal development of a primitive mapping system and are therefore well
positioned to take advantage of the internet expansion of powerful brick and
mortar businesses. Because we are also a supplier of software technology and
mapping development and not a destination site on the internet, we can be an
enabler of internet activity and e-commerce while simultaneously building our
brand.
PRODUCT DEVELOPMENT
Over the next 12 months, we anticipate completing Interactive City Guides to 10
major metropolitan areas in the United States pursuant to our major development
contract with Cityscape.com. These E-City branded guides will assist consumers
to locate businesses, restaurants, hotels, shops and for travel and leisure. We
intend to leverage our expertise developed from fulfillment of this project to
expand into other contexts and develop our sales channels. In addition, as a
value added element for smaller businesses that desire to license or have
developed an E-City mapping solution, we intend to offer simultaneously
e-commerce software that allows merchants to quickly and easily set up virtual
storefronts. These two products are complementary and can be used together
create a powerful software package that has several applications.
STRATEGIC POSITIONING
During the next 12 months we will focus on sales and product development,
specifically, leveraging our core competency of interactive mapping software
design and increasing sales from developing semi-custom solutions for customers.
We intend to build our business development force to develop strategic alliances
to increase market presence and build our brand.
We were founded on the basis of an expandable software architecture that
incorporates the most current internet and wireless technologies, including XML,
or extensible markup language. We are positioned to offer e-businesses advanced
mapping solutions to be presented on the internet in both an HTML and XML
development capability. We hope to win market share by employing the latest
Geographical Information Systems in our mapping software. We believe that the
current focus on XML and away from HTML, or hypertext markup language, will
allow us to seize additional market opportunity as traditional companies in the
interactive mapping space transition over and convert into an XML environment.
INTERNATIONAL EXPANSION
In conjunction with strategic partners that we hope to find in the satellite
mapping, interactive broadcast, global positioning system fields, E-City will
continue to grow its capabilities an the interactive visual mapping provider on
a global scale. We plan to build our international presence in the first quarter
of 2001 with interactive mapping capabilities for China, Europe, Japan and
India. We intend to follow with development in South and Central America and the
rest of Asia by the end of 2001. In addition, we hope to have wireless
deployment partners in place by the first quarter of 2001, continuing to develop
the E-City software for the WAP, or wireless access protocol, market.
CASH REQUIREMENTS
Although we will not receive any proceeds from the sale of shares pursuant to
this offering, we anticipate undertaking additional private financing and will
do so on an as needed basis during the course of the next 12 months. Presently,
without the planned sale of additional shares, we do not have sufficient capital
to maintain, grow or continue our operations for the next 12 months. Our plan of
operation is therefore dependent upon our ability to raise capital apart from
this offering.
RESEARCH AND DEVELOPMENT
We plan to conduct extensive research and development of our core visually
interactive user interface for multiple software products built for the mapping
applications of websites of our customers. Most of this research and development
will be paid for within the contractual fee for development of software for our
customers. We plan to develop and produce interactive mapping solutions for the
handheld, Web enabled wireless device market during the next 12 months. We also
intend to concentrate research on expansion into mapping software for
automotive, marine and aerospace applications that utilize the World Wide Web.
PLANT AND EQUIPMENT
We currently have offices in Seattle, Washington and Vancouver, British
Columbia. Most of our core software development and mapping and animation
technology will be hosted in Vancouver where the employee base is large and
wages are generally lower than in most regions of the United States for software
developers.
We are planning a very significant increase in the size of our facility in
Vancouver, expansion of our U.S. facility and significant expenditures on
computer hardware and software. We estimate requirements of at least $2,000,000
in capital to be raised privately and apart from this offering to be devoted to
expansion of the Vancouver and Seattle facilities and the acquisition of new
computer hardware and software for use by our expanded workforce.
EMPLOYEES
We plan to hire approximately 32 additional developers in the next 12 months to
meet business expansion and continue servicing existing and new clients,
developing existing and new business lines, and augmenting our management,
marketing, sales and business development capacities.
ITEM 18. DESCRIPTION OF PROPERTY
Most of our employees are located in an approximately 6,000 square foot facility
in Vancouver, British Columbia. The lease for this facility expires in May,
2002. Our headquarters is located in Seattle, Washington. This facility is
rented on a month to month basis with no lease agreement. We believe that these
existing facilities are adequate to meet our current, foreseeable requirements
or that suitable additional or substitute space will be available on
commercially reasonable terms.
ITEM 19. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
There has not been, nor is there currently proposed, any transaction or series
of similar transactions to which we were or are to be a party in which the
amount involved exceeds $60,000, and in which any director, executive officer,
holder of more than 5% of our common stock or any member of the immediate family
of any of these people had or will have a direct or indirect material interest
other than compensation agreements and other arrangements, which are described
where required in "Management," and the transactions described below.
ACQUISITION OF BUTTERFLY BY E-CITY-RELATIONSHIP WITH CITYSCAPE
To date, we have one development contract with Cityscape.com, Inc. This
Software Development Agreement, dated September 15, 1999, was originally between
3DcityGuide.com, Inc. (the previous name for Cityscape) and Butterfly Software.
The Agreement specifies payments of $2,000,000.00 from Cityscape to Butterfly
over a period of two years, ending August 1, 2001. The Agreement was for the
creation of interactive mapping solutions for 10 cities at an average of
$200,000 per city. There have been payments of approximately $600,000 to date
under the Agreement. The Agreement was assumed by E-City at the closing of the
E-City purchase of Butterfly Software, which occurred on August 15, 2000. E-City
purchased 100% of the stock of Butterfly Software on August 15, 2000 in exchange
for 50,000 shares of common stock of E-City, 25,000 of which will be registered
in this offering by Anis Jessa. Anis Jessa and his affiliates were 50% owners of
Butterfly Software prior to its acquisition by E-City. While the corporation's
conflict of interest policies were observed with respect to E-City's
ratification of this related party transaction, there can be no assurance that
the terms of the transaction were fair to the shareholders of E-City.
We have derived 100% of our revenues since inception from one customer,
Cityscape.com, Inc, a company Chief Executive Anis Jessa used to own
approximately 35% of the issued and outstanding shares. Mr. Jessa also served as
a director of Cityscape until July, 2000.
Anis Jessa currently serves as our Chief Executive Officer. Prior to July, 2000,
Mr. Jessa served as the President of Cityscape.com, Inc. and as a director. In
July of 2000, Mr Jessa resigned as an officer and director of Cityscape.
Pursuant to stock repurchase agreements entered into with other founders of
Cityscape, Mr. Jessa was required to sell his holdings in Cityscape to the other
founders at par value of $0.0001 per share upon his resignation. While Mr. Jessa
was a holder of approximately 35% of the issued and outstanding stock of
Cityscape, he presently has no direct or indirect financial or equity interest
in Cityscape.
SALES OF OUR COMMON STOCK AND PREFERRED STOCK
Common Stock. The following table summarizes the private placement transactions
in which we sold common stock to our directors, executive officers, 5%
stockholders and persons and entities affiliated with them.
SHARES OF
PRICE PER COMMON STOCK
PURCHASER DATES OF PURCHASE SHARE STOCK
------------------ ----------------- --------- ------------
Anis Jessa
Director and
Executive Officer 5/12/00 $0.0001 3,555,250
Salim Devji
Director and
Executive Officer 8/1/00 $0.0001 200,000
Robin Moulder
Director and
Executive Officer 8/1/00 $0.0001 20,000
Susan Polmar
Executive Officer 8/1/00 $0.0001 5,000
Shabnam Jessa 1 5/12/00 $0.0001 962,250
Mohamed Azim Jessa
Irrevocable Trust(1)
14213 SE 63rd St.
Bellevue, WA 98006 5/12/00 $0.0001 75,000
Irrevocable
Aliyah Jessa Trust 1 5/12/00 $0.0001 75,000
Zinnat Alibhai 1 5/12/00 $0.0001 12,500
Zehra Claire Visram 1 5/12/00 $0.0001 5,000
Fidahusein Jessa 1 5/12/00 $0.0001 5,000
Totals 4,915,000
1 Affiliates of Anis Jessa
DESCRIPTION OF INSIDER SALES
Between May 12, 2000 and August 1, 2000, the registrant sold 4,915,000
shares of common stock in a private placement. There was no public offering of
the shares. The duration of the offering period was May 12, 2000 to August 1,
2000. The shares were offered to acquaintances of the officers, directors and
employees, as well as offered to the Officers and Directors themselves. On
August 15, 2000, E-City issued to Butterfly Software 50,000 shares of common
stock in exchange for 100% of the issued and outstanding stock of Butterfly
Software pursuant to the attached Stock Purchase Agreement. The Officers and
Directors as a group purchased 4,915,000 shares in this private placement or 99%
of the total shares issued in the private placement. In addition, the additional
shares issued pursuant to the acquisition of the Butterfly Stock Purchase were
also issued to Insiders of the Company and totaled 50,000 shares or 1% of the
total then outstanding.
Pursuant to the above transactions, the officers, directors and 5% or greater
shareholders of E-City purchased a total of 4,915,000 shares in the private
placement, representing 99% of the total shares issued and outstanding of the
company subsequent to the private placement.
Officer and Director Anis Jessa and his affiliates purchased 4,690,000 of shares
on May 12, 2000 at a per share purchase price of $0.0001. Officer and Director
Anis Jessa was issued 25,000 shares on August 15, 2000 pursuant to the
acquisition of the Butterfly Software.
Officer and Director Robin Moulder purchased 20,000 shares of common stock at
$0.0001 per share on August 1, 2000 in the above mentioned private placement.
Officer and Director Sal Devji purchased 200,000 shares of common stock at
$0.0001 per share on August 1, 2000 in the above mentioned private placement.
Officer Susan Polmar purchased 5,000 shares of common stock at $0.0001 per share
on August 1, 2000 in the above mentioned private placement.
INDEMNIFICATION AGREEMENTS
We are entering into indemnification agreements with each of our directors and
officers. Such indemnification agreements will require us to indemnify our
directors and officers to the fullest extent permitted by Nevada law. For a
description of the limitation of our directors' and officers' liability and our
indemnification of such directors and officers, see "Limitation on Directors'
and Officers' Liability and Indemnification."
CONFLICT OF INTEREST POLICY
We believe that all transactions with affiliates described above were made on
terms no less favorable to us than could have been obtained from unaffiliated
third parties. Our policy is to require that a majority of the independent and
disinterested outside directors on our board of directors approve all future
transactions between us and our officers, directors, principal stockholders and
their affiliates. Such transactions will continue to be on terms no less
favorable to us than we could obtain from unaffiliated third parties.
ITEM 20. MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
There is no trading market for our common stock at present and there has been no
trading market to date. Management has not undertaken any discussions with any
prospective market maker concerning the participation in the aftermarket for our
securities and management does not intend to initiate any discussions. We cannot
guarantee that a trading market will ever develop or if a market does develop,
that it will continue. As of September 20, 2000, there are no options
outstanding to purchase shares of our common stock and no options to purchase
our common stock that are authorized and available for grant, no shares that may
be sold pursuant to Rule 144 and 3,853,000 shares that we have agreed to
register under the Securities Act in this offering for sale by current security
holders. There are approximately 52 holders of record of our shares of common
stock. No dividends have been paid on our common stock to date, and we have no
plans to pay dividends on our common stock in the foreseeable future.
The Securities and Exchange Commission has adopted a rule that established the
definition of a "penny stock," for purposes relevant to us, as any equity
security that has a market price of less than $5.00 per share or with an
exercise price of less than $5.00 per share, subject to certain exceptions. For
any transaction involving a penny stock, unless exempt, the rules require: (i)
that a broker or dealer approve a person's account for transactions in penny
stocks; and (ii) the broker or dealer receive from the investor a written
agreement to the transaction, setting forth the identity and quantity of the
penny stock to be purchased. In order to approve a person's account for
transactions in penny stocks, the broker or dealer must (i) obtain financial
information and investment experience and objectives of the person; and (ii)
make a reasonable determination that the transactions in penny stocks are
suitable for that person and that person has sufficient knowledge and experience
in financial matters to be capable of evaluating the risks of transactions in
penny stocks. The broker or dealer must also deliver, prior to any transaction
in a penny stock, a disclosure schedule prepared by the SEC relating to the
penny stock market, which, in highlight form, (i) sets forth the basis on which
the broker or dealer made the suitability determination; and (ii) that the
broker or dealer received a signed, written agreement from the investor prior to
the transaction. Disclosure also has to be made about the risks of investing in
penny stock in both public offering and in secondary trading, and about
commissions payable to both the broker-dealer and the registered representative,
current quotations for the securities and the rights and remedies available to
an investor in cases of fraud in penny stock transactions. Finally, monthly
statements have to be sent disclosing recent price information for the penny
stock held in the account and information on the limited market in penny stocks.
As a result, if trading in our common stock is determined to be subject to the
above rules, a stockholder may find it more difficult to dispose of, or to
obtain accurate quotations as to the market value of, our securities.
<PAGE>
MANAGEMENT
ITEM 21. EXECUTIVE COMPENSATION
EXECUTIVE COMPENSATION
The following table presents the compensation earned, awarded or paid for
services rendered to us in all capacities since the commencement of our
operations by our Chief Executive Officer, there are no other executive officers
who earned more than $100,000 in salary and bonus since commencement of
operations.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Awards
------------------- ----------------------
Name, Other Restricted Securities
Principal Annual Stock Underlying All Other
Position Salary($) Bonus($) Compensation($) Award(s)($) Options(#) Compensation
Anis
Jessa $60,000* 0 0 0 0 0
*Anis Jessa has not yet drawn any salary from E-City. It is anticipated
that Mr. Jessa will begin taking a salary of $60,000 beginning January 1, 2001.
Mr. Jessa is not entitled to any reimbursement for the salary he has elected to
forego.
OPTION GRANTS SINCE INCEPTION AND AGGREGATE OPTION EXERCISES DURING
LAST FISCAL YEAR AND FISCAL YEAR-END OPTION VALUES
Since inception, we have not granted any stock options to any individual,
including our Chief Executive Officer. We anticipate granting options to various
employees, directors and consultants. Any such grants will be made at an
exercise price equal to the fair market value of our common stock as determined
by our board of directors.
<PAGE>
Employee Benefit Plans
We do not currently
have any employee
benefit plans.
<PAGE>
(THIS PAGE INTENTIONALLY LEFT BLANK)
<PAGE>
ITEM 22. FINANCIAL STATEMENTS
Report of HANSEN, BARNETT & MAXWELL CERTIFIED PUBLIC ACCOUNTANTS ..........F1
Financial Statements
Balance Sheet .............................................................F2
Statements of Operations ..................................................F4
Statements of Shareholders' Equity.........................................F6
Statements of Cash Flows...................................................F8
Notes to Financial Statements..............................................F10
Report of Hansen,
Barnett & Maxwell,
Certified Public
Accountants,
<PAGE>
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
AND
FINANCIAL STATEMENTS
March 31, 2000 and 1999
<PAGE>
E-CITY SOFTWARE, INC.
AND SUBSIDIARY
TABLE OF CONTENTS
Page
Report of Independent Certified Public Accountants .......................F1
Financial Statements:
Consolidated Balance Sheets - June 30, 2000 (Unaudited),
March 31, 2000 and 1999 ..................................................F2
Consolidated Statements of Operations for the Three Months Ended
June 30, 2000 and 1999 (Unaudited), and for the Year Ended
March 31, 2000 and for the Five Months Ended March 31, 1999 ..............F4
Consolidated Statements of Stockholders' (Deficit) for the Five
Months Ended March 31, 1999 and for the Year Ended March 31,
2000 and for the Three Months Ended June 30, 2000 (Unaudited).............F6
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 2000 and 1999 (Unaudited), and for the Year Ended March
31, 2000 and for the Five Months Ended March 31, 1999 ....................F8
Notes to Financial Statements ............................................F10
<PAGE>
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East 300 South, Suite 200
Member of Summit International Associates Salt Lake City, Utah 84111-2693
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors and Shareholders
E-City Software, Inc. and Subsidiary
We have audited the accompanying consolidated balance sheets of E-City Software,
Inc. and subsidiary as of March 31, 2000 and 1999 and the related consolidated
statements of operations, stockholders' deficit, and cash flows for the year
ended March 31, 2000 and for the Five Months Ended March 31, 1999. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. 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 financial position of E-City Software,
Inc. and subsidiary as of March 31, 2000 and 1999, and the results of their
operations and their cash flows for the year ended March 31, 2000 and for the
five months ended March 31, 1999 in conformity with accounting principles
generally accepted in the United States.
