SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
NETCOMMERCE, INC. (formerly Virtual Enterprises, Inc. )
(Exact name of Registrant as specified in its charter)
NEVADA 84-1126818
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
4695 MacArthur Court, Suite 530, Newport Beach, CA 92660
(Address of Principal Executive Offices, including ZIP Code)
Consulting/Fee Agreements with J.L. Lawver, Richard Weed,
Fred G. Luke doing business as NuVen Advisors,
Leonard Roman, and Jonathan L. Small
(Full title of the plan)
Fred G. Luke
4695 MacArthur Court, Suite 530, Newport Beach, CA 92660
(Name and address of agent for service)
(949) 475-6755
(Telephone number, including area code, of agent for service)
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Maximum Maximum Amount of
Title of Securities Amount of Shares Offering Aggregate Registration
to be Registered to be Registered Price Per Share Offering Price Fee
<S> <C> <C> <C> <C>
$.01 par value
Common Stock 464,000 $.40625 $ 188,500 $ 52.40
$.01 par value
Common Stock 79,582 $.40625 $ 32,330 $ 8.98
$.01 par value
Common Stock 145,243 $.40625 $ 59,005 $ 16.40
$.01 par value
Common Stock 1,476,923 $.20312 $ 300,000 $ 83.40
$.01 par value
Common Stock 49,231 $.40625 $ 20,000 $ 5.56
$.01 par value
Common Stock 152,463 $.40625 $ 61,938 $ 17.22
TOTALS 2,367,442 N/A $ 661,773 $ 183.96
</TABLE>
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PROSPECTUS
NETCOMMERCE, INC.
4695 MacArthur Court, Suite 530
Newport Beach, CA 92660
(949) 475-6755
(2,367,442 SHARES OF COMMON STOCK)
This Prospectus relates to the offer and sale by NetCommerce, Inc. a Nevada
corporation (the "Company"), of shares of its $.01 par value per share common
stock (the "Common Stock") to certain advisors and consultants (the
"Consultants") pursuant to Consulting and Management Agreements entered into
between the Company and the Consultants. The Company is registering hereunder
and then issuing, upon receipt of adequate consideration therefor, to the
Consultants 2,367,442 shares of Common Stock in consideration for services to be
performed under the respective Consulting Agreements.
The Common Stock is not subject to any restriction on transferability.
Recipients of shares other than persons who are "affiliates" of the Company
within the meaning of the Securities Act of 1933 (the "Act") may sell all or
part of the shares in any way permitted by law, including sales in the
over-the-counter market at prices prevailing at the time of such sale. Of the
shares registered hereunder, there are 1,671,397 shares being registered for
affiliates of the Company. An affiliate is summarily, any director, executive
officer or controlling shareholder of the Company or anyone of its subsidiaries.
An "affiliate" of the Company is subject to Section 16(b) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). If a Consultant who is
not now an "affiliate" becomes an "affiliate" of the Company in the future, he
would then be subject to Section 16(b) of the Exchange Act. (See "General
Information - Restrictions on Resales").
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is November 2, 1999
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This Prospectus is part of a Registration Statement which was filed and
became effective under the Securities Act of 1933, as amended (the "Securities
Act"), and does not contain all of the information set forth in the Registration
Statement, certain portions of which have been omitted pursuant to the rules and
regulations promulgated by the U.S. Securities and Exchange Commission (the
"Commission") under the Securities Act. The statements in this Prospectus as to
the contents of any contracts or other documents filed as an exhibit to either
the Registration Statement or other filings by the Company with the Commission
are qualified in their entirety by the reference thereto.
A copy of any document or part thereof incorporated by reference in this
Prospectus but not delivered herewith will be furnished without charge upon
written or oral request. Requests should be addressed to: NetCommerce, Inc. 4695
MacArthur Court, Suite 530, Newport Beach, California 92660; Telephone: (949)
475- 6755.
The Company is subject to the reporting requirements of the Exchange Act
and in accordance therewith files reports and other information with the
Commission. These reports, as well as the proxy statements, information
statements and other information filed by the Company under the Exchange Act may
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W. Washington D.C. 20549. Copies may be
obtained at the prescribed rates. From November 30, 1989, and until September 6,
1990, the Companys common stock was traded on the over-the-counter market and
reported by the National Quotation Bureau Pink Sheets. Trading ceased on
September 6, 1990. Trading resumed Feburary 15, 1999 and is traded on NASDAQs
National Association of Securities Dealer Automated Quotation System (NASDAQ)
Electronic Bulletin Board.
No person has been authorized to give any information or to make any
representation, other than those contained in this Prospectus, and, if given or
made, such other information or representation must not be relied upon as having
been authorized by the Company. This Prospectus does not constitute an offer or
a solicitation by anyone in any state in which such is not authorized or in
which the person making such is not qualified or to any person to whom it is
unlawful to make an offer or solicitation.
Neither the delivery of this Prospectus nor any sale made hereunder shall,
under any circumstances, create any implication that there has not been a change
in the affairs of the Company since the date hereof.
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TABLE OF CONTENTS
Information Required in the Section 10(a) Prospectus...........................6
Item 1. Plan Information......................................................6
General Information...................................................6
The Company......................................................6
Purposes.........................................................6
Common Stock.....................................................6
The Consultants..................................................6
No Restrictions on Transfer......................................6
Tax Treatment to the Consultants.................................6
Tax Treatment to the Company.....................................6
Restrictions on Resales..........................................7
Documents Incorporated by Reference and Additional Information.................8
Item 2. Registrant Information and Employee Plan Annual Information...........8
Legal Opinion and Experts........................................8
Indemnification of Officers and Directors........................8
Information Required in the Registration Statement.............................9
Item 3. Incorporation of Documents by Reference...............................9
Item 4. Description of Securities.............................................9
Item 5. Interests of Named Experts and Counsel................................9
Item 6. Indemnification of Directors and Officers.............................9
Item 7. Exemption from Registration Claimed..................................11
Item 8. Exhibits.............................................................11
Item 9. Undertakings.........................................................12
Signatures . . . . . . . . ...................................................14
Exhibit Index . . . . ........................................................16
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PART I
INFORMATION REQUIRED IN THE SECTION 10(a)
PROSPECTUS
Item 1. Plan Information
GENERAL INFORMATION
The Company
The Company has its principal executive offices at 4695 MacArthur Court,
Suite 530, Newport Beach, California 92660; Telephone: (949) 475-6755.
Purposes
The Common Stock to be issued by the Company to certain Consultants will be
issued pursuant to agreements entered into between these Consultants and the
Company, which agreements have been approved by the Board of Directors of the
Company (the "Board of Directors"). The agreements are intended to provide a
method whereby the Company may be stimulated by the personal involvement of the
Consultants in the Company's future prosperity, thereby advancing the interests
of the Company, and all of its shareholders. Copies of the agreements have been
filed as exhibits to this Registration Statement.
