-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DBusG6Th0bxjrQG0N1McpIc8WUsbFjDdqNbI5EExO4llThdWzlInx/jFAJDp/J50 b7E7IUpbDJzo/4fZfyx9OA== 0001094891-01-000058.txt : 20010212 0001094891-01-000058.hdr.sgml : 20010212 ACCESSION NUMBER: 0001094891-01-000058 CONFORMED SUBMISSION TYPE: SB-2 PUBLIC DOCUMENT COUNT: 9 FILED AS OF DATE: 20010209 FILER: COMPANY DATA: COMPANY CONFORMED NAME: VENTUREDRIVE INC CENTRAL INDEX KEY: 0001134121 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 000000000 STATE OF INCORPORATION: A6 FILING VALUES: FORM TYPE: SB-2 SEC ACT: SEC FILE NUMBER: 333-55274 FILM NUMBER: 1530370 BUSINESS ADDRESS: STREET 1: 2275 LAKESHORE BOULEVARD WEST, STE 304 STREET 2: TORONTO, ONTARIO CITY: CANADA M8V 3Y3 STATE: A6 ZIP: 00000 MAIL ADDRESS: STREET 1: 2275 LAKESHORE BOULEVARD WEST, STE 304 STREET 2: TORONTO, ONTARIO CITY: CANADA M8V 3Y3 STATE: A6 ZIP: 00000 SB-2 1 0001.txt REGISTRATION STATEMENT ON FORM SB-2 As filed with the Securities and Exchange Commission on February 9, 2001 Registration Statement No. 333- _____ SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- FORM SB-2 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 ---------------------------- VentureDrive, Inc. (Name of Small Business Issuer in its Charter) ----------------------- Delaware 541611 N/A (State or Jurisdiction of (Primary Standard Industrial (I.R.S. Employer incorporation or organization Classification Number) Identification No.) ---------------------------- 2275 Lakeshore Boulevard West, Suite 304 Toronto, Ontario, Canada M8V 3Y3 (416) 255-5113 (Address and telephone number of principal executive offices) -------------------------- Peter J. Hamilton, President VentureDrive, Inc. 2275 Lakeshore Boulevard West, Suite 304 Toronto, Ontario, Canada M8V 3Y3 (416) 255-5113 (Name, address and telephone number of agent for service) ---------------------------- Copies to: Andrew D. Hudders, Esq. Graubard Mollen & Miller 600 Third Avenue New York, NY 10016 Telephone: (212) 818-8800 Facsmile: (212) 818-8881 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. ------------------------------------- If any of the securities being registered on this form are to be offered on a delayed or continuous basis under Rule 415 under the Securities Act of 1933, as amended, check the following box: [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, please 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(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 delivery of the prospectus is expected to be made pursuant to Rule 434, check the following box. [ ] CALCULATION OF REGISTRATION FEE - ----------------------------------------------------------------------------------------------- Title of each Amount Proposed Maximum Proposed Maximum Amount of Class of Securities To Be Offering Price Per Aggregate Offering Registration To Be Registered Registered Security Price Fee - ----------------------------------------------------------------------------------------------- Common Stock, $.001 2,000,000 $1.00 $2,000,000.00 $500.00 Par value - ----------------------------------------------------------------------------------------------- Total Amount Due $500.00 - -----------------------------------------------------------------------------------------------
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 or until the registration statement shall become effective on such date as the Commission, acting under Section 8(a), may determine. Information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted or would be unlawful prior to registration or qualification under the securities laws of any state. SUBJECT TO COMPLETION PRIMARY PROSPECTUS DATED FEBRUARY 9, 2001 VentureDrive, Inc. Up to 2,000,000 shares of our common stock are being sold by the officers of VentureDrive on a self-underwritten, best efforts basis, with no minimum. The offering will commence on the date of this prospectus and will continue for nine months or until all the shares offered are sold, if earlier. We will not escrow the funds received in the purchase of our common stock. We will issue certificates for common stock purchased within ten business days after receipt of a fully executed subscription agreement that is accepted by us and good funds for the purchase are in our account. No public market exists for our common stock. A public market may not develop after the sale of the shares. We are dependent on the proceeds of this offering to fund our operations. Investing in our common stock involves a high degree of risk. See "Risk Factors" beginning on page 4 of this prospectus. Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense. Per Share Total --------- ----------------- Public offering price..... $1.00 $2,000,0001 1 Assumes all 2,000,000 shares offered are sold. The expenses of this offering, estimated at $75,000, will be deducted from the total proceeds to VentureDrive. The date of this prospectus is _____________, 2001. 34 44882.2 TABLE OF CONTENTS Summary................................................................2 Risk Factors...........................................................4 Use of Proceeds........................................................8 Dividend Policy........................................................9 Determination of Offering Price........................................9 Dilution of the Price Paid for the Shares..............................9 Capitalization........................................................11 Plan of Operations....................................................12 Business..............................................................15 Management............................................................25 Executive Compensation................................................27 Principal Stockholders................................................29 Certain Transactions..................................................30 Description of Securities.............................................30 Shares Eligible for Future Sale.......................................31 Plan of Distribution..................................................32 Legal Matters.........................................................33 Experts...............................................................33 Where You Can Find Additional Information.............................33 Index to Financial Statements of VentureDrive, Inc...................F-1 VentureDrive, Inc., and our wholly owned subsidiary, Venture Drive.com Inc. is an Internet based venture catalyst company. The company is referred to as VentureDrive, we or us. We were incorporated in Delaware in April 24, 2000. Our executive offices are located at 2275 Lakeshore Boulevard West, Suite 304, Toronto, Ontario, M8V 3Y3, Canada. Our telephone number is (416) 255-5113. We refer to prospective investors as "you" or the "investor". Summary This summary highlights information contained elsewhere in this prospectus. You should read the entire prospectus carefully, paying particular attention to the section entitled Risk Factors. Generally about us VentureDrive is an Internet based venture catalyst company that has created a methodology and network to develop and process high volumes of early stage business plans and investor solicitation documentation for client companies in an efficient and cost effective manner. The VentureDrive business model is that of an on-line early stage capital development process which facilitates matching and linking entrepreneurial companies seeking funds to grow their businesses with qualified investors looking to have greater choice in early stage investment opportunities. We anticipate that our revenues will be derived from the following activities: o Companies will register with VentureDrive and pay process fees for the services rendered in developing or improving written business plans and investor materials and for advertising the client company investment opportunities on our website to registered, qualified investors. o Qualified investors will register with VentureDrive and pay registration and access fees to obtain information about potential investment opportunities. o Fees from processing investment documentation and company communications on behalf of the registered companies. o Fees from registered business partners in exchange for referrals of entrepreneur's seeking mentoring assistance under VentureDrive's certification program. o Advertising and other service revenues from registered partners of VentureDrive and other entities seeking to advertise to those markets. o Registration fees and sponsorship revenue from entrepreneur and investor marketing events. Strategy We believe that there is a large and renewable volume of early stage business entities attempting to obtain equity financing. The market space for introducing qualified investors to these entities is fragmented and often informal. We believe that a large number of business opportunities are lost from a lack of financing because they are not seen by appropriate investors. Alternatively, they may be seen but do not attract interest because their business plans and investor solicitation documents are poorly formulated. VentureDrive had developed, through the use of the Internet and a local business partner network, a business methodology to mentor entrepreneurs and their companies. VentureDrive will help them develop and document their business plans with appropriate business, legal and accounting information. Then VentureDrive will deliver this documentation on behalf of registered clients and related investment paperwork to qualified investors who are registered with VentureDrive. 2 VentureDrive seeks to reduce the time and expense of early capital rising for entrepreneurial companies. VentureDrive aggregates both investors and businesses into a "brick and click" market space by adding structure and organization to the informal and unstructured market for early stage investment. The Offering Securities offered.............. 2,000,000 shares of common stock. Common Stock outstanding Prior to the Offering........... 3,653,750 shares Common Stock to be outstanding after the Offering.............. 5,653,750 shares Use of proceeds................. We intend to use the net proceeds of this offering as follows: o Establishment of regional offices o Marketing, public relations, and awareness programs o Working capital and general purposes. 3 Risk Factors You should consider carefully the following risks before you decide to invest in our common stock. Our business, financial condition or results of operations could be materially adversely affected by any of these risks. Any of these risks could cause the trading price of our common stock to decline, and you could lose all or part of your investment. Risks Relating to Our Business We have no long-term history of operations upon which investors may evaluate our business plan and performance. We are in the early stages of developing and implementing our business plan. We have not engaged in any substantive operations to date. Therefore, investors will not have a track record with which to judge our ability to achieve our business objectives. Investors must evaluate an investment in VentureDrive based on management's expectations and their own evaluation of our prospects. Our ability to operate will depend on our ability to face all the challenges of a new business. We expect to face many challenges in the development of our business. An investment in VentureDrive must be considered in light of the risks, expenses and difficulties of companies in the early stage. These will include: o Engaging in a business model that has not been fully implemented; o Managing growth of the client base and internal staff; o Locating and managing authorized mentoring partners to advise the entrepreneurial business clients; o Managing entrepreneur and investor marketing/education events in various major cities to act as an intake mechanism for client entrepreneurs and registered investors; o Implementing appropriate financial controls; o Continuing to develop and upgrade our technology and improve our website; o Responding to competitive developments; and o Attracting and retaining qualified personnel. The failure to address one or more of these may impair our ability to carry out our business plan. We will be dependent on others for the implementation of parts of our business plan. VentureDrive will rely on the authorized mentoring partners to provide much of the counseling to the entrepreneurial entities that are its clients. This will include business presentation, legal counseling and accounting services necessary to prepare documentation that will properly present the business opportunity for investor review. VentureDrive will be actively involved in providing models and reviewing the work product. If, however, the authorized mentoring partners fail to act in a timely manner or in a manner meeting the standards of VentureDrive, the presentation that VentureDrive seeks to establish may be impaired and its goodwill and intellectual property impaired. 4 The market for online services is rapidly evolving which requires us to maintain currency and adjust our business model as changes occur. As is typical for new and rapidly evolving industries, demand and market acceptance for recently introduced services in online commerce are subject to a high level of uncertainty. Our success will depend on the willingness of entrepreneurs and investors to use a mixture of local face to face and online services as a method to aid in the process of seeking capital and investment opportunities. Our failure to attract sufficient numbers of clients on both sides of the equation will impair our growth and our overall prospects of success in establishing brand identity. Although our activities are not regulated, changes in government regulation may impact our business. We do not engage in a business that is regulated by the various governmental entities that have authority over the purchase and sale of securities. However, the business that we do conduct is subject to scrutiny by securities regulators from time to time and may become subject to varying degrees of regulatory control in the future. The purchase and sale of securities is subject to extensive regulation. It is possible that in the future, as the Internet based market in the securities industry develops, regulation of certain activities on the Internet may be devised and imposed on our business, which may have an adverse impact. The capital funding services industry is extremely competitive. VentureDrive competes with a significant number of traditional matching companies and fund-raising enterprises. These competitors operate in the traditional bricks and mortar and in the on-line environments. We believe that the market for these services will see additional entrants in the future because the barriers to entry are not significant. Many of our competitors are better funded. A large number of our competitors are established providers of venture capital finance, which have market awareness and marketing resources and established investor pools. Moreover, many of them are licensed broker-dealers with authority to do more activities and earn more than VentureDrive. Although we believe we have competitive advantages, it is possible that we will not be able to establish a market share and be sufficiently competitive to generate revenues to be profitable. We are dependent on our intellectual resources and intellectual property. We believe that the experience and background of our management personnel has created significant branding and intellectual property. Our inability to continue to differentiate ourselves and to protect our intellectual property assets to the extent they exist will impair our business plan and development. 5 Risks Relating to this Offering This offering is being made without an underwriter; therefore, it is possible that VentureDrive will not sell all the shares offered. The offering is self-underwritten. This means VentureDrive will not engage the services of an underwriter to sell the shares. We intend to sell the shares through the efforts of our officers, and we will not pay them any commissions. Without the services of a professional finance firm, it is possible that we will not sell all the shares offered. If VentureDrive does not raise the full amount being sought, it will have to modify its business plan to reduce its proposed expenditures. A substantial reduction in the business plan may impair the business and financial ability of VentureDrive, and it may be required to cease operations. This offering is being made without any escrow of investor funds or provisions to return funds. When investors make a subscription for our common stock, the purchase price will not be place in any escrow account and will become a general asset of VentureDrive. There is no minimum offering amount. Subscriptions will be accepted on a rolling basis. There are no investor protections for the return of invested monies. Because there is no minimum offering requirement, early investors in this offering bear a disproportionate risk of VentureDrive being able to operate on the funds raised. This offering is made on a rolling basis with no minimum amount having to be raised. Therefore, early investors will participate in the offering with no assurance that a sufficient amount of funds will be raised for the intended use of proceeds. If insufficient funds are the result of this offering, VentureDrive may have to limit the extent to which it will be able to implement its business plan, but investors will not be able to get their investment funds back. The offering price has been arbitrarily established. The offering price has been arbitrarily established by the board of directors. It is not based on market factors, business appraisal or other established criteria of business valuation. We have not consulted with any finance professionals to determine the offering price. The officers will have broad discretion in the use of proceeds from this offering. Although we have allocated the proceeds from this offering among several categories of uses, they may be changed by management at any time. The amount allocated to a use also may be changed depending on management's determination about the best use of the funds at a particular time. Therefore, investors must rely entirely on the business judgment of management in the use of the offering proceeds and to determine how and what portions of the business plan will be implemented. There has been no prior market for our common stock and the market price of the shares may fluctuate. There has been no market for our common stock prior to this offering. The price of our common stock after the offering may fluctuate widely and may trade at prices significantly below its initial public offering price. We cannot 6 guarantee that a trading market for our common stock will develop or, if a market does develop, that the depth of the trading market for the common stock or the prices at which the common stock will trade. There can be no assurance that a public market will develop for the common stock. We plan to take action so that our common stock will trade on the Over-the-Counter Bulletin Board, operated by NASDAQ. Because the OTC BB is a broker driven market, before our stock may be listed and quoted, brokers must apply for it to be listed and then establish market levels for it to trade. We must wait until brokers take the appropriate action before our common stock will trade in that market. There can be no assurance that a market will develop for the common stock. Investors may not be able to resell the shares acquired in the offering in the public markets. The shares are defined as penny stock under the Securities and Exchange Act of 1934 and rules of the SEC. These rules impose additional sales practice and disclosure requirements on broker-dealers who sell our shares to persons other than certain accredited investors. For covered transactions, a broker-dealer must make a suitability determination for each purchaser and receive a purchaser's written agreement prior to sale. In addition, the broker-dealer must make certain mandated disclosures in transactions of penny stocks. Consequently, these rules may affect the ability of broker-dealers to make a market in our common stock and may affect the investors ability to resell shares purchased in this offering. Our directors and officers will have substantial ability to control our business direction. Because our directors and officers own a substantial number of shares of common stock, they are in a position to control, or at least, influence the election of our directors. Therefore, they are able to influence the business operation of VentureDrive. Future sales of shares by our principal stockholders could adversely affect the market price of our common stock. After completion of this offering, there will be 5,650,750 shares of our common stock outstanding. The 3,653,750 shares of common stock outstanding before this offering were sold at various times during the calendar year 2000 and may be sold in the public market from time to time, in calendar year 2001, subject to volume and holding period limitations and method of sale requirements, after they have been held for one year. You should be aware that the possibility of these sales may, in the future, have a depressive effect on the price of the common stock in any market which may develop and, therefore, the ability of any investor to publicly sell his shares may depend upon the number of shares that are offered and sold. Moreover, the perception in the public markets that these sales by prior stockholders might occur could also adversely affect the market price of our common stock. 7 Use of Proceeds The offering is on a best-efforts basis, no minimum basis. Below are three alternatives of the application of proceeds that may be received on the offering. In each instance, the applications assume net proceeds after offering expenses estimated at $75,000. Activity Net Proceed Amounts -------- ------------------------------------- Establishment of Regional offices $ 200,000 $ 500,000 $ 700,000 Marketing, public relations and other forms of awareness programs 100,000 200,000 625,000 Working capital 200,000 300,000 600,000 ---------- ---------- ---------- TOTAL $ 500,000 $1,000,000 1,925,000 VentureDrive plans to have regional offices in the United States and Canada. The proceeds will be used to pay the salaries of the representatives and the office rental and operating expenses. The staff in these offices will be responsible for: o creating a local network of authorized mentoring partners; o attracting entrepreneurial investment opportunities; o attracting local accredited investors to review suitable early stage entrepreneurial opportunities; o managing local entrepreneur and investor marketing events to create prospective clients; o liaising with preferred service providers to advertise on the VentureDrive website; and o creating a series of local strategic partners that will supply and receive referrals of investment opportunities. VentureDrive plans on using the services of public relations firms to build media exposure in local markets and with local groups. Local groups to be targeted will be industry groups, trade organizations and forums, special interest business organizations and other business and capital raising groups. Marketing may also include participation in entrepreneurial and venture capital forums. Marketing will be oriented towards attracting clients and registered investors and towards building brand identification of VentureDrive as an efficient on-line forum for early stage investment opportunities. The working capital requirements of VentureDrive will include general administrative expenses, website maintenance, senior executive compensation, corporate overhead, accounting and professional expenses and similar general corporate expenses. Proceeds not immediately required for the purposes described above will be invested principally in United States government securities, short-term certificates of deposit, money market funds or other short-term interest-bearing investments. Although we have made allocations for the use of the net proceeds of the offering, management many change the allocations in its sole discretion based on the amount of funds actually received. Generally, if lesser amounts of 8 shares are sold, we correspondingly will limit our activities to fewer regional offices and reduced marketing efforts. We also would reduce the working capital allocation in favor of the other uses and try to limit the anticipated expenses of general corporate overhead. Significant reductions in the overall business plan or delays in taking action to implement the business plan may impair our ability to achieve our business goals or cause us to curtail all or substantial parts of our proposed business operations. In addition to changing allocations among the proposed uses, we may change the different uses of the proceeds because of required changes in our business plan or management decisions based on arbitrary decisions. Investors should understand that our management will have wide discretion over the use of proceeds which may be made without consultation with investors or notice to our stockholders. Therefore, our decisions may not be in line with the initial objectives of investors who will have little ability to influence these decisions other than through the process of changing the directors of VentureDrive by stockholder action. Dividend Policy We expect to retain all earnings generated by our operations, if any, for the development and growth of our business. We do not anticipate paying any cash dividends to our stockholders in the foreseeable future. The payment of future dividends on the common stock and the rate of dividends, if any, will be determined by our board of directors in light of our earnings, financial condition, capital requirements and other factors. Determination of Offering Price The price of the shares was arbitrarily determined in order for VentureDrive to raise up to a total of $2,000,000 in this offering. The offering price bears no relationship whatsoever to our assets, earnings, book value, business prospects, or other established criteria of value. We also did not consult finance professionals to help establish the offering price. There is no assurance that the price paid for a share in the offering will be recoverable by a sale of the shares in the public market, or that a public market will value the company as we have determined its value. Dilution of the Price Paid for the Shares The difference between the offering price of the common stock and the net tangible book value of a share of common stock after the offering is the dilution in the value of the offered common stock to investors. Net tangible book value for each share of common stock is determined by dividing the net tangible book value of VentureDrive by the number of shares of common stock outstanding. The net tangible book value is determined by calculating the total tangible assets and then subtracting the total liabilities of VentureDrive. At September 30, 2000, the net tangible book value of VentureDrive was $235,688 or $.067 per share of common stock. If you give effect to the sale of the 2,000,000 shares of common stock in this entire offering at the initial public offering price of $1.00 per share and the receipt of the net proceeds of this entire offering, based on the net tangible book value shown above, the adjusted net tangible book value of VentureDrive at September 30, 2000 would be $2,160,688 or $.39 per share. The dilution would be $.61 per share, or approximately 60.9%, less than the price you are paying per share in the offering. The following table illustrates this dilution. 9 Assumed public offering price per share .......................$ 1.00 Net tangible book value before offering (approximate)..$.07 Increase attributable to current investors.............$.32 Adjusted net tangible book value after offering................$ .39 ------- Dilution to investors in this offering.........................$ .61 ======= The public offering price is substantially higher than the net tangible book value per share. Investors will incur immediate and substantial dilution. The following table summarizes the number and percentage of shares purchased, the amount and percentage of consideration paid and the average price per share of common stock paid by all our existing stockholders and by new investors in this offering assuming all the shares are sold: Total Price Pe Number of Percent of Consideration Percentage of Share Shares Held Ownership Paid Consideration -------- ----------- ---------- ------------- ------------- Existing Stockholders $ .16 3,653,750 64.6% $ 577,000 22.4% Investors in this offering $1.00 2,000,000 35.4% $2,000,000 77.6% ----------- ------- ---------- ----- Total 5,653,750 100.0% $2,577,000 100%