The accompanying financial statements have been prepared assuming that the
Company will continue as a going concern. As discussed in Note 1 to the
consolidated financial statements, the Company's operating losses since
inception and negative working capital raise substantial doubt about its ability
to continue as a going concern. Management's plans concerning these matters are
also described in Note 1. The financial statements do not include any
adjustments that might result from the outcome of this uncertainty.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
September 12, 2000
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
June 30, March 31,
----------- ----------------------------
2000 2000 1999
(Unaudited)
ASSETS
Current Assets
Cash $ 27,489 $ 14,658 $ 12,452
Software
development costs 211,690 74,169 -
Prepaid expenses 16,433 13,232 -
Related party receivable 85,674 86,055 -
------- ------- ---------
Total Current Assets 341,286 188,114 12,452
------- ------- ------
Property and Equipment
Automobiles 20,600 21,043 -
Furniture and fixtures 9,031 6,480 -
Computer equipment 71,942 52,792 -
Less:
accumulated
depreciation (17,920) (11,636) -
----------- ----------- ----------
Total Property
and Equipment 83,653 68,679 -
---------- ---------- ----------
Total Assets $ 424,939 $ 256,793 $ 12,452
========== ========== =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
LIABILITIES AND STOCKHOLDERS' DEFICIT
June 30, March 31,
----------- ----------------------------
2000 2000 1999
(Unaudited)
Current Liabilities
Accounts payable $ 3,377 $ 3,451 $-
Accrued expenses 22,505 29,691 5,817
Obligations
under capital
lease -
current portion 3,529 3,538 -
Related
party notes
payable 178,292 182,130 13,322
Deferred revenue 304,000 96,000 -
-------- -------- ---------
Total Current
Liabilities 511,703 314,810 19,139
Obligations
Under Capital Lease
Long Term 13,761 14,984 -
-------- --------- ---------
Total Liabilities 525,464 329,794 19,139
-------- --------- ---------
Stockholders' Deficit
Common stock,
$0.0001 par value,
50,000,000 shares
authorized,
4,740,000,
50,000 and 50,000
shares
issued and outstanding,
respectively 474 5 5
Accumulated deficit (97,677) (68,136) (6,653)
Accumulated other
comprehensive
income(loss) (3,322) (4,870) (39)
------- -------- -------
Total Stockholders'
Deficit (100,525) (73,001) (6,687)
--------- --------- --------
Total Liabilities
and Deficit $ 424,939 $ 256,793 $ 12,452
========== ========== =========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
Months Ended For the Years Ended
June 30, March 31, March 31,
----------------- ----------- -----------
2000 1999 2000 1999
---- ---- ----------- -----------
(Unaudited)
Sales $- $- $ 250,000 $-
Cost of Goods Sold - - 132,023 -
----- ------ ---------- -------
Gross Profit - - 117,977 -
Operating Expenses
General and
administrative
expenses 26,931 - 78,394 6,636
Research and
development - 65,022 99,893 -
------ ------ ------ -------
Total Operating
Expenses 26,931 65,022 178,287 6,636
------ ------ ------- ------
Loss from
Operations (26,931) (65,022) (60,310) (6,636)
Other Income (Loss)
Interest income 17 5 57 2
Gain (Loss)
on foreign
currency exchange (2,627) 754 (1,230) (19)
-------- --- ------ ----
Net Other
Income (Loss) (2,610) 759 (1,173) (17)
------- --- ------ ----
Net Loss $ (29,541) $ (64,263) $ (61,483) $ (6,653)
========== ========== =========== ==========
Basic Loss
Per Share $ (0.01) $ (0.01) $ (0.01) $-
-------- -------- -------- ---------
Weighted
Average
Shares Outstanding 4,740,000 4,740,000 4,740,000 4,740,000
========== ========= ========== ==========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' Equity (DEFICIT)
Accumulated
Other
Common Stock Paid In Accumulated Comprehensive Total
Shares Amount Capital Deficit Loss Equity
------------- ------- ----------- ------------- ------
11-9-98 shares
issued
at inception 50,000 $ 5 $- $- $- $ 5
Net loss - - - (6,653) - (6,653)
Translation
adjustments - - - - (39) (39)
Comprehensive
Loss - - - - - (6,687)
--------- ----- ------ --------- -------- ---------
Balance
March 31, 50,000 5 - (6,653) (39) (6,687)
1999
Net loss - - - (61,483) - (61,483)
Translation
adjustments - - - - (4,831) (4,831)
Comprehensive
Loss - - - - - (66,314)
-------- ------- -------- --------- ----------- ---------
Balance
March 31, 50,000 5 - (68,136) (4,870) (73,001)
2000
Net loss
(unaudited) - - - (29,541) - (29,541)
Translation
adjustments
(unaudited) - - - - 1,548 1,548
Founders
shares
issued at
inception
of E-City
Software,
Inc.
on May 12,
2000
(unaudited) 4,690,000 469 - - - 469
Comprehensive
loss
(unaudited) - - - - - (27,524)
--------- ------ ------- -------- --------- ---------
Balance
June 30,
2000
(Unaudited)
4,740,000 $ 474 $- $ (97,677) $ (3,322) $ (100,525)
========= ====== ====== ========== ========= ===========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
Months Ended For the Months Ended
June 30, March 31, March 31,
----------------- --------- ----------
2000 1999 2000 1999
---- ---- --------- ----------
(Unaudited)
Cash Flows
From Operating
Activities
Net loss $ (29,541) $ (64,263) $ (61,483) $ (6,653)
Foreign exchange
(gain) loss 2,627 (754) 1,230 19
Depreciation
and amortization 6,532 627 11,463 -
Changes in
current assets
and liabilities:
Accounts receivable (378) - (85,178) -
Work in process (139,126) - (73,068) -
Prepaid expenses (3,481) (3,680) (13,035) -
Accounts
payable
and accrued
expenses (6,095) 7,663 26,788 5,788
Deferred revenue 208,000 - 96,000 -
------- ------ ------- -------
Net Cash
Provided by
(Used In)
Operating
Activities 38,538 (60,407) (97,283) (846)
---------- --------- --------- --------
Cash Flows From
Investing Activities
Equipment purchases (22,956) (15,285) (59,600) -
Net Cash Used
in Investing
Activities (22,956) (15,285) (59,600) -
Cash Flows
From
Financing
Activities
Principal
payments
of long-term
debt (842) (2,786) (5,257) (8,295)
Borrowings
under
long-term debt - 74,093 169,747 21,617
--------- ------- ------- ------
Net Cash
(Used In)
Provided by
Financing
Activities (842) 71,307 164,490 13,322
------- -------- ------- ------
Effect of Exchange Rate
Changes on Cash (1,909) 383 (5,401) (24)
------- --- ------ ---
Net Increase
(Decrease)
in Cash and
Cash Equivalents 12,831 (4,002) 2,206 12,452
Cash and Cash Equivalents at
Beginning of Year 14,658 12,452 12,452 -
Cash and Cash
Equivalents
at End of Year $ 27,489 $ 8,450 $ 14,658 $ 12,452
======== ======= ======== ========
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
<PAGE>
E-CITY SOFTWARE, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(INFORMATION WITH RESPECT TO JUNE 30, 2000 AND
FOR THE THREE MONTHS ENDED JUNE 30, 2000 AND 1999 IS UNAUDITED)
NOTE 1 - ORGANIZATION AND SIGNIFICANT ACCOUNTING POLICIES
Organization and Nature of Operations -- Butterfly Software, Inc. (Butterfly)
was incorporated on November 9, 1998 pursuant to the laws of British Columbia,
Canada. Its primary business activity is the development of interactive computer
software (interactive city guides) produced on a contract basis for customers.
On May 12, 2000, E-City Software, Inc. (E-City) was created as a Nevada
corporation by the major shareholder of Butterfly and 4,690,000 shares of common
stock were issued as founders shares. E-City has had no operations and is
considered a shell corporation. Subsequent to E-City's formation and pursuant to
a purchase agreement between Butterfly and E-City, the 100 outstanding shares of
Butterfly were exchanged for 50,000 shares of E-City whereby Butterfly became a
wholly owned subsidiary of E-City. For financial reporting, the acquisition was
accounted for at historical cost in a manner similar to a pooling-of-interests
with Butterfly considered the acquiring corporation. The historical financial
statements of Butterfly, which are presented herein, were restated to reflect
the E-City shares issued to the Butterfly shareholders. E-City and its
subsidiary, Butterfly, are herein referred to as "the Company".
Interim Unaudited Financial Information -- The accompanying condensed financial
statements have been prepared by the Company and are not audited. In the opinion
of management, all adjustments necessary for a fair presentation have been
included and consist only of normal recurring adjustments except as disclosed
herein. The financial position and results of operations presented in the
accompanying financial statements are not necessarily indicative of the results
to be generated for the remainder of 2000.
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 revenues and expenses during
the reporting period. Actual results could differ from those estimates
Basis of Presentation--The accompanying consolidated financial statements have
been prepared on a going concern basis, which contemplates the realization of
assets and the satisfaction of liabilities in the normal course of business. As
shown in the consolidated financial statements for the three month period ended
June 30, 2000 and 1999, and the year ended March 31, 2000 and for the five
months ended March 31, 1999, the Company has incurred net losses of $29,541,
$64,263, $61,483 and $6,653 respectively. Also, for the three month period ended
June 30, 2000, and the year ended March 31, 2000 and for the five months ended
March 31, 1999, the Company had a working capital deficit of $170,417, $126,696,
and $6,687, respectively. These factors, among others, raise substantial doubt
about the Company's ability to continue as a going concern for a reasonable
period of time. The consolidated financial statements do not include any
adjustments relating to the recoverability and classification of recorded assets
or the amount and classification of liabilities which might be necessary should
the Company be unable to continue as a going concern. The Company's continuation
as a going concern is dependent upon its ability to generate sufficient cash
flows to meet its obligations on a timely basis, to obtain additional financing
as may be required, and ultimately to attain successful operations. The
Company's management intends to use both capital and debt financing as needed to
provide sufficient cash flow.
Software Revenue -- Revenue from licenses of the interactive guides is
recognized when delivery is complete, and no significant obligations remain
unfulfilled by the Company and when collection of any remaining receivable is
probable. Payments collected prior to revenue recognition are accounted for as
deferred revenue.
<PAGE>
Service revenues from the post-contract customer support contract and software
upgrade contract are recognized at the time revenues from the contract are
recognized because the service period is less then one year. The Company has
estimated and accrued the costs related to these services and recorded them in
the year revenue is recognized.
Capitalized Software Costs -- In accordance with Financial Accounting Standards
Board ("FASB") Statement of Financial Accounting Standards ("SFAS") No. 86,
"Accounting for the Costs of Computer Software to be Sold, Leased or Otherwise
Marketed" development costs incurred in the research and development of new
software products to be sold, leased or otherwise marketed are expensed as
incurred until technological feasibility in the form of a working model has been
established. Subsequent costs to produce the interactive guides are accumulated
as an asset, "software development costs", and recorded as costs of goods sold
when revenue is recognized.
Major Customers -- During the year ended March 31, 2000, revenue from the
company's sole customer amounted to $250,000.
Financial Instruments -- The amounts reported as cash, related party accounts
receivable, accounts payable, accrued liabilities and unearned revenue are
considered to be reasonable approximations of their fair values due to their
near-term maturities.
Cash and Cash Equivalents -- The Company considers all short-term investments
with an original maturity of three months or less to be cash equivalents.
Property and Equipment -- Property and equipment is reported at cost. Minor
repairs, enhancements, and maintenance costs are expensed when incurred.
Depreciation is computed using the straight-line method over the estimated
useful lives of the assets. Depreciation expense for the three months ended June
30, 2000 and 1999 and the year ended March 31, 2000 and for the five months
ended March 31, 1999 was $6,532, $627, $11,467 and $0, respectively. Major
categories of property and equipment and estimated useful lives are as follows:
Estimated
Useful Life
Furniture and fixtures.................... 3-7 years
Computer equipment........................ 5 years
Automobiles............................... 5 years
Impairment of Long-lived Assets -- The Company reviews its long-lived assets,
for impairment when events or changes in circumstances indicate that the
carrying value of an asset may not be recoverable. The Company evaluates, at
each balance sheet date, whether events and circumstances have occurred which
indicate possible impairment. The Company uses an estimate of future
undiscounted net cash flows from the related asset or group of assets over their
remaining life in measuring whether the assets are recoverable. The Company does
not consider any of its long-lived assets to be impaired.
Foreign Currency Translation -- Monetary assets and liabilities which are
denominated in currencies other than Canadian Dollars are translated at the
exchange rate in effect at the balance sheet date. Revenue and expense items are
translated at rates of exchange prevailing on the transaction dates. All
exchange gains or losses are recognized currently in earnings.
For reporting purposes, the financial statements have been translated into
United States Dollars. Assets and liabilities are translated at the exchange
rate in effect on the balance sheet date. Revenue and expense items are
translated at an average exchange rate. Translation adjustments representing
translation gains or losses are recorded as a component of comprehensive income.
<PAGE>
Basic and Diluted Loss Per Share -- Basic loss per common share is computed by
dividing net loss by the weighted-average number of common shares outstanding
during the period. Diluted loss per share is calculated to give effect to
potentially issuable common shares except during loss periods when those
potentially issuable common shares would decrease the loss per share. There were
no potentially issuable shares at June 30, 2000 (unaudited), March 31, 2000, or
1999.
Earnings per share for the periods ended June 30, 2000 and 1999, and March 31,
2000 and 1999 has been calculated by considering the 4,690,000 shares issued
upon the inception of E-City on May 12, 2000 as being outstanding for the entire
period from November 9, 1998.
Income Taxes -- The Company recognizes an asset or liability for the deferred
tax consequences of all temporary differences between the tax bases of assets or
liabilities and their reported amounts in the financial statements that will
result in taxable or deductible amounts in future years when the reported
amounts of the assets or liabilities are recovered or settled. These deferred
tax assets or liabilities are measured using the enacted tax rates that will be
in effect when the differences are expected to reverse. Deferred tax assets are
reviewed periodically for recoverability and valuation allowances are provided,
as necessary.
Recent Accounting Pronouncements -- In June 1998, the FASB issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133").
SFAS 133 establishes new accounting and reporting standards for companies to
report information about derivative instruments, including certain derivative
instruments embedded in other contracts (collectively referred to as
derivatives), and for hedging activities. This statement is effective for
financial statements issued for all fiscal quarters of fiscal years beginning
after June 15, 2000. The Company does not expect this statement to have a
material impact on the Company's results of operations, financial position or
liquidity.
In March 2000, the FASB issued Interpretation No. 44, "Accounting for
Certain Transactions Involving Stock Compensation, An Interpretation of APB
Opinion No. 25." Interpretation No. 44 provides definitive guidance regarding
accounting for stock-based compensation to non-employee directors.
Interpretation 44 allows non-employee directors to be treated as "employees" for
purposes of applying APB Opinion No. 25.
NOTE 2 - CASH FLOW INFORMATION
Supplemental Cash Flow Information -- During the periods ended March 31, 1999
and 2000, and June 30, 2000 and 1999 the Company paid $0, $1,060, $498 and $0
for interest.
Noncash Investing and Financing Activities -- During 2000, the company entered
into a capital lease arrangement for a vehicle valued at $21,043. The company
also transferred equipment valued at $1,225 to a shareholder as a payment on a
note from the shareholder.
NOTE 3-RELATED PARTY TRANSACTIONS AND BALANCES
The Company entered in to an agreement in September 1999 with a related party
under common control to develop ten interactive city guides for a total contract
price of $2,000,000. During the year ended March 31, 2000 the Company completed
and delivered the first interactive guide and recognized revenues of $250,000.
In addition, the company has received deposits on subsequent city guides which
it has recorded as deferred revenue pending completion of each guide. The
Company has recorded deferred revenue of $304,000 and $96,000 for the three
months ended June 30, 2000 and the year ended March 31, 2000, respectively.
The Company has also loaned funds to this related party. As of June 30, 2000 and
March 31, 2000, the Company had a receivable of $85,674 and $86,055,
respectively, from the related party.
<PAGE>
The Company has borrowed funds for operating capital from various shareholders
and other companies under common management. Amounts due to these related
parties are non-interest bearing and without specific terms of repayment. As of
June 30, 2000 and March 31, 2000 and 1999, the Company owed $178,292, $182,130
and $13,322, respectively.
NOTE 4-COMMITMENTS
Obligations under Capital Leases -- During 2000, the Company entered a capital
lease agreement for a vehicle. The lease is for 48 months with a minimum monthly
payment of $401. Equipment under capital leases as of March 31, 2000 was as
follows:
Automobile $ 21,043
Less: Accumulated depreciation (3,069)
--------
$ 17,974
Operating Lease Obligations -- On February 29, 2000, the Company entered into a
24 month lease agreement for a vehicle. The lease payment is $458 per month.
On March 31, 2000, the Company entered into a 3-year agreement to lease office
space for monthly payments of $1,552. A yearly escalation allowance is provided
in the lease agreement.
Rental expense for the three months ended June 30, 2000 and the years ended
March 31, 2000 and 1999 was $4,864 and $19,766, and $0.
The future minimum lease payments for capital and operating leases as of March
31, 2000 are as follows:
For the Year Ending Capital Operating
March 31, Leases Leases
2001...............................................$ 4,807 $ 25,595
2002............................................... 4,807 24,708
2003............................................... 4,807 3,294
2004............................................... 7,626 -
Total minimum payments.............................22,047 $ 53,597
========
Less amount representing executory costs......... (2,299)
-------
Net minimum lease payment........................ 19,748
Less amount representing interest............... (1,226)
-------
Present value of net minimum lease payments...... 18,522
Less current portion............................ (3,538)
-------
Obligations Under Capital Lease ................$ 14,984
=========
<PAGE>
NOTE 5-COMPREHENSIVE LOSS
Comprehensive income (loss) consists of foreign currency translation adjustments
as follows:
Before-Tax Tax Net-of-Tax
Amount Benefit Amount
For the Quarter
Ended June 30, 2000
(Unaudited)
Translation adjustments $ 1,548 $- $ 1,548
--------- ----------- -------
Other Comprehensive Income $ 1,548 $- $ 1,548
======= =========== =======
For the Year
Ended March 31, 2000
Translation adjustments $ (4,831) $- $ (4,831)
--------- ------------ ---------
Other Comprehensive Loss $ (4,831) $- $ (4,831)
========= ============ =========
For the Year Ended March 31, 1999
Translation adjustments $ (39) $- $ (39)
----- ------------- ------
Other Comprehensive Loss $ (39) $- $ (39)
====== ============= ======
NOTE 6- INCOME TAXES
The Company did not have a current or deferred provision for income taxes for
the year ended March 31, 2000 and for the five months ended March 31, 1999. The
following presents the components of the net deferred tax asset at June 30,
2000, March 31, 2000 and 1999:
June 30, March 31,
-------------- -----------------
2000 2000 1999
----- ----- ----
(Unaudited)
Operating loss carryforwards $ 116,801 $ 53,495 $ 2,526
Software development costs (80,443) (28,184) -
Less: Valuation Allowance (36,358) (25,311) (2,526)
--------- ---------- -------
Net Deferred Tax Asset $- $- $-
The valuation allowance increased $11,047, $22,785 and $2,526 during the quarter
ended June 30, 2000, and the years ended March 31, 2000 and 1999, respectively.
At March 31, 2000, the Company has net operating loss carryforwards of $140,777
that expire, if unused, beginning in 2019.