Common Stock
The Board has authorized the issuance of up to 2,367,442 shares of the
Common Stock to the Consultants and upon effectiveness of this Registration
Statement.
The Consultants
The Consultants have agreed to provide their expertise and advice to the
Company for the purposes set forth in their agreements with the Company.
No Restrictions on Transfer
The Consultants will become the record and beneficial owners of the shares
of Common Stock upon issuance and delivery and are entitled to all of the rights
of ownership, including the right to vote any shares awarded and to receive
ordinary cash dividends on the Common Stock.
Tax Treatment to the Consultants
The Common Stock is not qualified under Section 401(a) of the Internal
Revenue Code. The Consultants, therefore, will be required for federal income
tax purposes to recognize ordinary income during the taxable year in which the
first of the following events occurs: (a) the shares become freely transferable,
or (b) the shares cease to be subject to a substantial risk of forfeiture.
Accordingly, absent a specific contractual provision to the
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<PAGE>
contrary the Consultants will receive compensation taxable at ordinary
rates equal to the fair market value of the shares on the date of receipt since
there will be no substantial risk of forfeiture or other restrictions on
transfer. If, however, the Consultants receive shares of common stock pursuant
to the exercise of an option or options at an exercise price below the fair
market value of the shares on the date of exercise, the difference between the
exercise price and the fair market value of the stock on the date of exercise
will be deemed ordinary income for federal income tax purposes. The Consultants
are urged to consult each of their tax advisors on this matter. Further, if any
recipient is an "affiliate", Section 16(b) of the Exchange Act is applicable and
will affect the issue of taxation.
Tax Treatment to the Company
The amount of income recognized by any recipient hereunder in accordance
with the foregoing discussion will be an expense deductible by the Company for
federal income tax purposes in the taxable year of the Company during which the
recipient recognizes income.
Restrictions on Resales
In the event that an affiliate of the Company acquires shares of Common
Stock hereunder, the affiliate will be subject to Section 16(b) of the Exchange
Act. Further, in the event that any affiliate acquiring shares hereunder has
sold or sells any shares of Common Stock in the six months preceding or
following the receipt of shares hereunder, any so called "profit", as computed
under Section 16(b) of the Exchange Act, would be required to be disgorged from
the recipient to the Company. Services rendered have been recognized as valid
consideration for the "purchase" of shares in connection with the "profit"
computation under Section 16(b) of the Exchange Act. The Company has agreed that
for the purpose of any "profit" computation under 16(b) the price paid for the
common stock issued to affiliates is equal to the value of services rendered.
Shares of Common Stock acquired hereunder by persons other than affiliates are
not subject to Section 16(b) of the Exchange Act.
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<PAGE>
DOCUMENTS INCORPORATED BY REFERENCE
AND
ADDITIONAL INFORMATION
The Company hereby incorporates by reference (i) its annual report on Form
10-KSB for the year ended May 31, 1999, filed pursuant to Section 13 of the
Exchange Act, (ii) any and all Forms 10-Q (or 10-QSB) filed under the Securities
or Exchange Act subsequent to any filed Form 10-K (or 10-KSB), as well as all
other reports filed under Section 13 of the Exchange Act, and (iii) its annual
report, if any, to shareholders delivered pursuant to Rule 14a-3 of the Exchange
Act. In addition, all further documents filed by the Company pursuant to Section
13, 14, or 15(d) of the Exchange Act prior to the termination of this offering
are deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing. All documents which when together, constitute
this Prospectus, will be sent or given to participants by the Registrant as
specified by Rule 428(b)(1) of the Securities Act.
Item 2. Registrant Information and Employee Plan Annual Information
A copy of any document or part thereof incorporated by reference in this
Registration Statement but not delivered with this Prospectus or any document
required to be delivered pursuant to Rule 428(b) under the Securities Act will
be furnished without charge upon written or oral request. Requests should be
addressed to: NetCommerce, Inc. 4695 MacArthur Court, Suite 530, Newport Beach,
California 92660: (949) 475-6755.
Legal Opinion and Experts
Richard O. Weed has rendered an opinion on the validity of the securities
being registered. Mr. Weed is not an "affiliate" of the Company. He currently
owns 106,400 shares of the Company's common stock.
The financial statements of NETCOMMERCE, INC., formerly Virtual
Enterprises, Inc., incorporated by reference in this Prospectus for the year
ended May 31, 1999 have been audited by McKennon, Morgan & Wilson, LLP,
independent certified public accountants, as set forth in their report
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
Indemnification of Officers and Directors
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers, or persons controlling the Company, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable.
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PART II
INFORMATION REQUIRED IN
THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
Registrant hereby states that (i) all documents set forth in (a) through
(c), below, are incorporated by reference in this registration statement, and
(ii) all documents subsequently filed by registrant pursuant to Section 13(a),
13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended, prior to
the filing of a post- effective amendment which indicates that all securities
offered have been sold or which de-registers all securities then remaining
unsold, shall be deemed to be incorporated by reference in this registration
statement and to be a part hereof from the date of filing of such documents.
(a) Registrant's latest Annual Report, whether filed pursuant to Section
13(a) or 15(d) of the Exchange Act;
(b) All other reports filed pursuant to Section 13(a) or 15(d) of the
Exchange Act since the end of the fiscal year covered by annual report referred
to in (a), above; and
(c) The latest prospectus filed pursuant to Rule 424(b) under the
Securities Act.
Item 4. Description of Securities
No description of the class of securities (i.e. the $.01 par value Common
Stock) is required under this item because the Common Stock is registered under
Section 12 of the Exchange Act.
Item 5. Interests of Named Experts and Counsel
Mr. Weed owns 106,400 shares of the Company's common stock.
Item 6. Indemnification of Directors and Officers
The only statute, charter provision, bylaw, contract, or other arrangement
under which any controlling person, director or officer of registrant is insured
or indemnified in any manner against any liability which they may incur in their
capacity as such is Sections 78.7502 and 78.751 of the Nevada Corporations Law,
the text of which is set forth below.
Section 78.7502. Discretionary and mandatory indemnification of officers,
directors, employees and agents: General provisions
1. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative,
except an action by or in the right of the corporation, by reason of the fact
that he is or was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as
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a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including attorneys'
fees, judgments, fines and amounts paid in settlement actually and reasonably
incurred by him in connection with the action, suit or proceeding if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his conduct was
unlawful. The termination of any action, suit or proceeding by judgment, order,
settlement, conviction or upon a plea of nolo contendere or its equivalent, does
not, of itself, create a presumption that the person did not act in good faith
and in a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and that, with respect to any criminal action or
proceeding, he had reasonable cause to believe that his conduct was unlawful.