10 Capitalization The following table sets forth our capitalization as at September 30, 2000: September 30, 2000 ------------------ Short-term debt...................................... $ 58,795 Stockholders' equity: Preferred stock, par value $0.001 per share, 2,000,000 shares authorized; no shares issued............................................. -- Common stock, par value $0.001 per share, 20,000,000 shares authorized; 3,528,750 shares issued and outstanding; ........................... 2,381 Additional paid-in capital........................... 544,288 Deficit accumulated during development stage......... 311,964 Transaction Adjustment............................... 1,163 Total stockholders' equity (deficit)............... 235,868 Total capitalization............................... 294,663 11 Plan of Operations Background The predominant nature of the early stage finance market is that it is local. Local angel investors finance local entrepreneurs. The process by which local entrepreneurs gain access and support from local angel investors, however is not organized and is almost totally dependant on informal relationships. Angel investors are also subject to this unorganized market and are unable to choose from all the potential available investment opportunities within the local market because there is no facility to bring all the opportunities together. VentureDrive uses its Internet based software application as a vehicle to aggregate both registered investors and registered entrepreneurs that are seeking angel investment funds and expertise. Coupled with the Internet application, VentureDrive solicits authorized mentoring partners in various local areas to work with entrepreneurs who approach VentureDrive in their search for financing. These local authorized mentoring partners, investors and entrepreneurs become part of the local VentureDrive network. By attracting a number of partners in each locale the network is able to leverage the skills, contacts, business premises, and relationships that groups of business partners possess. The success of VentureDrive is dependent upon attracting entrepreneurs looking for financing, attracting investors looking to invest and attracting business partners that will assist entrepreneurs in improving their business plans and proposals. Operations During fiscal year 2000, VentureDrive focused on development of its business plan, website development and initial capitalization. VentureDrive also began the process of seeking and entering into agreements with accounting and consulting firms to act as authorized mentors. VentureDrive has recruited 16 authorized mentoring partners in four Canadian provinces and has opened an office in New York City where it has recruited four authorized mentoring partners. In addition, VentureDrive began its recruitment of preferred service providers and registering potential investors. Entrepreneurs have been accessing the site and a number of financing proposals have been submitted to investors. VentureDrive believes that active due diligence has been conducted for several financing proposals and some of those proposals are in the process of being financed. During fiscal year 2001, VentureDrive will continue the development and maintenance of its website and expanding its operations, growing its entrepreneur base and registering investors. VentureDrive plans to expand its operations to Los Angeles, Chicago and several other large United States metropolitan areas. These future offices will likely be staffed with two or three persons who will recruit and develop the local networks and manage them. In fiscal year 2001, VentureDrive plans to increase its marketing efforts to establish greater market presence and brand identification. VentureDrive plans to have regular meetings in local venues where panelists consisting of angel investors, successful entrepreneurs, venture capitalists, VentureDrive staff, authorized mentoring partners and other associated individuals will meet with prospective clients, entrepreneurs and investors to provide information about the VentureDrive process. VentureDrive also intends to arrange and host two-day boot camps. These will consists of intensive sessions to explain to startup and early stage entrepreneurs the complete process leading to successful angel investment. When possible, the boot camps will be sponsored by local banking and financial institutions and others seeking to market their services to entrepreneurs and angel investors in general. Attendees will be charged a registration fee. VentureDrive will also use other conventional means of marketing, such as local advertising and attending angel investor and entrepreneurial forums. 12 VentureDrive had working capital of $96,501 as at September 30, 2000. Those funds, together with the full proceeds of this offering, will be sufficient to operate the current offices and complete the planned rollout of its currently proposed regional offices in Los Angeles, and Chicago. Because the VentureDrive model is variable cost oriented, if the complete offering is not sold or expenses increase in some areas, management may adjust the plan to maintain budgets without necessarily affecting the delivery of its services. Moreover, VentureDrive will be able to anticipate revenues against some costs because entrepreneurs and angel investors will be paying advance registration fees and mentoring fees while authorized mentoring partners will be paid after they have provided services. VentureDrive created the processes utilizing web applications together with the intellectual property resident on the website. Ongoing product and process design continues to take place as VentureDrive experiences the full range of interactions with various entrepreneurs and authorized mentoring partners. New content for the website also is continually being developed from the network events that the company sponsors. Additional products that VentureDrive is continuing to develop are reseller relationships with such companies as VC Experts, a New York based company specializing in providing training and educational materials to investors. The Company has signed a development and license agreement for the software used for its VentureDrive.com website whereby it owns the intellectual property attached to the website while licensing the registration and product delivery software from the software developer. VentureDrive is amortizing the original cost of the site over 48 months. Subsequent changes to the website are being expensed as incurred. VentureDrive leases virtually all of its computer and telecommunications equipment on a month-to-month basis. It is our intention to use serviced offices in regional centers as experience has proven that serviced offices provide improved cost control for rental space for smaller staff requirements. VentureDrive signed a one-year lease on its Toronto office premises and rents its New York office on a month-to-month basis. VentureDrive has been able to outsource its information technology services to Springboard Technology Solutions Inc., which is owned by some of the shareholders of VentureDrive. Springboard is located in the same building as VentureDrive and hosts the company's website and provides for support of all facets of the company's hardware and software needs. All purchases of services from Springboard are governed by a professional services agreement which outlines the cost for each service consumed. All rates and fees are at or below market rates. Results of operations We have a very limited operating history and our activities to date have been limited to launching our services which were formally launched on May 16, 2000 with the activation of our website. As a result, our historical financial information is not necessarily indicative of our future financial performance. We have generated nominal revenue to date. Since the inception of VentureDrive, we have incurred operating expenses of $150,504 for the period from inception to the end of the stub year end of June 30, 2000 which were comprised of the following: 13 o Marketing and Promotional Expenses $24,948 o Consulting and Business Partner Support (Salaries) $58,016 o Office, Rent and System Support Expenses $41,176 o Depreciation and Amortization on Software and Equipment $13,390 Since the inception of VentureDrive, we have incurred an aggregate net loss of $316,596. We have cash commitments of $58,795. These consist of normal trade payables. Our near term losses will be increased by costs associated with the roll out of the regional offices and the attendant lag that occurs between office opening and the attraction of entrepreneurs to our processes and the financing that occur between angel investors and early stage entrepreneurs. Liquidity and capital resources Since inception, our working capital requirements have been satisfied through the sale of securities. During fiscal year 2000, we raised a total of $576,000 from the sale of 3,520,000 shares of common stock in these sales. In connection with the private placement of our securities in 2000, VentureDrive issued 23,750 shares of common stock as a commission valued at $7,955. On April 3, 2000, VentureDrive issued 100,000 shares of common stock in partial payment of services rendered in connection with the development of its website. The value of these services was $7,955. On April 3, 2000, VentureDrive issued 10,000 shares of common stock in partial payment of rent for its executive offices. The value of the shares was $3,385. Our working capital at September 30, 2000 was $96,501. We anticipate that the net proceeds of this offering will satisfy our capital requirements for at least the18-month period following the consummation of this offering. Thereafter, we must either generate cash from our operations sufficient to fund our continued operations and further growth or obtain capital from external sources. These sources could include the public or private markets for our equity or debt securities. Additionally, the VentureDrive model of processing early stage companies could form a valuable front end deal flow engine for other venture capital or financial firms which may be a source of strategic investment. Specific external sources of capital, however, have not been identified and capital may not be available when needed or in the amounts desired. In addition, the terms may not be acceptable. Any issuance of equity securities would dilute the interest of our stockholders. If we incur debt, our cash flow may be insufficient to pay the principal and interest due. Further, instruments governing debt will typically contain extensive covenants restricting our financial and business activities. These restrictions could have important consequences for our business, including: o limiting our ability to access the additional capital we will need to sustain and grow our business; o limiting our flexibility in planning for, or reacting to, changes in our business; and o placing us at a competitive disadvantage to less leveraged competitors, which could have more capital to invest in their operations. Business General VentureDrive has developed an innovative strategy for improving a high volume of early stage business and investment propositions at the local level through use of authorized mentoring partners, typically small CPA firms or business consulting firms. The communication and delivery mechanism for the improved investment documentation that is output from local mentoring partners and entrepreneurs, is managed through the VentureDrive website and network presence. VentureDrive will realize on the groundbreaking opportunity to use the Internet as an innovative communication tool for its deal development process for entities seeking funding, by facilitating review of entrepreneur proposals by qualified angel investors. Angel investors will have an opportunity to finance business propositions as an early entry point. As a venture catalyst network, VentureDrive consists of: o entrepreneurs seeking guidance and financing to develop their early stage businesses; o qualified investors, such as high net worth investors, venture capital fund managers, and institutions, looking to invest in early stage business opportunities; o authorized mentoring partners selected by VentureDrive and located throughout the United States and Canada, who will mentor entrepreneurs through VentureDrive's deal development process, provide additional services and support and facilitate financing; o referral services between the registered entrepreneurs and the registered qualified angel investors; o preferred service providers that provide skills, ancillary products and services for both investors and entrepreneurs in the conduct of their businesses; o VentureDrive's back office processing system and overall direction of the network; and; o Monthly and quarterly events that facilitate exposure of entrepreneurs, mentoring partners and investors to the VentureDrive network. VentureDrive has identified that there is a large and renewable volume of early stage business entities attempting to obtain financing that are not finding potential investors or alternatively limited to those that are within their range of acquaintances and professional advisors. In short, the market space for introducing angel investors to developing entities is fragmented and often informal. We believe that a large number of business opportunities are lost from a lack of financing because they are either not seen by appropriate investors or are seen but do not attract interest because they are poorly formulated and documented. VentureDrive offers a solution to this problem of early stage capital raising. Through the avenue of the VentureDrive website, the local authorized mentoring partner network, a methodology and framework to mentor entrepreneurs and their companies, a system to catalogue and coordinate documents of companies seeking funding, and an efficient delivery methodology, VentureDrive is able to clarify a businesses description and business plan and describe its requirements so that qualified investors will have the information they need to pursue an investment opportunity. The use of VentureDrive is intended to reduce the time 14 and expense of early capital funding. Venture Drive aggregates both investors and businesses into a "brick and click" market space by adding structure and organization to the informal and unstructured market for early stage financing. The VentureDrive Process We believe our approach to developing an entrepreneur's business proposition is unique. VentureDrive is based upon an effective network created from ongoing interaction amongst authorized mentoring partners, qualified investors, entrepreneurs and our local staff in each regional office. We consider this interaction to be a complete and proprietary business process designed for cost effective, efficient deal development. We believe that our methodology will result in more investment for start-up businesses than the current means. The steps in the process are as follows. o Entrepreneurs are exposed to the capabilities of the VentureDrive network through public relations activities and early stage business events in local cities. These activities are designed to build the intake funnel to provide volume and entrepreneur "flow" for VentureDrive. o Entrepreneurs are encouraged to take the free "Test Drive" option on the website if they are interested in starting the process towards finding early stage capital. o A local VentureDrive entrepreneur relationship manger reads the entrepreneur's test drive submission and contacts the entrepreneur to suggest which of the available VentureDrive process options would be appropriate for the particular entrepreneur given the stage of development of the entrepreneur's business proposal. o The entrepreneur pays a fee, charged by credit card via the website, dependent on the path chosen to enter one of the three VentureDrive deal development processes: |_| "The Expressway" path may be chosen if the entrepreneur's proposal lacks some significant development that would cause qualified investors to discount or doubt the businesses' viability. |_| The "Direct to Certification" path may be chosen if the entrepreneur appears to have a well thought out business plan, has a cogent proposal, and needs to be certified as "due diligence ready" and have a "certified investment opportunity" proposal prepared. |_| The "Uncertified Investment Opportunity" path may be chosen if the entrepreneur wishes only to post his investment opportunity in "The Driveway" portion of the website where uncertified deals may be reviewed by qualified investors. This would be similar to posting an advertisement; however, it is in a standardized format for ease of review by qualified investors. o If either the Direct to Certification or Expressway path is chosen, the local VentureDrive office arranges for the entrepreneur to meet with a local authorized mentoring partner. o The authorized mentoring partner reviews the "Test Drive" form, business plan materials if any, or a business summary review in the case of the Expressway. 16 o Based on the results of the meeting and analysis of the transaction contemplated, together with a risk analysis, the mentor may recommend certification in the case of the Direct to Certification path and the entrepreneur and the mentoring partner complete a comprehensive due diligence check list and questionnaire. In the case of the Expressway, the mentor will recommend one or more of four modules that will need to be successfully completed by the entrepreneur prior to being considered for certification. In both cases if an entrepreneur is to be considered for certification, a standardized "certified investment opportunity form needs to be completed and approved for posting to "The Showroom" where certified deals may be reviewed by qualified investors. o In the case of all certified and uncertified proposals posted to the website, all identifying information is removed to eliminate the possibility that the transaction could be considered a public offering of securities. o If an investor is interested in one or more business positions posted to the website, the investor sends an email to the VentureDrive head office which in turn alerts the local partner relationship manager office that there is an interested party. o The mentor is provided with some information from the qualified investor's profile to ascertain if the investor and the entrepreneur would make a suitable combination based on the mentor's knowledge of the entrepreneur and the business position. o In the case of uncertified investment opportunities when an enquiry is received, the local VentureDrive office will assign the entrepreneur to a local mentor and facilitate a meeting in order to ascertain the entrepreneur's interest and capabilities prior to relaying the results of the meeting to the VentureDrive local office. o If the mentor believes that a meeting is appropriate, the local VentureDrive office arranges a meeting between the mentor, the entrepreneur and the investor. o In all cases, the meetings between the entrepreneur and the mentors facilitate the eventual goal of achieving financing as the negotiation between entrepreneur and investor can be led to a successful conclusion if an experienced mentor has prepared the entrepreneur for the negotiation process. o In those cases where a mentor may not be sufficiently versed in assisting the interaction between investors and entrepreneurs, VentureDrive will maintain a local investment manager whose role is to assist in structuring early stage investments. Authorized mentoring partners VentureDrive believes that authorized mentoring partners are a critical component of its delivery system. These partners are independent business persons that are currently involved in financial services in so far as they tend to deal directly with some entrepreneurs in some capacity. They are located in major cities and surrounding areas. VentureDrive will train these partners in its procedures and use their existing locations and facilities to deploy its products and processes to entrepreneurs. Authorized business mentoring will most likely come from the following categories: o accounting and law firms with practice orientations towards entrepreneurial businesses and venture capitalists; 17 o consulting and financial service firms which have accounting and consulting skills and are currently dealing with small to mid-size businesses; o Venture capital firms and institutional investors that invest in startup and growth stage businesses; and o financial planning firms which have relationships with high net worth individuals. The primary role of the authorized mentoring partner is: o to be a local mentor and consultant to both the entrepreneur and the qualified investor; o provide the pre-existing bricks and mortar for the VentureDrive network; o deliver many of the services necessary for deal development in conjunction with The Expressway process; o be available to recommend other authorized business partners and preferred service providers and build those networks; and o be a part of the larger network of deal and investment fund flows to fuel the growth of VentureDrive. Authorized mentoring partners will not have defined territories, and there is no exclusivity by sector. The reason for this is that VentureDrive will try to match the best certified mentoring partner for the entrepreneur depending on the stage of development, mentoring needed and services to be provided. Because the diversity of the mentoring partners is expected to increase as we grow, there will be the opportunity to assess the mentoring prospects of a client and bring together many skill sets and disciplines through VentureDrive to achieve optimal results. We have identified an initial group of authorized mentoring partners which have been assessed through interviews, referrals and focus groups. Most of these persons are located in Ontario and New York. We will continue to add to this group by increasing the number of geographic locations throughout North America where we will have members of the authorized mentoring partner pool. Initially, additional offices are targeted for Los Angeles and Chicago. We have commenced hiring mentoring partner relations managers. Their chief functions will include acting as a liaison between VentureDrive corporate offices and the partners, facilitating entrepreneur and partner relationships, conducting marketing programs for new participants, engaging additional partners to provide services and certifying the skill set of the partners. Authorized mentoring partners will be compensated by the person using their services at regular rates. One of the important elements for success of the VentureDrive model will be keeping costs within reason for the early stage company so that investments will provide meaningful amounts of working capital. VentureDrive Website The VentureDrive website will perform two primary roles. Both these roles are independent of one another. The first is the business presentation and matching function. This function will support the core business of introducing the entrepreneur to the VentureDrive process, facilitating his deal development, and then posting the business summary for the matching process with qualified investors. This is described above. The second function will be providing content relevant to the various registered users of VentureDrive and visitors to our website. This will include the offering of products and services, useful 18 information and communication opportunities. In the future, we may expand to include a third function of advertising by and referral to preferred product and service providers for our registered users and visitors to our website. The content element can be broken down into two segments, a publications segment and an uncertified business opportunity segment. Concomitant to these segments will be related advertising space and advertising revenue opportunities. VentureDrive believes there are over 50 nationally distributed print media magazines and other publications in North America aimed at the start up and developing business market. We believe that entrepreneurs and qualified investors, even if they do not take part in The Expressway process, will want to visit a site that has content tailored to their interests. Much of the content from these sources is free and may be reproduced or hyperlinked to our website. Because much of this is general or non-specific material, we plan on hiring a webmaster to add new feeds and search for appropriate content tailored to the interests of our audience. We may also commission content to complement what we are otherwise able to obtain. The uncertified business opportunity segment is important to the concept of the VentureDrive website as a destination site. We believe that the greater the number of certified and uncertified business opportunities placed on the website, the greater will be the ability of the website to attract investors as viewers, subscribers and finance participants in the network. We have developed a procedure whereby a potential uncertified business opportunity posting is reviewed by our staff, prior to being placed on the website for viewing. Any inquiries being received on this segment are referred to an authorized mentoring partner in proximity to the entrepreneur posting the opportunity, as best as possible. The mentoring partner will act as the agent and facilitator to assist where possible between the entrepreneur and the prospective investors. We believe that this process will maintain the integrity and inclusiveness of the network for all website users. We foresee that as a result of the core activities of VentureDrive, there will be opportunities to secure adverting on the site. The most likely group of advertisers will be those who provide products and services to our two groups of registered users and those wanting exposure on financial oriented websites. We have received a number of inquiries from insurance brokers, financial advisors, real estate brokers, accountants and lawyers. We also think that financial printers, shareholder relations firms, transfer agents and the like would also want exposure on our type of website. We anticipate that our authorized business partners will participate in adverting on our website. In addition to direct advertising revenues, we would expect to generate revenues from hyperlinked site referrals. Although we expect some advertising revenues, rates for banner ad placement and various other kinds of advertisements on websites have been falling dramatically over the last two years, therefore we do not expect that advertising will be an important source of revenues for VentureDrive. In the future, we may add a segment that provides retail products and services that would be of interest to our registered user groups. We have not extensively explored this and anticipate doing further market research once our website is more fully functional and we have a critical mass of registered users. To date, we have no agreements for any activities in this area of endeavor. Marketing We present VentureDrive as a venture catalyst company that has developed a unique set of methodologies and products and services that will support a rapid growth, high margin business, focused on deal development for early stage entrepreneurs. We operate in the very large, informal, and 19 fragmented industry of capital formation. We believe that the industry is focused on deal selection as opposed to deal development. We plan to continue gaining exposure for VentureDrive in each of our local markets and build brand recognition by continuing to implement the following marketing strategy and campaigns. We anticipate using the following techniques: o operate third party sponsored boot camps once every four months in each local city where the topic is "how to obtain private equity investment for your business" or "preparing your early stage company for private capital"; o operate a monthly networking meetings that contain content specifically aimed to the early stage entrepreneur market, including valuation mechanism, preparing cogent investment proposals, structuring investment opportunities, protecting intellectual property, and the like; o email and trigger based marketing software to target trade associations, usually in conjunction with association leadership; o identify, create and maintain all appropriate links to other websites that would generate additional traffic on www.VentureDrive.com; o contact search engines to obtain inclusion of our website in their responses to relevant searches; o place print media advertisements and classified ads in appropriate periodicals and local newspapers directed at attracting entrepreneurs and investors to the VentureDrive website; o use the Napoleon software activity marketing program to target entrepreneurial organizations and associations to elicit website visits by their members or to prompt orders of our marketing CD-ROM; o use the Napoleon software activity marketing program to target universities, colleges and for-profit schools to attract potential new entrepreneurs to the VentureDrive website and our program; o distribute our marketing CD-ROM explaining the VentureDrive process and operation at no cost through referral services, authorized mentoring partners and selected direct mail avenues; and o conduct a public relations program through effective media relationship management to target entrepreneurial organizations, business schools, newspapers and business magazines to clearly articulate VentureDrive's programs and support the network; and o attend and offer investor/entrepreneur forums. To establish the authorized mentoring partner network, our strategy is to employ the Napoleon software activity marketing program to generate leads for our managers by an advertising and direct mail campaign to the target groups. We also plan to host seminars from time to time in urban centers with attendance generated from blitz advertising and outsourced telemarketing. 