The following is a reconciliation of the income tax benefit computed at the
federal statutory tax rate with the provision for income taxes for the quarter
ended June 30, 2000 and the year ended March 31, 2000 and 1999:
June 30, March 31,
------------- ---------------------
2000 2000 1999
------ ------ ------
(Unaudited)
Income tax benefit at
statutory rate (38%) $ (11,047) $ (23,364) $ (2,526)
Deferred tax valuation
allowance change 11,047 22,785 2,526
Non-deductible expenses - 579 -
Provision for Income Taxes $- $- $-
<PAGE>
NOTE 7-SUBSEQUENT EVENTS
In August 2000, the Company sold 225,000 shares of common stock to certain
employees and directors of the Company at par value.
As of the report date, the Company was involved in preparing a Form SB-2 to be
filed with the Securities and Exchange Commission to register 3,853,000 shares
of common stock on behalf of the stockholders. The Company will receive no
proceeds from the sale of the shares to the public by the shareholders.
ITEM 23. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
There are no disagreements with the accountants on accounting policies or
financial disclosure.
<PAGE>
[Inside Back Cover Art]
<PAGE>
E-CITY SOFTWARE, INC.
<PAGE>
E-City Software, Inc.
REGISTRATION STATEMENT ON FORM SB-2
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article V of our articles of incorporation provides for the indemnification of
directors and officers to the fullest extent permissible under Nevada law.
Article V of our bylaws provides for the indemnification of officers, directors
and third parties acting on behalf of us if such person acted in good faith and
in a manner reasonably believed to be in and not opposed to our best interest,
and, with respect to any criminal action or proceeding, the indemnified party
had no reason to believe his or her conduct was unlawful.
We are entering into indemnification agreements with our directors and executive
officers, in addition to indemnification provided for in our bylaws, and intend
to enter into indemnification agreements with any new directors and executive
officers in the future. The indemnification agreements may require us, among
other things, to indemnify our directors and officers against certain liability
that may arise by reason of their status or service as directors and officers
(other than liabilities arising from willful misconduct of a culpable nature),
to advance their expenses incurred as a result of any proceeding against them as
to which they could be indemnified, and to obtain directors and officers'
insurance, if available on reasonable terms.
ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the costs and expenses, other than commissions,
payable by us in connection with the sale of common stock being registered. All
amounts are estimates except the SEC registration fee.
SEC registration fee.................................................... $5,086
OTC listing fee......................................................... $1,000
Printing and engraving costs............................................ 20,000
Legal fees and expenses................................................ 150,000
Accounting fees and expenses............................................ 10,000
Blue Sky fees and expenses.............................................. 10,000
Directors and Officers Insurance........................................ 25,000
Transfer Agent and Registrar fees........................................ 4,000
Miscellaneous expenses.................................................. 25,000
Total................................................................. =250,086
ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES
Between May 12, 2000 and August 1, 2000, the registrant sold 4,915,000
shares of common stock. There was no public offering of the shares. The duration
of the offering period was May 12, 2000 to August 1, 2000. The shares were
offered to acquaintances of the officers, directors and employees, as well as
offered to the officers and directors themselves. Between May 12, 2000 and
August 1, 2000, 4,915,000 shares were sold to founders of E-City at par value of
$0.0001 per share. The total offering price for this offering was $492.00. On
August 15, 2000, E-City issued to Butterfly Software 50,000 shares of common
stock in exchange for the purchase of 100% of the issued and outstanding stock
of Butterfly Software pursuant to the attached Stock Purchase Agreement.
For additional information concerning these equity investment transactions,
reference is made to the information contained under the caption "Related Party
Transactions" in the form of prospectus included herein.
ITEM 27. EXHIBITS
(a) Exhibits
Number Description
3.1 Articles of Incorporation of the Registrant
3.2 Bylaws of the Registrant.
4.1 Specimen common stock certificate.
5.1 Opinion of Jonathan Ram Dariyanani, Esq.* To be filed by Amendment
10.1 Form of Common Stock Purchase Agreement
10.2 Common Stock Purchase Agreement by and between
E-City Software, Inc. and Anis Jessa.
10.3 Common Stock Purchase Agreement
by and between E-City Software, Inc. and Salim Devji.
10.4 Common Stock Purchase Agreement
by and between E-City Software, Inc. and Robin Moulder.
10.5 Common Stock Purchase Agreement
by and between E-City Software, Inc and Susan Polmar.
10.6 Stock Purchase Agreement
by and between E-City Software, Inc and Butterfly Software Inc.
10.7 Software Development Agreement
10.8 Software Development Agreement Addendum
23.1 Consent of Hansen, Barnett & Maxwell,
Certified Public Accountants, (see Page II- 105 )
23.2 Consent of Jonathan Ram Dariyanani, Esq.
* To be filed by Amendment(included in Exhibit 5.1).
24.1 Power of Attorney (see Page II-60).
27.1 Financial Data Schedule.
(b) Description of Exhibits
(c) Financial Statement Schedules
Schedules not listed above have been omitted because the information required to
be set forth therein is not applicable or is shown in the financial statements
or notes thereto.
ITEM 28. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended, may be permitted to our directors, officers and controlling
persons pursuant to the foregoing provisions, or otherwise, we have been advised
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by us of expenses incurred or
paid by one or more of our directors, officers or controlling persons in the
successful defense of any action, suit or proceeding) is asserted by one or more
of our directors, officers or controlling persons in connection with the
securities being registered, we will, unless in the opinion of our counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by us is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
We hereby undertake:
(1) to file during any period in which we offer or sell securities, a
post-effective amendment to this registration statement: (a) to include any
prospectus required by Section 10(a)(3) of the Securities Act; (b) to reflect in
the prospectus any facts or events which, individually or together, represent a
fundamental change in the information in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in a form of prospectus filed
with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20% change
in the maximum aggregate offering price set forth in the "Calculation of the
Registration Fee" table in the effective registration statement; and (c) to
include any additional or changed material information on the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement.
(2) That, for the purpose of determining liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to the initial bona fide offering
thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities that remain unsold at the termination of the offering.
(4) For purposes of determining liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
registration statement in reliance on Rule 430A and contained in the form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be a part of this registration
statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities Act, each
post-effective amendment that contains a form of prospectus shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to the initial bona
fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Seattle, State of Washington, on the
20th day of September, 2000.
By: /s/ Anis Jessa
Anis Jessa, Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Anis Jessa, his or her attorney-in-fact, each
with the power of substitution, for him or her and in his or her name, place and
stead, in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this Registration Statement, and to sign any
registration statement for the same offering covered by this Registration
Statement that is to be effective upon filing pursuant to Rule 462(b)
promulgated under the Securities Act of 1933, as amended, and all post-effective
amendments thereto, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorney-in-fact and agents, full power and authority to do
and perform each and every act and thing requisite and necessary to be done in
and about the premises, as fully to all intents and purposes as he or she might
or could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agents or any of them, or his or her substitute or
substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
Chief Executive Officer, Interim September 20th, 2000
/s/ Anis Jessa C.F.O. and Director
------------------
Anis Jessa
/s/ Salim Devji Chief Technology Officer and Director September 20th, 2000
------------------
Salim Devji
/s/ Robin Moulder Chief Operating Officer and Director September 20th, 2000
------------------
Robin Moulder
<PAGE>
Exhibit 3.1
Articles of Incorporation of the Registrant
Dan Heller Filed: C13438-00
Secretary of State May 12, 2000
101 North Carson Street
Suite 3
Carson City, Nevada 89701
(775) 684-5708
Articles of Incorporation
1. Name of Corporation: E - City Software, Inc.
-------------------
2. Resident Agent Name: Kirk Roberts
and Street Address 4620 S. Arville Street , Suite C Las Vegas, NV 89103
3. Shares: 50,000,000 par value 0.0001
4. Government Board: Shall be styled as Directors
Name, Address The first board of Directors shall consist of one member
Number of Board one whose name and address are as follows:
Directors Kirk Roberts
1012-5353 W. Dessert Inn Road Las Vegas, NV 89146
5. Purpose: The purpose of this corporation shall be:
Software Development
6. Other Matters: N/A
7. Name,Address and Kirk Robers
Signature of 1012-5353 W. Dessert Inn Road Las Vegas, NV 89146
/s/ Kirk Roberts
------------------
Kirk Roberts
Incorporators
/s/ Kirk Roberts
--------------------
Kirk Roberts
Director
Notary:
8. Certificate of Acceptance Kirk Roberts
of Appointed 1012-5353 W. Dessert Inn Road Las Vegas, NV 89146
Resident Agent /s/ Kirk Roberts
--------------------
Kirk Roberts
<PAGE>
Exhibit 3.2
Bylaws of the Registrant
BYLAWS
OF
E- CITY SOFTWARE, INC., INC.
ARTICLE I: OFFICES
The principal office of the Corporation in the State of Nevada shall be located
in Las Vegas, County of Clark, the Corporation may have such other offices,
either within or without the State of Nevada, as the Board of Directors my
designate or as the business of the Corporation my require from time to time.
ARTICLE II: SHAREHOLDERS
SECTION 1. Annual Meeting. The annual meeting of the shareholders shall be held
on the 15th day in the month of September in each year, beginning with the
transaction of such other business as may come before the meeting. If the day
fixed for the annual meeting shall be a legal holiday in the State of Nevada,
such meeting shall be held on the next succeeding business day. If the election
of Directors shall be held on the day designated herein for any annual meeting
of the shareholders or at any adjournment thereof, the Board of Directors shall
cause the election to be held at a special meeting of the shareholders as soon
thereafter as conveniently may be.
SECTION 2. Special Meetings. Special meeting of the shareholders, for any
purpose or purposes, unless otherwise prescribed by statute, may be called by
the President or by the Board of Directors, and shall be called by the President
at the request of the holders of not less than ten percent (10%) of all the
outstanding shares of the Corporation entitled to vote at the meeting.
SECTION 3. Place of Meeting. The Board of Directors my designate any place,
either within our without the State of Nevada, unless otherwise prescribed by
statute, as the place of meeting for any annual meeting or for any special
meeting. A waiver of notice signed by all shareholders entitled to vote at a
meeting may designate any place, either within our without the State of Nevada,
unless otherwise prescribed by statute, as the place for the holding of such
meeting. If no designation is made, the place of meeting shall be the principal
office of the Corporation.
SECTION 4. Notice of Meeting. Written notice stating the place, day and hour of
the meeting and, in case of a special meeting, the purpose or purposes for which
the meeting is called, shall unless otherwise prescribed by statute, be
delivered not less than ten (10) nor more than sixty (60) days before the date
of the meeting, to each shareholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered when deposited in the
United States Mail, addressed to the shareholder at his address as it appears on
the stock transfer books of the Corporation, with postage thereon prepaid.
SECTION 5. Closing of Transfer Books or Fixing of Record. For the purpose of
determining shareholders entitled to notice of or to vote at any meeting of
shareholders or any adjournment thereof, or shareholders entitled to receive
payment of any dividend, or in order to make a determination of shareholders for
any other proper purpose, the Board of Directors of the Corporation may provide
that the stock transfer books shall be closed for a stated period, but not to
exceed in any case fifty (50) days. If the stock transfer books shall be closed
for the purpose of determining shareholders entitled to notice of or to vote at
a meeting of shareholders, such books shall be closed for at least fifteen (15)
days immediately preceding such meeting. In lieu of closing the stock transfer
books, the board of Directors may fix in advance a date as the record date for
any such determination of shareholders, such date in any case to be not more
than thirty (30) days and, in case of a meeting of shareholders, not less than
ten (10) days, prior to the date on which the particular action requiring such
determination of shareholders is to be taken. If the stock transfer books are
not closed and no record date is fixed for the determination of shareholders
entitled to notice of or to vote at a meeting of shareholders, or shareholders
entitled to receive payment of a dividend, the date on which notice of the
meeting is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the record date
for such determination of shareholders. When a determination of shareholders
entitled to vote at any meeting of shareholders has been made as provided in
this section, such determination shall apply to any adjournment thereof.
SECTION 6. Voting Lists. The officer or agent having charge of the ,stock
transfer books for shares of the corporation shall make a complete list of
shareholders entitled to vote at each meeting of shareholders or any adjournment
thereof, arranged in alphabetical order, with the address of and the number of
shares held by each. Such lists shall be produced and kept open at the time and
place of the meeting and shall be subject to the inspection of any shareholder
during the whole time of the meeting for the purposes thereof.
SECTION 7. Quorum. A majority of the outstanding shares of the Corporation
entitled to vote, represented in person or by proxy, shall constitute a quorum
at a meeting of shareholders. If less than a majority of the outstanding shares
are represented at a meeting, a majority of the shares so represented may
adjourn the meeting from time to time without further notice. At such adjourned
meeting at which a quorum shall be present or represented, any business may be
transacted which might have been transacted at the meeting as originally
noticed. The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
SECTION 8. Proxies. At all meetings of shareholders, a shareholder may vote in
person or by proxy executed in writing by the shareholder or by his or duly
authorized attorney-in-fact. Such proxy shall be filed with the secretary of the
Corporation before or at the time of the meeting. A meeting of the Board of
Directors my be had by means of telephone conference or similar communications
equipment by which all persons participating in the meeting can hear each other,
and participation in a meeting under such circumstances shall constitute
presence at the meeting.
SECTION 10. Voting of Shares by Certain Holders. Shares standing in the name of
another corporation may be voted by such officer, agent or proxy as the Bylaws
of such corporation may prescribe or, in the absence of such provision, as the
Board of Directors of such corporation may determine.
Shares held by an administrator, executor, guardian or conservator my be voted
by him either in person or by proxy, without a transfer of such shares into his
name. Shares standing in the name of a trustee may be voted by him, either in
person or by proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name.
Shares standing in the name of a receiver may be voted by such receiver, and
shares held by or under the control of a receiver may be voted by such receiver
without the transfer thereof into his name, if authority to do so be contained
in an appropriate order of the court by which such receiver was appointed.
A shareholder whose shares are pledged shall be entitled to vote such shares
until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to the Corporation shall not be voted directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares at any given time.
SECTION 11. Informal Action by Shareholders. Unless otherwise provided by law,
any action required to be taken at a meeting of the shareholders, or any other
action which may be taken at a meeting of the shareholders, may be taken without
a meeting if a consent in writing, setting forth the action so taken, shall be
signed by all of the shareholders entitled to vote with respect to the subject
matter thereof.
ARTICLE III: BOARD OF DIRECTORS
SECTION 1. General Powers. The business and affairs of the Corporation shall be
managed by its Board of Directors.
SECTION 2. Number, Tenure and Qualifications. The number of directors of the
Corporation shall be fixed by the Board of Directors, but in no event shall be
less than two ( 2 ). Each Director shall hold office until the next annual
meeting of shareholder and until his successor shall have been elected and
qualified.
SECTION 3. Regular Meetings. A regular meeting of the Board of Directors shall
be held without other notice than this Bylaw immediately after, and at the same
place as, the annual meeting of shareholders. The Board of Directors may
provide, by resolution, the time and place for the holding of additional regular
meetings without notice other than such resolution.
SECTION 4. Special Meetings. Special meetings of the Board of Directors may be
called by or at the request of the President or any two directors. The person or
persons authorized to call special meetings of the Board of Directors may fix
the place for holding any special meeting of the Board of Directors called by
them.
SECTION 5. Notice. Notice of any special meeting shall be given at least one (1)
day previous thereto by written notice delivered personally or mailed to each
director at his business address, or by telegram. If mailed, such notice shall
be deemed to be delivered when deposited in the United Sates mail so addressed,
with postage thereon prepaid. If notice be given by telegram, such notice shall
be deemed to be delivered when the telegram is delivered to the telegraph
company. Any directors may waive notice of any meeting. The attendance of a
director at a meeting shall constitute a waiver of notice of such meeting,
except where a director attends a meeting for the express purpose of objecting
to the transaction of any business because the meeting is not lawfully called or
convened.
SECTION 6. Quorum. A majority of the number of directors fixed by Section 2 of
the Article III shall constitute a quorum for the transaction of business at any
meeting of the Board of Directors, but if less than such majority is present at
a meeting, a majority of the directors present may adjourn the meeting from time
to time without further notice.
SECTION 7. Manner of Acting. The act of the majority of the directors present
at a meeting at which a quorum is present shall be the act of the Board of
Directors.
SECTION 8. Action Without a Meeting. Any action that may be taken by the Board
of Directors at a meeting may be taken without a meeting if a consent in
writing, setting forth the action so to be taken, shall be signed before such
action by all of the directors.
SECTION 9. Vacancies. Any vacancy occurring in the Board of Directors may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors, unless otherwise provided by law.
A director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office. Any directorship to be filled by reason of an
increase in the number of directors may be filled by election by the Board of
Directors for a term of office continuing only until the next election of
directors by the shareholders.
SECTION 10. Compensation. By resolution of the Board of Directors, each director
may be paid his expenses, if any, of attendance at each meeting of the Board of
Directors, and may be paid a stated salary as a director or a fixed sum for
attendance at each meeting of the Board of Directors or both. No such payment
shall preclude any director from serving the Corporation in any other capacity
and receiving compensation thereof.
SECTION 11. Presumption of Assent. A director of the Corporation who is present
at a meeting of the Board of Directors at which action on any corporate matter
is taken shall be presumed to have assented to the action taken unless his
dissent shall be entered in the minutes of the meeting or unless he shall file
his written dissent to such action with the person acting as the Secretary of
the meeting before the adjournment thereof, or shall forward such dissent by
registered mail to the Secretary of the Corporation immediately after the
adjournment of the meeting. Such right to dissent shall not apply to a director
who voted in favor of such action.
ARTICLES IV: OFFICERS
SECTION 1. Number. The officers of the corporation shall be a President, one or
more vice Presidents, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors. Such other officers and assistant officers as may be
deemed necessary may be elected or appointed by the Board of Directors,
including a Chairman of the Board. In its discretion, the Board of Directors may
leave unfilled for any such period as it may determine any office except those
of President and Secretary. Any two or more offices may be held by the same
person. Officers may be directors or shareholders of the Corporation.