2. A corporation may indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action or
suit by or in the right of the corporation to procure a judgment in its favor by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses, including amounts paid in
settlement and attorneys' fees actually and reasonably incurred by him in
connection with the defense or settlement of the action or suit if he acted in
good faith and in a manner which he reasonably believed to be in or not opposed
to the best interests of the corporation. Indemnification may not be made for
any claim, issue or matter as to which such a person has been adjudged by a
court of competent jurisdiction, after exhaustion of all appeals therefrom, to
be liable to the corporation or for amounts paid in settlement to the
corporation, unless and only to the extent that the court in which the action or
suit was brought or other court of competent jurisdiction determines upon
application that in view of all the circumstances of the case, the person is
fairly and reasonably entitled to indemnity for such expenses as the court deems
proper.
3. To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in subsections 1 and 2, or in defense of
any claim, issue or matter therein, the corporation shall indemnify him against
expenses, including attorneys' fees, actually and reasonably incurred by him in
connection with the defense.
Section 78.751. Authorization required for discretionary indemnification;
advancement of expenses; limitation on indemnification and advancement of
expenses
1. Any discretionary indemnification under NRS 78.7502, unless ordered by a
court or advanced pursuant to subsection 2, may be made by the corporation only
as authorized in the specific case upon a determination that indemnification of
the director, officer, employee or agent is proper in the circumstances. The
determination must be made:
(a) By the stockholders;
(b) By the board of directors by majority vote of a quorum consisting of
directors who were not parties to the action, suit or proceeding;
(c) If a majority vote of a quorum consisting of directors who were not
parties to the action, suit or proceeding so orders, by independent legal
counsel in a written opinion; or
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(d) If a quorum consisting of directors who were not parties to the action,
suit or proceeding cannot be obtained, by independent legal counsel in a written
opinion.
2. The articles of incorporation, the bylaws or an agreement made by the
corporation may provide that the expenses of officers and directors incurred in
defending a civil or criminal action, suit or proceeding must be paid by the
corporation as they are incurred and in advance of the final disposition of the
action, suit or proceeding, upon receipt of an undertaking by or on behalf of
the director or officer to repay the amount if it is ultimately determined by a
court of competent jurisdiction that he is not entitled to be indemnified by the
corporation. The provisions of this subsection do not affect any rights to
advancement of expenses to which corporate personnel other than directors or
officers may be entitled under any contract or otherwise by law.
3. The indemnification and advancement of expenses authorized in or ordered
by a court pursuant to this section:
(a) Does not exclude any other rights to which a person seeking
indemnification or advancement of expenses may be entitled under the articles of
incorporation or any bylaw, agreement, vote of stockholders or disinterested
directors or otherwise, for either an action in his official capacity or an
action in another capacity while holding his office, except that
indemnification, unless ordered by a court pursuant to NRS 78.7502 or for the
advancement of expenses made pursuant to subsection 2, may not be made to or on
behalf of any director or officer if a final adjudication establishes that his
acts or omissions involved intentional misconduct, fraud or a knowing violation
of the law and was material to the cause of action.
(b) Continues for a person who has ceased to be a director, officer,
employee or agent and inures to the benefit of the heirs, executors and
administrators of such a person.
Item 7. Exemption from Registration Claimed
Not applicable.
Item 8. Exhibits
(a) The following exhibits are filed as part of this registration statement
pursuant to Item 601 of Regulation S-B and are specifically incorporated herein
by this reference:
Exhibit No. Title
1. Not required.
2. Not required.
3. Not required.
4. Not applicable.
5. Opinion of Richard O. Weed regarding the legality of
the securities registered.
6. Not required.
7. Not required.
8. Not required.
9. Not required.
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Exhibit No. Title
10. A. Consulting Agreement with J.L. Lawver
B. Consulting Agreement with Richard O. Weed
C. Consulting Agreement with Fred G. Luke doing
business as NuVen Advisors
D. Consulting Agreement with Leonard Roman
E. Consulting Agreement with Jonathan L. Small
11. Not required.
12. Not required.
13. Not required.
14. Not required.
15. Not required.
16. Not required.
17. Not required.
18. Not required.
19. Not required.
20. Not required.
21. Not required.
22. Not required.
23. Not required.
24.1 Consent of Richard O. Weed, special counsel to
registrant, to the use of his opinion with respect to
the legality of the securities being registered hereby
and to the references to him in the Prospectus filed
as a part hereof.
24.2 Consent of McKennon, Wilson, Morgan, LLP
25. Not applicable.
26. Not applicable.
27. Not applicable.
28. Not applicable.
29. Not applicable.
Item 9. Undertakings
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of registrant
pursuant to the foregoing provisions, or otherwise, registrant has 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 registrant of expenses
incurred or paid by a director, officer or controlling person of registrant in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification is against public policy
as expressed in the Act and will be governed by the final adjudication of such
issue.
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Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement to:
(i) include any prospectus required by Section 10 (a) (3) of the Securities
Act;
(ii) reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represents a
fundamental change in the information set forth in the registration statement;
(iii) include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, paragraphs (i) and (ii) shall not apply if the
information required to be included in a post-effective amendment by those
paragraphs are incorporated by reference from periodic reports filed by the
registrant small business issuer under the Exchange Act.
(2) That, for the purpose of determining any liability under the Securities
Act, each post-effective amendment to the registration statement 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 be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14e-3 under the
Securities Exchange Act of 1934; and, where interim financial information
require to be presented by Article 3 of Regulation S-X is not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
Registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of registrant's annual
report pursuant to Section 13(a) of the Securities Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by
reference in the registration statement 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 be the initial bona fide offering
thereof.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-8 and has duly caused this registration
statement to be signed on its behalf by the undersigned thereunto duly
authorized in the City of Newport Beach, State of California on the 2nd day of
November , 1999.
NETCOMMERCE, INC.
(Registrant)
By:/s/ Fred G. Luke
Fred G. Luke, President
Pursuant to the requirements of the 1933 Act, this registration statement
or amendment has been signed by the following persons in the capacities and on
the dates indicated:
Signatures Title Date
/s/ Fred G. Luke Director November 2, 1999
Fred G. Luke
/s/ Mark Lindberg Director November 2, 1999
Mark Lindberg
/s/ Daniel Henderson Director November 2, 1999
Daniel Henderson
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FORM S-8 REGISTRATION STATEMENT
EXHIBIT INDEX
The following Exhibits are filed as part of this registration statement
pursuant to Item 601 of Regulation S-B and are specifically incorporated herein
by this reference:
<TABLE>
<CAPTION>
Exhibit
Number in
Registration Numbered
Statement Description Page
<S> <C> <C>
5. Opinion of Counsel 16
10. A. Consulting Agreement with J.L. Lawver(1)
B. Consulting Agreement with Richard O. Weed(2)
C. Consulting Agreement with Fred G. Luke doing business 19
as NuVen Advisors(1)
D. Consulting Agreement with Leonard Roman
E. Consulting Agreement with Jonathan L. Small(1)
24.1 Consent of Richard O. Weed to Use of Opinion
24.2 Consent of McKennon Morgan & Wilson LL
</TABLE>
(1) Incorporated by reference from Form 10-KSB for year ended May 31, 1996.