20 Competition VentureDrive faces widespread competition from many sources. These include: o internet and bricks and mortar incubator companies and organizations looking for start-up companies to nurture or match to investors; o national accounting and financial advisory firms which have developed business divisions that are business incubators; o venture capital firms whose primary business is attracting capital to participate in deals that they have selected; o investment banks and broker-dealers, including national firms, smallcap firms, and niche investment banking houses; and o state and local agencies, educational organizations and industry associations that to varying degrees facilitate the capital formation process for start-up companies. Our competitors often have greater financial resources with which to sustain their operations. Generally too, they have seasoned personnel, established reputations and verified marketing channels. We believe that many of our competitors have established market positions and market shares. These factors tend to give our competitors substantial deal flow and access to a large pool of qualified investors. We also believe that this industry will become more competitive because the Internet offers others the same opportunities it offers VentureDrive. Moreover, the barriers to entry in this industry generally are not substantial. We believe that VentureDrive will have competitive advantage with many of its competitors. Principally, we will focus on deal development rather than deal selection. We believe that presenting as many deals as possible, at both our certified and uncertified levels, will provide the opportunity to raise capital to more entrepreneurs and yield more investment possibilities to more qualified investors. We believe that our registered groups are seeking choice and opportunity more than anything else. We also will compete with comparable services on the basis of providing a more comprehensive, hands-on service of business plan and deal development. Our authorized mentoring partners will add significant value to the overall presentations and consummation of transactions because of their expertise and advice. Overall, we believe that our business presentations will be of a higher caliber than those of our competition which will attract significant numbers of entrepreneurs and investors. Proprietary Rights We regard the protection of our intellectual property, including our URL "www.VentureDrive.com" and our "The Expressway" and "VentureDrive Accelerator Model" trademarks, as critical to our success. A URL is a website's address, which when entered by a user into a web browser, takes the user to the desired website. We also rely on the proprietary models we developed for The Expressway. Unauthorized use of the intellectual property used in our business by third parties may damage our brand and our reputation. We rely on intellectual property laws and confidentiality and license agreements with our employees, customers, partners and others to protect our intellectual property rights. 21 If we are unable to protect our VentureDrive.com domain name our business could be harmed. We may be unable to prevent third parties from acquiring Internet domain names that are similar to ours. We anticipate that many websites will use the words "venture" and/ or "drive" as part of their URL or brand name. Creating brand awareness for a brand containing the terms "venture" or "drive" may prove difficult if the markets confuse or are unable to differentiate among the numerous websites using these words. Government Regulation We are not subject to any particular set of laws regulating our business as a whole. There may be specific activities from time to time or business aspects we develop in the future that will be regulated businesses. Few laws or regulations are directly applicable to access to the Internet. However, because of the Internet's popularity and increasing use, new laws and regulations may be adopted. These laws and regulations may cover issues that include: o user privacy; o pricing; o tax; o content; o copyright and trademark and trade dress; and o characteristics and quality of product and services. In addition, the growth of the Internet and e-commerce, coupled with publicity regarding Internet fraud, may lead to the enactment of more stringent consumer protection laws. These laws may impose additional burdens on our business. The enactment of any additional laws or regulations may impede the growth of the Internet, which could decrease our potential revenues or otherwise adversely affect our business, financial condition and operating results. Because our business is in the area of financial services, we believe that from time to time our industry will be subject to scrutiny by securities regulators. As a result of review, our business segment may become subject to varying degrees of regulatory control. The purchase and sale of securities is subject to extensive regulation. It is possible that in the future, as the Internet based market in the securities industry develops, regulation of certain activities on the Internet may be devised and imposed on our business which may have an adverse impact. Our ability to generate revenues from the sale of advertising on our website depends on demonstrating to advertisers that our web site traffic is comprised of users that are demographically attractive to them. These are groups of users having common characteristics, including similar buying habits and similar income levels, or which reside in the same geographic locations. If we are not able to legally share information regarding our customers with potential advertisers, our ability to generate advertising revenues will suffer. The public is becoming increasingly concerned about issues relating to privacy on the Internet. This increased sensitivity could result in the adoption of stringent legislation that prevents or limits our ability to use personal and other data about our website users and visitors. Laws and regulations directly applicable to e-commerce or Internet communications are becoming more prevalent. Congress has passed Internet laws regarding online copyright infringement. Although not yet enacted, Congress also 22 is considering laws regarding Internet taxation. These are all recent actions, and there is uncertainty regarding their market place impact. In addition, various jurisdictions already have enacted laws that are not specifically directed to e-commerce but that could affect our business. The applicability of many of these laws to the Internet is uncertain and could expose us to substantial liability. Any new legislation or regulation regarding the Internet, or the application of existing laws and regulations to the Internet, could materially adversely affect us. If we were alleged to violate federal, state or foreign, civil or criminal law, even if we could successfully defend the claims, it could materially adversely affect us. We believe that our use of third-party material on our web site is permitted under current provisions of copyright law. However, because legal rights relating to Internet content and commerce are not clearly settled, our ability to rely upon exemptions or defenses under copyright law is uncertain. Several telecommunications carriers are seeking to have telecommunications over the Internet regulated by the Federal Communications Commission in the same manner as other telecommunications services. Additionally, local telephone carriers have petitioned the Federal Communications Commission to regulate Internet providers and online service providers in a manner similar to long distance telephone carriers and to impose access fees on these providers. If either of these petitions is granted, the costs of communicating on the Internet could increase substantially. This, in turn, could slow the growth of use of the Internet. Any legislation or regulation of this type could materially adversely affect our business, financial condition and operating results. Technology We have entered, and continue to seek to enter into relationships with technology providers in connection with the development, operation and maintenance of our web site. We rely on Springboard Technology Solutions Inc. for the design, development, operation and maintenance and hosting of our web site. As part of this relationship, we also have use of Springboard's state of the art data center and its experienced staff of software and e-commerce technology developers. Springboard Technology Solutions Inc. is a Canadian private company incorporated under the Ontario Companies Act. All but one of the shareholders of Springboard own shares in VentureDrive, and the officers and directors of VentureDrive control Springboard. The relationship between VentureDrive and Springboard is governed by a professional services agreement dated February 12, 2000 that sets out the rates for various services. The agreement has a three-year service term, which is cancelable with 60 days written notice prior to the expiry of the agreement. The relationship between Springboard and VentureDrive has meant that VentureDrive has not had to go to the expense of creating its own technical operations group thereby allowing VentureDrive to purchase technical expertise as required and eliminating many fixed costs. Springboard has a number of other clients and is not dependent on VentureDrive for its day-to-day operations or cash flow. In November 2000, VentureDrive moved its head office location to take space in the same building as Springboard which move allows VentureDrive increased access to Springboard's technical expertise. Springboard's technical staff updates the VentureDrive website content at regular intervals and is on call to facilitate VentureDrive's non-technical staff with their requirements for content changes. We believe that Springboard's 23 technical staff will enable us to address specific customer requirements, should they arise, as well as handle custom integration issues which may arise from expansion of the website for additional product and services offerings. Development of the website and use of the various applications embedded within the website is governed by a development and license agreement between Springboard and VentureDrive. The agreement allows VentureDrive to license certain computer applications and code created by Springboard while preserving for VentureDrive the ownership and title to VentureDrive content. In structuring our technology backbone, we ensure that the resulting platform has the following characteristics: Scalability. We require our backbone to be scalable for the rapid deployment of functions, features and content as required to meet the demand while maintaining desired performance standards. In the rapidly changing Internet environment, the ability to update an application to stay current with new technologies is important. Our site system and related technologies allow for the addition, modification or replacement of web site based applications in a cost-efficient and expeditious manner. Reliability and security. We use leading-edge software to protect our web servers. The majority of our hardware and software is maintained by Springboard, which provides us with professional data center hosting facilities and redundant high-speed Internet connectivity. Springboard monitors and supports our systems 24 hours a day, seven days a week. We also are currently developing our own content and web site management tools to facilitate the maintenance and updating of our web site. We must ensure that we do not experience significant or frequent disruptions in access to our web site. Web site failures could result in loss of existing customers and opportunities to garner additional customers. Our business also is highly dependent on our systems to process, on a daily basis, many transactions. We rely heavily on our data processing systems and our telecommunications systems. If any of these systems do not operate properly or are unavailable due to problems with our physical infrastructure, we could suffer disruptions to our business. These disruptions could expose us to liabilities to clients, regulatory interventions or damage to our reputation and the development of our brand name. The need to securely transmit confidential information over the Internet has been a significant issue in e-commerce and communications. We are potentially vulnerable to attempts by unauthorized computer users to penetrate network security. If successful, those individuals could cause serious interruptions in services. We may be required to expend significant capital and resources to protect against the threat of security breaches or to alleviate resulting problems. Despite efforts we make to maintain network security, we may not be successful. If third parties are able to successfully penetrate our network security and misappropriate our customers' information, we could be subject to liability. We could be subject to claims for violation of data protection rights, impersonation or other fraud claims. Any of these claims could result in litigation. Publicized acts of misappropriation of our customers' information would also likely harm our reputation. Employees As of January 31, 2001, we had six full-time employees and one part-time employee/consultant. We also use five independent contractors on a project-to-project basis. In addition, we will have relationships with numerous authorized mentoring partners whose numbers will increase and decrease from quarter to quarter. We consider our relationships with our employees to be good. None of our employees are covered by collective bargaining agreements. 24 Properties Our corporate headquarters are located in approximately 2,500 square feet of space at 2275 Lakeshore Boulevard West, Suite 304, Toronto, Ontario. We lease these premises at a monthly rental of $2,500. Currently all servers utilized in the operation of our website are managed by Springboard and housed at their data center in Toronto. Our server location is monitored 24 hours a day, seven days per week, and connected to multiple, redundant Internet access points and power sources. Management Our directors and executive officers are as follows: Name Age Position Gordon W. Walker 58 Chairman of the Board Peter J. Hamilton 53 President, Chief Executive Officer and Director Brian J. MacDonald 52 Executive Vice President, Chief Financial Officer, Secretary, Treasurer and Director Richard Cuthbert 62 Director Mr. Gordon Walker has been the chairman of the board from the inception of VentureDrive in February 2000. From July, 1998 he has also been a principal of Gordon Walker Consulting Associates. From March 1996 to July 1998, he was VP and Chief Financial Officer of Merritt Corporation. From December, 1991 to March, 1996, Mr. Walker was retired. From 1978 to December, 1991 he was an executive with Imperial Oil Limited where he was the chairman of the Syncrude Finance Committee from 1978 to 1980. Prior to 1978, Mr. Walker was employed by Allstate Insurance Company in its venture capital department. Mr. Walker holds a B.A. in Economics from the University of Toronto, an M.B.A. in Marketing from Northwestern University and an M.B.A. (summa cum laude) in Finance from the University of Chicago. Mr. Peter J. Hamilton has been the president, chief executive officer and a director of VentureDrive since its inception in February, 2000. From January 1, 1999 onward he remains a co-owner with Mr. Brian MacDonald in Springboard Technology Solutions Inc. which company supports the information technology infrastructure of VentureDrive Inc. From December 1995 to December 1998, Mr. Hamilton was the President, CEO and Chairman of Lava Systems Inc., a software distribution company and Toronto Stock Exchange publicly listed company operating in Canada, the United States, the United Kingdom and Australia. Lava Systems was the result of the reacquisition in 1993 of Insight Business Consultants Inc, a company co-founded by Mr. Hamilton in 1984 and sold to SoftKey Software Products in 1989, and the merger of several companies. From 1989 to 1995 Mr. Hamilton was Vice President Operations with SoftKey (later The Learning Company). Mr. Brian J. MacDonald has been the executive vice president, chief financial officer, secretary, treasurer, and a director of VentureDrive since its inception. From January 1, 1999 onward he remains a co-owner with Mr. Peter Hamilton in Springboard Technology Solutions Inc. which company supports the 25 information technology infrastructure of VentureDrive Inc. From June 1995 to December 1998, Mr. MacDonald was the Senior Vice President Corporate Development, and at times also the Chief Financial Officer of Lava Systems Inc., a software distribution company and Toronto Stock Exchange publicly listed company operating in Canada, the United States, the United Kingdom and Australia. Lava Systems was the result of the reacquisition in 1993 of Insight Business Consultants Inc, a company co-founded by Mr. Hamilton in 1984 and sold to SoftKey Software Products in 1989, and the merger of several companies. From 1992 to May, 1995 Mr. MacDonald was the Assistant Vice President Investment Risk Management of Confederation Life Insurance and was responsible for selling off many of the assets of Confederation Life Insurance through its wind up. Prior to 1992 Mr. MacDonald was employed by ABN Armo Bank from 1989 to 1992, Banque Nationale de Paris from 1984 to 1989 and The Toronto Dominion Bank from 1976 until 1984. Mr. MacDonald holds a Masters of Arts degree in Political Science and Public Policy from the University of British Columbia in Vancouver British Columbia and a Honours Bachelor of Arts (Magna cum Laude) from the University of Alberta, in Edmonton Alberta. Mr. Richard D. Cuthbert has been a director since the inception of VentureDrive in February 2000, however, does not perform in an officer capacity. Mr. Cuthebert is since 1998 has been employed by the Canadian Imperial Bank of Commerce as a Senior Technology Advisor in its knowledge based business finance department. Mr. Cuthebert from 1993 to 1997 was on the Board of Directors of Bridge-it, Tele-Partners, and CdC and on the Management Advisory Board Shamrock Corporation. Mr. Cuthbert was also a Consulting Associate RKA, Pacomm Consulting and Shamrock. From 1991 to 1992 he was the founder and owner/operator of ACCU-TEL (Now Tele-Partners). From 1983 to 1990 he occupied the following positions 1989-1990 Vice-President, Plans and Controls, Unitel Communications 1987-1988 Vice-President, Marketing, CNCP Telecommunications (Now Unitel) 1983-1986 General Manager, Data Services Division CNCP. From 1959 to 1982 he occupied the following positions 1981-1982 Director of Office Automation Planning, Bell Northern Research 1979-1980, Vice-President, Planning Bell Northern Software Research 1976-1979 Marketing Applications Mgr., Texas Instruments Professional Products 1962-1975 Operations Research Manager and Analyst, Xerox, Midwest Research Institute and Technical Operations Inc.1959-1961 Physicist, U.S. Weather Bureau and U.S. Naval Research Lab. Mr. Cuthbert has a M.B.A. from the University of Rochester and an A.B. Physics and Mathematics, from the Catholic University of America. 26 Board of directors and committees Each director will hold office until the next meeting of stockholders or until his successor is duly appointed and qualified. Non-employees directors will be reimbursed for reasonable travel and lodging expenses incurred in attending meetings of the board of directors. They currently do not receive compensation. There are no committees of the board of directors of VentureDrive. Limitation on Directors' Liabilities Our certificate of incorporation limits, to the maximum extent permitted under Delaware law, the personal liability of directors and officers for monetary damages for breach of their fiduciary duties as directors and officers, except in certain circumstances involving certain wrongful acts, such as a breach of the director's duty of loyalty or acts of omission which involve intentional misconduct or a knowing violation of law. Delaware Law permits us to indemnify officers, directors or employees against expenses (including attorney's fees), judgments, fines and amounts paid in settlement in connection with legal proceedings if the officer, director or employee acted in good faith and in a manner he reasonably believed to be in or not opposed to our best interest, and, with respect to any criminal act or proceeding, he had no reasonable cause to believe his conduct was unlawful. Indemnification is not permitted as to any matter as to which the person is adjudged to be liable unless, and only to the extent that, the court in which such action or suit was brought upon application that, despite the adjudication of liability, but 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. Individuals who successfully defend this type of action are entitled to indemnification against expenses reasonably incurred in connection therewith. Our by-laws require us to indemnify directors and officers against, to the fullest extent permitted by law, liability which they may incur under the circumstances described in the preceding paragraph. Executive Compensation VentureDrive has consulting agreements with each of Messrs. Gordon Walker, Peter J. Hamilton and Brian J. MacDonald. Each agreement is for a one-year term ending May 1, 2001, which may be renewed upon mutual agreement of VentureDrive and the executives. Each agreement may be terminated on seven days advance notice. The agreements do not require the consultant to devote a specific amount of time to the affairs of the company. There are no severance arrangements in the event of early termination under the agreements. Each agreement has standard non-competitive, confidentiality and assignment of intellectual property rights provisions to protect VentureDrive. Each agreement provides for an annual fee, the amounts of which are as follows: Mr. Walker: $21,435; Mr. Hamilton: $64,320 and Mr. MacDonald: $64,320. The table below summarizes the compensation for each of the executive officers for the fiscal year ended December 31, 2000 for all his services to us and our subsidiaries. 27 Summary Compensation Table Name and Annual Long-Term Position Fiscal Year Compensation Compensation - ----------- ------------ ------------- ------------- Gordon Walker,1 Chairman of the Board 2000 $ 16,075 -- Peter J. Hamilton1 President, and chief executive officer 2000 46,900 -- Brian J. MacDonald1 Executive vice president, chief financial officer, secretary and treasurer 2000 46,900 -- 1 The salary amount is for the period inception through December 31, 2000. VentureDrive is still in the early stages of its development and will review its compensation arrangements at regular intervals as it achieves its growth and revenue targets. VentureDrive does not currently have an equity based performance plan. However, it intends to implement such a plan, which will include stock options, in the future to provide incentives to attract performance-oriented employees whose interests are in line with those of the stockholders. 28 Principal Stockholders The following table sets forth the beneficial ownership of our common stock by all stockholders that hold 5% or more of the outstanding shares of our common stock, each director and executive officer. Each stockholder named has sole voting and investment power with respect to his or its shares. As of the date of this prospectus, there were shares of common stock issued and outstanding. Number of Percentage Name and Address or Shares Beneficially Before Identity of Group Owned Before Offering Offering - -------------------- --------------------- ----------- Peter J. Hamilton 500,000 13.7% Brian J. MacDonald 500,000 13.7% Andrew Stevenson 400,000 10.9% c/o Dundas St. West Suite 700 Toronto, Ontario, Canada M5T 2Z5 Gordon Walker400,000 10.9% Richard Cutbert 200,000 5.4% 1382108 Ontario Ltd. 200,000 5.4% Unit 4 109 Woodbine Downs Blvd. Etobicole, Ontario, Canada M9W 6Y1 John Vandyk 200,000 5.4% 2377 Prince John Blvd. Mississauga, Ontario, Canada L5K 2J2 The Rider Group, Inc. 400,000 10.9% 370 King Street West, Suite 700 Toronto, Ontario, Canada M5V 1J9 All officers and directors 1,600,000 43.8% as a group (6 persons) The address for each specified person, if not included under each person's name, is care of VentureDrive, Inc., 2275 Lakeshore Boulevard West, Suite 304,Toronto, Ontario, Canada M8V 3Y3. A person is deemed to beneficially own voting securities that can be acquired by that person with 60 days from the date of this prospectus upon the 29 exercise of options. Each beneficial owner's percentage ownership is determined by assuming that the options held by that person, but not those held by any other person, and which are exercisable within 60 days of the date of this prospectus have been exercised. Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. Certain Transactions During the period ending June 30, 2000, VentureDrive, through its subsidiary, paid the officers and directors of VentureDrive or Springboard Technology Solutions Inc., a company controlled by such officers and directors, an aggregate sum of $208,641. This amount was for consulting expenses, promotion expenses, system support expenses and acquisition of an Internet portal system. For the three months ending September 30, 2000, the same subsidiary paid the officers and directors of VentureDrive or Springboard an aggregate sum of $106,375. This amount was for consulting expenses, promotion expenses, promotion expenses, system support expenses and acquisition of computer equipment. Description of Securities General Our authorized capital stock consists of 20,000,000 shares of common stock, $.001 par value per share, and 2,000,000 shares of preferred stock, $.001 par value per share. Upon consummation of this offering, there will be outstanding 5,653,000 shares of common stock and no shares of preferred stock. Common stock Holders of common stock are entitled to receive dividends as may be declared by our board of directors from funds legally available for these dividends. Upon liquidation, holders of shares of common stock are entitled to a pro rata share in any distribution available to holders of common stock. The holders of common stock have one vote per share on each matter to be voted on by stockholders, but are not entitled to vote cumulatively. Holders of common stock have no preemptive rights or conversion rights. All of the outstanding shares of common stock are, and all of the shares of common stock to be issued in connection with this offering will be, validly issued, fully paid and non-assessable. Prior to this offering, there has been no public market for our shares. Our common stock is not approved for listing on any trading medium or exchange. After the offering, we plan to take such action as may permit a broker-dealer to apply for quotation of the common stock on the Over-the-Counter Bulletin Board. The OTC BB is a broker driven market. VentureDrive is not able to make an application for listing itself on that market. Therefore, it is dependant on an application being made and market quotes being supplied by a broker-dealer. If no broker-dealer takes action in respect of the common stock, there will be no trading on that market. Prior to any listing on the OTC BB, we anticipate there may be trading of the common stock on the "pink sheets." Even if there is a quote for the common stock, there can be no assurance that an active market will develop. If an active trading market is not developed or maintained, the liquidity and trading price of our common stock could be adversely affected. The per-share price in this offering was determined by the management of VentureDrive. It may bear no relationship to the price at which the shares will trade upon completion of this offering. It also is not indicative of the future market performance of our common stock. 30 Preferred stock We are authorized to issue preferred stock, which may be issue from time to time in one or more series upon authorization by the board of directors. The board of directors, without further approval of the stockholders, is authorized to fix the dividend rights, voting rights redemption rights and any other rights, preferences, privileges and restrictions applicable to each series of preferred stock. The issuance of preferred stock while providing flexibility in connection with possible acquisitions and other corporate purposes, could, among other things, adversely affect the voting position of the holders of common stock and, in some cases, make it more difficult for a third party to gain control of VentureDrive, discourage bids for our common stock at a premium or otherwise adversely affect the market price of the common stock. Anti-takeover provisions in our charter documents Provisions in our certificate of incorporation and bylaws may have the effect of delaying or preventing a change of control or change in our management that a stockholder might consider favorable. These provisions include: o the ability of the board of directors to issue series of preferred stock without stockholder approval; o the inability of stockholders to call a special meeting of the stockholders; o written consent action by the stockholders may be taken only if all the stockholders give their written consent within 60 days of each other; and o the requirement that stockholders proposals and nominations of directors by stockholders be made in advance to the board of directors with not less than 70 days notice prior to the date of the stockholders meeting. Because VentureDrive is incorporated in Delaware, we are subject to the provisions of Section 203 of the Delaware General Corporation Law. These provisions prohibit some stockholders, including those owning 15% or more of the outstanding voting stock, from consummating a merger or combination with a corporation unless: o 66 2/3 of the shares of voting stock not owned by the significant stockholder approve the merger or combination, or o the board of directors approves the merger or combination or the transaction which resulted in the significant stockholder owning 15% or more of our voting stock. Transfer Agent The transfer agent and registrar for common stock is {Olde Monmouth Stock Transfer Co. Inc., 77 Memorial Parkway, Suite 101, Atlantic Highlands, New Jersey, 07716}. Shares Eligible for Future Sale Immediately after the completion of this offering, we will have 5,653,750 shares of common stock outstanding. All shares sold in the offering will be freely tradeable without restriction under the Securities Act of 1933. There will be 3,653,750shares of restricted securities as defined in Rule 144 under the Securities Act and are currently subject to the restrictions of Rule 144. 31 Under Rule 144, a person, or persons whose shares are aggregated, who has beneficially owned restricted securities for at least one year, including the holding period of any prior owner except an affiliate, would be generally entitled to sell within any three month period a number of shares that does not exceed the greater of 1% of the number of then outstanding shares of the common stock or the average weekly trading volume of the common stock in the public market during the four calendar weeks preceding the sale. Sales under Rule 144 are also subject to manner of sale provisions, notice requirements and the availability of current public information about the company. Any person (or persons whose shares are aggregated) who is not deemed to have been an affiliate of the company at any time during the three months preceding a sale, and who has beneficially owned shares for at least two years including any period of ownership of preceding nonaffiliated holders, would be entitled to sell shares under Rule 144(k) without regard to the volume limitations, manner-of-sale provisions, public information requirements or notice requirements. Plan of Distribution The shares in this offering will be sold by the efforts of the officers of VentureDrive. None of these persons will receive a commission from the sale of any shares. These persons will not register as broker-dealers pursuant to Section 15 of the Securities and Exchange Act of 1934 in reliance upon Rule 3a4-1, which sets forth those conditions under which a person associated with an issuer may participate in the offering of the issuer's securities and not be deemed to be a broker-dealer. These conditions included the following. 1. None of the selling persons are subject to a statutory disqualification, as that term is defined in Section 3(a)(39) of the Exchange Act, at the time of participation. 2. None of such persons are compensated in connection with his participation by the payment of commissions or other remuneration based either directly or indirectly on transactions in securities. 3. None of the selling persons are, at the time of participation, an associated person of a broker-dealer. 4. All of the selling persons meet the conditions of paragraph (a)(4) (ii) of Rule 3a4-1 of the Exchange Act, in that they (A) primarily perform or are intending primarily to perform at the end of the offering, substantial duties for or on behalf of the issuer otherwise than in connection with transactions in securities, and (B) are not a broker or dealer, or an associated person of a broker or dealer, within the preceding twelve months, and (C) do not participate in selling and offering of securities for any issuer more than once every twelve months other than in reliance on this rule. Since the offering is self-underwritten, we intend to advertise and hold investment meetings in various states where the offering will be registered and will distribute this prospectus to potential investors at the meetings and to persons with whom management is acquainted who are interested in VentureDrive and a possible investment in the offering. We are offering the shares subject to prior sale and subject to approval of certain matters by our legal counsel. This offering will commence on the date of this prospectus and continue for a period of nine months, unless we sell all the shares prior to that final date. We may terminate this offering at any time, for any reason; thus not selling any or all of the shares offered. There is no minimum number of shares that we are required to sell. 32 Procedure of Subscription If you decide to subscribe for shares in this offering, you will be required to execute a subscription agreement and tender it, together with a check or wired funds to us, for acceptance or rejection. All checks should be made payable to VentureDrive, Inc. A copy of this agreement will accompany a prospectus or may be obtained from us by persons who have received a prospectus and requested the agreement. We have the right to accept or reject subscriptions in whole or in part, for any reason or for no reason. All monies from rejected subscriptions will be returned immediately by us to the subscriber, without interest or deductions. Subscriptions for securities will be accepted or rejected promptly. Once accepted, the funds will be deposited in an account maintained by VentureDrive and considered property of VentureDrive once cleared by our bank. Subscription funds will not be deposited in an escrow account. Certificates for the shares purchased will be issued and distributed by our transfer agent, within ten business days after a subscription is accepted and "good funds" are received in our account. Certificates will be sent to the address supplied in the investor subscription agreement by regular mail. Legal Matters Graubard Mollen & Miller, will opine as to the validity of the common stock offered by this prospectus and legal matters for us. Experts Our financial statements have been included in the registration statement in reliance upon the report of Simon Krowitz Bolin & Associates, P.A., independent certified public accountants, appearing in the registration statement, and upon the authority of this firm as experts in accounting and auditing. Where You Can Find Additional Information We intend to furnish our stockholders with annual reports, which will include financial statements audited by our independent accountants, and all other periodic reports as we may determine to furnish or as may be required by law, including Sections 13(a) and 15(d) of the Exchange Act. We have filed with the SEC a registration statement on Form SB-2 under the Securities Act with respect to the securities offered by this prospectus. This prospectus does not contain all the information set forth in the registration statement and the accompanying exhibits, as permitted by the rules and regulations of the SEC. For further information, please see the registration statement and accompanying exhibits. Statements contained in this prospectus regarding any contract or other document which has been filed as an exhibit to the registration statement are qualified in their entirety by reference to these exhibits for a complete statement of their terms and conditions. The registration statement and the accompanying exhibits may be inspected without charge at the offices of the SEC and copies may be obtained from the SEC's principal office at 450 Fifth Street, N.W., Washington, D.C. 20549 or at of its regional offices located at 7 World Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, upon payment of the fees prescribed by the SEC. Electronic reports and other information filed through the Electronic Data Gathering, Analysis, and Retrieval System, known as EDGAR, are publicly available on the SEC's website, http://www.sec.gov. 33 Index to Financial Statements of VentureDrive, Inc. Report of Independent Certified Public Accountants.................................................... F-2 Financial Statements: Consolidated Balance Sheets................................... F-3 Consolidated Statements of Operations And (Deficit Accumulated During Development Stages)....................................... F-4 Consolidated Statement of Stockholders' Equity................ F-5 Consolidated Statements of Cash Flows......................... F-6 Notes to Consolidated Financial Statements.................... F-7 F-1 SIMON KROWITZ BOLIN & ASSOCIATES, P.A. 11300 ROCKVILLE PIKE, SUITE 800 ROCKVILLE, MARYLAND 20852 Independent Auditors' Report To the Board of Directors and Stockholders VentureDrive, Inc. We have audited the accompanying consolidated balance sheet of VentureDrive, Inc. and Subsidiary (a development stage company) as of June 30, 2000 and the related consolidated statements of operations and deficit accumulated during development stage, consolidated statement of stockholders' equity and cash flows for the period February 12, 2000 (inception) to June 30, 2000. These consolidated statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit. We did not audit the financial statements of VentureDrive.com, which statements reflect total assets of $160,471 as of June 30, 2000, and total revenues of $1,761 for the period February 12, 2000 (inception) to June 30, 2000. Those statements were audited by other auditors whose report has been furnished to us, and our opinion, insofar as it relates to the amounts included for VentureDrive.com is based solely on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the combined financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit and the report of other auditors provide a reasonable basis for our opinion. In our opinion, based on our audit and the report of other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of VentureDrive and Subsidiary (a development stage company) as of June 30, 2000 and the results of their operations and their cash flows for the period ended in conformity with accounting principles generally accepted in the United States of America. /s/ Simon Krowitz Bolin & Associates, P.A. December 5, 2000 F - 2 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED BALANCE SHEET ================================================================================ September 30, June 2000 30, 2000 (Unaudited) ---------- ------------ ASSETS Current Assets Cash $ 272,346 $ 129,914 Accounts Receivable 17,522 25,382 ---------- ------------ Total Current Assets 289,868 155,296 ---------- ------------ Property and Equipment Office Furniture and Equipment 1,260 1,246 Computer Equipment 0 10,452 Internet Portal System 141,624 140,007 Accumulated Depreciation and Amortization (3,109) (12,338) ---------- ------------ Net Property and Equipment 139,775 139,367 ---------- ------------ TOTAL ASSETS $ 429,643 $ 294,663 ========== ============ LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts Payable $ 131,241 $ 58,795 ---------- ------------ Total Liabilities 131,241 58,975 ---------- ------------ Stockholders' Equity Common Stock - Authorized 20,000,000 Shares $.001 Par Value; 3,528,750 and 3,225,000 Issued and Outstanding 2,177 2,381 Additional Paid in Capital 442,276 544,288 (Deficit) Accumulated During Development Stage (150,501) (311,964) Translation Adjustment 4,450 1,163 ---------- ------------ Total Stockholders' Equity 298,402 235,868 ---------- ------------ TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 429,643 $ 294,663 ========== =========== F - 3 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE ================================================================================ February 12, 2000 (inception) to February 12, July 1, September 30, 2000 2000, to 2000 (inception) September 30, September 30, to June 30, 2000 2000 2000 (Unaudited) (Unaudited) ----------- ----------- ------------- REVENUE Sales $ 1,761 $ 1,584 $ 3,345 ----------- ----------- ----------- EXPENSES Consulting 47,772 53,580 101,352 Office 30,034 20,143 50,177 Promotion 24,948 21,946 46,894 Professional Fees 24,976 20,342 45,318 Internet Systems Support 11,142 27,938 39,080 Business Partners' Support 10,244 11,058 21,302 Depreciation and Amortization 3,146 9,327 12,473 ----------- ----------- ----------- TOTAL EXPENSES 152,262 164,334 316,596 OTHER INCOME Interest Income 0 1,287 1,287 ----------- ----------- ----------- NET (LOSS) $ (150,501) $ (161,463) $ (311,964) =========== =========== =========== EARNING PER COMMON SHARE - BASIC $ (.06) $ (.05) $ (.11) WEIGHTED AVERAGE SHARES - BASIC 2,319,700 3,485,688 2,758,013 F - 4
VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY ================================================================================================================================== Acumulated Additional Other Par Paid-In Accumulated Comprehensive Shares Value Capital (Deficit) Income/(Expense) Total - -------------------------------- ----------- ------------ ------------ ------------- --------------- ------------ Balance - February 12, 2000 (inception) Sale of Stock 3,115,000 $ 2,102 $ 405,044 $ $ $ 407,146 Stock Issued for Professional Fees 10,000 7 3,385 3,392 Stock Issued for Partial Payment on Internet 100,000 68 33,847 33,915 Comprehensive Loss: Net Loss (150,501) (150,501) Other Comprehensive Income/(Expense): Translation Adjustment 4,450 4,450 ---------- ---------- ---------- ---------- ---------- ---------- Total Comprehensive Loss (146,051) ---------- ---------- ---------- ---------- ---------- ---------- Balance - June 30, 2000 3,225,000 2,177 442,276 (150,501) 4,450 298,402 Sale of Stock 280,000 189 94,057 94,246 Stock Issued for Professional Fees 23,750 15 7,955 7,970 Comprehensive Loss: Net Loss (161,463) (161,463) Other Comprehensive Income/(Expense): Translation Adjustment (3,287) (3,287) ---------- ---------- ---------- ---------- ---------- ---------- Total Comprehensive Loss (164,750) ---------- ---------- ---------- ---------- ---------- ---------- Balance - September 30, 2000 (Unaudited) 3,528,750 $ 2,381 $ 544,288 $ (311,964) $ 1,163 $ 235,868 ---------- ---------- ---------- ---------- ---------- ----------
F - 5
VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) CONSOLIDATED STATEMENTS OF CASH FLOWS ==================================================================================================================== February 12, 2000 (Inception) to February 12, July 1, 2000 to September 30, 2000 (Inception) September 30, 2000 (Unaudited) to June 30, 2000 2000 (Unaudited) ------------------ ----------------- ------------------- CASH FLOWS FROM OPERATING ACTIVITIES Net Loss $ (150,501) $ (161,463) $ (311,964) Adjustments to Reconcile Net Loss to Net Cash Provided by Operating Activities: Depreciation and Amortization 3,146 9,327 12,473 Stock Issuance in Exchange for Professional Services and Internet Portal System 3,753 7,971 11,724 (Increase) in Accounts Receivable (17,522) (7,860) (25,382) Increase/(Decrease) in Accounts Payable 131,242 (72,447) 58,794 ------------------ ----------------- ------------------- NET CASH (USED) PROVIDED BY OPERATING ACTIVITIES (29,883) (224,472) (254,355) ------------------ ----------------- ------------------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Office Furniture and Equipment (1,260) 0 (1,260) Purchase of Internet Portal System (141,624) 0 (141,624) Purchase of Computer Equipment 0 (10,452) (10,452) ------------------ ----------------- ------------------- NET CASH (USED) BY INVESTING ACTIVITIES (142,884) (10,452) (153,336) ------------------ ----------------- ------------------- CASH FLOWS FROM BY FINANCING ACTIVITIES Sale of Common Stock 440,700 94,245 534,945 ------------------ ----------------- ------------------- EFFECT OF EXCHANGE RATE ON CASH 4,413 (1,753) 2,660 ------------------ ----------------- ------------------- NET INCREASE (DECREASE) IN CASH 272,346 (142,432) 129,914 CASH - Beginning 0 272,346 0 ------------------ ----------------- ------------------- CASH - Ending $ 272,346 $ 129,914 $ 129,914 ================== ================= ===================
F - 6 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 and September 30, 2000 (Unaudited) =============================================================================== NOTE 1 - BUSINESS ACTIVITIES VentureDrive, Inc. (the Company) was formed in April, 2000 as a Delaware corporation and is a Company in the development stage. Prior to April 2000 the founding shareholders of the company formed a Canadian company in February 2000 which company was combined with the Delaware company in May 2000. The Company operates a venture accelerator network through local communities of entrepreneurs, investors, mentors and service providers that enable entrepreneurs and investors to leverage an internet based system to accelerate the development and financing of early stage enterprises. The Company helps entrepreneurs develop investment proposals that meet investors criteria. In the process both entrepreneurs and investors obtain access to each other and improve the chances of obtaining financing, development funds and increased selection of transactions for investors. The above services are provided through the Company's wholly owned subsidiary, VentureDrive.com, Inc. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES Principles of Consolidation - The accompanying consolidated financial statements include the accounts of VentureDrive, Inc. and its wholly owned subsidiary, VentureDrive.com, Inc. All significant intercompany transactions have been eliminated in consolidation. Use of Estimates - The preparation of financial statements in conformity with generally accepted accounting principles required management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results may differ from those estimates. Foreign Currency Translation - For international operations, local currency is considered the functional currency. We translated assets and liabilities to their U.S. dollar equivalents at rates in effect at the combined balance sheet date and contributed capital at their historical rate. Translation adjustments are recorded in Stockholders' Equity. We translate combined statement of operations and accumulated deficit at average rates for the period. Cash Equivalents - The Company considers securities with maturities of three months or less, when purchased, to be cash equivalents. Accounts Receivable - The Company considers accounts receivable to be fully collectible; accordingly, no allowance for doubtful accounts is required. If amounts become uncollectible, they will be charged to operations when that determination is made. F - 7 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 and September 30, 2000 (Unaudited) ================================================================================ NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (Continued) Property and Equipment - Property and equipment is stated at cost. Depreciation and amortization is calculated using the straight-line method over the estimated useful lives of the respective assets as follows: Office Furniture and Equipment 4 Years Computer Equipment 3 Years Internet Portal System 48 Months NOTE 3 - POOLING-OF-INTEREST MERGER On May 1, 2000, VentureDrive, Inc. (the "Company") merged with VentureDrive.com, Inc. Each share of VentureDrive.com common stock was converted into one share of VentureDrive common stock. VentureDrive issued 2,110,000 shares in exchange for all of the outstanding shares of VentureDrive.com. The merger was accounted for as pooling of interest under Accounting Principles Board Opinion No. 16 and accordingly, VentureDrive's consolidated financial statements have been restated for all periods prior to the merger to include the results of operations; financial position and cash flows of VentureDrive.com as though it had always been a part of VentureDrive. Intercompany transactions from February 12, 2000 (inception) to September 30, 2000 have been eliminated. The results of operations for the separate companies and the combined amounts presented in the consolidated financial statements are as follows: February 12, 2000 (inception) to April 30, 2000 --------------- REVENUES VentureDrive $ 0 VentureDrive.com 0 ------------ COMBINED $ 0 ------------ NET (LOSS) VentureDrive $ 0 VentureDrive.com (61,195) ------------ COMBINED $ (61,195) ------------ F - 8 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 and September 30, 2000 (Unaudited) ================================================================================ NOTE 4 - CONCENTRATION OF CREDIT RISK The Company maintains cash balances at one Canadian chartered bank in Toronto, Ontario. The Canada Deposit Insurance Corporation (CDIC) insures checking accounts and deposits held in savings accounts or in term deposits with a maturity date not exceeding five years, payable in Canadian currency to a maximum of $60,000 of funds at member banks. U.S. currency accounts kept in Canada are not insured by CDIC. Cash exceeded the insured amount by: September 30, 2000 June 30, (Unaudited) 2000 ---------- --------- VentureDrive, Inc. - Canadian Dollar Accounts $123,341 $347,430 VentureDrive.com, Inc. - U.S. Dollar Account 1,390 1,549 NOTE 5 - EARNINGS PER COMMON SHARE Basic earnings per common share was calculated by dividing net loss by the weighted average number of common shares outstanding during the period. NOTE 6 - COMPREHENSIVE INCOME VentureDrive has adopted SFAS No. 130, Reporting Comprehensive Income. SFAS No. 130 requires new standards for reporting and displaying foreign translation adjustments that VentureDrive has displayed in its Combined Statements of Changes in Shareowners' Equity. However, it does not affect net income or total shareowners' equity. Translation Adjustment Balance February 12, 2000 (Inception) $ 0 Period Change 4,450 ------- Balance June 30, 2000 4,450 Period Change (3,287) -------- Balance September 30, 2000 $1,163 ======== NOTE 7 - INCOME TAXES No provision for income taxes is required, as the Company has incurred losses during its development stage. These losses are available to offset taxable years in the future. The losses expire from 2007 until 2020. F - 9 VENTUREDRIVE, INC. AND SUBSIDIARY (A development stage company) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS June 30, 2000 and September 30, 2000 (Unaudited) ================================================================================ NOTE 8 - RELATED PARTY TRANSACTIONS During the period, the subsidiary entered into the following transactions with some of the shareholders of VentureDrive, Inc. who are also officers and directors of the subsidiary, or with another company controlled by some of them: September 30, 2000 June 30, 2000 (Unaudited) ------------- ------------ Consulting Expense $ 47,772 $ 53,580 Promotion Expense 11,056 14,421 System Support Expense 8,189 27,922 Acquisition of Internet Portal System 141,624 0 Acquisition of Computer Equipment 0 10,452 F - 10 [back cover page] You should rely only on the information contained in this prospectus. This prospectus is not an offer to sell nor is it seeking an offer to buy these securities in any jurisdiction where the offer or sale is not permitted. The information contained in this prospectus is correct only as of the date of this prospectus, regardless of the time of the delivery of this prospectus or any sale of these securities. VentureDrive, Inc. PART TWO INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 24. INDEMNIFICATION OF DIRECTORS AND OFFICERS. The laws of the Delaware permit the indemnification of directors, employees, officers and agents of Delaware corporations. Our articles of incorporation and bylaws provide that we shall indemnify to the fullest extent permitted by Delaware law any person whom we indemnify under that law. The provisions of Delaware law that authorize indemnification do not eliminate the duty of care of a director. In appropriate circumstances, equitable remedies such as injunctive or other forms of non-monetary relief will remain available. In addition, each director will continue to be subject to liability for (a) violations of criminal laws, unless the director has reasonable cause to believe that his conduct was lawful or had no reasonable cause to believe his conduct was unlawful, (b) deriving an improper personal benefit from a transaction, (c) voting for or assenting to an unlawful distribution and (d) willful misconduct or conscious disregard for our best interests in a proceeding by or in our right to procure a judgment in its favor or in a proceeding by or in the right of a stockholder. The statute does not affect a director's responsibilities under any other law, such as the federal securities laws. The effect of the foregoing is to require us to indemnify our officers and directors for any claim arising against such persons in their official capacities if such person acted in good faith and in a manner that he or she reasonably believed to be in or not contrary to the best interests of the corporation, and, with respect to any criminal action or proceeding, had no reasonable cause to believe his or her conduct was unlawful. To the extent that we indemnify our management for liabilities arising under securities laws, we have been informed by the SEC that this indemnification is against public policy and is therefore unenforceable. ITEM 25. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION. The estimated expenses payable by us in connection with the distribution of the securities being registered are as follows: SEC Registration and Filing Fee............................. $ 500.00 Legal Fees and Expenses..................................... 30,000.00 Accounting Fees and Expenses................................ 20,000.00 Financial Printing and Engraving............................ 5,000.00 Blue Sky Fees and Expenses.................................. 10,000.00 Miscellaneous............................................... 9,500.00 TOTAL.......................................... 75,000.00 II-1 ITEM 26. RECENT SALES OF UNREGISTERED SECURITIES 1. On February 11, 2000 and March 9, 2000 the registrant issued to five persons an aggregate of 2,000,000 shares of common stock as founder shares. The exemption under United States federal securities laws for the issuance was Section 4(2) of the Securities Act of 1933. The total consideration paid was $67,000. 2. On April 3, 2000, the registrant issued to two persons as a service providers 100,000 shares of common stock for an assigned value of $33,847. The exemption for the issuance was section 4(2) of the Securities Act of 1933. 3. On April 3, 2000, the registrant issued to a landlord 10,000 shares common stock as partial payment for rent due in the amount of $3,385. The exemption for the issuance was Section 4(2) of the Securities Act of 1933. 4. During the period June - August 2000, the registrant conducted a private placement. In connection with the private placement, the registrant sold 1,520,000 shares of common stock for gross proceeds of $510,000. There were fifteen purchasers, none of whom is a resident of the United States. Each purchaser was determined to be either an accredited investor or sophisticated investor under United States securities law and an exempted purchaser under the laws of the jurisdiction in which the purchaser resides or is an entity. The proceeds of the offering have been used for working capital. In connection with this offering, the registrant issued 23,750 shares of common stock to an individual as a commission. The value assigned to these shares was $7,955. The recipient of the shares was determined to be a sophisticated investor. The exemption for the issuance of these shares by the registrant was Section 4(2) of the Securities Act of 1933. ITEM 27. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES. Exhibit No. Description of Document ----------- ------------------------ 3.1 Certificate of Incorporation of VentureDrive, Inc. 3.2 Bylaws of VentureDrive, Inc. 4.1 Specimen Common Stock Certificate* 5.1 Opinion of Graubard Mollen & Miller* 10.1 Professional Service Agreement between Springboard Technologies Solutions Inc. and the Registrant 10.2 Development and License Agreement between Springboard Technology Solutions Inc. and Registrant 10.3 Consulting Agreement between Registrant and Gordon Walker 10.4 Consulting Agreement between Registrant and Peter J. Hamilton 10.5 Consulting Agreement between Registrant and Brian J. MacDonald 23.1 Consent of Simon Krowitz Bolin & Associates, P.A. 23.2 Consent of Graubard Mollen & Miller (Contained in Exhibit 5.1)* II-2 24.1 Powers of Attorney (included on signature page) - ---------------------- *To be filed by amendment ITEM 28. UNDERTAKINGS The undersigned issuer undertakes: (a) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement to: (1) include any prospectus required by section 10(a)(3) of the Securities Act; (2) reflect in the prospectus any facts or events arising after the effective date of the registration statement; (3) include any additional or changed material information regarding the plan of distribution; (4) for determining liability under the Securities Act, we will treat each post-effective amendment as a new registration statement of the securities offered, and the offering of the securities at that time shall be deemed to be the initial bona fide offering; and (5) file a post-effective amendment to remove from registration any of the securities that remain unsold at the end of the offering. (b) As indemnification for liability arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant under the above 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 unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment of expenses incurred or paid by a director, officer or controlling person in the successful defense of any action, suit or proceeding) is asserted by any director, officer or controlling person 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. (c) We undertake: (1) For the purpose of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of prospectus filed by us under Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective. (2) 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 in the prospectus and the offering of such securities at that time shall be deemed to be the initial bona fide offering of the securities. II-3 Signatures Pursuant to the requirements of the Securities Act of 1933, as amended, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form SB-2 and authorized this registration statement to be signed on its behalf by the undersigned, hereunto duly authorized, in Toronto, Ontario on February 9, 2001. VENTUREDRIVE, INC. By: /s/ Peter J. Hamilton Peter J. Hamilton President and Chief Executive Officer (Principal Executive Officer) KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below constitutes and appoints Brian J. MacDonald and Peter J. Hamilton, and each of them, with full power to act without the other, such person's true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign this Registration Statement, any and all amendments thereto (including post-effective amendments), any subsequent Registration Statements pursuant to Rule 462 of the Securities Act of 1933, as amended, and any amendments thereto and to file the same, with exhibits and schedules thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing necessary or desirable to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Form SB-2 registration statement has been signed by the following persons in the capacities and on the dates indicated. SIGNATURE TITLE DATE - --------- ----- ---- - ----------------- Chairman of the Board ___________, 2001 Gordon W. Walker /s/ Peter J. Hamilton President, Chief February 9, 2001 - --------------------- Executive Officer Peter J. Hamilton and Director /s/ Brian J. MacDonald Chief Financial Officer, February 9, 2001 - ---------------------- Executive Vice President, Brian J. MacDonald Secretary, Treasurer and Director (Principal Financial Officer and Principal Accounting Officer) /s/ Richard Cuthbert Director February 9, 2001 - -------------------- Richard Cuthbert II-4 Exhibit Index Exhibit No. Description of Document ----------- ------------------------ 3.1 Certificate of Incorporation of VentureDrive, Inc. 3.2 Bylaws of VentureDrive, Inc. 4.1 Specimen Common Stock Certificate* 5.1 Opinion of Graubard Mollen & Miller* 10.1 Professional Service Agreement between Springboard Technologies Solutions Inc. and the Registrant 10.2 Development and License Agreement between Springboard Technology Solutions Inc. and Registrant 10.3 Consulting Agreement between Registrant and Gordon Walker 10.4 Consulting Agreement between Registrant and Peter J. Hamilton 10.5 Consulting Agreement between Registrant and Brian J. MacDonald 23.1 Consent of Simon Krowitz Bolin & Associates, P.A. 23.2 Consent of Graubard Mollen & Miller (Contained in Exhibit 5.1)* 24.1 Powers of Attorney (included on signature page) - ---------------------- *To be filed by amendment EX-3.1 2 0002.txt CERTIFICATE OF INCORPORATION CERTIFICATE OF INCORPORATION OF VentureDrive, Inc. The undersigned, being of legal age, in order to form a corporation under and pursuant to the laws of the State of Delaware, does hereby set forth, as follows: FIRST: The name of the corporation (herein referred to as the "Corporation") is: VentureDrive, Inc. SECOND: The address of the registered office of the Corporation in the State of Delaware is c/o National Corporate Research, Ltd., 9 East Loockerman Street, County of Kent, Dover, Delaware 19901. The name of the Corporation's registered agent at such address is National Corporate Research, Ltd. THIRD: The purposes of the Corporation are to engage in, promote, conduct, and carry on any lawful acts or activities for which corporations may be organized under the General Corporation Law of the State of Delaware. FOURTH: The total number of shares of stock that the Corporation is authorized to issue is Twenty-two million (22,000,000), consisting of twenty million (20,000,000) shares of Common Stock, par value $.001 per share, and two million (2,000,000) shares of Preferred Stock, par value $.001 per share. The Board of Directors is expressly granted authority to issue shares of the Preferred Stock, in one or more series, and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series. The Board of Directors is further granted authority to change and amend, without the consent of the holders of the Corporation's outstanding Common Stock, the voting powers, designations, preferences and relative, participating, optional or other special rights and the qualifications, limitations or restrictions of any outstanding series of the Preferred Stock in any manner as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for such change and amendment. No holder of shares Common Stock of the Corporation shall have any preferential or preemptive right to subscribe for, purchase, or receive any shares of stock of the Corporation of any class, now or hereafter authorized, or any options or warrants for such shares, or any rights to subscribe to or purchase such shares, or any securities convertible into or exchangeable for shares of Common Stock, which may at any time or from time to time be issued, sold, or offered for sale by the Corporation. FIFTH: The name and mailing address of the sole incorporator are: Andrew D. Hudders, Graubard Mollen & Miller, 600 Third Avenue, 32nd Floor, New York, New York 10016. SIXTH: The Corporation is to have perpetual existence. SEVENTH: The private property or assets of the stockholders of the Corporation shall not to any extent whatsoever be subject to the payment of the debts of the Corporation. EIGHTH: Elections of directors need not be by written ballot unless otherwise provided in the By-laws of the Corporation. NINTH: The number of directors of the Corporation shall be such number as from time to time shall be fixed by, or in the manner provided in, the By-laws of the Corporation. None of the directors need be a stockholder or a resident of the State of Delaware. TENTH: The books of the Corporation may be kept outside the State of Delaware at such place or places as may be designated from time to time by the Board of Directors or in the By-laws of the Corporation, subject to any provision contained in the statutes. ELEVENTH: Any action required by law or by the Certificate of Incorporation or Bylaws of the Corporation to be taken at a meeting of the stockholders of the Corporation or any other action which may be taken at a meeting of the stockholders, may be taken without a meeting if a written consent setting forth the action so taken, shall be signed by all the stockholders entitled to vote on the action to be taken. TWELFTH: Special meetings of the stockholders of the Corporation for any purpose or purposes may be called at any time by a majority of all the members of the board of directors or the president of the Corporation. Special meetings of the stockholders of the Corporation may not be called by any other person or persons. THIRTEENTH: At an annual meeting of stockholders, only such business shall be conducted, and only such proposals shall be acted upon, as shall have been brought before the annual meeting (a) by, or at the direction of, a majority of the directors, or (b) by any shareholder of the Corporation who complies with the notice procedures set forth in this Article Thirteenth. For a proposal to be properly brought before an annual meeting by a shareholder, the shareholder must have given timely notice thereof in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than 70 days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided, however, that if less than 70 days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the shareholder to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. A shareholder's notice to the Secretary shall set forth as to each matter the shareholder proposes to bring before the annual meeting (a) a brief description of the proposal desired to be brought before the annual meeting and the reasons for conducting such business at the annual meeting, (b) the name and address, as they appear on the Corporation's books, or the shareholder proposing such business and any other stockholders known by such shareholder to be supporting such proposal, (c) the class and number of shares of the Corporation's stock which are beneficially owned by the shareholder on the date of such shareholder notice and by any other stockholders known by such shareholder to be supporting such proposal on the date of such shareholder notice, and (d) any financial interest of the shareholder in such proposal and by any other stockholders known by such shareholder to be supporting such proposal. The presiding officer of the annual meeting shall determine and declare at the annual meeting whether the shareholder proposal was made in accordance with the terms of this Article Thirteenth. If the presiding officer 2 determines that a shareholder proposal was not made in accordance with the terms of this Article Thirteenth, he or she shall so declare at the annual meeting and any such proposal shall not be acted upon at the annual meeting. This provision shall not prevent the consideration and approval or disapproval at the annual meeting of reports of officers, directors and committees of the board of directors, but, in connection with such reports, no new business shall be acted upon at such annual meeting unless stated, filed and received as herein provided. FOURTEENTH: Only persons who are nominated in accordance with the following procedures shall be eligible for election as directors. Nominations of persons for election to the board of directors of the Corporation may be made at a meeting of stockholders by or at the direction of the board of directors, by a nominating committee or person appointed by the board of directors or by any shareholder of the Corporation entitled to vote for the election of directors at the meeting who complies with the notice procedures set forth in this Article Fourteenth. Such nominations, other than those made by or at the direction of the board of directors, shall be made pursuant to timely notice in writing to the Secretary of the Corporation. To be timely, a shareholder's notice must be delivered to, or mailed and received at, the principal executive offices of the Corporation not less than 70 days prior to the scheduled annual meeting, regardless of any postponements, deferrals or adjournments of that meeting to a later date; provided however, that if less than 70 days' notice or prior public disclosure of the date of the scheduled annual meeting is given or made, notice by the shareholder, to be timely, must be so delivered or received not later than the close of business on the tenth day following the earlier of the day on which such notice of the date of the scheduled annual meeting was mailed or the day on which such public disclosure was made. A shareholder's notice to the Secretary shall set forth (a) as to each person whom the shareholder proposes to nominate for election or reelection as a director, (i) the name, age, business address and residence address of the person, (ii) the principal occupation or employment of the person, (iii) the class and number of shares of capital stock of the Corporation which are beneficially owned by the person, and (iv) any other information relating to the person that is required to be disclosed in solicitations for proxies for election of directors pursuant to any rules or regulations under the Securities Exchange Act of 1934, as amended; and (b) as to the shareholder giving the notice (i) the name and address, as they appear on the Corporation's books, of the shareholder, and (ii) the class and number of shares of the Corporation's stock which are beneficially owned by the shareholder on the date of such shareholder notice. The Corporation may require any proposed nominee to furnish such other information as may reasonably be required by the Corporation to determine the eligibility of such proposed nominee to serve as a director of the Corporation. The presiding officer of the annual meting shall determine and declare at the annual meeting whether the nomination was made in accordance with the terms of this Article Fourteenth. If the presiding officer determines that a nomination was not made in accordance with the terms of this Article Fourteenth, he or she shall so declare at the annual meeting and any such defective nomination shall be disregarded. FIFTEENTH: Subject to, and to the fullest extent permitted by, Section 102(b)(7) of the Delaware General Corporation Law, as amended from time to time, no director shall be liable to the Corporation or to any of its stockholders for monetary damages for breach of fiduciary duty as a director, except with respect to (1) a breach of the director's duty of loyalty to the Corporation; (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law; (3) liability under Section 174 of the Delaware General Corporation Law; or (4) a transaction from which the director derived an improper personal benefit. The Corporation shall indemnify any and all of its 3 directors or officers or former directors, or officers or any person who may have served at its request as a director or officer of another corporation in which it owns shares of capital stock or of which it is a creditor, against expenses actually and necessarily incurred by them in connection with the defense of any action, suit or proceeding, civil or criminal, in which they, or any of them, are made parties, or a party, by reason of being or having been directors or officers or a director or officer of the Corporation, or of such other corporation, except in relation to matters as to which any such director or officer or former director or officer or person shall be adjudged in such action, suit or proceeding, civil or criminal, to be liable for any breach of the director's duty of loyalty to the Corporation or its stockholders, for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, under Section 174 of the General Corporation Law of Delaware or for any transaction from which such officer or director derived an improper benefit. Such indemnification shall not be deemed exclusive of any other rights to which those hereby indemnified may be entitled, under any By-law, agreement, vote of stockholders or otherwise. SIXTEENTH: Notwithstanding anything contained in the Certificate of Incorporation to the contrary, the affirmative vote of at least 66-2/3% of the outstanding shares of Common Stock of the Corporation shall be required to amend or repeal Articles Eleven, Twelve, Thirteen, Fourteen and Sixteen of this Certificate of Incorporation or to adopt any provision inconsistent therewith. The undersigned, being the sole incorporator hereinabove named, for the purpose of forming a corporation pursuant to the General Corporation Law of the State of Delaware, does make this Certificate of Incorporation, hereby declaring, affirming, acknowledging, and certifying, under penalties of perjury, that this is the act and deed of the undersigned and that the facts stated herein are true, and accordingly has hereunto set his hand this ___th day of April, 2000. /s/ Andrew D. Hudders ----------------------------------- Andrew D. Hudders, Incorporator 4 EX-3.2 3 0003.txt BY-LAWS BY-LAWS OF VenutureDrive, Inc. ARTICLE I Stockholders Section 1.1 Annual Meetings. An annual meeting of stockholders shall be held for the election of directors at such date, time and place either within or without the State of Delaware as may be designated by the Board of Directors from time to time. Any other proper business may be transacted at the annual meeting. Section 1.2 Special Meetings. As set forth in the Certificate of Incorporation, special meetings of stockholders may be called at any time by the the President or a majority of the members of the Board of Directors, to be held at such date, time and place either within or without the State of Delaware as may be stated in the notice of the meeting. Section 1.3 Notice of Meetings. Whenever stockholders are required or permitted to take any action at a meeting, a written notice of the meeting shall be given which shall state the place, date and hour of the meeting. In the case of a special meeting, the notice shall also state the purpose or purposes for which the meeting is called and no other business shall be transacted at such special meeting. Unless otherwise provided by law, the written notice of any meeting shall be given not less than ten nor more than sixty days before the date of the meeting to each stockholder entitled to vote at such meeting. If mailed, such notice shall be deemed to be given when deposited in the United States mail, postage prepaid, directed to the stockholder at such stockholder's address as it appears on the records of the Corporation. A failure to give or any defect or irregularity in giving the notice for an annual meeting shall not affect or invalidate the proceedings of such annual meeting. Section 1.4 Adjournments. Any meeting of stockholders, annual or special, may adjourn from time to time to reconvene at the same or some other place, and notice need not be given of any such adjourned meeting if the time and place thereof are announced at the meeting at which the adjournment is taken. At the adjourned meeting the Corporation may transact any business which might have been transacted at the original meeting. If the adjournment a new record date is fixed for the adjourned meeting, a notice of the adjourned meeting shall be given to each stockholder of record entitled to vote at the meeting. Section 1.5 Quorum. At each meeting of stockholders, except where otherwise provided by law or the Certificate of Incorporation or these By-laws, the holders of a majority of the outstanding shares of each class of stock entitled to vote at the meeting, present in person or represented by proxy, shall constitute a quorum. For purposes of the foregoing, two or more classes or series of stock shall be considered a single class if the holders thereof are entitled to vote together as a single class at the meeting. In the absence of a quorum, the stockholders so present may, by majority vote, adjourn the meeting from time to time in the manner provided by Section 1.4 of these By-laws until a quorum shall attend. Shares of its own capital stock belonging on the record date for the meeting to the Corporation or to another corporation, if a majority of the shares entitled to vote in the election of directors of such other corporation is held, directly or indirectly, by the Corporation, shall neither be entitled to vote nor be counted for quorum purposes; provided, however, that the foregoing shall not limit the right of the Corporation to vote stock, including but not limited to its own stock, held by it in a fiduciary capacity. Section 1.6 Organization. Meetings of stockholders shall be presided over by the Chairman of the Board or in the absence of the Chairman of the Board, by the President, or in the absence of the President by a Vice President, or in the absence of the foregoing persons by a chairman designated by the Board of Directors, or in the absence of such designation, by a chairman chosen at the meeting. The Secretary shall act as secretary of the meeting, or in the absence of the secretary by an Assistant Secretary, or in their absence the Chairman of the meeting may appoint any person to act as secretary of the meeting. Section 1.7 Voting; Proxies. Unless otherwise provided in the Certificate of Incorporation, each stockholder entitled to vote at any meeting of stockholders shall be entitled to one vote for each share of stock held by such stockholder which has voting power upon the matter in question. Each stockholder entitled to vote at a meeting of stockholders may authorize another person or persons to act for such stockholder by proxy, but no such proxy shall be voted or acted upon after three years from this date, unless the proxy provides for a longer period. A duly executed proxy shall be irrevocable if it states that it is irrevocable and if, and only as long as, it is coupled with an interest sufficient in law to support an irrevocable power. A stockholder may revoke any proxy which is not irrevocable by attending the meeting and voting in person or by filing an instrument in writing revoking the proxy or another duly executed proxy bearing a later date with the Secretary of the Corporation. Voting at meetings of stockholders need not be by written ballot and need not be conducted by inspectors unless the chairman of such meeting shall so determine. At all meetings of stockholders for the election of directors, a plurality of the votes cast shall be sufficient to elect. With respect to other matters, unless otherwise provided by law or by the Certificate of Incorporation or these By-laws, the affirmative vote of the holders of a majority of the shares of all classes of stock present in person or represented by proxy at the meeting and