SECTION 2. Election and Term of Office. The officers of the Corporation to be
elected by the board of Directors shall be elected annually by the board of
Directors at the first meeting of the Board of Directors held after each annual
meeting of the shareholders. If the election of officers shall not be held at
such meeting, such election shall be held as soon thereafter as conveniently may
be. Each officer shall hold office until his successor shall have been duly
elected and shall have qualified, or until his death, or until he shall resign
or shall have been removed in the manner hereinafter provided.
SECTION 3. Removal. Any officer or agent may be removed by the Board of
Directors whenever, in its judgment, the best interests of the Corporation will
be served thereby, but such removal shall be without prejudice to the contract
rights, if any, of the person so removed. Election or appointment of an officer
or agent shall not of itself create contract rights, and such appointment shall
be terminable at will.
SECTION 4. Vacancies. A vacancy in any office because of death, resignation,
removal, disqualification or otherwise, may be
filled by the Board of Directors for the un-expired portion of the term.
SECTION 5. President. The president shall be the principal executive officer of
the Corporation and, subject to the control of the Board of Directors, shall in
general supervise and control all of the business and affairs of the
Corporation. He shall, when present, preside at all meetings of the shareholders
and of the Board of Directors, unless there is a Chairman of the Board, in which
case the Chairman shall preside. He may sign, with the Secretary or any other
proper officer of the Corporation thereunto authorized by the Board of
Directors, certificates for shares of the Corporation, any deed, mortgages,
bonds, contract, or other instruments which the Board of Directors has
authorized to be executed, except in cases where the signing and execution
thereof shall be expressly delegated by the Board of Directors or by there
Bylaws to some other officer or agent of the Corporation, or shall be required
by law to be otherwise signed or executed; and in general shall perform all
duties incident to the office of President and such other duties as may be
prescribed by the Board of Directors from time to time.
SECTION 6. Vice President. In the absence of the president or in the event of
his death, inability or refusal to act, the Vice President shall perform the
duties of the President, and when so acting, shall have all the powers of and be
subject to all the restrictions upon the President. The Vice President shall
perform such other duties as from time to time may be assigned to him by the
President or by the Board of Directors, If there is more than one Vice
President, each Vice President shall succeed to the duties of the President in
order of rank as determined by the Board of Directors. If no such rank has been
determined, then each Vice President shall succeed to the duties of the
President in order of date of election, the earliest date having the first rank.
SECTION 7. Secretary. The Secretary shall: (a) keep the minutes of the Board of
Directors in one or more minute books provided for the purpose; (b) see that all
notices are duly given in accordance with the provisions of the Bylaws or as
required by law; (c) be custodian of the corporate records and of the seal of
the Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the Corporation under its seal is
duly authorized; (d) keep a register of the post office address of each
shareholder which shall be furnished to the Secretary by such shareholder; (e)
sign with the President certificates for share of the Corporation, the issuance
of which shall have been authorized by resolution of the Board of Directors; (f)
have general charge of the stock transfer books of the Corporation, and (g) in
general perform all duties incident to the office of the Secretary and such
other duties as from time to time may be assigned to him by the President or by
the Board of Directors.
SECTION 8. Treasurer. The Treasurer shall: (a) have charge and custody of and be
responsible for all funds and securities of the Corporation; (b) receive and
give receipts for moneys due and payable to the Corporation in such banks, trust
companies or other depositories as shall be selected in accordance with the
provisions of Article VI of these Bylaw; and (c) in general perform all of the
duties incident to the office of Treasurer and such other duties as from time to
time may be assigned to him by the President or by the Board of Directors. If
required by the Board of Directors, the Treasurer shall give a bond for the
faithful discharge of his duties in such sum and with such sureties as the Board
of Directors shall determine.
SECTION 9. Salaries. The salaries of the officers shall be fixed from time to
time by the Board of Directors, and no officer shall be prevented from receiving
such salary by reason of the fact that he is also a director of the Corporation.
ARTICLE V: INDEMNITY
The Corporation shall indemnify its directors, officers and employees as
follows:
(a) Every director, officer, or employee of the Corporation shall be indemnified
by the Corporation against all expenses and liabilities, including counsel fees,
reasonable incurred by or imposed upon him in connection with any proceeding to
which he may become involved, by reason of his being or having been 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 the
corporation, partnership, joint venture, trust or enterprise, or any settlement
thereof, whether or not he is a director, officer, employee or agent at the time
such expenses are incurred, except in such cases wherein the director, officer,
or employee is adjudged guilty of willful misfeasance or malfeasance in the
performance of his duties; provided that in the event of a settlement the
indemnification herein shall apply only when the Board of Directors approves
such settlement and reimbursement as being for the best interests of the
Corporation.
(b) The Corporation shall provide to 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 director, officer, employee or agent of the
corporation, partnership, joint venture, trust or enterprise, the indemnity
against expenses of suit, litigation or other proceedings which is specifically
permissible under applicable law.
(c) The Board of Directors may, in its discretion, direct the purchase of
liability insurance by way of implementing the provisions of the Article V.
ARTICLE VI: CONTRACTS, LOANS, CHECKS, AND DEPOSITS
SECTION 1. Contracts. The Board of Directors may authorize any office or
officers, agent or agents, to enter into any contract or execute and deliver any
instrument in the name of and on behalf of the Corporation, and such authority
may be general or confined to specific instances.
SECTION 2. Loans. No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name unless authorized
by a resolution of the Board of Directors. Such authority may be general or
confined to specific instances.
SECTION 3. Checks, Drafts, Etc. All checks, drafts or other orders for the
payment of money, notes or other evidences of indebtedness issued in the name of
the Corporation, shall be signed by such officer or officers, agent or agents of
the Corporation and in such manner as shall from time to time be determined by
resolution of the Board of Directors.
SECTION 4. Deposits. All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the Corporation in such banks,
trust companies or other depositories as the Board of Directors may select.
ARTICLE VII: CERTIFICATES FOR SHARES AND THEIR TRANSFER
SECTION 1. Certificates for Shares. Certificates representing shares of the
Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President and by the
Secretary or by such other officers authorized by law and by the Board of
Directors so to do, and sealed with the corporate seal. All certificates for
shares shall be consecutively numbered or otherwise identified. The name and
address of the person to whom the shares represented thereby are issued, with
the number of shares and date of issue, shall be entered on the stock transfer
books of the Corporation. All certificates surrendered to the Corporation for
transfer shall be cancelled and no new certificate shall be issued until the
former certificate for a like number of shares shall have been surrendered and
cancelled, expect that in case of a lost, destroyed or mutilated certificate a
new one may be issued therefore upon such terms and indemnity to the Corporation
as the Board of Directors may prescribe.
SECTION 2. Transfer of Shares. Transfer of shares of the Corporation shall be
made only on the stock transfer books of the Corporation by the holder of record
thereof or by his legal representative, who shall furnish proper evidence of
authority to transfer, or by his attorney thereunto authorized by power of
attorney duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The person in
whose name shares stand on the books of the Corporation shall be deemed by the
Corporation to be the owner thereof for all purposes, Provided, however, that
upon any action undertaken by the shareholder to elect S Corporation status
pursuant to Section 1362 of the Internal Revenue Code and upon any shareholders
agreement thereto restricting the transfer of said shares so as to disqualify
said S Corporation status, said restriction on transfer shall be made a part of
the Bylaws so long as said agreements is in force and effect.
ARTICLE VIII: FISCAL YEAR
The fiscal year of the Corporation shall begin on the 1st day of January and end
on the 31st day of December of each year.
ARTICLE IX: DIVIDENDS
The Board of Directors may from time to time declare, and the Corporation may
pay, dividends on its outstanding shares in the manner and upon the terms and
condition provided by law and its Articles of Incorporation.
ARTICLE X: CORPORATE SEAL
The Board of Directors shall provide a corporate seal which shall be circular in
form and shall have inscribed thereon the name of the Corporation and the state
of incorporation and the words, Corporate Seal.
ARTICLE XI: WAIVER OF NOTICE
Unless otherwise provided by law, whenever any notice is required to be given to
any shareholder or director of the Corporation under the provision of the
Articles of Incorporation or under the provisions of the applicable Business
Corporation Act, a waiver thereof in writing, signed by the person or persons
entitled to such notice, whether before or after the time stated therein, shall
be deemed equivalent to the giving of such notice.
ARTICLE XII: AMENDMENTS
These Bylaws may be altered, amended or repealed and new Bylaws may be adopted
by the Board of Directors at any regular or special meeting of the Board of
Directors.
The above Bylaws are certified to have been adopted by the Board of Directors of
the Corporation on the 15th day of May, 2000.
/s/ Kirk Roberts
--------------------------------------
Kirk Roberts,
<PAGE>
Exhibit 4.1
Specimen Common Stock Certificate
[FORM OF FACE OF CERTIFICATE]
E - CITY SOFTWARE, INC.
INCORPORATED UNDER THE LAWS OF NEVADA
THE CORPORATION IS TO ISSUE 50,000,000 SHARES OF COMMON STOCK - PAR VALUE
$.0001 EACH
This certifies that _______________________________is the owner of
_______________________________ Shares
of the Capital Stock of E - City Software, Inc. transferable only on the books
of the Corporation by the holder hereof in
person or by Attorney upon surrender of this Certificate properly endorsed.
In Witness Whereof, the said Corporation has caused this Certificate to be
signed by its duly authorized officers
and its Corporate Seal to be hereunto affixed this ______________ day of
_______________ A.D. 19____
--------------------------- -----------------------------------
SECRETARY PRESIDENT
[FORM OF BACK OF CERTIFICATE]
For value received, _________________ hereby sell, assign and transfer
unto___________________________ Shares of the Capital Stock represented by the
within Certificate, and do hereby irrevocably constitute and appoint
____________________ Attorney to transfer the said shares on the books of the
within-named Company with full power of substitution in the premises.
Dated, _____________________
In presence of
<PAGE>
Exhibit 5.1
Legal Opinion
* To be filed by Ammendment
<PAGE>
Exhibit 10.1
Form of Common Stock Purchase Agreement
E-CITY SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of May ___,
2000, by and between E-City Software, Inc. ,
a Nevada Corporation (the "Company"), and ____________________________________,
("Purchaser").
In consideration of the mutual covenants and representations herein set forth,
the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to Purchaser and Purchaser
hereby agrees to purchase an aggregate of
-------------
__________shares of the Company's Common Stock (the "Shares"), at a purchase
price of $0.0001 per share (the "Purchase Price"), or an
Aggregate Purchase Price of $____________.
2. Payment of Purchase Price. The Purchase Price for the Shares shall be paid to
the Company by any combination of the following: (i) in immediately available
funds upon the execution of this Agreement or (ii) the cancellation of
indebtedness owed by the Company to the Purchaser, such cancellation being
hereby acknowledged by receipt of the Shares and as identified in Exhibit A
hereto.
3. Definitions.
-----------
(a) "Shares" refers to the purchased Shares and all shares received in respect
thereof as a consequence of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, reorganizations or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
or may be entitled by reason of Purchaser's ownership of the Shares.
4. Legends. The share certificate evidencing the Shares issued hereunder shall
be endorsed with the following restrictive
-------
legends (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT SAYING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
-20-
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS AVAILABLE UPON THE REQUEST OF THE REGISTERED
HOLDER HEREOF TO THE SECRETARY OF THE COMPANY.
5. Adjustments for Stock Splits, etc. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock dividend, stock split, recapitalization, merger,
reorganization or other change in the Shares which may be made by the Company
after the date of this Agreement.
6. [Intentionally Omitted]
7. Purchaser's Representations. In connection with the Purchaser's purchase of
the Shares, the Purchaser hereby represents
---------------------------
and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Shares or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser has a pre-existing business relationship
with the Company and has the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.
(b) Economic Risk. The Purchaser realizes that the purchase of the Shares will
be a highly speculative investment and involves a high degree of risk, and the
Purchaser is able, without impairing financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss on the Purchaser's
investment.
(c) Restricted Securities. The Purchaser understands and acknowledges that:
---------------------
(i) the sale of the Shares has not been registered under the Act, and the Shares
must be held indefinitely unless subsequently registered under the Act or an
exemption from such registration is available and the Company is under no
obligation to register the Shares;
(ii) the share certificate representing the Shares will be stamped with the
legend specified in
Section 4 hereof; and
(iii) the Company will make a notation in its records of the aforementioned
restrictions on transfer and legend.
8. Intentionally Omitted.
9. Intentionally Omitted.
10. General Provisions.
------------------
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Nevada as they apply to contracts entered into and
wholly to be performed within such state.
(b) This Agreement represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser.
(c) Any notice, demand or request required or permitted to be given by either
the Company or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered, if delivered personally; three
business days after the business day of deposit in the U.S. mail, by registered
or certified mail with postage prepaid; one business day after the business day
of facsimile transmission, if a confirmation copy is sent by first class mail
with postage prepaid; or, one business day after the business day of deposit
with Federal Express or similar overnight carrier, freight prepaid; in any such
case addressed to any party at such party's address as set forth at the end of
this Agreement or such other address as the party may designate by notifying the
other in writing.
(d) The rights and benefits of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Purchaser under
this Agreement may only be assigned with the prior written consent of the
Company.
-52-
C:\DOCUMENT DIRECTORY\E-CITYSOFTWARE\E CITY REGISTRATION FINAL VERSION RTF
9-21-00.DOC
(e) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party from thereafter enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to assert
all other legal remedies available to it under the circumstances.
(f) Purchaser agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
By Purchaser's signature below, Purchaser represents that Purchaser hereby
accepts this Agreement subject to all of the terms and provisions thereof.
Purchaser has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement.
COMPANY:
E-CITY SOFTWARE, INC.
By: __ _______________
Title: _____
PURCHASER:
---------------------------
By: ________________
Title:
<PAGE>
Exhibit 10.2
E-CITY SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of May 12,
2000, by and between E-City Software, Inc. , a Nevada Corporation (the
"Company"), and Anis Jessa, ("Purchaser").
In consideration of the mutual covenants and representations herein set forth,
the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to Purchaser and
Purchaser hereby agrees to purchase an aggregate of 3,555,250 shares of the
Company's Common Stock (the "Shares"), at a purchase price of $0.0001 per share
(the "Purchase Price"), or an Aggregate Purchase Price of $356.00.
2. Payment of Purchase Price. The Purchase Price for the Shares shall be paid to
the Company by any combination of the following: (i) in immediately available
funds upon the execution of this Agreement or (ii) the cancellation of
indebtedness owed by the Company to the Purchaser, such cancellation being
hereby acknowledged by receipt of the Shares and as identified in Exhibit A
hereto.
3. Definitions.
-----------
(a) "Shares" refers to the purchased Shares and all shares received in respect
thereof as a consequence of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, reorganizations or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
or may be entitled by reason of Purchaser's ownership of the Shares.
4. Legends. The share certificate evidencing the Shares issued hereunder shall
be endorsed with the following restrictive
-------
legends (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT SAYING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS AVAILABLE UPON THE REQUEST OF THE REGISTERED
HOLDER HEREOF TO THE SECRETARY OF THE COMPANY.
5. Adjustments for Stock Splits, etc. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock dividend, stock split, recapitalization, merger,
reorganization or other change in the Shares which may be made by the Company
after the date of this Agreement.
6. [Intentionally Omitted]
7. Purchaser's Representations. In connection with the Purchaser's purchase of
the Shares, the Purchaser hereby represents
and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Shares or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser has a pre-existing business relationship
with the Company and has the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.
(b) Economic Risk. The Purchaser realizes that the purchase of the Shares will
be a highly speculative investment and involves a high degree of risk, and the
Purchaser is able, without impairing financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss on the Purchaser's
investment.
(c) Restricted Securities. The Purchaser understands and acknowledges that:
---------------------
(i) the sale of the Shares has not been registered under the Act, and the Shares
must be held indefinitely unless subsequently registered under the Act or an
exemption from such registration is available and the Company is under no
obligation to register the Shares;
(ii) the share certificate representing the Shares will be stamped with the
legend specified in
Section 4 hereof; and
(iii) the Company will make a notation in its records of the aforementioned
restrictions on transfer and legend.
8. Intentionally Omitted.
9. Intentionally Omitted.
10. General Provisions.
------------------
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Nevada as they apply to contracts entered into and
wholly to be performed within such state.
(b) This Agreement represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser.
(c) Any notice, demand or request required or permitted to be given by either
the Company or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered, if delivered personally; three
business days after the business day of deposit in the U.S. mail, by registered
or certified mail with postage prepaid; one business day after the business day
of facsimile transmission, if a confirmation copy is sent by first class mail
with postage prepaid; or, one business day after the business day of deposit
with Federal Express or similar overnight carrier, freight prepaid; in any such
case addressed to any party at such party's address as set forth at the end of
this Agreement or such other address as the party may designate by notifying the
other in writing.
(d) The rights and benefits of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Purchaser under
this Agreement may only be assigned with the prior written consent of the
Company.
(e) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party from thereafter enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to assert
all other legal remedies available to it under the circumstances.
(f) Purchaser agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
By Purchaser's signature below, Purchaser represents that Purchaser hereby
accepts this Agreement subject to all of the terms and provisions thereof.
Purchaser has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement.
COMPANY:
E-CITY SOFTWARE, INC.
By: /s/ Salim Devji____________
Title: Chief Technology Officer_____
PURCHASER:
____Anis Jessa________________
By: __/s/ Anis Jessa________
Title: President
<PAGE>
Exhibit 10.3
E-CITY SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of August 1,
2000, by and between E-City Software, Inc. , a Nevada Corporation (the
"Company"), and Salim Devji, ("Purchaser").
In consideration of the mutual covenants and representations herein set forth,
the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to Purchaser and Purchaser
hereby agrees to purchase an aggregate of 200,000 shares of the Company's Common
Stock (the "Shares"), at a purchase price of $0.0001 per share (the "Purchase
Price"), or an Aggregate Purchase Price of $200.00.
2. Payment of Purchase Price. The Purchase Price for the Shares shall be paid to
the Company by any combination of the following: (i) in immediately available
funds upon the execution of this Agreement or (ii) the cancellation of
indebtedness owed by the Company to the Purchaser, such cancellation being
hereby acknowledged by receipt of the Shares and as identified in Exhibit A
hereto.