(2) Incorporated by reference from Form S-8 registration statement dated
December 9, 1998.
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EXHIBIT 5.
OPINION OF COUNSEL
WEED & COMPANY L.P.
4695 MacArthur Court, Suite 530, Newport Beach, California 92660-2164
Telephone (949) 475-9086 Facsimile (949) 475-9087
WRITERS DIRECT NUMBER
(949) 475-7730
November 2, 1999
Board of Directors
NetCommerce, Inc.
4695 MacArthur Court, Suite 530
Newport Beach, CA 92660
Re: Form S-8 Registration Statement Opinion of Counsel
Gentlemen:
I have acted as a special counsel for NetCommerce, Inc. a Nevada
corporation (the "Company") in connection with the preparation and filing with
the Securities and Exchange Commission (the "Commission") under the Securities
Act of 1933, as amended, (the "Act") of a registration statement on Form S-8
(the "Registration Statement"), relating to the offer and sale of 2,367,442
shares of Common Stock, $.01 par value (the "Common Stock") to consultants of
the Company, in consideration for services performed and to be performed on
behalf of the Company under the terms and conditions of certain consulting
agreements (the "Consulting Agreements").
As special counsel for the Company, I have examined the Companys articles
of incorporation, bylaws, minute book, and certain other corporate records. For
the purpose of the opinions expressed below, I have also examined the
Registration Statement on Form S-8 to be filed with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, covering the Common
Stock in this offering.
In arriving at the opinions set forth below, I have examined and relied
upon originals or copies, certified or otherwise identified to my satisfaction,
of corporate records (including the Registration Statement with its exhibits)
provided by the officers of the Company. I have made such investigations of law
as I have considered necessary or appropriate as a basis for my opinions.
<PAGE>
NetCommerce, Inc.
November 2 , 1999
Page 2
My opinions are qualified in all respects by the scope of the document
examination and I make no representation as to the sufficiency of my
investigation for your purpose. I have not made any document examination or
rendered any other advice other than as described herein and I at all times have
assumed and relied upon the truth and completeness of the information,
statements and representations which have been given by the Company to me. I do
not express any opinion with respect to the completeness, adequacy, accuracy or
any other aspect of the financial statements incorporated by reference in the
Registration Statement.
In rendering this opinion, I have assumed, without independently verifying
such assumptions, and this opinion is based and conditioned upon the following:
(i) the genuineness of the signatures on and the enforceability of all
instruments, documents and agreements examined by me and the authenticity of all
documents furnished for my examination as originals and the conformity to the
original documents of all documents furnished to me as copies; (ii) where an
executed document has been presented to me for my review, that such document has
been duly executed on or as of the date stated and that execution and delivery
was duly authorized on the part of the parties thereto; (iii) each of the
foregoing certificates, instruments and documents being duly authorized,
executed and delivered by or on behalf of all the respective parties thereto,
and such instruments and documents being legal, valid binding obligations of
such parties; (iv) the truth and accuracy of representations and statements made
in the documents received from the State of Nevada; and (vi) NetCommerce, Inc.
will be operated in accordance with the terms of its charter documents and the
laws of the State of Nevada and the terms of the instruments or documents
referred to above.
Based upon the foregoing, I am of the opinion that:
1. The Company has been duly incorporated and is validly existing as a
corporation in good standing under the laws of the State of Nevada, the
jurisdiction of its incorporation.
2. The terms and provisions of the Common Stock conform to the description
thereof contained in the Registration Statement, and the form of the stock
certificates used to evidence the Common Stock are in good and proper form and
no stockholder is entitled to preemptive rights to subscribe for or purchase any
of the Common Stock.
3. Based upon the foregoing, I am of the opinion that the issuance and the
sale of the shares of Common Stock in this offering has been duly and validly
authorized, and subject to compliance with the provisions of the written
agreements, the Common Stock issuable under the Consulting Agreements will duly
authorized and validly issued as fully paid and non-assessable shares of Common
Stock.
4. Based upon the opinion of defense counsel for the Company, there are no
suits, proceedings or actions known to me which are threatened or pending
against the Company in any court or before or by any governmental body which
might materially and adversely affect the business of the Company, its condition
(financial or otherwise), business operations, income, properties or business
prospects, except as set forth in or contemplated by the Prospectus, or by the
Companys Annual Report on Form 10-KSB for the fiscal year ended May 31, 1998 as
filed with the Securities and Exchange Commission.
5. No consent, approval, order or authorization of any regulatory board,
agency, or instrumentality having jurisdiction over the Company or its
properties (other than registration under the Act
<PAGE>
NetCommerce, Inc.
November 2, 1999
Page 3
or qualification under state securities or Blue Sky laws or clearance from
the NASD) is required for the valid authorization, issuance and delivery of the
Common Stock or, if required, it has been obtained and is in full force and
effect.
I am admitted to practice in the State of California and the State of
Texas. I am not admitted to practice in Nevada, the state of incorporation of
the Company, or in any other jurisdictions other than California and Texas, in
which the Company may own property or transact business. My opinions herein are
with respect to federal law only and, to the extent my opinions are derived from
the laws of other jurisdictions, are based upon an examination of all relevant
authorities and the documents referenced herein and are believed to be correct.
However, except for pending litigation or claims matters, I have not directly
obtained legal opinions as to such matters from attorneys licensed in such other
jurisdictions. No opinion is expressed upon any conflict of law issues. My
opinions are qualified to the extent that enforcement of rights and remedies are
subject to bankruptcy, insolvency, fraudulent conveyance, moratorium, and other
laws of general application or equitable principles affecting the rights and
remedies of creditors and security holders and to the extent that the
availability of the remedy of specific performance or of injunctive relief is
subject to the discretion of the court before which any proceeding may be
brought.
This opinion is limited to matters existing as of this date, and no
responsibility is assumed to advise you of changes (factual or legal) which may
hereafter occur, whether deemed material or not.
This opinion is furnished by me to you as special counsel for the Company
and it is solely for your benefit. This opinion is not to be used, circulated,
quoted or otherwise referred to in whole or in part for any purpose, other than
as set forth in my written consent.
Very truly yours,
/s/ Richard O. Weed
Richard O. Weed
<PAGE>
EXHIBIT 10. D.
CONSULTING AGREEMENT
This Consulting Agreement is made this 15th day of May 1999, by and between
Leonard J. Roman, his principal offices at 4695 MacArthur Court, Newport Beach,
California 92660, ("Consultant") and Virtual Enterprises Inc., a Nevada
corporation, with its principal offices at 4695 MacArthur Court, Suite 530,
Newport Beach, California 92660 ("Client").