entitled to vote on the subject matter shall be the act of the stockholders. Where a separate vote by class is required, the affirmative vote of the holders of a majority of the shares of each class present in person or represented by proxy at the meeting shall be the act of such class, except as otherwise provided by law or by the Certificate of Incorporation or these By-laws. Section 1.8 Fixing Date for Determination of Stockholders of Record. In order that the Corporation may determine the stockholders entitled to notice of or to vote at any meeting of stockholders or any adjournment thereof, or entitled to receive payment of any dividend or other distribution or allotment of any rights, or entitled to exercise any rights in respect of any change, conversion or exchange of stock or for the purpose of any other lawful action, the Board of Directors may fix, in advance, a record date, which shall not be more than sixty nor less than ten days before the date of such meeting, nor more than sixty days prior to any other action. If no record date is fixed: (1) the record date for determining stockholders entitled to notice of or to vote at a meeting of stockholders shall be at the close of business on the day 2 next preceding the day on which notice is given, or, if notice is waived, at the close of business on the day next preceding the day on which the meeting is held; and (2) the record date for determining stockholders for any other purpose shall be at the close of business on the date on which the Board adopts the resolution relating thereto. A determination of stockholders or record entitled to notice of or to vote at a meeting of stockholders shall apply to any adjournment of the meeting; provided, however, that the Board may fix a new record date for the adjourned meeting. Section 1.9 List of Stockholders Entitled to Vote. The Secretary shall prepare and make, at least ten days before every meeting of stockholders, a complete list of the stockholders entitled to vote at the meeting, arranged in alphabetical order, and showing the address of each stockholder and the number of shares registered in the name of each stockholder. Such list shall be open to the examination of any stockholder, for any purpose germane to the meeting, during ordinary business hours, for a period of at least ten days prior to the meeting, either at a place within the city where the meeting is to be held, which place shall be specified in the notice of the meeting, or, if not so specified, at the place where the meeting is to be held. The list shall also be produced and kept at the meeting, during the whole time thereof, and may be inspected by any stockholder who is present. ARTICLE II Board of Directors Section 2.1 Powers; Number; Qualifications. The business and affairs of the Corporation shall be managed by or under the director of the Board of Directors, except as may be otherwise provided by law or in the Certificate of Incorporation. The Board shall consist of one or more members, the number thereof to be determined from time to time by the Board. Section 2.2 Election; Term of Office; Resignation; Removal; Vacancies. Each director shall hold office until the annual meeting of stockholders next succeeding his or her election and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any director may resign at any time upon written notice to the Board of Directors, the Chairman of the Board or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. A director or the entire Board of Directors may be removed, with or without cause, by the holders of a majority of the shares then entitled to vote at an election of directors. Whenever the holders of any class or series of stock are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, the provisions of the preceding sentence shall apply, in respect to the removal without cause of the director or directors so elected, to the vote of the holders of the outstanding shares of that class or series and not to the vote of the outstanding shares as a whole. Unless otherwise provided in the Certificate of Incorporation or these By-laws, vacancies and newly created directorships resulting from any increase in the authorized number of directors elected by all of the stockholders having the right to vote as a single class or from any other cause may be filled by a majority of the directors then in office, although less than a quorum, or by the sole remaining director. Whenever the holders of any class or classes of stock or series thereof are entitled to elect one or more directors by the provisions of the Certificate of Incorporation, vacancies and newly created directorships of such class or classes or series may be filled by a majority of the directors elected by such class or classes or series thereof then in office, or by the sole remaining director so elected. 3 Section 2.3 Regular Meetings. Regular meetings of the Board of Directors may be held at such places within or without the State of Delaware and at such times as the Board may from time to time determine, and if so determined notice thereof need not be given. Section 2.4 Special Meetings. Special meetings of the Board of Directors may be held at any time or place within or without the State of Delaware whenever called by the Chairman of the Board, President, or Chief Executive Officer, by the Executive Committee of the Board, or by the majority of all the directors or the entire Board of Directors. At least two days prior written notice thereof shall be given by the person or persons calling the meeting. Section 2.5 Participation in Meetings by Conference Telephone Permitted. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, members of the Board of Directors, or any committee designated by the Board of Directors, may participate in a meeting of the Board of Directors or of such committee, as the case may be, by means of conference telephone or similar communications equipment by means of which all persons participating in the meeting can hear each other, and participation in a meeting pursuant to this By-law shall constitute presence in person at such meeting. Section 2.6 Quorum; Vote Required for Action. At all meetings of the Board of Directors, a majority of the entire Board of Directors shall constitute a quorum for the transaction of business. The vote of a majority of the directors present at a meeting at which a quorum is present shall be the act of the Board of Directors unless the Certificate of Incorporation or these By- laws shall require a vote of a greater number. In case at any meeting of the Board of Directors a quorum shall not be present, the members of the Board of Directors present may adjourn the meeting from time to time until a quorum shall attend. Section 2.7 Organization. Meetings of the Board of Directors shall be presided over by the Chairman of the Board, or in his or her absence by a chairman chosen at the meeting. The Secretary, or in the absence of the Secretary an Assistant Secretary, shall act as secretary of the meeting, but in the absence of the Secretary and any Assistant Secretary the chairman of the meeting may appoint any person to act as secretary of the meeting. Section 2.8 Annual Meeting. The Board of Directors shall meet at such time and place as shall be determined by the Chairman of the Board, on the day of the annual meeting of stockholders, or as soon as practicable thereafter, to elect the officers of the Corporation for the ensuing year. The Board of Directors shall also elect the members of the several committees provided for by these By-laws. Such meeting shall be the Annual Meeting and shall be a regular meeting of the Board of Directors for the transaction of business. Section 2.9 Compensation. Each member of the Board of Directors who is not a salaried officer of the Corporation or of any subsidiary of the Corporation, may be paid such fees, retainers and other compensation, if any, as shall be fixed by the Board of Directors, in addition to transportation and other expenses actually incurred by the directors in attending special or regular meetings of the Board of Directors or of any committee of which the director is a member. Section 2.10 Action by Directors Without a Meeting. Unless otherwise restricted by the Certificate of Incorporation or these By-laws, any action required or permitted to be taken at any meeting of the Board of Directors, or of any committee thereof, may be taken without a meeting if all members of the Board or of such committee, as the case may be, consent thereto 4 in writing, and the writing or writings are filed with the minutes of proceedings of the Board of Directors or committee. ARTICLE III Committees of the Board of Directors Section 3.1 Establishment of Committees. The Board of Directors may establish any number of committees for any purpose, including but not limited to an Executive Committee, Audit Committee and nominating Committee. The Board of Directors shall elect members of such committees only from this own members. The Board of Directors shall determine the number of members of each committee and may increase or decrease that number from time to time; provided that the number of members of each committee shall not be less than the number hereinafter provided in this Article III. The Board of Directors may remove members form any committee and fill vacancies in membership. Each committee shall have such authority as shall be delegated to it by the Board of Directors from time to time and the authority to determine its own rules of procedure, the time and place of its meetings and the kind, time, and contents of notice of meetings to be given to its members. No committee shall have the power or authority in reference to amending the Certificate of Incorporation (except that a committee may, to the extent authorized in the resolution or resolutions providing for the issuance of shares of stock adopted by the Board of Directors, fix any of the preferences or rights of such shares relating to dividends, redemption, dissolution, any distribution of assets of the Corporation or the conversion into, or the exchange of such shares for, shares of any other class or classes or any other series of the same or any other class or classes of stock of the Corporation), adopting an agreement of merger or consolidation, recommending to the stockholders the sale, lease or exchange of all or substantially all of the Corporation's property and assets, recommending to the stockholders a dissolution of the Corporation or a revocation of a dissolution, removing or indemnifying directors or amending the By-laws of the Corporation; and, unless the resolution, By-laws, or Certificate of Incorporation expressly so provide, no committee shall have the power or authority to declare a dividend or to authorize the issuance of stock. Section 3.2 The Executive Committee. If created by the Board of Directors, the Executive Committee shall consist of at least three members, a majority of whom shall be persons who are not officers or employees of the Corporation. The Executive Committee shall meet on call, when required, to act during the intervals between meetings of the Board of Directors with a quorum of not less than three members. Subject to the limitations set forth in Section 3.1, the Executive Committee shall have and may exercise all of the authority of the Board of Directors in the management of the business of the Corporation, except for: (a) those powers which are to be exercised only with the approval of other committees, as provided in the By-laws or by the Board of Directors; and (b) the filling of vacancies in the Board of Directors or in any committee. Section 3.3 The Audit Committee. If created by the Board of Directors, the Audit Committee shall consist of at least two members. The membership of the Audit Committee shall include either one person, if the Audit Committee is two persons, or a majority of persons, if the Audit Committee is more than two persons, who are not officers or relatives of principal executive officers, employees, and consultants compensated on a continuing basis by the Corporation. The Audit Committee shall periodically review with the General Auditor and with the independent accountants the scope of the auditing 5 procedures and the policies relating to internal accounting procedures and controls of the Corporation and its subsidiaries and shall make recommendations to management in relation thereto. The Audit Committee shall review the public financial statements of the Corporation with the Comptroller and may call upon the Comptroller for such other reports and discussions as the Audit committee may consider desirable. The Audit Committee shall review each annual report on the consolidated financial statements submitted by the independent accountants and may call upon them for such other reports and discussions as the Audit Committee may consider desirable. The Audit Committee shall report its findings, recommendations and conclusions to the Board of Directors at least once each year. The Audit Committee shall consult with management and recommend to the Board of Directors the independent accountants to be nominated for appointment by the shareholders each year, and upon appointment, the independent accountants shall have direct access to the Committee. Section 3.4 Nominating Committee. If created by the Board of Directors, the Nominating Committee shall consist of at least two members. The Nominating Committee shall review and make recommendations to the Board of Directors with respect to candidates or directors of the Corporation, review appointments of directors to committees of the Board of Directors and review and recommend the scope of activities to be undertaken by the committees of the Board of Directors. ARTICLE IV Officers Section 4.1 Election of Officers. The Board of Directors shall elect at the Annual Meeting a President, one or more Vice Presidents, a Secretary, and a Treasurer. The Board of Directors may elect a Chairman of the Board (who shall be a member of the Board of Directors). The Board of Directors may also elect or appoint a Chief Executive Officer, Comptroller, Assistant Secretaries, Assistant Treasurers, Assistant Comptrollers, and such other officers or agents as the Board of Directors shall determine necessary or desirable. Section 4.2 Term of Officer; Resignation; Removal; Vacancies. Except as otherwise provided in the resolution of the Board of Directors electing any officer, each officer shall hold office until the Annual Meeting of the Board of Directors after the annual meeting of stockholders next succeeding his or her election, and until his or her successor is elected and qualified or until his or her earlier resignation or removal. Any officer may resign at any time upon written notice to the Board of Directors or to the President or the Secretary of the Corporation. Such resignation shall take effect at the time specified therein, and unless otherwise specified therein no acceptance of such resignation shall be necessary to make it effective. The Board of Directors may remove any officer with or without cause at any time. Any such removal shall be without prejudice to the contractual rights of such officer, if any, with the Corporation, but the election of an officer, if any, with the Corporation, but the election of an officer shall not of itself create contractual rights. Any vacancy occurring in any office of the Corporation by death, resignation, removal or otherwise may be filled for the unexpired portion of the term by the Board of Directors at any regular or special meeting. Section 4.3 The Chairman of the Board. The Chairman of the Board shall preside at all meetings of the Board of Directors. 6 Section 4.4 The President. The President shall have authority to execute all contracts and agreements authorized by the Board of Directors and shall perform such other duties and have other responsibilities and authorities as shall be prescribed from time to time by the Board of Directors, including but, not limited to the following: (a) have general supervision of the entire business of the Corporation, subject to the control of the Board of Directors; (b) have general supervision over the officers of the Corporation and shall prescribe the duties to be performed by them in addition to those prescribed by these By-laws or by the Board of Directors; (c) see that all orders and resolutions of the Board of Directors are carried into effect; (d) from time to time report to the Board of Directors all matters which the interests of the Corporation may require to be brought to their notice; and (e) have the general powers and duties of supervision and management usually vested in the President of a corporation. Section 4.5 The Vice Presidents. The Vice Presidents shall have authority to execute contracts and agreements authorized by the board of Directors and shall perform such other duties and have other responsibilities and authorities as shall be prescribed from time to time by the Board of Directors. Any Vice President may be designated by the Board of Directors or by the Chairman of the Board and Chief Executive Officer as an Executive Vice President, a Senior Vice President or an Administrative Vice President. Section 4.6 The Secretary. The Secretary shall give notice of all meetings of the stockholders and the Board of Directors and shall record all votes and proceedings of the stockholders and the Board of Directors in a minute book kept for that purpose. The Secretary shall have custody of the seal of the Corporation and shall affix it to any instrument requiring the same. The Secretary shall perform such other duties and have such other responsibilities and authorities as shall be prescribed form time to time by the Board of Directors. Section 4.7 The Assistant Secretaries. The assistant Secretaries shall be vested, under the supervision of the Secretary, with all of the powers of the Secretary and shall, in the absence of the Secretary, perform all duties of the Secretary required to be performed. Section 4.8 The Treasurer. The Treasurer shall: (a) select, subject to change by the Board of Directors, financially sound depositories in which shall be deposited all monies and other valuable effects of the Corporation; (b) be responsible for the investment and reinvestment of funds of the Corporation in accordance with general investment policies determined from time to time by the Corporation; 7 (c) see that the Corporation is adequately insured against liability and that its properties are adequately insured against loss or destruction and administer such programs for insurance and self-insurance as may from time to time be approved by the Corporation; (d) disburse the funds of the Corporation in the regular conduct of the Corporation's business or as may be ordered by the Board of Directors; (e) ensure that the Corporation is adequately funded at all times, arranging at the direction of the Board of Directors, for issuance of debt, equity and other forms of securities which may be necessary or appropriate; (f) keep full and accurate books of account; (g) furnish to the Corporation a fidelity bond in a sum and containing provisions as the Board of Directors may require, if at all; (h) keep the accounts of stock registered and transferred in a form and manner and under such regulations as the Board of Directors may prescribe; and (i) perform other duties and shall have other responsibilities and authorities as prescribed form time to time by the Board of Directors. Section 4.9 The Assistant Treasurers. The Assistant Treasurers shall be vested, under the supervision of the Treasurer, with all of the powers of the Treasurer and shall, in the absence of the Treasurer, perform all duties of the Treasurer required to be performed. When required by the Board of Directors, each Assistant Treasurer shall furnish to the Corporation a bond in an amount and with such conditions as may be satisfactory to the Board of Directors. Section 4.10 The Comptroller. The Comptroller shall: (a) keep full and accurate books of account of all assets, liabilities, and business transactions of the Corporation and supervise preparation of the budgets and adherence to them by the departments of the Corporation; (b) establish and maintain such other controls as may be necessary or desirable to assure adequate protection of the assets of the Corporation; (c) have administrative supervision over credit matters in consultation with the various officers and department heads concerned with sales on credit terms; and (d) perform such other duties and have such other responsibilities and authorities as shall be prescribed from time to time by the Board of Directors. 8 Section 4.11 The Assistant Comptrollers. The Assistant Comptrollers shall be vested, under the supervision of the Comptroller, with all of the powers of the Comptroller and shall, in the absence of the Comptroller, perform all duties of the Comptroller required to be performed. Section 4.12 Other Officers. The other officers, if any, of the Corporation shall have such powers and duties in the management of the Corporation as shall be stated in a resolution of the Board of Directors which is not inconsistent with these By-laws and, to the extent not so stated, as generally pertain to their respective offices, subject to the control of the Board of Directors. The Board of Directors may require any officer, agent or employee to give security for the faithful performance of his or her duties. ARTICLE V Stock Section 5.1 Certificates. Every holder of stock of the Corporation shall be entitled to have such shares of stock represented by share certificates, which shall be numbered and entered in the records of the Corporation as they are issued. Such share certificates shall state that the Corporation is organized under the laws of the State of Delaware, the name of the registered owner represented thereby the number and class of shares, and the designation of the series, if any, which the certificate represents and the par value of each share represented, or a statement that the shares are without par value. Every share certificate shall be signed by the Chairman of the Board, the President or a Vice President and by the Treasurer or an Assistant Treasurer, or the Secretary or an Assistant Secretary, and sealed with the corporate seal, which may be a facsimile, engraved or printed, but where such certificate is signed by a transfer agent or a registrar, the signature of any such officer upon such certificate may be a facsimile, engraved or printed. In case any officer, transfer agent or registrar who has signed or whose facsimile signature has been placed upon a certificate shall have ceased to be such officer, transfer agent or registrar before such certificate is issued, it may be issued by the Corporation with the same effect as if such person were such officer, transfer agent or registrar at the date of issue. Section 5.2 Lost, Stolen or Destroyed Stock Certificates; Issuance of New Certificates. The Corporation may issue a new certificate of stock in the place of any certificate theretofore issued by it, alleged to have been lost, stolen or destroyed, and the Corporation may require the owner of the lost, stolen or destroyed certificate, or such owner's legal representative, to give the Corporation a bond sufficient to indemnify it against any claim that may be made against it on account of the alleged loss, theft or destruction of any such certificate or the issuance of such new certificate. Section 5.3 Owners of Shares. The Corporation shall be entitled to treat the holder of record of any share or shares of the Corporation as the holder and owner in fact for all purposes. The Corporation shall not be bound to recognize any equitable or other claim to or right, title or interest in such shares on the part of any other person, whether or not it shall have express or other notice thereof, except as otherwise expressly provided by law. Section 5.4 Registrar. The Board of Directors or Executive Committee of the Board may appoint a registrar or registrars to record the transfer of the Corporation's shares, and so long as the appointment of such registrar or registrars shall be in effect, no certificate for shares 9 issued pursuant to Section 5.1 hereof shall be binding upon the Corporation or have any validity unless countersigned by such registrar or one of such registrars. Section 5.5 Transfer Agents. Transfers of shares shall be made only upon the books of the Corporation by the holder in person or by power of attorney duly executed and filed with the Treasurer, and on surrender of the certificate or certificates for such shares; but the Board of Directors or Executive Committee of the Board may appoint one or more suitable banks or trust companies or agents to effect transfers of shares under such regulations as the Board of Directors may form time to time prescribe. Section 5.6 Dividends. Except as otherwise provided by law, dividends may be declared by the Board of Directors from time to time in cash or property and shall be payable at such times as the Board of Directors may determine. ARTICLE VI Indemnification Section 6.1 Indemnification of Directors, Officers and Employees. The Corporation shall indemnify to the full extent authorized by law any person made or threatened to be made a party to any action, suit or proceeding, whether criminal, civil, administrative or investigative, by reason of the fact that such person or such person's testator or intestate is or was a director, officer or employee of the Corporation or serves or served at the request of the Corporation any other enterprise as a director, officer or employee. For purposes of this By-law, the term "other enterprise" shall include, but not be limited to, any corporation, limited liability company, partnership, joint venture, trust or employee benefit plan; service "at the request of the Corporation" shall include, but not be limited to, service as a director, officer or employee of the Corporation which imposes duties on, or involves services by, such director, officer or employee with respect to an employee benefit plan, its participants or beneficiaries; any excise taxes assessed on a person with respect to an employee benefit plan shall be deemed to be indemnifyable expenses; and action by a person with respect to an employee benefit plan which such person reasonably believes to be in the interest of the participants and beneficiaries of such plan shall be deemed to be action not opposed to the best interests of the Corporation. Section 6.2 Advance Payments. Expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Corporation in advance of the final disposition of such action, suit or proceeding as authorized by the Board of Directors in the specific case upon receipt of an undertaking by or on behalf of such director or officer to repay such amount unless it shall ultimately be determined that he is entitled to be indemnified by the Corporation as authorized in this Article VI. Such expenses incurred by other employees and agents may be so paid upon such terms and conditions, if any, as the Board of Directors deems appropriate. Section 6.3 Non-Exclusivity. The indemnification provided by this Article VI shall not be deemed exclusive of any rights to which those seeking indemnification may be entitled under any By-law, agreement, vote of stockholders or disinterested directors or otherwise, both as to action in such person's official capacity and as to action in another capacity while holding 10 such office, and shall continue as to a person who has ceased to be a director, officer, employee or agent and shall inure to the benefit of the heirs, executors and administrators of such person. Section 6.4 Reliance on Provisions. Each person who shall act as a director, officer, employee or agent of the Corporation shall be deemed to be doing so in reliance upon the rights of indemnification provided by this Article VI. ARTICLE VII Miscellaneous Section 7.1 Fiscal Year. The fiscal year of the Corporation shall be determined by the Board of Directors. Section 7.2 Seal. The Corporation may have a corporate seal which shall have the name of the Corporation inscribed thereon and shall be in such form as may be approved from time to time by the Board of Directors. The corporate seal may be used by causing it or a facsimile thereof to be impressed or affixed or in any other manner reproduced. Section 7.3 Waiver of Notice of Meetings of Stockholders, Directors and Committees. Whenever notice is required to be given by law or under any provision of the Certificate of Incorporation or these By-laws, a written waiver thereof, signed by the person entitled to notice, whether before or after the time stated therein, shall be deemed equivalent to notice. Attendance of a person at a meeting shall constitute a waiver of notice of such meeting, except when the person attends a meeting for the express purpose of objecting, at the beginning of the meeting, to the transaction of any business because the meeting is not lawfully called or convened. Neither the business to be transacted at, nor the purpose of, any regular or special meeting of the stockholders, directors, or members of a committee of directors need be specified in any written waiver of notice unless so required by the Certificate of Incorporation or these By-laws. Section 7.4 Form of Records. Any records maintained by the Corporation in the regular course of its business, including its stock ledger, books of account and minute books, may be kept on, or be in the form of, punch cards, magnetic tape, photographs, microphotographs or any other information storage device, provided that the records so kept can be converted into clearly legible form within a reasonable time. The Corporation shall so convert any records so kept upon the request of any person entitled to inspect the same. Section 7.5 Amendment of By-Laws. These By-laws may be amended or repealed, and new by-laws adopted, by the Board of Directors, but the stockholders entitled to vote may adopt additional by-laws and may amend or repeal any by-law whether or not adopted by them. Section 7.6 Contributions. The Corporation shall have the power to make contributions and donations for the public welfare or for religious, charitable, scientific or educational purposes. Section 7.7 Governing Law. Reference to "law" in these By-laws shall mean the laws of the State of Delaware. 