3. Definitions.
-----------
(a) "Shares" refers to the purchased Shares and all shares received in respect
thereof as a consequence of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, reorganizations or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
or may be entitled by reason of Purchaser's ownership of the Shares.
4. Legends. The share certificate evidencing the Shares issued hereunder shall
be endorsed with the following restrictive
-------
legends (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT SAYING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS AVAILABLE UPON THE REQUEST OF THE REGISTERED
HOLDER HEREOF TO THE SECRETARY OF THE COMPANY.
5. Adjustments for Stock Splits, etc. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock dividend, stock split, recapitalization, merger,
reorganization or other change in the Shares which may be made by the Company
after the date of this Agreement.
6. [Intentionally Omitted]
7. Purchaser's Representations. In connection with the Purchaser's purchase of
the Shares, the Purchaser hereby represents
---------------------------
and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Shares or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser has a pre-existing business relationship
with the Company and has the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.
(b) Economic Risk. The Purchaser realizes that the purchase of the Shares will
be a highly speculative investment and involves a high degree of risk, and the
Purchaser is able, without impairing financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss on the Purchaser's
investment.
(c) Restricted Securities. The Purchaser understands and acknowledges that:
---------------------
(i) the sale of the Shares has not been registered under the Act, and the Shares
must be held indefinitely unless subsequently registered under the Act or an
exemption from such registration is available and the Company is under no
obligation to register the Shares;
(ii) the share certificate representing the Shares will be stamped with the
legend specified in
Section 4 hereof; and
(iii) the Company will make a notation in its records of the aforementioned
restrictions on transfer and legend.
8. Intentionally Omitted.
9. Intentionally Omitted.
10. General Provisions.
------------------
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Nevada as they apply to contracts entered into and
wholly to be performed within such state.
(b) This Agreement represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser.
(c) Any notice, demand or request required or permitted to be given by either
the Company or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered, if delivered personally; three
business days after the business day of deposit in the U.S. mail, by registered
or certified mail with postage prepaid; one business day after the business day
of facsimile transmission, if a confirmation copy is sent by first class mail
with postage prepaid; or, one business day after the business day of deposit
with Federal Express or similar overnight carrier, freight prepaid; in any such
case addressed to any party at such party's address as set forth at the end of
this Agreement or such other address as the party may designate by notifying the
other in writing.
(d) The rights and benefits of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Purchaser under
this Agreement may only be assigned with the prior written consent of the
Company.
(e) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party from thereafter enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to assert
all other legal remedies available to it under the circumstances.
(f) Purchaser agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
By Purchaser's signature below, Purchaser represents that Purchaser hereby
accepts this Agreement subject to all of the terms and provisions thereof.
Purchaser has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement.
COMPANY:
E-CITY SOFTWARE, INC.
By: __/s/ Anis Jessa___________
Title: President__________
PURCHASER:
____Salim Devji________________
By: __/s/ Salim Devji_______
Title: Chief Technology Officer__
<PAGE>
Exhibit 10.4
E-CITY SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of August 1,
2000, by and between E-City Software, Inc. , a Nevada Corporation (the
"Company"), and Robin Moulder, ("Purchaser").
In consideration of the mutual covenants and representations herein set forth,
the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to Purchaser and Purchaser
hereby agrees to purchase an aggregate of 20,000shares of the Company's Common
Stock (the "Shares"), at a purchase price of $0.0001 per share (the "Purchase
Price"), or an Aggregate Purchase Price of $20.00.
2. Payment of Purchase Price. The Purchase Price for the Shares shall be paid to
the Company by any combination of the following: (i) in immediately available
funds upon the execution of this Agreement or (ii) the cancellation of
indebtedness owed by the Company to the Purchaser, such cancellation being
hereby acknowledged by receipt of the Shares and as identified in Exhibit A
hereto.
3. Definitions.
-----------
(a) "Shares" refers to the purchased Shares and all shares received in respect
thereof as a consequence of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, reorganizations or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
or may be entitled by reason of Purchaser's ownership of the Shares.
4. Legends. The share certificate evidencing the Shares issued hereunder shall
be endorsed with the following restrictive
-------
legends (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT SAYING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS AVAILABLE UPON THE REQUEST OF THE REGISTERED
HOLDER HEREOF TO THE SECRETARY OF THE COMPANY.
5. Adjustments for Stock Splits, etc. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock dividend, stock split, recapitalization, merger,
reorganization or other change in the Shares which may be made by the Company
after the date of this Agreement.
6. [Intentionally Omitted]
7. Purchaser's Representations. In connection with the Purchaser's purchase of
the Shares, the Purchaser hereby represents
---------------------------
and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Shares or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser has a pre-existing business relationship
with the Company and has the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.
(b) Economic Risk. The Purchaser realizes that the purchase of the Shares will
be a highly speculative investment and involves a high degree of risk, and the
Purchaser is able, without impairing financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss on the Purchaser's
investment.
(c) Restricted Securities. The Purchaser understands and acknowledges that:
---------------------
(i) the sale of the Shares has not been registered under the Act, and the Shares
must be held indefinitely unless subsequently registered under the Act or an
exemption from such registration is available and the Company is under no
obligation to register the Shares;
(ii) the share certificate representing the Shares will be stamped with the
legend specified in
Section 4 hereof; and
(iii) the Company will make a notation in its records of the aforementioned
restrictions on transfer and legend.
8. Intentionally Omitted.
9. Intentionally Omitted.
10. General Provisions.
------------------
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Nevada as they apply to contracts entered into and
wholly to be performed within such state.
(b) This Agreement represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser.
(c) Any notice, demand or request required or permitted to be given by either
the Company or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered, if delivered personally; three
business days after the business day of deposit in the U.S. mail, by registered
or certified mail with postage prepaid; one business day after the business day
of facsimile transmission, if a confirmation copy is sent by first class mail
with postage prepaid; or, one business day after the business day of deposit
with Federal Express or similar overnight carrier, freight prepaid; in any such
case addressed to any party at such party's address as set forth at the end of
this Agreement or such other address as the party may designate by notifying the
other in writing.
(d) The rights and benefits of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Purchaser under
this Agreement may only be assigned with the prior written consent of the
Company.
(e) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party from thereafter enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to assert
all other legal remedies available to it under the circumstances.
(f) Purchaser agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
By Purchaser's signature below, Purchaser represents that Purchaser hereby
accepts this Agreement subject to all of the terms and provisions thereof.
Purchaser has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement.
COMPANY:
E-CITY SOFTWARE, INC.
By: /s/ Anis Jessa_______________
Title: President _____
PURCHASER:
____Robin Moulder_______________
By: __/s/ Robin Moulder______
Title: Chief Operating Officer______
<PAGE>
E-CITY SOFTWARE, INC.
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (the "Agreement") is entered into as of August 1,
2000, by and between E-City Software, Inc. , a Nevada Corporation (the
"Company"), and Susan Polmar, ("Purchaser").
In consideration of the mutual covenants and representations herein set forth,
the Company and the Purchaser agree as follows:
1. Sale of Stock. The Company hereby agrees to sell to Purchaser and Purchaser
hereby agrees to purchase an aggregate of 5,000 shares of the Company's Common
Stock (the "Shares"), at a purchase price of $0.0001 per share (the "Purchase
Price"), or an Aggregate Purchase Price of $5.00.
2. Payment of Purchase Price. The Purchase Price for the Shares shall be paid to
the Company by any combination of the following: (i) in immediately available
funds upon the execution of this Agreement or (ii) the cancellation of
indebtedness owed by the Company to the Purchaser, such cancellation being
hereby acknowledged by receipt of the Shares and as identified in Exhibit A
hereto.
3. Definitions.
-----------
(a) "Shares" refers to the purchased Shares and all shares received in respect
thereof as a consequence of stock dividends, stock splits, reverse stock splits,
recapitalizations, mergers, reorganizations or the like, and all new,
substituted or additional securities or other properties to which Purchaser is
or may be entitled by reason of Purchaser's ownership of the Shares.
4. Legends. The share certificate evidencing the Shares issued hereunder shall
be endorsed with the following restrictive
-------
legends (in addition to any legend required under applicable state securities
laws):
THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND
NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF, AND
HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933. SUCH SHARES MAY NOT
BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS THE COMPANY
RECEIVES AN OPINION OF COUNSEL REASONABLY ACCEPTABLE TO IT SAYING THAT SUCH SALE
OR TRANSFER IS EXEMPT FROM THE REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS
OF SAID ACT.
THE SHARES REPRESENTED HEREBY ARE SUBJECT TO CERTAIN RESTRICTIONS UPON TRANSFER
AND RIGHTS OF REPURCHASE AS SET FORTH IN AN AGREEMENT BETWEEN THE COMPANY AND
THE SHAREHOLDER, A COPY OF WHICH IS AVAILABLE UPON THE REQUEST OF THE REGISTERED
HOLDER HEREOF TO THE SECRETARY OF THE COMPANY.
5. Adjustments for Stock Splits, etc. All references to the number of Shares and
the purchase price of the Shares in this Agreement shall be appropriately
adjusted to reflect any stock dividend, stock split, recapitalization, merger,
reorganization or other change in the Shares which may be made by the Company
after the date of this Agreement.
6. [Intentionally Omitted]
7. Purchaser's Representations. In connection with the Purchaser's purchase of
the Shares, the Purchaser hereby represents
---------------------------
and warrants to the Company as follows:
(a) Investment Intent; Capacity to Protect Interests. The Purchaser is
purchasing the Shares solely for his own account for investment and not with a
view to or for sale in connection with any distribution of the Shares or any
portion thereof and not with any present intention of selling, offering to sell
or otherwise disposing of or distributing the Shares or any portion thereof in
any transaction other than a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Act"). The Purchaser also represents
that the entire legal and beneficial interest of the Shares is being purchased,
and will be held, for the Purchaser's account only, and neither in whole or in
part for any other person. Purchaser has a pre-existing business relationship
with the Company and has the capacity to evaluate the merits and risks of an
investment in the Company and to protect Purchaser's own interests in connection
with this transaction.
(b) Economic Risk. The Purchaser realizes that the purchase of the Shares will
be a highly speculative investment and involves a high degree of risk, and the
Purchaser is able, without impairing financial condition, to hold the Shares for
an indefinite period of time and to suffer a complete loss on the Purchaser's
investment.
(c) Restricted Securities. The Purchaser understands and acknowledges that:
---------------------
(i) the sale of the Shares has not been registered under the Act, and the Shares
must be held indefinitely unless subsequently registered under the Act or an
exemption from such registration is available and the Company is under no
obligation to register the Shares;
(ii) the share certificate representing the Shares will be stamped with the
legend specified in
Section 4 hereof; and
(iii) the Company will make a notation in its records of the aforementioned
restrictions on transfer and legend.
8. Intentionally Omitted.
9. Intentionally Omitted.
10. General Provisions.
------------------
(a) This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of Nevada as they apply to contracts entered into and
wholly to be performed within such state.
(b) This Agreement represents the entire agreement between the parties with
respect to the purchase of the Shares by the Purchaser.
(c) Any notice, demand or request required or permitted to be given by either
the Company or Purchaser pursuant to the terms of this Agreement shall be in
writing and shall be deemed given when delivered, if delivered personally; three
business days after the business day of deposit in the U.S. mail, by registered
or certified mail with postage prepaid; one business day after the business day
of facsimile transmission, if a confirmation copy is sent by first class mail
with postage prepaid; or, one business day after the business day of deposit
with Federal Express or similar overnight carrier, freight prepaid; in any such
case addressed to any party at such party's address as set forth at the end of
this Agreement or such other address as the party may designate by notifying the
other in writing.
(d) The rights and benefits of the Company under this Agreement shall be
transferable to any one or more persons or entities, and all covenants and
agreements hereunder shall inure to the benefit of, and be enforceable by the
Company's successors and assigns. The rights and obligations of Purchaser under
this Agreement may only be assigned with the prior written consent of the
Company.
(e) Either party's failure to enforce any provision or provisions of this
Agreement shall not in any way be construed as a waiver of any such provision or
provisions, nor prevent that party from thereafter enforcing each and every
other provision of this Agreement. The rights granted both parties herein are
cumulative and shall not constitute a waiver of either party's right to assert
all other legal remedies available to it under the circumstances.
(f) Purchaser agrees upon request to execute any further documents or
instruments necessary or desirable to carry out the purposes or intent of this
Agreement.
By Purchaser's signature below, Purchaser represents that Purchaser hereby
accepts this Agreement subject to all of the terms and provisions thereof.
Purchaser has reviewed this Agreement in its entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully
understands all provisions of this Agreement.
COMPANY:
E-CITY SOFTWARE, INC.
By: /s/ Anis Jessa____________
Title: President __________
PURCHASER:
____Susan Polmar________________
By: __/s/ Susan Polmer________
Title: _Chief Marketing Officer____
<PAGE>
Exhibit 10.6
STOCK PURCHASE AGREEMENT
This Stock Purchase Agreement (this "Agreement") is made and entered into this
10th day of August 2000 between Butterfly Software, a Canadian Corporation
("Seller"), and E-City Software, Inc., a Nevada corporation ("Buyer").
RECITALS
WHEREAS, Seller, who is engaged in the development of interactive mapping
software ("Business") desires to sell to Buyer at the Closing, as hereinafter
defined, and Buyer desires to purchase from Seller 100% of the issued and
outstanding stock of Seller upon and subject to the terms and conditions
contained in this Agreement.
NOW, THEREFORE, IN CONSIDERATION of the premises and the mutual representations,
warranties and covenants which are made and to be performed by the respective
parties, it is agreed as follows:
ARTICLE 1.
PURCHASE AND SALE OF STOCK
1.1. Purchase and Sale of Stock. Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell, transfer, convey, assign and
deliver to Buyer and Buyer shall purchase, acquire and accept from Seller 100%
of the issued and outstanding stock of Seller ("Stock").
1.2. No Liabilities. Except as specifically set forth in Schedule 1.2 hereof,
and anything in this Agreement to the contrary notwithstanding, there are no
debts, claims, obligations, commitments, or other liabilities of Seller or any
other person or entity whatsoever relating in any way to the operation of the
Business prior to the Closing Date.
<PAGE>
ARTICLE 2.
CONSIDERATION
2.1. Purchase Price.The purchase price to be paid for the Stock shall consist of
the issuance of the Shares as described below (the "Purchase Price"). The
Purchase Price shall be paid according to Section 2.2 below.
2.2. Payment of Purchase Price. At the Closing, Buyer shall deliver to Seller
50,000 fully paid, validly issued,
-------------------------
non-assessable shares of its common stock (the "E-City Stock").
2.3 E-City Stock. The E-City Stock shall have the same rights, privileges and
preferences of any other stock issued to the "founders" of E-City Software.
2.4 Transfer and Similar Taxes. Seller agrees to pay all sale, transfer and
similar taxes ("Transfer Taxes") relating to the sale and purchase of the Stock
pursuant to this Agreement. Buyer and Seller shall cooperate to minimize all
such Transfer Taxes.
2.5 Immediate Transfer. Buyer and Seller agree that the E-City Stock shall be
issued to the shareholders of Seller as
------------------
directed by Seller immediately prior to the Closing.
ARTICLE 3.
CLOSING: OBLIGATIONS OF THE PARTIES
3.1. Closing Date. The closing (the "Closing") shall take place and be effective
for all purposes at 10:00 a.m., local time, on a date to be specified by the
parties, which shall in no event be later than August 15, 2000 (the "Closing
Date"), at the offices of Butterfly Software, unless another date or place is
agreed to in writing by the parties hereto.
3.2. Obligations of the Parties at the Closing
(a) At the Closing, Buyer shall deliver to Seller (or Seller's agent):
(i) the Purchase Price in the form of the E-City Stock, complete with
certificates, properly in the name of shareholders of the Seller as supplied by
the Seller immediately prior to the Closing;
(ii) a copy of resolutions of the Board of Directors of Buyer, certified by
Buyer's Secretary or Assistant Secretary, authorizing the execution, delivery
and performance of this Agreement and the other documents referred to herein to
be executed by Buyer, and the consummation of the transactions contemplated
hereby;
(iii) a certificate of Buyer certifying as to the accuracy of Buyer's
representations and warranties at and as of the Closing and that Buyer has
performed or complied with all of the covenants, agreements, terms, provisions
and conditions to be performed or complied with by Buyer at or before the
Closing;
(iii) such other certificates and documents as Seller or its counsel may
reasonably request; and
(b) At the Closing, Seller will deliver to Buyer:
(i) certificates with appropriately executed transfer documents showing that the
Stock has been issued to E-City; (vii) such other certificates and documents as
Buyer or its counsel may reasonably request;
ARTICLE 4.
REPRESENTATIONS AND WARRANTIES BY SELLER
Except as set forth in Seller's disclosure letter (the "Seller Disclosure
Letter") delivered by Seller to Buyer herewith (which letter may be updated in
an immaterial manner up to the Closing), including items in the Seller
Disclosure Letter referred to as "Items" below, Seller hereby represents and
warrants to Buyer as follows:
4.1. Authorization. Seller has obtained full title and authority to transfer the
Stock free and clear of any encumbrance, lien, security interest, debt or claim
of any kind by any third party, and transfers the Stock without violation of any
contractual rights of any third party.
4.2. No Violation. The execution and delivery of this Agreement by Seller does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision of, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Seller is a party or by which any of the Stock are
bound; or (b) violate any other contractual or legal obligation or restriction
to which Seller is subject.
4.3. No Undisclosed Liability. Except as set forth in Item 4.3, Seller does not
have any liabilities or obligations of any nature, whether absolute, accrued,
contingent or otherwise and whether due or to become due (including, without
limitation, liabilities for taxes and interest, penalties and other charges
payable with respect thereto) in respect of the Stock or the Business.