WHEREAS, Consultant is a Certified Public Accountant and has over
twenty-eight (28) years of experience in accounting and in the audit of
publicly-held companies; and
WHEREAS, Client desires to retain the services of Consultant to serve as
Client's Chief Financial Officer, and to advise Client's Board of Directors and
its Audit Committee, and Consultant desires to serve Client on the terms and
conditions set forth below:
1. Engagement
Client agrees to engage Consultant as its Chief Financial Officer, and to
provide Client with advice and financial consulting services, on an as-needed
basis, effective the date hereof and continuing through the Initial Consulting
Period (as defined below).
2. Scope of Services to be Provided
Consultant hereby accepts the engagement on the terms and conditions set
forth in the Agreement and agrees to provide the services which shall consist of
establishing internal controls and procedures to effect accurate and timely
preparation of financial statements and regulatory reports on Form 10-K, Form
10-Q and Form 8-K, and to be the individual responsible for the preparation,
review and filing of such reports; establishing sales and disbursement systems;
establishing payroll and inventory methods; assisting Client's Board of
Directors in the analysis of business opportunities, and debt and equity
financing proposals; preparing and/or timely reviewing of financial projections
and preparing budget; preparing capital requirement forecasts and corporate
finance requirements, the coordination of Client's audit, including preparation
of audit schedules, confirmations, reports and responses to auditors; and, the
performance of such additional duties as requested by Client's Board of
Directors (collectively referred to herein as the "Services"). Consultant may
not assign his duties hereunder unless agreed to in writing with Client.
Consultant's failure to perform the Services shall be deemed a voluntary
termination of this Agreement by Consultant pursuant to Paragraph 12 hereof.
3. Term
This Agreement shall have an initial term ending on May 1, 2001 (the
"Initial Consulting Period"); thereafter, this Agreement will automatically be
extended on an annual basis (the "Extension Period") unless Consultant or Client
shall serve written notice on the other party terminating the Agreement;
provided, however, that Consultant and client shall agree in writing as to
Consultant's continuing compensation. Notice to terminate shall be in writing
and shall be delivered at least ten (10) days prior to the end of the Initial
Consulting Period or any subsequent Extension Period as provided herein. In the
event of termination pursuant to this Paragraph 3, neither party shall have any
further rights or obligations hereunder after the effective date of such
termination, except that the obligation of Client to pay fees earned and to
reimburse costs and expenses of Consultant incurred prior to the effective date
of termination in performance of the Services shall continue until such fees,
costs, and expenses are paid in full by Client.
<PAGE>
4. Time and Effort of Consultant
Consultant shall devote that amount of working time, as necessary, on a
monthly basis, to fulfilling his obligations under this Agreement. The
particular amount of time may vary from day to day or week to week; provided
however, that Consultant shall allocate and be available to Client for at least
eight (8) hours per calendar month. Consultant agrees that he will at all times,
faithfully and to the best of his experience, ability, and talents, perform all
the duties required of him under this Agreement.
5. Compensation
Compensation to Consultant for the Services provided under this Agreement
shall consist of the following:
(A) For Services as Chief Financial Officer. During the term of the
Agreement Consultant shall be paid a base fee for serving as Client's Chief
Financial Officer, and providing advice regarding general financial and
corporate affairs and growth strategy, at the rate of Four Thousand Dollars
($4,000) per month, with such fee to be paid in arrears in cash or in shares of
Client's common stock (the "Fee Shares"), at Client's sole discretion.
6. Registration of Client's Shares
As soon as possible following the date hereof, Client will register the
Option Shares, and the Fee Shares (if any) with the Securities and Exchange
Commission under a Form S-8 registration statement. At Client's sole discretion,
any such shares to be issued to Consultant may be issued prior to registration
in reliance on exemptions from registration provided by Section 4(2) of the
Securities Act of 1933 (the "Act"), Regulation D of the Act, and applicable
state securities laws. Such shares shall be issued in reliance on
representations and warranties of Consultant set forth herein.
7. Costs and Expenses
Unless otherwise agreed and approved in writing between Consultant and
Client, all third party and out-of-pocket expenses, filing fees, copy, and
mailing expenses incurred by Consultant performing Services under this Agreement
are the responsibility of Consultant. Any expenses incurred with the previous
approval of Client in carrying out the Services set forth under this Agreement
shall be reimbursed by Client within thirty (30) days of written notice by
Consultant.
8. Place of Services
Except as otherwise mutually agreed by Consultant and Client, the Services
provided by Consultant hereunder will be performed primarily through Client's
offices in Newport Beach, California, or such other place of business designated
by Client as its principal office.
9. Independent Contractor
Consultant will act as an independent contractor in the performance of
duties under this Agreement. Accordingly, Consultant will be responsible for
payment of all federal, state, and local taxes on compensation paid under this
Agreement, including income and social security taxes, unemployment insurance,
and any other taxes or business license fees as may be required.
<PAGE>
10. No Agency Express or Implied
This Agreement neither expressly nor impliedly creates a relationship of
principal and agent between Consultant and Client. Consultant is not authorized
to enter into any agreements on behalf of Client. Client expressly retains the
right to approve, in its sole discretion, any and all transactions introduced by
Consultant (if any) and to make all final decisions with respect to activities
undertaken by Consultant related to this Agreement.
11. Nondisclosure and Nonuse of Confidential Information
Consultant acknowledges that non-public information concerning the
finances, plans, strategies, and overall business operations of Client is highly
confidential and proprietary to Client ("Confidential Information"). This
Confidential Information includes, but is not limited to, the following:
(A) Non-public information related to the business operations, including
financial and accounting information, plans of operations, and potential mergers
or acquisitions prior to the public announcement of Client;
(B) Customer lists, call lists, and other non-public customer data of
Client;
(C) Memoranda, notes, records, sketches, plans, drawings, and any media
used to store, communicate, transmit, record, or embody such Confidential
Information of Client;
(D) Information treated, marked, or otherwise identified by Client as
confidential or as trade secrets.
Consultant acknowledges that such Confidential Information represents a
legitimate, valuable, and protectable interest of Client and gives Client a
competitive advantage, which would otherwise be lost if the Confidential
Information was improperly disclosed. Consultant further acknowledges that
unauthorized or improper disclosure or use of Confidential Information would
cause Client irreparable harm and injury. Consultant therefore agrees that, in
perpetuity or for as long as the Confidential Information remains confidential,
he will not disclose or threaten to disclose the Confidential Information to any
person, partnership, company, corporation, or to any other business or
governmental organization or agency without the express written consent of
Client, as the case may be. Consultant further agrees not to use or threaten to
use the Confidential Information in any way that is not specifically authorized
by, or otherwise contrary to the interests of Client, as the case may be.