11 EX-10.1 4 0004.txt PROFESSIONAL SERVICES AGREEMENT SPRINGBOARD TECHNOLOGY SOLUTIONS INC. PROFESSIONAL SERVICES AGREEMENT Agreement made this 12th day of February, 2000 , (Commencement Date) between Springboard Technology Solutions Inc. having its registered head office at Suite 401, 2275 Lakeshore Blvd., West, Toronto, Ontario 16 M8V 3Y3, hereinafter referred to as Consultant, and 1401629 Ontario Inc. , having its principal place of business at 2345 Yonge Street, Suite 401, Toronto, Ontario, M4P 2E5 , hereinafter referred to as Client. 1. PROVISION OF SERVICES 1.1 The scope, volume, and cost of services to be provided by the Consultant, to the Client, is outlined in Appendix "A". Where the scope, volume or costs have been estimated; these estimates have been developed in good faith by the Consultant but should not be interpreted as a 'not to exceed' quote. 1.2 All requests for services from the Client must be presented to the Consultant in writing. In return, the Consultant will provide a Client Services Request (CSR), as set forth in Appendix "A", which identifies the services to be provided and associated costs. 1.3 In the event a signed CSR is obtained from the Client, the Consultant will treat the signed document as a purchase order. If the Client prefers to provide a signed purchase order for these services, based on the CSR provided, this will be treated as a signed CSR. 2. FEES AND EXPENSES 2.1 All services shall be provided to the Client on a 'time and material' basis at the fee structure contained in Appendix "A". These fees are subject to an increase on January 1st of each year. The Client shall receive written notification of any increases at least 30 days prior to their inception. 2.2 All travel, accommodation and out-of-pocket expenses incurred by the Consultant's employees while engaged in providing the specified services, shall be invoiced to the Client at cost. All communication costs (incurred by the Consultant) will be invoiced to the Client at cost. 2.3 The Consultant shall invoice the Client weekly for services rendered and associated expenses incurred. The invoice will detail the work performed during that week. All invoices are due for payment upon receipt. 3. CLIENT RESPONSIBILITIES 3.1 Where the Consultant will be required to attend and perform work at the Client's location, the Client shall provide the Consultant's employees access (at no cost to the Consultant) to any 'reasonable facilities' required in order to perform the services requested. 'Reasonable facilities' shall be interpreted to be commensurate with those provided to the Client's own employees. 3.2 The Client's inability to provide resources, the required environment or support during the Consultant's visit does not relieve the Client of their full responsibility for the hourly charge. 3.3 The Client shall provide the Consultant's employees access to information technology resources, as required to perform the services requested. 3.4 The Client is responsible for the development and execution of adequate backup and recovery procedures, to ensure that the development effort is secured on a daily basis. Any loss caused by inadequate procedures will be the Client's responsibility to reconstruct. 4. CONSULTANT RESPONSIBILITIES 4.1 The Consultant warrants that all employees assigned to the execution of this agreement shall be appointed in good faith and be suitably qualified in the appropriate area of expertise. The Consultant will ensure that its employees and agents will, whenever on Client's premises, obey all reasonable instructions and directions issued by the Client and adhere to the Client's normal standard of business conduct and behaviors for those areas visited by the Consultant. 4.2 The Client shall have the right to disapprove each of the Consultant's employees whose qualifications, in the Client's good faith and reasonable judgment, do not meet the standards established by the Client as necessary for the performance of the Services. 4.3 The Consultant warrants that its services will be of professional quality, conforming to generally accepted information technology and consulting practices. 5. CONFIDENTIAL INFORMATION AND PRPERTY RIGHTS 5.1 Each party undertakes to protect from disclosure the following information ("Confidential Material"): (a) (in respect of the Consultant's obligations under this Agreement) any and all information relating to the Client or its business, including but not limited to information, knowledge or expertise gained as a result of exposure during the term of the Agreement, the Client's business, the Client's know-how, methodology, work product and techniques which may come into the possession of the Consultant, whether or not such information is reduced to a tangible form or marked in writing as "confidential". The Consultant shall procure that its agents, employees and subcontractors abide by this obligation; (b) (in respect of the Client's obligations under this Agreement) any and all information relating to the Consultant or its business which may come into the possession of Client or any employee or authorized agent of Client (other than information which the Consultant is required to generate or supply to Client in performing the Services), whether or not such information is reduced to a tangible form or marked in writing as "confidential"; and (c) any and all information which has been or which may be derived or obtained from any such information set out in Clause 5.1(a) in respect of the Consultant's undertaking and Clause 5.1(b) in respect of the Client's undertaking. 5.2 Neither party shall make available or disclose any of the contents of the Confidential Material to any person, or make or permit any use of the Confidential Material without the prior written consent of the other party, except that the Confidential Material may be made available or disclosed to those, and only those, of the employees, agents or sub contractors of the disclosing party as required for the purpose of fulfilling the disclosing party's obligations under the Agreement. 5.3 Both parties shall ensure that its employees are aware of in writing and comply with the confidentiality and non-disclosure provisions contained in this Section. If either party becomes aware of the possession, use of knowledge of any of the Confidential Material by any person not authorized to possess, use or have knowledge of the Confidential Material, it shall promptly notify other party and shall at the request of that party provide such reasonable assistance as required to deal with such event. 5.4 The disclosing party shall take all reasonable steps to ensure that any Confidential Material disclosed to any person is treated as confidential by the person to whom it is disclosed. 5.5 Failure by either party to comply with Clause 5.1 shall constitute a breach of this Agreement, entitling the other party to terminate the Agreement forthwith. The disclosing party shall indemnify the other party against any loss or damage which that party may sustain or incur as a result of any breach of confidence by any of its employees. 5.6 Sections 5.1 through to 5.5 shall not include information which: a) is in or becomes part of the public domain through no act or omission of either party; b) was in the either party's lawful possession prior to the disclosure and had not been obtained by the that party either directly or indirectly from the other party; c) was independently developed by the other party without reference to the Confidential Information; d) is obtained from a third party who is lawfully authorized to disclose such information; or e) is authorized for release by prior written consent of the non-disclosing party. Page 2 of 5 5.7 In any event either party relying on the above noted exclusions in section 5.6 shall prove the existence of any of the above noted circumstances beyond any reasonable doubt, before any confidential information shall be excluded. 6. RECRUITMENT 6.1 For the period of this agreement and for twelve (12) months after its termination, both the Client and the Consultant agree not to employ, contract or sub-contract any employee or contractor of the other party without the express written consent of the other party. Each party also agrees not to employ, contract or sub-contract any employee or contractor of the other party for a period of twelve (12) months following the cessation of that individual's employment or contract with the other party. Notwithstanding the aforementioned, should the Client or Consultant employ or subcontract an employee of the other party during the period of this Agreement or within 12 months after its termination, the party hiring the employee shall pay to the other party a fee equal to 6 months salary and any other reasonable fees incurred as result of this action. 7. AGREEMENT TERMS 7.1 Modification: Any modification or amendment to this Agreement to be binding must be in writing and signed by duly authorized representative of both parties. 7.2 Term: This agreement shall commence as of the date hereof and shall continue for a period of three (3) years and shall be renewable for successive one-year terms until the services are no longer required. The Services provided for herein, may be extended or modified from time to time. 7.3 Termination: The Client may, at its discretion elect to cancel this agreement at any time following three years from the date of execution by providing 60 business days written notice to the Consultant prior to the end of the initial three year period. In such event the Client will pay in full to the Consultant any amounts that are due as of that date as well as any reasonable expenses already incurred by Consultant prior to the termination notice. Reasonable expenses shall include: the remaining unpaid balance plus applicable administration fees of any equipment or software that has been leased by the consultant for the exclusive or partial use of the Client, the estimated market value of all equipment or software purchased on the client's behalf and used by the consultant in completion of the client's work and, if applicable, the payout of sub-contracts let for completion of client work and any other costs that the consultant may have reasonably incurred in-order to render services on behalf of and for the client. If the Client is shall cause the contract to terminate due to poor service then the consultant shall have a period of not less than 60 days to rectify the cause of the poor service. In each case where poor service has been alleged then the client shall provide in writing specific instances or examples of poor service and the steps required to achieve a satisfactory level of service. Under no circumstances shall the Client set the level of satisfactory service above the norms established in the IT industry as its standard. 7.3 7.4 Waiver: Any waiver by one party's breach of any term or provision by the other party shall not be construed as a waiver of any other provision of the Agreement nor a waiver of future breaches of the same term or provision. 8. GENERAL 8.1 Entire Agreement: The Agreement constitutes the entire understanding between parties relating to the subject matter of the Agreement and, save as may be expressly referred to or referenced above, supersedes all prior representations, writing, negotiations or understandings, oral or written, except in respect of any fraudulent representations made by either party. 8.2 Governing Law: This Agreement and all matters arising out of or relating to this Agreement shall be governed by the Laws of the Province of Ontario, Canada. [This Agreement is not subject to, and shall not be interpreted by, the United Nations Convention on Contracts for the International Sale of Goods. The parties to this Agreement agree to submit to the non-exclusive jurisdiction of the Province of Ontario, Canada] Page 3 of 5 8.3 Severability: In the event any or more of the provisions contained in this Agreement should be ruled wholly or partly invalid or unenforceable by a court, arbitration panel, or other government body of competent jurisdiction, then: (i) the validity and enforceability of all provisions of this Agreement not ruled to be invalid or unenforceable shall be unaffected; (ii) the effect of the ruling shall be limited to the jurisdiction of the court or other body making the ruling; (iii) the provision(s) held wholly or partly invalid or unenforceable shall be deemed amended, and the court or other body is authorized to reform the provision(s), to the minimum extent necessary to render them valid and enforceable in conformity with the parties' intent as manifested herein; and (iv) if the ruling, and/or controlling principle of law or equity leading to the ruling, is subsequently overruled, modified, or amended by legislative, judicial, or administrative action, then the provision(s) in question as originally set forth in this Agreement shall be deemed valid and enforceable to the maximum extent permitted by the new controlling principle of law or equity. 8.4 Headings: The division of this Agreement into Sections and subsections and the insertion of headings are for convenience of reference only and shall not affect its construction or interpretation. 8.5 Extended Meanings: In this Agreement, words importing the singular number include the plural and vice versa and words importing gender include all genders. The word "person" includes, subject to the context in which it appears, an individual, partnership, association, body corporate, trustee, executor, administrator or legal representative. IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first above written and do each hereby warrant and represent that their respective signatory whose signature appears below has been and is on the date of this Agreement duly authorized by all necessary and appropriate corporate action to execute this Agreement: Signed for and on behalf of Accepted for and on behalf of Springboard Technology Solutions Inc.: Client: 1401629 Ontario Inc. "signed" 12/02/2000 ________________________________________ __________________________________ Authorized Signature Date Authorized Signature Date Brian J. MacDonald President ________________________________________ __________________________________ Please Print/Type Name Title Please Print/Type Name Title Page 4 of 5 PROFESSIONAL SERVICES AGREEMENT APPENDIX "A" - ------------------------------------------------------------------------------- CLIENT SERVICES REQUEST (CSR 00000) This Appendix forms an integral part of the Professional Services Agreement dated February 12, 2000 between 1401629 Ontario Inc. and Springboard Technology Solutions Inc. By the execution of this Professional Services Agreement, 1401629 Ontario Inc. hereby agrees to purchase from Springboard Technology Solutions Inc. the following specified services: SCOPE OF WORK TO BE PROVIDED - ------------------------------------------------------------------------------- 1. Development and delivery of a web based deal development application with administration tool for use by internal staff . Estimated Cost: $205,000.00 plus 5% of the common stock in 1401629 Ontario Inc. at no cost. Such common stock will be delivered to Martin Berg and Kevin Birch in consideration of their services. 2. Design, preparation, and creation of a marketing CD-ROM - $30,000 3. Implementation of a network with dial in access for staff of 1401629 Ontario Inc. See hourly rates. 4. Lease/purchase of computer infrastructure - all requirements - reimbursement plus administrative expenses 5. Web site co - location hosting - see rates 6. Software licensing - firewall; email services, SQL v 7.0. At Cost. 7. Network support as required - see rates. 8. Webmaster and data base maintenance post development - see rates 9. Help line support - as required and to be determined based on volume. 10. Marketing programs as determined including Napoleon access and licensing - to be determined. 11. Data base analysis, marketing integration to website - to be determined. 12. Tele-Communication Infrastructure: email, ADSL lines, as required. 13. Other services which may be required based on the IT infrastructure, volume of usage and configuration, which are as yet undetermined. If a daily rate is quoted, then this is based on an eight-hour day. Should the Consultant work more than ten hours per day, the Client will be invoiced on an hourly basis. The hourly rate will be the agreed daily rate divided by eight hours. The above rate excludes travel, accommodation and out-of-pocket expenses. These expenses shall be invoiced to the Client at cost. All invoices will be sent to the attention of: Brian J. MacDonald, President (please print) Client's Phone: 416-440-1015 ext. 3216 Client's Fax Number:416-482-9258 Signed for and on behalf of Accepted for and on behalf of Springboard Technology Solutions Inc.: Client: 1401629 Ontario Inc. ________________________________________ __________________________________ Authorized Signature Date Authorized Signature Date Brian J. MacDonald President ________________________________________ __________________________________ Please Print/Type Name Title Please Print/Type Name Title Page 5 of 5 EX-10.2 5 0005.txt DEVELOPMENT AND LICENSE AGREEMENT DEVELOPMENT AND LICENSE AGREEMENT This DEVELOPMENT AND LICENSE AGREEMENT (the "Agreement") is made and entered into as of February 12, 2000 (the "Effective Date"), by and between Springboard Technology Solutions Inc., an Ontario corporation ("Springboard"), and 1401629 Ontario Inc., a corporation organized under the laws of Ontario ("1401629"). Recitals A. Springboard operates a business conceptualizing, developing, building, maintaining and managing Web Sites, Web Applications and Web based businesses, and it has developed certain proprietary software sets (the "WebAPP Software") to enable the deployment of innovative Internet strategies and to provide users with methods to register, access, share and interact with collections of off -line and on-line resources. B. 1401629 wishes to develop an Internet site under the brand name "VentureDrive.com" (the "VentureDrive site") aimed at creating a marketplace for early stage entrepreneurial proposals for the Angel Investor marketplace and in addition to offer other services and products. C. 1401629 wishes to retain the services of Springboard to (i) develop the VentureDrive web site that demonstrates information gathering, retrieval, and client offerings, and, (ii) develop a customized user interface intended to market the VentureDrive marketplace, all in order to enhance the overall experience of the VentureDrive Site using Springboard's WebAPP Software. D. The VentureDrive Site will be hosted and operated by Springboard for the purpose of streamlining the way entrepreneurs, angel investors and other community members connect, communicate and conduct commerce. E. In connection herewith, 1401629 will obtain from Springboard a exclusive license to use the VentureDrive website, as well as a non-exclusive license to use the WebAPP Software for the sole and limited purpose of operating the VentureDrive Site, all on the terms and subject to the conditions contained herein. NOW, THEREFORE, in consideration of the mutual covenants and conditions contained herein, the parties hereto agree as follows: ARTICLE I. DEFINITIONS For purposes of this Agreement, the following terms shall have the following meanings: 1.1 "Confidential Information" means all data and information of a confidential nature and not in the public domain, including know-how and trade secrets, relating to the business, the affairs, the web site(s) and any other projects of either party, including, without limitation, the terms of this Agreement. Confidential Information may be communicated orally, in writing or in any other recorded or tangible form. Information shall be considered to be Confidential Information of a party if: (a) the party has marked it as such, (b) the party, orally or in writing, has advised the other party of its confidential nature, or (c) due to its character or nature, a reasonable person in a like position and under like circumstances as the other party would treat them as secret and confidential. 1.2 "Developed Software" means the customized user interface data objects to be developed by Springboard pursuant hereto in order to interact with the WebAPP Software. 1.3 "Development Fees" means the fees described in Section 4.1 hereof. 1.4 "1401629 Content" means all existing and future digitized and non-digitized information, articles, reviews, digital or transcribed interviews, video and audio libraries, photographs, books and any other content which 1401629 has created, published or produced, or which 1401629 has access to through a licensing arrangement with any other entity. 1.5 "1401629 Marks" means those 1401629 trademarks, service marks, and logos set forth in Exhibit C attached hereto. 1.6 "1401629 Technology" means and includes all proprietary designs, drawings, blueprints, models, technical specifications, data and procedures, performance data, quality control standards and specifications, know-how, software programs (including object code and source code), and other technical information, in whatever form, tangible or intangible, in existence as of the Effective Date of this Agreement, and any such proprietary technology and information as shall be developed solely by 1401629 for the purposes of this Agreement, relating to the design, development, operation, service and maintenance of the VentureDrive Site, including, but not limited to, the Deal Development Modules and the 1401629 Content. 1.7 "Intellectual Property Rights" means all proprietary rights and information, including, without limitation, all patents, patent applications, divisions, continuations and continuations-in-part, ideas, conceptions and inventions (whether or not patentable, reduced to practice or made the subject of a pending patent application), copyrights, copyrighted or copyrightable works and trademarks (whether or not registered), drawings, designs, mask works or registrations thereof, know-how, trade secrets, manufacturing and production processes and techniques, research and development information and other confidential technical information, as well as all rights in and to computer programs, data files and software. 1.8 "Licensed Software," means, collectively, the WebAPP Software and the Developed Software. 1.9 "Powered by Springboard Logo" means the logo in the form provided by Springboard, the approximate size of the graphic for which shall be 480 by 720 pixels, and which shall be located in a location appropriate to the nature of the VentureDrive Site. -2- 1.10 "Project" means the efforts of each party and the cooperation and collaboration of the parties and any agents of the parties directed to join in such effort or collaboration to complete the development objectives of this Agreement. 1.11 "Project Roadmap" means the agreement of the Parties with respect to the Services, the degree and nature of support and consultation of the parties, and the scheduling and functional and performance criteria for the Work Product necessary to achieve the purposes of the Project, which Project Roadmap is attached hereto as Exhibit "A". 1.12 "Services" means the following design and development services to be performed by Springboard hereunder: (a) in conjunction with 1401629, development of the specifications for the Developed Software; (b) the building of a working website that demonstrates information gathering, retrieval, and client offer collaboration; (c) the preparation of a complete architecture and development roadmap that can be used to build upon the initial prototype to account for customer/investor feedback; and (d) the development of the Developed Software. 1.13 "Springboard Marks" means and includes the names and marks "Springboard " and "Springboard WebAPPs", the Springboard logo and the Powered by Springboard Logo. 1.14 "Springboard Technology" means and includes all designs, drawings, blueprints, models, technical specifications, data and procedures, performance data, quality control standards and specifications, know-how, trade secrets, software programs (including object code and source code), and other technical information, in whatever form, tangible or intangible, relating to the operations of Springboard, including the Licensed Software. 1.15 "Users" mean 1401629's internal marketing and operational staff and any external users who access the VentureDrive Site. 1.16 "User Information" means any information collected from the VentureDrive Site that pertains to Users visiting or using services from the VentureDrive Site, including without limitation the User's name, address, e-mail address, and the information or content viewed by the User. 1.17 "WebAPP Software" means (a) the machine-readable object code version of the current release of the computer programs described in Exhibit "B" attached hereto, whether embedded on disc, tape or other media; (b) any fixes, customizations or revisions of such software that are provided to 1401629; and (c) any copies thereof. -3- ARTICLE II. DEVELOPMENT PROJECT 2.1 Engagement. 1401629 hereby engages Springboard, and Springboard hereby agrees, to perform the Services in accordance ------------------- with the Project Roadmap. 2.2 Development Schedule. The estimated target date for completion of the Project is June 1, 2000, as is more specifically outlined in the Project Roadmap. 