4.4. Intellectual Property. To best of Seller's belief and knowledge, Seller has
sufficient title to and ownership of all technology and marks, or adequate
licenses and rights to use the technology or marks of others on reasonable
terms, which is necessary for the conduct of the Business. The Business is being
carried on without conflicts with the registered patents, patent applications,
licenses, trademarks, copyrights or trade names of others, other than as set
forth in Item 4.4. Seller has full right to sell, convey, transfer, assign and
deliver any and all of its right, title and interest in and to such technology
and marks, free and clear of any mortgage, pledge, lien, security interest,
conditional sale agreement, encumbrance or charge of any kind.
4.5. Professional Fees. Seller has not done anything to cause or incur any
liability or obligation for investment banking, brokerage, finders, agents or
other fees, commissions, expenses or charges in connection with the negotiation,
preparation, execution or performance of this Agreement or the consummation of
the transactions contemplated hereby, and Seller does not know of any claim by
anyone for such a fee, commission, expense or charge.
4.6. Taxes All United States, foreign, state and local tax returns and reports
required to be filed to date with respect to the operations of the Business have
been accurately prepared and duly filed, or an extension therefrom has been duly
obtained, and, except for taxes contested in good faith and disclosed in Item
4.6, all taxes payable have been paid when due; there is no examination or audit
known to Seller or any claim, asserted deficiency or assessment for additional
taxes in progress, pending, or threatened, nor is there any reasonable basis for
the assertion of any such claim, deficiency or assessment; no material special
charges, penalties, fines, liens, or similar encumbrances have been asserted
against Seller in connection with the operation of the Business with respect to
payment of or failure to pay any taxes which have not been paid or resolved
without further liability to Seller. Seller has not executed or filed with any
taxing authority any agreements extending the period for assessment or
collection of any taxes in connection with the operation of the Business. Proper
amounts have been withheld by Seller from the Business's employees' compensation
payments for all periods in compliance with the tax withholding provisions of
applicable federal and state laws.
4.7. Consents and Approvals. Seller has, or will have by Closing, obtained all
consents, approvals, authorizations or orders of third parties, including
governmental authorities, necessary for the authorization, execution and
performance of this Agreement by Seller.
4.8. Full Disclosure. Neither this Agreement, when considered together with the
Seller Disclosure Letter, the Schedules, exhibits, lists, certificates or other
instruments and documents furnished or to be furnished by Seller to Buyer
pursuant to this Agreement, contains any untrue statement of a material fact or
omits to state any material fact required to be stated herein or therein or
necessary to make the statements and information contained herein or therein not
misleading.
ARTICLE 5.
REPRESENTATIONS AND WARRANTIES BY BUYER
Except as set forth in Buyer's disclosure letter (the "Buyer Disclosure Letter")
delivered by Buyer to Seller herewith (which letter may be updated in an
immaterial manner up to the Closing), including items in the Buyer Disclosure
Letter referred to as "Items" below, Buyer hereby represents and warrants to
Seller as follows:
5.1. Authorization. Buyer has full corporate power and authority to enter into
this Agreement and perform its obligations hereunder and carry out the
transactions contemplated hereby. The Board of Directors of Buyer has taken all
action required by law, its Articles of Incorporation, its Bylaws and otherwise
to authorize the execution and delivery by Buyer of this Agreement and the
consummation by Buyer of the transactions contemplated hereby. This Agreement
constitutes a valid and binding agreement of Buyer, enforceable against Buyer in
accordance with its terms.
5.2. Organization and Good Standing. Buyer is a corporation duly organized,
validly existing and in good standing under the laws of the State of Nevada and
has full corporate power and authority to enter into this Agreement and to carry
out the transactions contemplated hereby.
5.3. No Violation. The execution and delivery of this Agreement by Buyer does
not, and the consummation of the transactions contemplated hereby will not, (a)
violate any provision, or result in the creation of any lien or security
interest under, any agreement, indenture, instrument, lease, security agreement,
mortgage or lien to which Buyer is a party or by which it is bound; (b) violate
any provision of Buyer's Articles of Incorporation or Bylaws; (c) violate any
order, arbitration award, judgment, writ, injunction, decree, statute, rule or
regulation applicable to Buyer; or (d) violate any other contractual or legal
obligation or restriction to which Buyer is subject.
5.4. Professional Fees. Buyer has not done anything to cause or incur any
liability for investment banking, brokerage, finders, agents or other fees,
commissions, expenses or charges in connection with the negotiation,
preparation, execution and performance of this Agreement or the consummation of
the transactions contemplated hereby, and Buyer does not know of any claim by
anyone for such a commission or fee, except with respect to certain commissions
which may be due in the course of Buyer's financing arrangements and which would
be borne exclusively by Buyer.
5.5. Consents and Approvals. Buyer has obtained all consents, approvals,
authorizations or orders of third parties,
----------------------
including governmental authorities, necessary for the authorization,
execution and performance of this Agreement by Buyer.
5.6. Full Disclosure. Neither this Agreement, nor any certificate or other
instrument or document furnished or to be furnished by Buyer to Seller pursuant
to this Agreement, contains any untrue statement of a material fact or omits to
state a material fact required to be stated herein or therein or necessary to
make the statements and information contained herein or therein not misleading.
ARTICLE 6.
COVENANTS AND AGREEMENTS OF SELLER
Seller agrees that from the date hereof until the Closing, and thereafter if so
specified, to fulfill the following covenants and agreements unless otherwise
consented to by Buyer in writing:
6.1. Schedules. Seller shall have the continuing obligation to supplement or
amend promptly the Seller Disclosure Letter with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described therein.
ARTICLE 7.
COVENANTS AND AGREEMENTS OF BUYER
Buyer agrees that from the date hereof until the Closing, unless otherwise
consented to by Seller in writing, it will fulfill the following covenants and
agreements:
7.1. Return of Materials. In the event the transactions contemplated by this
Agreement are not consummated, for any reason, Buyer promptly will return to
Seller all records and information provided to Buyer from Seller, and Buyer will
treat all such records and information as confidential.
7.2. Schedules. Buyer shall have the continuing obligation to supplement or
amend promptly the Buyer Disclosure Letter with respect to any matter hereafter
arising or discovered which, if existing or known at the date of this Agreement,
would have been required to be set forth or described therein.
7.3. Consents and Approvals. Buyer shall, in a timely, accurate and complete
manner, take all necessary corporate and other action and obtain and deliver at
Closing all consents, approvals, permits, licenses and amendments of agreements
required of Buyer to carry out the transactions contemplated in this Agreement.
ARTICLE 8.
COVENANTS AND AGREEMENTS OF BOTH SELLER AND BUYER
8.1. Confidentiality and Disclosure. Neither party shall, nor shall permit any
of its representatives to, issue any press release or otherwise publicly
disseminate any document or other written material relating to this Agreement or
any of the other transactions contemplated by this Agreement unless (a) each
party shall have approved such press release or written material (it being
understood that neither party shall unreasonably withhold or delay its approval
of any such press release or written material), or (b) a party shall have been
advised by its outside legal counsel that the issuance of such press release or
the dissemination of such written material is likely required by any applicable
law or regulation, and such party shall have consulted with the other and
modified such release so that it is reasonably acceptable to the other prior to
issuing such press release or disseminating such written material; provided,
however, that Buyer shall be entitled to file with the SEC, after the execution
and delivery of this Agreement, a report on Form 8-K (together with a copy of
this Agreement, including the exhibits hereto) and the press release (all of
which shall have been approved by the other party as described above) announcing
this Agreement. Each party shall use reasonable, diligent efforts to ensure that
none of its representatives makes any public statement, whether oral or written,
that is materially inconsistent with any press release issued or any written
material approved in advance by any part and publicly disseminated by such party
with respect to this Agreement or with respect to any of the other transactions
contemplated by this Agreement. Each party will take all reasonable precautions
to prevent any trading in the securities of any party by any officer, director,
employee or agent of such party having knowledge of any material information
regarding this Agreement provided hereunder, or any disclosure by any such
persons to anyone outside of the parties of any material non-public information
concerning any party or the transactions contemplated by this Agreement, until
the information in question has been adequately and publicly disclosed.
ARTICLE 9.
CONDITIONS TO BUYER'S OBLIGATIONS
All obligations of Buyer hereunder are subject to the fulfillment, prior to or
at the Closing, of each of the following conditions:
9.1. Representations and Warranties. The representations and warranties made by
Seller in this Agreement and the statements contained in the Seller Disclosure
Letter and in the Schedules attached hereto or in any instrument, list,
certificate or writing delivered by Seller pursuant to this Agreement shall be
true in all material respects when made and at and as of the time of the Closing
as though such representations and warranties were made at and as of the
Closing.
9.2. Performance by Seller. Seller shall have performed and complied with all
covenants, agreements, obligations and
---------------------
conditions required by this Agreement to be so complied with or performed.
9.3. Certificate of Seller. Seller shall have delivered to Buyer a certificate,
dated the Closing Date, certifying as to
---------------------
the fulfillment of the conditions specified in Sections 9.1 and 9.2 hereof.
9.4. Closing Deliveries. All other documents and items specified in this
Agreement to be delivered by Seller at the
------------------
Closing shall be so delivered, and shall be in form and substance satisfactory
to Buyer and its counsel.
9.5. Consents and Approvals. Buyer shall have received from Seller executed
counterparts of all consents required for the consummation of the transactions
contemplated hereby, including without limitation all consents of third parties
relating to the Stock or the Assumed Liabilities, all of which consents shall be
in form and substance satisfactory to Buyer and its counsel.
ARTICLE 10.
CONDITIONS TO SELLER'S OBLIGATIONS
All obligations of Seller under this Agreement are subject to the fulfillment,
prior to or at the Closing, of each of the following conditions:
10.1. Representations and Warranties. The representations and warranties made by
Buyer in this Agreement and the statements contained in the Buyer Disclosure
Letter and in the Schedules attached hereto or in any instrument, list,
certificate or writing delivered by Buyer pursuant to this Agreement shall be
true in all material respects when made and at and as of the time of the Closing
as though such representations and warranties were made at and as of the
Closing.
10.2. Performance by Buyer. Buyer shall have performed and complied with all
agreements, obligations and conditions
--------------------
required by this Agreement to be so complied with or performed.
10.3. Certificate of Buyer. Buyer shall have delivered to Seller a Certificate,
dated the Closing Date, certifying as to
--------------------
the fulfillment of the conditions specified in Sections 10.1 and 10.2 hereof.
10.4. Closing Deliveries. All other documents and items specified in this
Agreement to be delivered by Buyer at the
------------------
Closing shall be so delivered, and shall be in form and substance satisfactory
to Seller and its counsel.
10.5. Consents and Approvals. Seller shall have received from Buyer executed
counterparts of all consents required for the consummation of the transactions
contemplated hereby, including without limitation all consents of third parties
relating to the Stock or the Assumed Liabilities, all of which consents shall be
in form and substance satisfactory to Seller and its counsel.
<PAGE>
ARTICLE 11.
INDEMNIFICATION
11.1. Indemnification by Seller. Seller hereby agrees to defend, indemnify and
hold harmless Buyer, and each of Buyer's stockholders, affiliates, officers,
directors, employees, agents, successors and assigns ("Buyer's Indemnified
Persons") and shall reimburse Buyer's Indemnified Persons for, from and against
each claim, loss, liability, cost and expense (including without limitation,
interest, penalties, costs of preparation and investigation, and the reasonable
fees, disbursements and expenses of attorneys, accountants and other
professional advisors) (collectively, "losses"), directly or indirectly relating
to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
non-fulfillment of any covenant,
agreement or other obligation by or of Seller contained herein, any Schedule
hereto or in any certificate, document or instrument delivered to Buyer pursuant
hereto;
(b) Any other loss incidental to any of the foregoing.
11.2. Indemnification by Buyer. Buyer hereby agrees to defend, indemnify and
hold harmless Seller, and each of Seller's stockholders, affiliates, officers,
directors, employees, agents, successors and assigns ("Seller's Indemnified
Persons") and shall reimburse Seller's Indemnified Persons for, from and against
losses directly or indirectly relating to, resulting from or arising out of:
(a) Any untrue representation, misrepresentation, breach of warranty or
nonfulfillment of any covenant,
agreement or other obligation by Buyer contained herein or in any certificate,
document or instrument delivered to Seller pursuant
hereto; and
(b) Any other loss incidental to the foregoing.
11.3. Survival. All representations and warranties by the parties contained in
this Agreement or in any certificate delivered pursuant hereto shall survive the
Closing and any investigation at any time made by or on behalf of any party
hereto solely for purposes of Section 11.1 and 11.2 and shall terminate on the
date which is twelve months after the Closing Date.
NOTWITHSTANDING THE FOREGOING, NEITHER PARTY WILL BE LIABLE TO THE OTHER FOR ANY
CONSEQUENTIAL OR INCIDENTAL DAMAGE IN CONNECTION WITH THE PERFORMANCE OF THIS
AGREEMENT EVEN IF ADVISED IN ADVANCE OF THE POSSIBILITY OF SUCH DAMAGES AND THIS
AGREEMENT INCLUDES ALL REPRESENTATIONS AND WARRANTIES GIVEN BY ONE PARTY TO
ANOTHER, EACH PARTY HEREBY WAIVING ANY IMPLIED WARRANTIES SUCH AS WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, COURSE OF DEALING OR TRADE
PRACTICE.
ARTICLE 12.
TERMINATION OF AGREEMENT
12.1. Termination of Agreement. This Agreement may be terminated at any time
prior to the Closing:
------------------------
(a) By mutual agreement of Seller and Buyer.
(b) By Buyer, if there has been a material violation or breach by Seller of any
of the agreements,
representations or warranties contained in this Agreement which has not been
waived in writing, or if any of the conditions set forth in Article 9 hereof
have not been satisfied by the Closing or have not been waived in writing by
Buyer.
(c) By Seller, if there has been a material violation or breach by Buyer of any
of the agreements,
representations or warranties contained in this Agreement which has not been
waived in writing, or if any of the conditions set forth in Article 9 hereof
have not been satisfied by the Closing or have not been waived in writing by
Seller.
(d) By either Buyer or Seller, if the transactions contemplated by this
Agreement shall not have been consummated on or before October 15, 2000.
(e) By either Buyer or Seller, if the other makes an assignment for the benefit
of creditors, files a voluntary petition in bankruptcy or seeks or consents to
any reorganization or similar relief under any present or future bankruptcy act
or similar law, or is adjudicated a bankrupt or insolvent, or if a third party
commences any bankruptcy, insolvency, reorganization or similar proceeding
involving the other.
ARTICLE 13.
MISCELLANEOUS ARTICLE
13.1. Fees and Expenses. All fees and expenses incurred by Seller, including
without limitation legal fees of its retained counsel and expenses, in
connection with this Agreement will be borne by Seller and all fees and expenses
incurred by Buyer, including without limitation, legal fees and expenses, in
connection with this Agreement will be borne by Buyer.
13.2. Assignability: Parties in Interest. Neither Buyer nor Seller may assign,
transfer or otherwise dispose of any of its rights hereunder without the prior
written consent of the other party. Any such assignee shall assume all of
Assignor's duties, obligations and undertakings hereunder, but the assignor
shall remain liable thereunder. All the terms and provisions of this Agreement
shall be binding upon, shall inure to the benefit of and shall be enforceable by
the respective heirs, successors, assigns and legal or personal representatives
of the parties hereto.
13.3. Allocation of Purchase Price. The Purchase Price for the Stock shall be
allocated as set forth in Schedule 13.3
----------------------------
attached hereto. The parties hereto agree to follow such allocation for Federal
and State income tax purposes.
13.4. Entire Agreement: Amendments. This Agreement, including the exhibits,
Schedules, lists and other documents and writings referred to herein or
delivered pursuant hereto, which form a part hereof, contains the entire
understanding of the parties with respect to its subject matter. There are no
restrictions, agreements, promises, warranties, covenants or undertakings other
than those expressly set forth herein or therein. This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter. This Agreement may be amended only by a written instrument duly
executed by all parties or their respective heirs, successors, assigns or legal
personal representatives. Any condition to a party's obligations hereunder may
be waived but only by a written instrument signed by the party entitled to the
benefits thereof. The failure or delay of any party at any time or times to
require performance of any provision or to exercise its rights with respect to
any provision hereof, shall in no manner operate as a waiver of or affect such
party's right at a later time to enforce the same.
13.5. Headings. The section and paragraph headings contained in this Agreement
are for reference purposes only and shall
--------
not affect in any way the meaning or interpretations of this Agreement.
13.6. Severability. The invalidity of any term or terms of this Agreement shall
not affect any other term of this
------------
Agreement, which shall remain in full force and effect.
13.7. Notices. All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be deemed to have been duly given if
delivered in person, by electronic facsimile transmission, cable, telegram,
telex, or other standard form of telecommunications, by overnight courier or
registered or certified mail, postage prepaid, return receipt requested as
follows:
If to Buyer: E-City Software
Anis Jessa
1201 First Avenue South
Suite 330
Seattle, WA 98134
(206) 264-9715 Tel
(520) 441-8755 Fax
If to Seller: Butterfly Software
Daryl Brooks
#302 - 343 Railway Street
Vancouver, B.C. Canada V6A 1A4
(604) 605-1130 Tel
(604) 605-1132 Fax
or to such other address as any party may have noticed to the others in writing
in accordance herewith, except that notices of change of address shall only be
effective upon receipt.
13.8. Governing Law This Agreement shall be governed by and construed and
enforced in accordance with the laws of the
--------------
State of Nevada, without regard to its conflict of laws rules. Venue shall be
Clark County, Nevada.
13.9. Counterparts. This Agreement may be executed simultaneously in
counterparts, with the same effect as if the signatories executing the several
counterparts had executed one counterpart; provided, however, that the several
executed counterparts shall together have been signed by Buyer and Seller. All
such executed counterparts shall together constitute one and the same
instrument.
<PAGE>
IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by duly
authorized officers of Buyer and Seller on the date first above written.
BUYER:
E-City Software, INC.
By: /s/ Anis Jessa
Title: President
SELLER:
Butterfly Software, Inc.
By: /s/ Daryl Brooks
<PAGE>
STOCK PURCHASE AGREEMENT
BY AND BETWEEN
E-City Software , INC.
AND
Butterfly Software, Inc.