Consultant agrees that unauthorized disclosure or use of Confidential
Information constitutes misappropriation of trade secrets and confidential
information. Consultant further agrees that all ownership rights to the
Confidential Information are held or retained by Client, as the case may be, and
that no right of ownership shall pass to Consultant by virtue of this Agreement
or the Services provided hereunder.
<PAGE>
12. Termination
(A) Termination for Disability. If during the Initial Consulting Period,
Consultant shall be unable to provide the services as set forth under this
Agreement for twenty (20) business days because of illness, accident, or other
incapacity, Client shall have the right to immediately terminate this Agreement
upon written notice to Consultant after the end of any such 20-day period.
Termination under this Paragraph 12(A) shall be effective upon receipt by
Consultant of such written notice.
(B) Death. In the event of Consultant's death, this Agreement and all
rights and obligations hereunder shall immediately be terminated.
(C) Termination for Cause. Client may, at its option, terminate this
Agreement by giving written notice of termination to Consultant without
prejudice to any other remedy to which the Client may be entitled either at law,
in equity, or under this Agreement, if Consultant:
(i) Willfully breaches or neglects the duties, or fails to timely provide
the Services as required under the terms of this Agreement;
(ii) Fails to promptly comply with and carry out the directives of Client's
Board of Directors;
(iii) Commits any dishonest or unlawful act, in the judgment of Client's
Board of Directors;
(iv) Engages in any conduct which disrupts the business of Client or any
entity affiliated with Client;
(v) Fails to produce work product which, in the judgment of Client's Board
of Directors, is necessary for Client to comply with requests from auditors or
Consultant's successor, or to timely file reports required of it.
(vi) Is found to have engaged in conduct, prior to or subsequent to the
date hereof, that may preclude Client from obtaining any local, state or federal
regulatory approval of Client's intent, or application for a license, to own an
interest in or to operate any regulated business.
(D) Termination Other Than For Cause. This Agreement shall terminate
immediately on the occurrence of any one of the following events:
(i) The occurrence of circumstances, in the judgment of Client's Board of
Directors, that make it impracticable for Client to continue its present line of
business;
(ii) The decision of and upon notice by Consultant to voluntarily terminate
this Agreement;
(iii) The loss by Consultant of legal capacity;
(iv) If either party files a petition in a court of bankruptcy or is
adjudicated a bankrupt;
<PAGE>
(v) If either party institutes, or has instituted against it any bankruptcy
proceeding for reorganization for rearrangement of the party's financial
affairs;
(vi) If either party has a receiver of the party's assets or property
appointed because of insolvency;
(vii) If either party makes a general assignment for the benefit of
creditors; or
(viii) If either party otherwise becomes insolvent or unable to timely
satisfy all obligations in the ordinary course of business.
(E) Effect of Termination on Compensation. In the event of the termination
of this Agreement Other Than for Cause prior to the expiration of the Initial
Consulting Period, Consultant shall be entitled to the compensation earned, and
to exercise by appropriate payment therefore the Option Shares exercisable prior
to the date of termination as provided for in this Agreement. Consultant shall
be entitled to no further compensation after the date of termination.
13. Representations and Warranties of Client
Client represents and warrants to Consultant that:
(A) Corporate Existence. Client is a corporation duly organized, validly
existing, and in good standing under the laws of the State of Nevada, with
corporate power to own property and carry on its business as it is now being
conducted.
(B) Financial Information. Client has or will cause to be delivered
concurrently with the execution of this Agreement, copies of the Disclosure
Documents (as defined in Paragraph 14(D)(1)) which accurately set forth the
financial condition of Client as of the respective dates of such documents.
(C) Capitalization. The capitalization of Client is, as of the date hereof,
comprised of Fifty Million (50,000,000) shares of authorized $.01 par value
common stock of which no more than Sixteen Million (16,000,000) shares are
issued and outstanding. Additionally, there currently are Six Hundred Sixty
Eight Thousand (668,000) Warrants to purchase common stock. All issued and
outstanding shares are legally issued, fully paid, and nonassessable, and are
not issued in violation of the preemptive or other right of any person.
(D) No Conflict. This Agreement has been duly executed by Client and the
execution and performance of this Agreement will not violate, or result in a
breach of, or constitute a default in any agreement, instrument, judgment,
decree or order to which Client is a party or to which Client is subject, nor
will such execution and performance constitute a violation or conflict of any
fiduciary duty to which Client is subject.
<PAGE>
(E) Full Disclosure. The information concerning Client provided to
Consultant pursuant to this Agreement is, to the best of Client's knowledge and
belief, complete and accurate in all material respects and does not contain any
untrue statement of a material fact or omit to state a material fact required to
make the statements made, in light of the circumstances under which they were
made, not misleading.
(F) Date of Representations and Warranties. Each of the representations and
warranties of Client set forth in this Agreement is true and correct at and as
of the date of execution of this Agreement.
14. Representations and Warranties of Consultant
Consultant represents and warrants to Client that:
(A) Prior Experience. Consultant has extensive experience in the area of
auditing publicly-held companies and the preparation of financial statements,
establishment of internal control procedures, tax planning, debt and equity
financing, budgeting and capital requirement analysis.
(B) No Conflict. This Agreement has been duly executed by Consultant and
the execution and performance of this Agreement will not violate, or result in a
breach of, or constitute a default in any agreement, instrument, judgment,
decree or order to which Consultant is a party or to which Consultant is
subject, nor will such execution and performance constitute a violation or
conflict of any fiduciary duty to which Consultant is subject.
(C) No Litigation. Consultant is not a defendant, nor plaintiff against
whom a counterclaim has been asserted, in any litigation, pending or threatened,
nor has any material claim been made or asserted against Consultant, nor are
there any proceedings threatened or pending before any U.S. or other
territorial, federal, state or municipal government, or any department, board,
body or agency thereof, involving as of the date hereof, that may entitle a
successful litigant to a claim against any assets of Consultant, or interfere in
any way with the duties of Consultant hereunder.
(D) Registration and/or Exemption of Client's Shares. Consultant
understands and acknowledges that the Option Shares issued and any Fee Shares
issued pursuant to this Agreement prior to registration will be so issued in
reliance on the exemptions from registration provided by Section 4(2) or
Regulation D of the Act and applicable state securities laws. Representations
and warranties by Consultant in this Paragraph will be used and relied upon by
Client to determine whether any issuance of such shares may be made to
Consultant pursuant hereto, and Consultant will notify Client immediately of any
material changes to the representations made herein. In this regard, Consultant
represents and warrants that:
(1) Consultant has been furnished with a copy of Client's most recent
Annual Report on Form 10-KSB and 10-K and all reports or documents required to
be filed under Sections 13(a), 14(a), and 15(d) of the Securities and Exchange
Act of 1934 ("Exchange Act"), including but not limited to quarterly reports on
Form 10-QSB or 10-Q, Current Reports on Form 8-K, and Proxy Statement (the
"Disclosure Documents"). In addition, Consultant has been furnished with a
description of Client's capital structure and any material changes in Client's
financial condition that may not have been disclosed in the Disclosure
Documents.
<PAGE>
(2) Consultant has had the opportunity to ask questions and receive answers
concerning the terms and conditions of Client's shares to be issued pursuant to
this Agreement, and to obtain any additional information which Client possesses
or can acquire without unreasonable effort or expense necessary to verify the
accuracy of information furnished under this Paragraph.
(3) By reason of Consultant's knowledge and experience in financial and
business matters in general, and investments in particular, Consultant is
capable of evaluating the merits and risks of this transaction and in bearing
the economic risks of an investment in Client's shares, and Client in general,
and fully understand the speculative nature of such securities and the
possibility of such loss.
(4) Consultant is fully aware that any of Client's shares issued to
Consultant pursuant to this Agreement prior to registration will be "Restricted
Securities" as defined by Rule 144 of the Act, and that any resale of such
shares by Consultant may be governed by Rule 144.
(6) Consultant will not sell, transfer or otherwise dispose of any of
Client's shares issued pursuant to this Agreement prior to registration except
in compliance with the Act.
(7) Any and all certificates representing any of Client's shares issued
pursuant to this Agreement issued prior to registration of such shares, and any
and all securities issued in replacement thereof or in exchange therefore, shall
bear the following legend:
"The shares represented by this certificate have not been registered under
the Securities Act of 1933 (the "Act") and are "restricted securities" as that
term is defined in Rule 144 under the Act. The shares may not be offered for
sale, sold, or otherwise transferred except pursuant to an effective
Registration Statement under the Act or pursuant to an exemption from
registration under the Act, the availability of which is to be established to
the satisfaction of the Company."
(E) Full Disclosure. Consultant's resume, and all other information
concerning Consultant provided to Client pursuant to this Agreement is, to the
best of Consultant's knowledge and belief, complete and accurate in all material
respects and does not contain any untrue statement of a material fact or omit to
state a material fact required to make the statements made, in light of the
circumstances under which they were made, not misleading.
(F) Non-Compete and Related Agreements.
Consultant agrees that during the Non-competition Period (as herein
defined), unless otherwise agreed with Client in writing, he will not:
(i) directly or indirectly own, manage, control, participate in, lend his
name to, act as consultant or advisor to, or render services to (alone or in
association with any other person, firm, corporation or other business
organization) any person or entity engaged in any business similar to or related
in any way to the business conducted by Client anywhere within the continental
United States,
<PAGE>
(ii) have any interest directly or indirectly in any business engaged in
any business similar to or related in any way to the business conducted by
Client (provided that nothing herein will prevent Consultant from owning in the
aggregate not more than five percent (5%) of the outstanding stock of any class
of a corporation engaged in the business which is publicly traded, so long as
Consultant has not participated in the management or conduct of business of such
corporation),
(iii) induce or attempt to induce any other employee of the Client to leave
the employ of the Client or its affiliates, or in any way interfere with the
relationship between the Client and any other employee of Client or its
affiliates, or
(iv) induce or attempt to induce any customer, supplier, franchisee,
licensee, or other business relation of Client or any affiliate of Client to
cease doing business with the Client or any affiliate of Client, or in any way
interfere with the relationship between any customer, franchisee or other
business relation and Client or any affiliate of Client, without the prior
written consent of Client's Board of Directors.
For purposes of this Agreement, "Non-competition Period" shall mean the
period commencing as of the date hereof and ending on the second anniversary of
the date on which Consultant shall not be engaged by Client; provided that in
the event Consultant's engagement hereunder is terminated by Client for any
reason other than Cause or other than as provided in Paragraph 12 above,
"Non-competition Period" shall mean the period commencing as of the date hereof
and ending on the second anniversary date of the termination hereof.
(ii) If, at the time of enforcement of any provisions of Paragraph 12
above, a court of competent jurisdiction holds that the restrictions stated
therein are unreasonable under circumstances then existing, the parties hereto
agree that the maximum period or scope reasonable under such circumstances will
be substituted for the stated period or scope.
(iii) Consultant agrees that the covenants made in this Paragraph shall be
construed as an agreement independent of any other provision of this Agreement,
and shall survive the termination of this Agreement for a period of two (2)
years.
(G) Soliciting Customers After Termination of Agreement. Consultant shall
not for a period two (2) years immediately following the termination of his
engagement with Client, either directly or indirectly:
(i) make known to any person, firm or corporation the names or addresses of
any of the customers of Client or any other information pertaining to them; or,
<PAGE>
(ii) call on, solicit, or take away, attempt to call on, solicit, to take
away any of the customers of Client on whom the Consultant called or became
acquainted with during its engagement with Client, either for itself or for any
other person, firm or corporation.
(H) Date of Representations and Warranties. Each of the representations and
warranties of Consultant set forth in this Agreement is true and correct at and
as of the date of execution of this Agreement.
15. Indemnification
Client and Consultant agree to indemnify, defend and hold each other
harmless from and against all demands, claims, actions, losses, damages,
liabilities, costs and expenses, including without limitation, interest,
penalties and attorneys' fees and expenses asserted against or imposed or
incurred by either party by reason of or resulting from a breach of any
representation, warranty, covenant, condition, or agreement of the other party
to this Agreement.
16. Agreement Does not Contemplate Corrupt Practice - Domestic or Foreign
Any and all payments under this Agreement constitute compensation for
services performed and this Agreement and all payments and the use of the
payments by Consultant, do not and shall not constitute an offer, payment, or
promise or authorization of payment of any money or gift to an official or
political party of, or candidate for political office in any jurisdiction within
or outside the United States. These payments may not be used to influence any
act or decision of an official, party or candidate to use his/her/its influence
with a government to assist Client in obtaining, retaining, or directing
business to Client, or any person or other corporate entity. As used in this
paragraph, the term "official" means any officer or employee of a government, or
any person acting in an official capacity for or on behalf of any government;
the term "government" includes any department, agency, or instrumentality of a
government.
17. Inside Information - Securities Laws Violations
In the course of the performance of his duties, Consultant may become aware
of information which may be considered "inside information" within the meaning
of the Federal Securities Laws, Rules and Regulations. Consultant acknowledges
that his use of such information to purchase or sell securities of Client, or
its affiliates, or to transmit such information to any other party with a view
to buy, sell or otherwise deal in the securities of Client or its affiliates is
prohibited by law and would constitute a breach of this Agreement and
notwithstanding the provisions of this Agreement, will result in the immediate
termination of the Agreement.