August 10, 2000
<PAGE>
Exhibit 10.7
SOFTWARE DEVELOPMENT AGREEMENT
THIS DEVELOPMENT AGREEMENT (hereinafter called "Agreement") made this 15th day
of September, 1999 by and between 3DCityguide.com, Inc., a Washington
corporation (hereinafter called "3DCityguide", which term shall include
3DCityguide's subsidiaries and affiliates) and Butterfly Software, a British
Columbia numbered company ("Butterfly").
WITNESSETH:
WHEREAS, Butterfly has the development capacity to build custom visually
interactive software products distributed in the CD ROM format;
WHEREAS, 3DCityguide desires to produce a limited number of custom visually
interactive CD ROM products for various metropolitan destinations throughout the
world;
WHEREAS, Butterfly desires to assist in the production of the CD ROM product by
building custom visually interactive software products pursuant to the
3DCityguide specifications;
WHEREAS, Butterfly has developed and possesses certain computer technology with
reference to software development and visual animations (which together with all
future developments thereof is collectively called "Butterfly Software
Technology"),
WHEREAS, Butterfly has the technology, capability and expertise to develop,
create, design, manufacture, produce and provide certain visually interactive
software technology; and
WHEREAS, subject to the conditions and terms contained herein, Butterfly is
willing and desirous to grant to 3DCityguide, and 3DCityguide desires to obtain
from Butterfly an exclusive, assignable, transferable, license for the
distribution, production, promotion, marketing and sale rights to the Butterfly
Software Technology for 3DCityguide as incorporated into any Development
Project; and
WHEREAS, Butterfly and 3DCityguide have negotiated and agreed upon the following
conditions and terms for a business relationship for the development,
production, distribution, marketing, license and sale of the CD ROM product
produced by any Development project incorporating Butterfly Software Technology
.
NOW, THEREFORE, for and in the consideration of Ten Dollars ($10.00) in hand
paid each respective party to the other and other good/valuable considerations
including, but not limited to, the covenants, conditions and terms hereof, the
sufficiency and receipt of said good/valuable considerations being herewith
acknowledged by the respective parties, Butterfly and 3DCityguide stipulate and
agree as follows:
<PAGE>
1. Recitals. The recitals set forth above are accurate, correct and true and
are incorporated herein by this reference
--------
describing specifically the understandings and intentions of the respective
parties hereto.
2. Definitions. When used in this Agreement, the following terms shall have
the meanings set forth next to the same as
-----------
follows:
(a) The term "Future Products" means the Butterfly Software Technology
components, which are developed during the Term of this agreement in the field
of visually interactive technology by Butterfly for sale and licensing.
(c) The term "3DCityguide Builds" means a version of the Butterfly Software that
has been customized by Butterfly for the sole and exclusive distribution, sale
and/or use by 3DCityguide in its promotional/marketing opportunities,
presentations, programs and/or projects in the visually interactive market and
is encompassed in the specifications of a specific Development Project.
(d) The term "3DCityguide Customers" means 3DCityguide's advertisers, suppliers,
customers, sponsors and/or contacts.
(e) The term "3DCityguide Site" means 3DCityguide's Internet site on the World
Wide Web known as www.3DCityguide.com, www.chatvegas.com and any other domain
names owned by 3DCityguide or any affiliate or subsidiary of the same
(f) The term "Development Project" means a software product built by Butterfly
for 3DCityguide pursuant to this Agreement which incorporates Butterfly Software
Technology and which includes the development of any 3DCityguide Build. (g) The
term "CD ROM" means a compact disk or any other type of medium for the delivery
of software
(h) The term "Master" means a Private Build CD ROM "Master Disc" created by
Butterfly and suitable for use in the manufacturing, production and replication
of Butterfly Software Technology as incorporated in a Development Project or any
other 3DCityguide Build on CD ROM through subsequent replications thereof.
(i) The term "Replicator" means a manufacturer and/or packager of CD ROMs
containing Butterfly Software Technology that is ready for distribution to the
public for lease or sale through 3DCityguide
(j) The term "Start Date" means September 15, 1999.
(k) The term "Supplemental Product" means any enhancement, upgrade, update or
add-on to any 3DCityguide Build or Development Project.
(l) The term "Territory" means North America, the United States, Canada and
Mexico.
3. Butterfly's Right to Terminate.
------------------------------
(a) Butterfly may terminate this Agreement, in addition to any other remedies
available to it, (i) if
3DCityguide has failed to perform or meet any material obligation, condition or
term contained herein and failed to remedy the default within thirty (30) days
after the receipt of written notice from Butterfly to that effect, or (ii) if
3DCityguide has failed to make any payment when payable and due under this
Agreement to Butterfly within fifteen (15) days after the receipt of written
notice from Butterfly to that effect.
(b) Notwithstanding the foregoing, this Agreement shall be automatically
terminated if 3DCityguide becomes bankrupt, involuntary, voluntary or
adjudicated, or 3DCityguide shall cease to function as a going concern by
suspending or discontinuing its business or ceases to distribute, market,
license and/or sell Butterfly Software Technology for any reason except for
periodic shutdowns in the ordinary course of business and interruptions caused
by strike, labor dispute or any other events over which it has no control.
(c) Butterfly's failure to resort to any remedy for breach hereunder shall not
be deemed to be a waiver for any subsequent breach of this Agreement.
4. 3DCityguide's Right to Terminate.
--------------------------------
(a) 3DCityguide may terminate this Agreement, in addition to any other remedies
available to it if Butterfly has failed to perform or meet any material
obligation, condition or term contained herein and failed to remedy the default
within thirty (30) days after the receipt of written notice from 3DCityguide to
that effect.
(b) Notwithstanding the foregoing, this Agreement shall be automatically
terminated if Butterfly becomes bankrupt, involuntary, voluntary or adjudicated,
or at 3DCityguide's discretion may terminate if Butterfly shall cease to
function as a going concern by suspending or discontinuing its business, ceases
supply, development or support of the Butterfly Software Technology except for
the decision to discontinue specific projects and periodic shutdowns in the
ordinary course of business and interruptions caused by strike, labor dispute or
any other events over which it has no control.
(c) 3DCityguide's failure to resort to any remedy for breach hereunder shall not
be deemed to be a waiver for any subsequent breach of this Agreement.
5. Grant of License Rights. Subject to the conditions and terms contained
herein, during the Term of this Agreement, Butterfly grants to 3DCityguide a
non-exclusive, transferable, assignable license, (with the right to sublicense),
to manufacture, distribute, produce, advertise, market, promote and sell the
Butterfly Software Technology in the Territory.
6. Butterfly Software Technology. The Butterfly Software Technology is a suite
of visually interactive animation
-----------------------------
technologies and associated graphical and informational user interfaces and
related code, which may be improved and updated from time to time with
technological and graphic advancements that incorporate as a part thereof
certain respective features available to the user of the Butterfly Software
Technology from time to time.
7. Butterfly License Terms. Butterfly shall deliver and provide to 3DCityguide
the Butterfly Software Technology pursuant to the attached delivery schedule,
Exhibit A. Notwithstanding anything herein to the contrary, all proprietary
right, title and interest in and unto the foregoing Butterfly Software
Technology, including the extension of those rights in the respective
3DCityguide Builds, shall remain the exclusive and sole proprietary property of
Butterfly subject only to the rights to same granted to 3DCityguide herein.
Consistent with the foregoing, Butterfly shall not make any sales or
distribution to any party of any Butterfly Software Technology in or outside of
the Territory other than 3DCityguide without first obtaining the 3DCityguide's
consent, which 3DCityguide may grant in it's sole and absolute discretion.
8. Butterfly Compensation and Term of Agreement. In consideration of the
Butterfly Software Technology, license rights
--------------------------------------------
granted herein by Butterfly to 3DCityguide, 3DCityguide shall pay to Butterfly
the following sums as described hereafter:
(a) Cash. 3DCityguide shall pay to Butterfly monetary sums in accordance with
Exhibit B attached hereto at an amount
therein indicated .
9. 3DCityguide Builds and other Development Projects. Pursuant to the
3DCityguide Build Schedule and Specifications attached hereto as Exhibit C,
Butterfly agrees to complete each 3DCityguide Build pursuant to the same and any
additional Development Projects which may be agreed to from time to time by both
parties.
10. Additional Butterfly Software Technology. Butterfly may provide to
3DCityguide from time to time, at Butterfly's absolute and sole discretion,
certain additional Butterfly Software Technology products not required to be
licensed to 3DCityguide under this Agreement. Such additional software products
shall be compensated as agreed to by the parties and paid upon delivery.
11. Goodwill of Trademark.
---------------------
(a) Butterfly acknowledges the value of the goodwill associated with the
Trademark and that the Trademark is distinctive and has acquired secondary
meaning. Butterfly agrees, during the Term, and thereafter, never to challenge
the rights of 3DCityguide or others in the Trademark.
(b) Butterfly shall promptly comply on a prospective basis with all instructions
and specifications from time to time communicated by Butterfly in connection
with the use and display of the Trademark, not inconsistent with this Agreement.
12. Trademark Protection. Butterfly acknowledges that the trademarks, trade
names and design marks ("Trademark") used by 3DCityguide and listed on Exhibit
"D" attached hereto and incorporated herein by this reference are the
proprietary and sole property of 3DCityguide or otherwise licensed to
3DCityguide for its use. Butterfly shall not use the Trademark(s), except in the
normal course of advertising and marketing the Butterfly Software Technologies
and shall appropriately designate the rights of the parties therein on such
advertising and marketing materials. Upon termination of this Agreement,
Butterfly shall immediately cease the use of any of 3DCityguide's proprietary
trademarks, trade names, design marks or rights.
(a) Butterfly agrees that it shall not, at any time:
(i) apply for any registration of any trademark or other designation, which
would adversely affect
3DCityguide's rights in the Trademark;
(ii) file any document with any governmental authority or take any action which
would adversely affect 3DCityguide's rights in the Trademark;
(iii) use or authorize the use of any trademark, trade name or other designation
identical with or
confusingly similar to the Trademark;
(iv) use or display the Trademark in a manner which might be confusing or
deceptive or might injure the good will and reputation associated with the
Trademark; or
(v) otherwise commit any act, which would create a potential liability on the
part of 3DCityguide or would adversely affect the goodwill and reputation of the
Trademark.
(b) 3DCityguide shall have the right, but not the obligation, to prosecute,
defend and/or settle at its own cost and expense and in its sole discretion, all
actions, proceedings and claims involving the Trademark, and to take any other
action that it deems proper or necessary for the protection and preservation of
its rights in the Trademark. In its sole option, 3DCityguide may take any action
described above in its own name, and/or in the name of Butterfly, and Butterfly
will cooperate fully therewith. All expenses of any action taken by 3DCityguide
to protect its interests in the Trademark shall be borne by 3DCityguide, and all
relief granted in connection therewith shall be solely for the account of
3DCityguide, except as described herein where Butterfly may participate in such
action. In the event Butterfly determines, in its absolute and sole discretion,
that it desires to participate with 3DCityguide in any action, proceeding and/or
claim or to initiate it's own action to protect its interests in the 3DCityguide
Builds which utilize the Trademark, then Butterfly shall proportionately bear
its portion of the expenses related to same with 3DCityguide, and shall
proportionately benefit in the relief granted in connection therewith as it
relates to Butterfly's rights. Butterfly shall notify 3DCityguide promptly of
any adverse, pending or threatened action in respect of the Trademark, and of
any use by third parties that would or might tend to be adverse to the rights of
3DCityguide, if said action against the Trademark or adverse use of the
Trademark becomes known to Butterfly.
13. Representations and Warranties.
------------------------------
(a) Butterfly represents and warrants to 3DCityguide:
(i) that it is a British Columbia corporation, duly organized, validly existing
and in good standing under the laws of said State;
(ii) that it has the full right, power and authority to enter into and perform
the obligations
contemplated in this Agreement;
(iii) that this Agreement constitutes a legal, valid and binding obligation of
Butterfly, enforceable in accordance with its conditions and terms; and
(iv) that neither Butterfly nor any of its shareholders, directors or officers
is subject to, or a party to, any agreement, obligation, claim, action, order or
judgment, in effect, pending or threatened, which would adversely affect or
otherwise interfere with Butterfly's performance under this Agreement. (v) that
the Butterfly Software Technology will function as specified in accordance with
the specifications on Exhibits attached hereto.
(b) 3DCityguide represents and warrants to Butterfly:
(i) that it is a Washington corporation, duly organized, validly existing and
in good standing under
the laws of said State;
(ii) that it has the full right, power and authority to enter into and perform
the obligations
contemplated in this Agreement;
(iii) that this Agreement constitutes a legal, valid and binding obligation of
3DCityguide, enforceable in accordance with its conditions and terms;
(iv) that neither 3DCityguide nor any of its shareholders, directors or officers
is subject to, or a party to, any agreement, obligation, claim, action, order or
judgment, in effect, pending or threatened, which would adversely affect or
otherwise interfere with 3DCityguide's performance under this Agreement; and
14. Indemnification.
---------------
(a) 3DCityguide hereby indemnifies Butterfly and holds Butterfly harmless and
defends Butterfly from and against any and all claims, suits, losses,
liabilities, causes of action, damages and costs (including reasonable
attorneys' fees), or the settlement or avoidance thereof, arising out of any
breach of 3DCityguide's representations and warranties or breach of this
Agreement. For purposes of this subparagraph, "3DCityguide" shall include
3DCityguide's officers, directors, employees, agents, subsidiaries, parents and
affiliates and partners.
(b) Butterfly hereby indemnifies 3DCityguide and holds 3DCityguide harmless and
defends 3DCityguide from and against any and all claims, suits, losses,
liabilities, causes of action, damages and costs (including reasonable
attorneys' fees), or the settlement or avoidance thereof, arising out of any
breach of Butterfly's representations and warranties or breach of this
Agreement. For purposes of this subparagraph, "Butterfly" shall include
Butterfly's officers, directors, employees, agents, subsidiaries, parents and
affiliates.
(c) The provisions of this Section shall survive the termination or expiration
of this Agreement
15. Non-Compete. Butterfly shall not develop, release, manufacture, distribute,
license, sell, rent or lease to third parties or end users a directly or
indirectly competing product to any 3DCityguide Build or Development Project
during the Term of this Agreement (hereinafter called the "Non-Compete Period")
without the written permission of 3DCityguide. For the purposes of this Section,
"indirectly competing product" shall mean any software product which provides
visual animations of any city, state or other geographical area or any software
product whatsoever built for a competitor of 3DCityguide, as determined by the
exercise of 3DCityguide's reasonable, good-faith judgment.
16. Butterfly Software Technology Ownership.
---------------------------------------
(a) Code Ownership. 3DCityguide has developed and owns, or has the licensed
rights to use, and has copyright and trademark rights thereto where applicable,
all of the proprietary software in object code form and all modifications or
additions to such code (hereinafter collectively called "Proprietary Code") as
is incorporated at any time in the Butterfly Software Technology as part of a
3DCityguide Build or development project. The Proprietary Code may be expanded
upon during the Term of this Agreement and shall remain under the exclusive
ownership and control of 3DCityguide. Butterfly acknowledges that it has no
right, title or interest in or unto the Proprietary Code. By execution hereof,
Butterfly acknowledges and agrees that all property rights to the Proprietary
Code shall remain the exclusive property of 3DCityguide, and to the extent
possible under applicable law, Butterfly hereby assigns to 3DCityguide all of
its right, title and interest, if any, in and unto the Proprietary Code (to
secure 3DCityguide's ownership of the Proprietary Code which is integrally
incorporated therein) and further Butterfly agrees to execute and deliver such
instruments and take such other action as may be required and requested by
3DCityguide to carry out the assignment contemplated herein.
17. Disclaimer. THE WARRANTIES IN THIS AGREEMENT REPLACE ALL OTHER WARRANTIES,
EXPRESS OR IMPLIED, INCLUDING ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. IN NO EVENT WILL EITHER PARTY BE LIABLE TO THE OTHER FOR ANY
LOSS OF PROFITS OR OTHER INCIVISUALLY INTERACTIVE OR CONSEQUENTIAL DAMAGES
ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY PERFORMANCE OR
NONPERFORMANCE HEREUNDER, EVEN IF THAT PARTY HAS BEEN ADVISED OF THE POSSIBILITY
OF SUCH DAMAGES.
18. Master Delivery and Acceptance.
------------------------------
(a) Butterfly will develop and provide to 3DCityguide the Butterfly Software
Technology (i.e., 3DCityguide Build One - 3DCityguide Build Ten) in the form of
a Master developed in accordance with the specifications for same (hereinafter
called "Specifications"), which Specifications shall be mutually acceptable to
Butterfly and 3DCityguide but developed in 3DCityguide's absolute and sole
discretion relative to the appropriate software considerations for same. In
accordance with the Specifications, Butterfly shall provide and deliver to
3DCityguide the Master for 3DCityguide Build One pursuant to the attached
exhibits. Subsequent Masters for the additional Butterfly Software Technology
for 3DCityguide (i.e., 3DCityguide Build Two - 3DCityguide Build Ten) shall be
provided and delivered to 3DCityguide by Butterfly throughout the Term . In the
event that 3DCityguide requests that Butterfly create further Butterfly Software
Technology thereafter for 3DCityguide's use, 3DCityguide will gather all of the
necessary Feature information and material and forward an order for same to
Butterfly to determine whether Butterfly desires to develop and create same
including the consideration that Butterfly will receive for such additional
development. In the event that Butterfly determines that it desires to develop
and create the additional Butterfly Software Technology for 3DCityguide, then
Butterfly will develop same in accordance with the Specifications relating to
the new development software and will provide to 3DCityguide a timetable for the
delivery of same. Notwithstanding anything herein to the contrary, Butterfly
shall have a period of fifteen (15) days within which to determine whether
Butterfly will undertake and accept an assignment from 3DCityguide to develop
and create additional Butterfly Software Technology for 3DCityguide including
the consideration and determinations relative to same. Butterfly shall agree to
use its best efforts to modify the 3DCityguide Builds during the first year of
the Term to the satisfaction of 3DCityguide and shall use its best efforts to
provide 3DCityguide with at least as many additional 3DCityguide Builds each
year and thereafter throughout the course of the Term as are required by
exhibits attached hereto together with any reasonable modifications to the same
by 3DCityguide which to not materially change the nature of the 3DCityguide
Build, in the sole reasonable discretion of Butterfly. Butterfly also agrees to
upgrade the 3DCityguide Builds whenever the Butterfly Software Technology is
upgraded at no additional cost to 3DCityguide, should 3DCityguide so desire.