18. Exclusive Services
Consultant agrees that the Services to be provided hereunder are exclusive
and, accordingly, Consultant shall not render services of the same nature or of
a similar nature to any other individual or entity during the term hereof
without the written consent of Client; provided that, if Consultant wishes to
consult to or provide services to any other party, Consultant may voluntarily
terminate this Agreement at any time pursuant and subject to the provisions of
Paragraph 12 hereof. On the other hand, Consultant understands and agrees that
Client shall not be prevented or barred from retaining other persons or entities
to provide services of the same or similar nature as those provided by
Consultant.
<PAGE>
19. Specific Performance
Consultant and Client acknowledge that in the event of a breach of this
Agreement by either party, money damages would be inadequate and the
non-breaching party would have no adequate remedy at law. Accordingly, in the
event of any controversy concerning the rights or obligations under this
Agreement, such rights or obligations shall be enforceable in a court of equity
by a decree of specific performance. Such remedy, however, shall be cumulative
and non-exclusive and shall be in addition to any other remedy to which the
parties may be entitled.
20. Miscellaneous
(A) Subsequent Events. Consultant and Client each agree to notify the other
party if, subsequent to the date of this Agreement, either party incurs
obligations which could compromise their efforts and obligations under this
Agreement.
(B) Amendment. This Agreement may be amended or modified at any time and in
any manner only by an instrument in writing executed by the parties hereto.
(C) Further Actions and Assurances. At any time and from time to time, each
party agrees, at its or their expense, to take actions and to execute and
deliver documents a may be reasonably necessary to effectuate the purposes of
this Agreement.
(D) Waiver. Any failure of any party to this Agreement to comply with any
of its obligations, agreements, or conditions hereunder may be waived in writing
by the party to whom such compliance is owed. The failure of any party to this
Agreement to enforce at any time any of the provisions of this Agreement shall
in no way be construed to be a waiver of any such provision or a waiver of the
right of such party thereafter to enforce each and every such provision. No
waiver of any breach of or non-compliance with this Agreement shall be held to
be a waiver of any other or subsequent breach or non-compliance.
(E) Assignment. Neither this Agreement nor any right created by it shall be
assignable by Consultant without the prior written consent of Client.
(F) Notices. Any notice or other communication required or permitted by
this Agreement must be in writing and shall be deemed to be properly given when
delivered in person to an officer of the other party, when deposited in the
United States mails for transmittal by certified or registered mail, postage
prepaid, or when deposited with a public telegraph company for transmittal, or
when sent by facsimile transmission charges prepared, provided that the
communication is addressed:
(1) In the case of Client:
Virtual Enterprises Inc.
4695 MacArthur Court, Suite 530
Newport Beach, California 92660
Telephone: (714) 475-6755
Telefax: (714) 833-7854
<PAGE>
(2) In the case of Consultant:
Leonard J. Roman
4695 MacArthur Court, Suite 530
Newport Beach, California 92660
Telephone: (714) 833-2094
Telefax: (714) 645-7610
or to such other person or address designated by Client or Consultant to
receive notice.
(G) Headings. The paragraph and subparagraph headings in this agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
(H) Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
(I) Governing Law. This Agreement was negotiated and is being contracted
for in the State of California, and shall be governed by the laws of the State
of California, notwithstanding any conflict-of-law provision to the contrary.
(J) Binding Effect. This Agreement shall be binding upon the parties hereto
and inure to the benefit of the parties, their respective heirs, administrators,
executors, successors, and assigns.
(K) Entire Agreement. This Agreement contains the entire agreement between
the parties hereto and supersedes any and all prior agreements, arrangements, or
understandings between the parties relating to the subject matter of this
Agreement. No oral understandings, statements, promises, or inducements contrary
to the terms of this Agreement exist. No representations, warranties, covenants,
or conditions, express or implied, other than as set forth herein, have been
made by any party.
(L) Severability. If any part of this Agreement is deemed to be
unenforceable the balance of the Agreement shall remain in full force and
effect.
(M) Facsimile Counterparts. A facsimile, telecopy, or other reproduction of
this Agreement may be executed by one or more parties hereto and such executed
copy may be delivered by facsimile of similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes. At the request of any party hereto, all
parties agree to execute an original of this Agreement as well as any facsimile,
telecopy or other reproduction hereof.
(N) Termination of Any Prior Agreements. Effective the date hereof, all
prior rights of Consultant relating to the accrual or payment of any form of
compensation or other benefits from Client based upon any agreements other than
this Agreement, whether written or oral, entered into prior to the date hereof,
are hereby terminated.
(O) Consolidation or Merger. Subject to the provisions of Paragraph 12
hereof, in the event of a sale of the stock, or substantially all of the stock,
of Client, or consolidation or merger of Client with or into another corporation
or entity, or the sale of substantially all of the operating
<PAGE>
assets of the Client to another corporation, entity or individual, Client
may assign its rights and obligations under this Agreement to its
successor-in-interest and such successor-in-interest shall be deemed to have
acquired all rights and assumed all obligations of Client hereunder; provided,
however, that in no event shall the duties and services of Consultant provided
for in Paragraph 2 hereof, or the responsibilities, authority or powers
commensurate therewith, change in any material respect as a result of such sale
of stock, consolidation, merger or sale of assets.
(P) Time is of the Essence. Time is of the essence of this Agreement and of
each and every provision hereof.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
above written.
"Consultant"
Leonard J. Roman
/s/ Leonard J. Roman
Name: Leonard J. Roman
Title: Consultant
"Client"
Virtual Enterprises Inc.
a Nevada corporation
By: /s/ Fred G. Luke
Name: Fred G. Luke
Title: Chairman and President
<PAGE>
EXHIBIT 24.1
CONSENT OF RICHARD O. WEED TO USE OF OPINION
WEED & COMPANY, L.P.
4695 MacArthur Court, Suite 530, Newport Beach, California 92660-2164
Telephone (949) 475-9086 Facsimile (949) 475-9087
WRITERS DIRECT NUMBER
(949) 475-7730
November 2 , 1999
Board of Directors
NetCommerce, Inc.
4695 MacArthur Court, Suite 530
Newport Beach, CA 92660
Re: Form S-8
Gentlemen:
I hereby consent to the filing of my opinion dated even date herewith as an
Exhibit to the November 2, 1999 Form S-8 Registration Statement to be filed by
NetCommerce, Inc.
I further consent to the reference to me and my opinion under the caption
"Legal Opinion and Experts" in the Prospectus.
Very truly yours,
/s/ Richard O. Weed
Richard O. Weed
<PAGE>
EXHIBIT 24.2
CONSENT OF McKENNON MORGAN & WILSON, LLP
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement of NetCommerce, Inc., formerly Virtual Enterprises, Inc., on Form S-8
of our report dated August 19, 1999, appearing in the Annual Report on Form
10-KSB of NetCommerce, Inc. for the year ended May 31, 1999 and to the reference
to us under the heading "Experts" in the Prospectus which is part of this
Registration Statement.
/s/ McKennon Morgan & Wilson, LLP
Irvine, California
November 2 , 1999
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