(b) Butterfly agrees to provide 3DCityguide Build testing subject to further
independent examination and testing by third parties of 3DCityguide's choosing.
Butterfly shall advise 3DCityguide in writing that it has completed its testing
program and shall submit the respective 3DCityguide Build to 3DCityguide for
independent testing if 3DCityguide so desires. After the delivery of each
respective 3DCityguide Build (hereinafter called "Delivered Product"),
3DCityguide shall evaluate the Delivered Product and shall submit a written
acceptance or rejection of same within ten (10) days of its submission for
consideration. In the event that 3DCityguide does not issue a written acceptance
or rejection within the ten (10) day period described herein, then 3DCityguide's
silence shall be consider acceptance for purposes of accepting the Delivered
Product under this Agreement.
(c) In addition to the 3DCityguide Build "Master" which Butterfly will deliver
to 3DCityguide, Butterfly will retain an additional "Master" of each respective
3DCityguide Build at its offices.
24. Export Control. This Agreement is made subject to any applicable regulation,
restrictions or orders on the export from the United States of America of
control of commodities, technical data or of information concerning such
technical data, which might be imposed from time to time by the United States of
America. 3DCityguide will not export, indirectly or directly, any of the
3DCityguide Builds or other Butterfly Software Technology to any country for
which the United States of America or any agency thereof requires governmental
approval at the time of export without first obtaining an export license or
requires the existence of an export license for same, and further subject to the
requirement that 3DCityguide must be able to export the 3DCityguide Builds to
said country in accordance with this Agreement's conditions and terms.
25. Shipment of Masters. Butterfly will ship the respective 3DCityguide Build
"Masters" to 3DCityguide, or if
-------------------
3DCityguide desires to its Replicator designated through written instruction to
Butterfly, and will utilize the shipment carrier and method instructed by
3DCityguide in its order to arrange for the shipment of the respective Master
and will insure same during such shipment. Such shipment from Butterfly to
3DCityguide shall be from Butterfly's place of business to 3DCityguide or
3DCityguide's Replicator and all shipping, freight, tax and insurance charges
therefore shall be 3DCityguide's responsibility. Risk of loss of the respective
Master shall be 3DCityguide's risk after Butterfly has delivered the respective
Master to the appropriate carrier for shipment.
26. Support. Butterfly and 3DCityguide agree that support for the 3DCityguide
Builds shall utilize the Internet, E-mail and telephone resources to provide
reasonable support consistent with and the terms and conditions as described in
Exhibit E attached hereto and incorporated herein by this reference and shall
include at least two visits to the 3DCityguide offices of 3DCityguide by
Butterfly personnel per Term year of this Agreement, the reasonable business
travel expenses of which shall be borne by 3DCityguide.
27. Relationship. Nothing herein contained shall be construed to place
3DCityguide and Butterfly in a relationship as partners, joint ventures,
employer and employee, or principal and agent, respectively, and neither
3DCityguide nor Butterfly shall have the power to bind or obligate the other
party in any manner whatsoever.
28. Assignment. Neither Butterfly nor 3DCityguide shall sublicense, transfer or
assign any rights herein granted, except (upon prior written notice to
3DCityguide) to Butterfly's subsidiaries, affiliates or parents, or to
3DCityguide's subsidiaries, affiliates or parents, without obtaining the other
respective party's prior written approval, which approval shall not unreasonably
be withheld or delayed, and, if granted, shall be conditioned upon the
sublicense's, transferee's, or assignee's agreement in writing to abide by the
same obligations, conditions and terms applicable to the respective parties
hereto.
29. Notices. All notices, approvals and other communications provided for in
this Agreement shall be made in writing and delivered personally or by certified
or registered mail, return receipt requested, postage prepaid, to the parties at
their addresses set forth below, or to such address as either party may specify
by like written notice to the other and shall be deemed given when received.
Failure to accept certified or registered mail shall be deemed a receipt thereof
within ten (10) days after the first notice of delivery of the certified or
registered mail. Any entity may change its address as designated herein by
giving notice thereof.
If to 3DCityguide: 4620 S. Arville Street Suite A, Las Vegas, NV, USA 89103
If to Butterfly: #302 - 343 Railway Street, Vancouver, BC, Canada V6A 1A4
or such other address either party from time to time specify in writing to the
other.
30. Confidentiality. Butterfly and 3DCityguide agree that the conditions and
terms of this Agreement shall be deemed confidential information between the
respective parties. Each respective party expressly undertakes to retain in
confidence and to require its directors, officers, employees, representatives
and agents to retain in confidence all information between the respective
parties that the disclosing party has identified as being confidential and/or
proprietary or which, by the nature of the circumstances surrounding the
disclosure, should in good faith be treated as confidential and/or proprietary.
Without limiting the foregoing, all of the conditions and terms of this
Agreement shall be considered confidential and shall not be disclosed (except to
either respective party's prospective acquisition partners, accountants,
attorneys, advisors and consultants, including financial institutions and
sources and potential financing entities, together with such foregoing entities'
directors, officers, employees, representatives and agents, on a need to know
basis and provided that such parties are bound by the conditions and terms of
this non-disclosure section) without the prior written consent of the other
respective party, except that the respective parties may disclose confidential
information as required by governmental entity or court of law with the power to
compel such disclosure but only after giving the other respective party an
opportunity and due notice to defend against the disclosure requirement. The
respective parties stipulate and agree that upon expiration or termination of
this Agreement, each respective party will return to the other respective party
all specifications, memorandums, blue prints, drawings, designs, devices,
documents, notes and any other material containing or disclosing any
confidential and/or proprietary information of the other respective party. The
respective parties may mutually agree in writing that rather than returning all
said documentation, the possessing party of such documentation shall destroy the
confidential and/or proprietary information in its possession in accordance with
this section. Neither respective party will retain any such documentation
relating to confidential and/or proprietary information without the other
respective party's prior written approval thereof.
31. Mediation/Arbitration. Any controversy, claim, misunderstanding, cause of
action, matter in question, breach or disagreement arising out of, or relating
to, this Agreement (hereinafter called "Dispute") shall be decided by mediation
or arbitration as follows:
(a) Mediation: The party seeking resolution of a Dispute (hereinafter called
"Complaining Party") shall provide the other party (hereinafter called
"Responding Party") with written notice describing the Dispute and requesting
mediation (hereinafter called "Mediation Notice") thereof including the naming
therein of its proposed mediator. Within ten (10) calendar days of the delivery
date of Mediation Notice, the respective parties shall appoint a mutually
acceptable mediator (hereinafter called "Mediator") to resolve the Dispute.
Within a reasonable period of time thereafter, not to exceed ten (10) calendar
days after appointing the Mediator, the respective parties in controversy
("Dispute") shall submit their respective cases to the Mediator who shall hear
the evidence and render a final decision thereon within three (3) calendar days
after the close of the evidence. The respective parties agree that the mediation
of the Dispute shall take place in Bellingham, Washington or such other location
mutually acceptable to the respective parties, and shall be governed by
Washington law. Any decision or award rendered by the Mediator, and acceptable
to the respective parties, shall be final and judgment thereon may be entered in
accordance with applicable law in any Court having jurisdiction thereof. If the
Mediator shall demand compensation for its services prior to mediation, then
Complaining Party and Responding Party shall pay said Mediator expenses on a
fifty-fifty (50-50) basis in advance of the mediation. The substantially
prevailing party in mediation shall be entitled to recover all expenses and
costs of mediation including its reasonable attorney's fees and any advanced
Mediator's expenses from the non-prevailing party.
(b) Arbitration: In the event the respective parties do not select a mutually
acceptable mediator within ten (10) calendar days of Mediation Notice, the
Complaining Party shall notify the Responding Party in writing of its demand to
arbitrate, and shall designate in such notice (hereinafter called "Arbitration
Notice") the name of its arbitrator. Within ten (10) calendar days of the
delivery date of Arbitration Notice, Responding Party shall select its
arbitrator. Within twenty (20) calendar days of the delivery date of Arbitration
Notice, the two (2) arbitrators so selected shall appoint a third arbitrator
(third arbitrator hereinafter called "The Arbitrator"). Within thirty (30)
calendar days of the delivery date of Arbitration Notice the respective parties
in controversy ("Dispute") shall submit their respective cases to the panel of
Arbitrators who shall hear the evidence and render a final decision thereon
within three (3) calendar days after the close of the evidence. The respective
parties agree that the arbitration shall take place in Seattle, Washington or
such other location mutually acceptable to the respective parties, and shall be
governed by Washington law in accordance with the American Arbitration
Association regulations and rules except as otherwise supplemented, modified or
amended herein. The Arbitrator shall be empowered to take such procedural and
discovery actions as the Arbitrator deems appropriate, to the same extent as a
court acting pursuant to the Federal Rules of Civil Procedure. Any decision or
award rendered by the Arbitrator shall be final and judgment thereon may be
entered in accordance with applicable law in any court having jurisdiction
thereof. If the Arbitrator shall demand compensation for their services prior to
arbitration, then Complaining Party and Responding Party shall pay said
Arbitrators' expenses on a fifty-fifty (50-50) basis in advance of the
arbitration. The substantially prevailing party in arbitration shall be entitled
to recover all expenses and costs of arbitration including its reasonable
attorney's fees and any advanced Arbitrators' expenses from the non-prevailing
party.
(c) Equitable Remedy. Notwithstanding this Agreement's conditions and terms
relating to mediation and/or arbitration of Disputes, the respective parties
acknowledge and agree that breach of certain of the covenants, conditions and
terms of this Agreement, such as a breach creating irreparable harm, would have
an inadequate remedy at law, and may not be adequately remedied by damages, and
further consent and agree that temporary and/or permanent injunctive and other
relief may be sought and pursued to prevent irreparable harm to either
respective party for breach of this Agreement's covenants, conditions and terms
without waiving the right to seek actual damages thereafter.
32. Miscellaneous.
-------------
(a) Legal Representation. Each party to this Agreement has been represented by
counsel in the negotiation of this Agreement and accordingly, no provision of
this Agreement shall be construed against a party due to the fact that it or its
counsel drafted, dictated or modified this Agreement or any condition or term
thereof.
(b) Further Instruments. Each party hereto shall, from time to time, execute
and deliver such further
-------------------
instruments as any other party or parties or its counsel may reasonably request
to effectuate the intent of this Agreement.
(c) Successors and Assigns. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns,
if and when applicable.
(d) Survival of Representations and Warranties. The respective representations,
warranties and agreements of the respective parties to this Agreement and
contained in this Agreement shall survive and remain in effect.
(e) Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Washington. Wherever possible, each
provision, condition and term of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law; but if any provision,
condition or term of this Agreement, or any documentation executed and delivered
hereto, shall be prohibited by or invalid under such applicable law, then such
provision, condition or term shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision,
condition or term or the remaining provisions, conditions and terms of this
Agreement or any documentation executed and delivered pursuant hereto.
(f) Section Headings. The section headings inserted in this Agreement are for
convenience only and are not intended to, and shall not be construed to, limit,
enlarge or affect the scope or intent of this Agreement, nor the meaning of any
provision, condition or term hereof.
(g) Counterparts. This Agreement may be executed in two or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same document.
(h) Entire Agreement. This Agreement contains the entire Agreement between the
respective parties hereto and supersedes any and all prior agreements and
understandings between the parties hereto relating to the subject matter hereof.
No statement or representation of the respective parties hereto, their agents or
employees, made outside of this Agreement, and not contained herein, shall form
any part hereof or bind any party hereto. This Agreement shall not be
supplemented, amended or modified except by written instrument signed by the
respective parties hereto.
(i) Attorneys' Fees and Costs: In any Dispute arising out of or pertaining to
this Agreement, the prevailing party, or substantially prevailing party in
multiple claims as the case may be, shall be entitled to an award of its
attorneys' fees and costs after a finally sustained determination or decision,
whether incurred before, after or during mediation, arbitration, trial, or upon
any appellate level.
(j) Time: Time is of the essence of this Agreement. When any time period
specified herein falls upon a Saturday,
----
Sunday or legal holiday, the time period shall be extended to 5:00 P.M.
on the next ensuing business day.
(k). Relationship. Nothing herein contained shall be construed to place
Butterfly and 3DCityguide in a relationship as co-Butterfly, partners, joint
ventures, employer and employee, or principal and agent, respectively, and
neither 3DCityguide nor the Butterfly shall have the power to bind or obligate
the other party in any manner whatsoever.
(l). Notices. All notices, approvals and other communications provided for in
this Agreement shall be made in writing and delivered personally or by certified
or registered mail, return receipt requested, postage prepaid, to the parties at
such address as either party may specify by like written notice to the other and
shall be deemed given when received. Failure to accept certified or registered
mail shall be deemed a receipt thereof within ten (10) days after the first
notice of delivery of the certified or registered mail. Any entity may change
its address as designated herein by giving notice thereof as provided herein.
(m). Representations. Butterfly represent, covenant and warrant that they are
the sole owners and copyright holders of their respective works, that they have
the proper authority to enter into this Agreement and to grant the License and
agree to indemnify 3DCityguide for any breach of this representation.
IN WITNESS WHEREOF, the undersigned respective parties have caused this
Agreement to be executed in their names the day and year first above written.
On behalf of 3DCityguide.com, Inc.
3DCityguide.com, Inc.
a Washington corporation
By: /s/ Matthew Brooks
Title: Secretary and Director
On behalf of Butterfly Software, Inc.
Butterfly Software, Inc.
a British Columbia corporation
By: /s/ Anis Jessa
Title: President
Exhibit 10.8
September 1, 2000
Re: Letter of Amendment between E-City Software, Inc. and Cityscape.com, Inc.
To Whom It May Concern:
This letter is a letter amendment ("Letter of Amendment" or "Agreement") between
E-City Software, Inc., a Nevada corporation ("E-City ") and Cityscape.com, Inc.
("Cityscape"), together the Parties, concerning the Software Development
Agreement between the Parties or their successors or predecessors in interest
dated September 15, 1999 (the "License"). In consideration of the mutual
covenants contained herein as consideration the sufficiency of which is hereby
acknowledged, the Parties hereby agree that the terms of this Agreement are as
follows:
1. Definition of Time . In various locations throughout the License, Cityscape
is entitled to updates, customer support and telephone support (together
"Support") with respect to the subject matter of the License. It is explicitly
agreed to and understood by each Party that in no event is E-City, the successor
in interest for Butterfly Software, Inc., obligated to provide Support beyond
the one-year anniversary of the License.
2. No Prejudice. The Extension shall not prejudice the rights of either Party
for any reason, nor shall it be considered by either Party to be a waiver of any
kind with respect to any breach of the License, except as concerns the Extension
of time itself. Subsequent to the Extension, both Parties reserve the right to
insist on strict performance of the mutual obligations in the License as therein
enumerated.
3. Miscellaneous. This Agreement shall bind and inure to the benefit of the
parties hereto and their successors and assigns. This Agreement shall be
governed by the laws of the State of Nevada, without reference to conflict of
laws principles. This document and the License contain the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended, nor any obligation waived, except by a writing signed by
both parties hereto.
4. Counterparts. This Agreement may be signed in counterparts, each of which
shall be deemed an original and all of which
-------------
shall constitute one instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the day and date
set forth above.
On behalf of Cityscape, Inc.
Cityscape, Inc.
A Washington corporation
By: /s/ Matthew Brooks
On behalf of E-City Software, Inc.
E-City Software, Inc.
a Nevada corporation
By: /s/ Anis Jessa
II-20
Exhibit 23.1
HANSEN, BARNETT & MAXWELL
A Professional Corporation
CERTIFIED PUBLIC ACCOUNTANTS
(801) 532-2200
Member of AICPA Division of Firms Fax (801) 532-7944
Member of SECPS 345 East Broadway, Suite 200
Member of Summit International Associates, Inc. Salt Lake City, Utah 84111-2693
www.hbmcpas.com
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
To the Board of Directors
E-City Software, Inc.
As independent certified public accountants, we hereby consent to the use of our
report dated September 12, 2000 with respect to the consolidated financial
statements of E-City Software, Inc. included in this Registration Statement on
Form SB-2, and consent to the use of our name in the "Experts" section of this
Registration Statement.
HANSEN, BARNETT & MAXWELL
Salt Lake City, Utah
September 12, 2000
Exhibit 23.2
Consent of Counsel
* To be filed by Amendment
Included in Exhibit 5.1
Exhibit 24.1
See page 60.
<PAGE>
X-1
EXHIBIT INDEX
Number Description
3.1 Articles of Incorporation of the Registrant
3.2 Bylaws of the Registrant.
4.1 Specimen common stock certificate.
5.1 Opinion of Jonathan Ram Dariyanani Esq. * To be filed by Amendment
10.1 Form of Common Stock Purchase Agreement
10.2 Common Stock Purchase Agreement
by and between E-City Software, Inc. and Anis Jessa.
10.3 Common Stock Purchase Agreement
by and between E-City Software, Inc. and Salim Devji.
10.4 Common Stock Purchase Agreement
by and between E-City Software, Inc. and Robin Moulder.
10.5 Common Stock Purchase Agreement
by and between E-City Software, Inc and Susan Polmar.
10.6 Stock Purchase Agreement
by and between E-City Software, Inc and Butterfly Software Inc.
10.7 Software Development Agreement
10.8 Software Development Agreement Addendum
23.1 Consent of Hansen, Barnett & Maxwell, Certified Public Accountants,
(see Page II- 105 )
23.2 Consent of Jonathan Ram Dariyanani, Esq. * To be filed by Amendment
(included in Exhibit 5.1).
24.1 Power of Attorney (see Page II-60)
27.1 Financial Data Schedule.