2.3 Development Fee. In consideration for the Services to be performed hereunder, 1401629 shall pay to Springboard an aggregate development fee equal to CAD 205,000 (the "Development Fee"), payable in accordance with the terms and subject to the conditions set forth in Section 4.1. 2.4 Personnel and Facilities. Except as otherwise agreed between the parties, Springboard shall be solely responsible for providing all facilities, equipment, personnel, supplies and other resources required by Springboard for the performance of its obligations under this Agreement. Springboard shall be solely responsible for determining the manner, means and methods by which Springboard performs its obligations hereunder. Except as set forth in Section 2.8, Springboard shall be responsible for its own personnel and related expenses incurred in connection with performing its obligations hereunder, including, without limitation, all salaries, payroll taxes and employee benefits. 2.5 Expenses. At 1401629's reasonable request, Springboard shall make available personnel to visit 1401629's facility or facilities to advise and assist 1401629 in connection with the implementation of the Work Product; provided that 1401629 shall reimburse Springboard for all reasonable travel, living and other out-of-pocket expenses actually incurred by Springboard in connection therewith, together with charges for Springboard 's employees' time at the Springboard prevailing hourly rates. 2.6 Access to Personnel. During the development phase of this Agreement, each party shall have reasonable access to the other party's technical support staff involved in the Project. Each party shall provide appropriate working conditions for all personnel of the other party who work on-site at the host party's facilities during the Project. Each party's personnel shall, while at any facility of the other party, comply with the host party's rules and regulations relating to safety and security. Each party shall at all times be responsible for administrative supervision of its personnel. 2.7 Consulting Services. At 1401629's reasonable request, Springboard shall make available personnel to visit 1401629's facilities to advise and -4- assist 1401629 in connection with the implementation of the Work Product; provided that 1401629 shall reimburse Springboard for all reasonable travel, living and other out-of-pocket expenses actually incurred by Springboard in connection therewith, together with charges for Springboard 's employees' time at the Springboard prevailing rates. 2.8 Additional Services. In addition, at the reasonable request of 1401629 and subject to the availability of appropriate personnel, Springboard may provide 1401629 with additional consulting services, including, but not limited to business planning and development services, at billing rates indicated in Springboard's professional services agreement with 1401629. 2.9 Delivery of Developed Software. Upon completion of the Developed Software, Springboard shall so notify 1401629 in writing and shall deliver to 1401629 such deliverable. 1401629 shall have a reasonable period of time to inspect and approve such Developed Software and to provide Springboard with a written acceptance thereof or a detailed written statement of errors. To the extent that 1401629 does not accept the Developed Software, the parties shall work together in good faith to rectify any problems identified in the Statement of Errors. 2.10 Warranty. Springboard warrants to 1401629 that it shall perform the Services with reasonable skill and care, using suitably qualified personnel, and that it shall use all commercially reasonable efforts to achieve the objectives of the Project. 2.11 DISCLAIMER. EXCEPT FOR THE WARRANTY CONTAINED IN SECTION 2.10, SPRINGBOARD MAKES NO ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, WHETHER EXPRESS OR IMPLIED, INCLUDING, BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE RELATING TO THE SERVICES TO BE PROVIDED HEREUNDER. In furtherance of the foregoing, the parties acknowledge and agree that the successful achievement of the Project depends on a number of factors outside of the control of the parties. As such, no statement (whether written or oral) in any proposal, letter, report or presentation is deemed to be in any circumstances a representation, undertaking or warranty (whether express or implied) of achievable results. 2.12 Limitation on Liability. Under no circumstances shall Springboard be liable for any consequential, indirect, special, punitive or incidental damages or lost profits, whether foreseeable or unforeseeable, based on 1401629's claims or those of its partners (including, but not limited to, claims for loss of data, goodwill, use of money or use of the products, interruption in use or availability of data, stoppage of other work or impairment of other assets), arising out of breach or failure of express or implied warranty, breach of contract, misrepresentation, negligence, strict liability in tort or otherwise. In no event shall the aggregate liability that Springboard may incur in any action or proceeding exceed the total amount actually paid by 1401629 for the specific item that directly caused the damage. This Section 2.12 shall not apply only when and to the extent that applicable law specifically requires liability, despite the foregoing exclusion and limitation. 2.13 No Technology Transfer. Except for the licenses expressly granted herein, the parties acknowledge and agree that no Intellectual Property Rights relating to the Springboard Technology, including, but not limited to, the Licensed Software, shall vest in 1401629 or be assigned, licensed or otherwise transferred to 1401629 or any of its affiliates in connection with this Agreement. ARTICLE III. LICENSE GRANTS 3.1 Grant of License to Springboard. In connection with the performance of Springboard 's activities hereunder, 1401629 hereby grants to Springboard, and Springboard hereby accepts, a limited, non-exclusive, royalty-free, -5- non-transferable license to utilize the 1401629 Technology and 1401629's Intellectual Property Rights and 1401629's Confidential Information relating thereto, in connection with the performance of the Services hereunder in accordance with the terms and conditions, and subject to the limitations and restrictions, of this Agreement. 3.2 Grant of Licenses to 1401629. (a) Subject to full and timely payment of the Development Fee and to the provisions of Section 3.5, Springboard hereby grants to 1401629 a perpetual, exclusive, fully paid license to use the Developed Software. (b) Springboard hereby grants to 1401629 a limited, non-exclusive, nontransferable license, without the right to sub-license, to use Springboard's WebApps Software in conjunction with the Developed Software solely in connection with the operation and maintenance of the VentureDrive Site and the promotion thereof in accordance with the terms and conditions, and subject to the limitations and restrictions, contained in this Agreement. 3.3 Restrictions On Use. 1401629 agrees to use the WebApps Software only for the operation of the VentureDrive Site and its own other internal purposes related solely to the VentureDrive Site. Without limiting the generality of the foregoing, 1401629 shall not: (a) use or permit the WebAPP Software to be used in any manner, whether directly or indirectly, that would enable 1401629's partners or any other person or entity to use the WebAPP Software except in connection with the operation of the VentureDrive Site; (b) rent, sell, assign, lease, sublicense, or otherwise transfer the WebAPP Software or use it in any manner not expressly authorized by this Agreement; (c) derive or attempt to derive the source code, source files or structure of all or any portion of the WebAPP Software by reverse engineering, disassembly, decompilation, or any other means; (d) copy, translate, port, or modify the WebAPP Software, or create derivative works based on the WebAPP Software or based on the WebAPP Software, in whole or in part, except as permitted under this Agreement; (e) modify, rent, lease, loan, distribute, or sell the WebAPP Software or the WebAPP Software, in whole or in part; and (f) copy the WebAPP Software, except that 1401629 may make one (1) copy for back-up purposes only; provided, however, that (i) 1401629 shall reproduce onto such back-up copy all titles, trademarks, and copyright and restricted rights notices, and (ii) such back-up copy shall be subject to the terms and conditions of this Agreement. -6- 3.4 Rights Granted to 1401629's "VentureDrive" Operation Only. The rights to use the WebAPP Software granted by Springboard to 1401629 are restricted to 1401629's "VentureDrive" operation. 1401629 may not authorize or allow the use of the Licensed Software by any third party or by any other operation or division of 1401629, and 1401629 may not assign or transfer any rights in or to the WebAPP Software or this Agreement to any third party or to any other operation or division of 1401629 without the prior written consent of Springboard. 3.5 Grant-Back of License to Use Developed Software. 1401629 hereby grants to Springboard a perpetual, worldwide, royalty-free, non-exclusive, non-transferable license to use the Developed Software; provided, however that such license shall be restricted as follows: (a) Springboard shall be entitled to use the Developed Software solely for demonstration purposes; (b) Springboard shall not market or distribute the Developed Software as a stand-alone product; and (c) Springboard shall not use the Developed Software in connection with any applications related to market places for early stage ventures or any other venture capital businesses. 3.6 Reservations of Rights. Springboard hereby reserves all rights in and to the Springboard Technology that are not explicitly granted to 1401629 herein. Without limiting the generality of the foregoing, Springboard retains all title, copyright, and other proprietary interests in the WebAPP Software, and 1401629 does not acquire any rights, express or implied, in the WebAPP Software, other than those specifically set forth in this Agreement. Nothing in this License shall entitle 1401629 to receive the source code of the WebAPP Software or any enhancements thereof, in whole or in part. 3.7 Initial Training. At no additional cost to 1401629, Springboard shall provide the initial consulting services relating to the use of the Licensed Software and the functionality of the VentureDrive Site specified in Exhibit "C." At 1401629's request, Springboard, either itself or through one or more subcontractors, may provide 1401629 with additional internal consulting, subject to Springboard 's then-current standard rates and expense reimbursement policies and the availability of appropriate personnel. 3.8 Maintenance. As a condition to the execution of this Agreement and the licenses granted by Springboard hereunder, 1401629 is executing concurrently herewith Springboard 's standard Support and Maintenance Agreement in the form attached hereto as Exhibit "D." 3.9 SOFTWARE DISCLAIMER. THE LICENSED SOFTWARE IS PROVIDED "AS IS" AND, TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, SPRINGBOARD MAKES NO WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, BY STATUTE OR OTHERWISE, INCLUDING BUT NOT LIMITED TO ANY IMPLIED WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, TITLE, OR NON-INFRINGMENT. SPRINGBOARD DOES NOT WARRANT THAT THE WEBAPP SOFTWARE WILL FUNCTION UNINTERRUPTED, THAT IT WILL MEET THE REQUIREMENTS OF 1401629, THAT IT IS ERROR-FREE, OR THAT ANY ERRORS WILL BE CORRECTED. -7- ARTICLE IV. CONSIDERATION 4.1 Development Fee. In consideration for the Services to be performed hereunder and the grant of the exclusive license to use the Developed Software, 1401629 shall pay to Springboard the Development Fee, which amount shall be payable as follows: (a) $205,000 shall be due and payable upon execution of this Agreement; Notwithstanding the above Springboard may make accommodations with regard to the payment from time to time but no accommodations will remove the obligation of 1401629 to pay the amount in full. 4.2 License Fee. In consideration for the grant of the license to use the WebAPP Software, 1401629 shall pay to Licensor an annual license fee (the "License Fee") in the amounts and in accordance with the terms set forth in Exhibit "E". All payments shall be made in Canadian dollars, unless otherwise agreed by the parties. Late payments shall be subject to interest at a rate equal to the lesser of (a) 1.5% per month, or (b) the maximum allowed by applicable law. 4.3 Withholding Taxes. In the event that under applicable law tax must be withheld from amounts payable to Springboard hereunder, 1401629 shall gross-up the sum to be paid to Springboard so that the actual sum received by Springboard is the amount stated to be due to Springboard pursuant to this Agreement. Springboard shall provide 1401629 with official tax receipts or other evidence of payment of the tax required to be withheld, promptly following the date of withholding. ARTICLE V. TRADEMARKS AND CONTENT LICENSES 5.1 By 1401629. 1401629 hereby grants to Springboard a limited, non-exclusive, non-transferable, royalty-free license to use, reproduce, distribute, create derivative works of, publicly display, publicly perform and digitally perform the 1401629 Content and the 1401629 Marks solely in connection with Springboard's performance of the Services. Springboard hereby acknowledges and agrees that, except as specifically provided in this Section 5.1, Springboard shall acquire no rights whatsoever with respect to any of the 1401629 Marks, and without limiting the generality of this Section 5.1, Springboard shall not utilize any of the 1401629 Marks in connection with the design and development of the VentureDrive Site. 5.2 By Springboard. Springboard hereby grants to 1401629 a limited, non-exclusive, non-transferable, royalty-free license to use the Springboard Marks on the VentureDrive Site and to advertise and promote the VentureDrive Site and the Springboard Site or otherwise to fulfill its obligations under this Agreement. 5.3 Trademark Restrictions. The respective trademark owner may terminate the foregoing trademark licenses if, in its reasonable discretion, the other party's use of the owner's trademarks tarnishes, blurs or dilutes the -8- quality associated with such trademarks or the associated goodwill and such problem is not cured within ten (10) days of notice of breach. Title to and ownership of each party's trademarks shall remain with the owner. Each party shall use the other's trademarks exactly in the form provided and in conformance with any trademark usage policies. Neither party shall take any action inconsistent with the owner's ownership of its trademarks, and any benefits accruing from use of such trademarks shall automatically vest in the owner. Neither party shall form any combination marks with the other party's trademarks. 5.4 Standards. 1401629 shall not provide to Springboard any 1401629 Content or 1401629 Marks, and Springboard shall not provide to 1401629 any Springboard Frameset or Springboard Marks, that (a) infringe any third party's intellectual property or privacy/publicity right; (b) violate any law or regulation; (c) are defamatory, obscene, harmful to minors or child pornographic; (d) contain any viruses, trojan horses, worms, time bombs, cancelbots or other computer programming routines that are intended to damage, detrimentally interfere with, surreptitiously intercept or expropriate any system, data or personal information; or (e) are materially false, inaccurate, or misleading. ARTICLE VI. OTHER AGREEMENTS 6.1 Posting of Content to VentureDrive Site. 1401629 acknowledges and agrees that all content created by 1401629 or its Users shall be posted to the VentureDrive Site for global display in the Springboard WebAPP; provided, however, that the content, links, e-mail transmissions, news group uploads and other information or data posted by 1401629 or Users to shall not be viewable by the general public without the prior written consent of 1401629. 6.2 Link to Springboard Site; Powered By WebAPP's Logo. During the term of this Agreement, 1401629 shall maintain on the VentureDrive Site one or more hypertext links to the Springboard Site, as well as a prominently displayed Powered By Springboard Logo. 6.3 Joint Marketing Efforts. During the term of this Agreement, the parties will mutually work together in good faith to identify, create, develop and implement marketing and public relations opportunities for additional promotion of Springboard on the VentureDrive Site and other 1401629 properties, with an eye to increase the traffic flow to the Springboard Site and on the Springboard Site for the 1401629 properties. ARTICLE VII. INTELLECTUAL PROPERTY RIGHTS; INFRINGEMENTS 7.1 Ownership of the Licensed Software. All Intellectual Property Rights in or related to the Licensed Software are and shall remain the exclusive property of Springboard or its licensors. 1401629 shall not take any action that jeopardizes Springboard's or its licensor's Intellectual Property Rights. 7.2 1401629 Content. 1401629 and its suppliers retain all rights; title and interest in and to all Intellectual Property Rights embodied in or associated with the 1401629 Content and the VentureDrive Site (excluding the Licensed Software). There are no implied licenses under this Agreement, and any rights not expressly granted to 1401629 hereunder are reserved by Springboard or its suppliers. -9- 7.3 User Information. Springboard agrees that (a) all User Information collected from the VentureDrive Site shall be owned by 1401629; and (b) Springboard will only use User Information to perform Springboard's obligations under this Agreement. Without limiting the generality of the foregoing, Springboard shall not use the User Information for direct marketing or promotions to Users and shall not send any direct communications (including e-mail, telephone calls, faxes and physical mail) to Users except in support or 1401629 marketing activities. Springboard agrees that it will not distribute User Information to any third party without 1401629's prior written consent. In the event Springboard obtains such consent, it may only distribute User Information in a summary or aggregate form, which summary form does not identify or reference, in any way or manner, (x) a specific User or (y) personally identifiable User Information about a specific User. ARTICLE VIII. CONFIDENTIALITY 8.1 Confidentiality. Each party acknowledges that it may have access to certain Confidential Information of the other party. Each party shall: (a) refrain from using or exploiting any and all Confidential Information of the other party for any purposes or activities other than those expressly contemplated in this Agreement; (b) maintain the secrecy and confidentiality of all such Confidential Information; and (c) not sell or disclose in any manner, directly or indirectly, such Confidential Information, except as necessary in compliance with its obligations contained herein. Each party shall implement effective security procedures in order to avoid disclosure or misappropriation of such Confidential Information of the other. If either party learns of an actual or potential unauthorized use or disclosure of the other party's confidential information, such party shall promptly notify the other party and take all steps that may be reasonably available to recover the confidential information and prevent its further unauthorized use or dissemination. 8.2 Remedies. The parties expressly acknowledge that the covenants contained in this Article VIII are unique and integral to this Agreement and that monetary damages would be an inadequate remedy at law in the event of a breach. For that reason, the parties consent that such covenants shall be enforceable in a court of equity by temporary or permanent injunction, restraining order or a decree of specific performance. The remedies provided above shall be cumulative and not exclusive and are in addition to any other remedies which either party may have under this Agreement or applicable law. ARTICLE IX. WARRANTIES INDEMNIFICATION 9.1 1401629 Representations and Warranties. 1401629 represents and warrants that: (a) it has full power and authority to enter into, and to perform its obligations under this Agreement; (b) it has all registrations, licenses and approvals necessary to enter into and perform its obligations under this Agreement; (c) it will use reasonable commercial efforts to correct any errors, inaccuracies or omissions in the VentureDrive Site necessary to prevent Springboard from incurring any liability as a result of such errors, inaccuracies or omissions; (d) the 1401629 Content does not contain any false statements, use defamatory language nor contain any language which damages the reputation of a group, business or individual; and (e) it is the owner or valid -10- licensee of the 1401629 Content and the 1401629 Marks, and has the right to grant to Springboard the rights granted under this Agreement. 9.2 1401629 Indemnification. 1401629 shall indemnify, defend, and hold Springboard and its affiliates, and their respective officers, directors, agents and employees harmless from and against any and all liabilities, damages, losses, costs and expenses (including reasonable attorneys' fees): (a) arising out of or relating to any breach or alleged breach of the foregoing representations and warranties; (b) arising out of or relating to 1401629's operation or maintenance of the VentureDrive Site, except to the extent due to acts or omissions of Springboard; or (c) for third party claims alleging that the 1401629 Content or 1401629 Marks, or any portion thereof, infringe, misappropriate or violate any third party Intellectual Property Rights. 9.3 Springboard Representations and Warranties. Springboard represents and warrants that (a) it has full power and authority to enter into, and to perform its obligations under, this Agreement; (b) it is the owner or valid licensee of the Springboard Marks, and has the right to grant to 1401629 the rights granted under this Agreement; (c) it will use reasonable commercial efforts to correct any errors, inaccuracies or omissions in the VentureDrive Site necessary to prevent 1401629 from incurring any liability as a result of such errors, inaccuracies or omissions; (d) it owns all copyrights and trade secrets in and to the WebAPP's Software or possesses sufficient rights thereunder to execute and perform this Agreement; and (e) to its knowledge, without investigation, the WebAPP's Software does not, and the Developed Software will not, infringe any registered U.S. patent or registered U.S. copyright owned by a third person; provided, however, that these representations shall not apply to any modifications to the Licensed Software made by 1401629. 9.4 Springboard Indemnification. Springboard shall indemnify, defend, and hold 1401629 and its affiliates, and their respective officers, directors, agents and employees harmless from and against any and all liabilities, damages, losses, costs and expenses (including reasonable attorneys' fees): (a) arising out of or relating to any breach or alleged breach of the foregoing representations and warranties; (b) arising out of or relating to the VentureDrive Site, except to the extent due to acts or omissions of Springboard; or (c) for third party claims alleging that the Licensed Software or the Springboard Marks, or any portion thereof, infringes, misappropriates, or violates any U.S. patent or U.S. registered copyright. 9.5 Enforcement Actions. (a) 1401629 shall immediately give notice in writing to Springboard of any infringement or threatened infringement of, or any challenge to, any of the Licensed Software that comes to its knowledge. 1401629 shall give such assistance as is reasonably requested by Springboard to assist Springboard in the prevention of any such infringement, but 1401629 shall not, subject to Section 9.5(b), institute any legal proceedings without the Springboard 's prior written consent. (b) If Springboard fails to institute legal proceedings necessary to prevent infringement of the Licensed Software within three months of having been notified of such infringement, 1401629 shall be entitled to do all such things as it shall consider proper to prevent such infringement and in -11- particular shall have the right, at its sole cost, to institute or defend legal proceedings on giving ten (10) days' prior written notice to Springboard of its intention so to do. Springboard hereby consents to the use of its name by 1401629 in legal proceedings instituted or defended in accordance with this Section 9.5 insofar as it is necessary for the prosecution or defense of such proceedings. 9.6 Indemnification Procedure. (a) If a third party brings a claim against 1401629 alleging that the Licensed Software infringes its U.S. patent or U.S. registered copyright, Springboard shall indemnify 1401629, its directors, officers, employees and agents from and against claims, losses and damages (including reasonable attorneys' fees) which may arise from such claim, but only if: (i) 1401629 notifies Springboard promptly upon learning that the claim has been or may be asserted; (ii) Springboard has sole control over the defense of the claim and any negotiation for its settlement or compromise; and (iii) 1401629 cooperates with Springboard in connection with such claim and takes no action that, in Springboard 's reasonable judgment, is contrary to Springboard 's interest. 1401629 shall have the right to participate in the defense of any such claim at its own expense. Springboard agrees not to settle any such claim without the consent of 1401629 unless the settlement involves consideration payable by Springboard solely in the form of payment of money. (b) If a claim described in Section 9.6(a) above may be or has been asserted, 1401629 shall permit Springboard, at Springboard 's option and expense, to: (i) procure the right for 1401629 to continue exercising its rights under this Agreement; (ii) replace or modify the Licensed Software to eliminate the infringement while providing functionally equivalent performance; or (iii) if Springboard deems neither of these remedies to be practicable, terminate this Agreement in exchange for a refund of the Development Fee paid to Springboard . (c) Springboard shall have no obligation to 1401629 under this Section 9.6 if the claim results from: (i) a correction, modification or enhancement of the Licensed Software not provided by Springboard; (ii) 1401629 Content provided by 1401629 in connection with the development of the VentureDrive Site; (iii) the failure by 1401629 to promptly use and distribute an update or enhancement provided by Springboard that would have eliminated the actual or alleged infringement or misappropriation; or (iv) the combination of the Licensed Software with other items not provided by Springboard . This Section sets forth 1401629's exclusive remedies, and Springboard's exclusive liability, in case of any infringement or misappropriation claim related to the Licensed Software. 9.7 LIMITATIONS OF LIABILITY. TO THE MAXIMUM EXTENT PERMITTED UNDER APPLICABLE LAW, NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY LOSS OF USE, INTERRUPTION OF BUSINESS, LOST PROFITS OR ANY INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES OF ANY KIND OR NATURE FOR ANY REASON WHATSOEVER, WHETHER SUCH LIABILITY IS ASSERTED ON THE BASIS OF CONTRACT, TORT (INCLUDING NEGLIGENCE OR STRICT LIABILITY), OR OTHERWISE, EVEN IF THE OTHER -12- PARTY HAS BEEN WARNED OF THE POSSIBILITY OF SUCH LOSS OR DAMAGES. EXCEPT FOR CLAIMS UNDER ARTICLES III, IV, V AND VI, IN NO EVENT SHALL EITHER PARTY'S LIABILITY FOR DAMAGES ARISING FROM OR IN CONNECTION WITH THIS AGREEMENT EXCEED THE AMOUNT PAID BY 1401629 UNDER THIS AGREEMENT. THIS SECTION STATES EACH PARTY'S ENTIRE LIABILITY HEREUNDER NOTHWITHSTANDING THE FAILURE OF ESSENTIAL PURPOSE OF ANY PROVISION OF THIS AGREEMENT. ARTICLE X. TERM AND TERMINATION 10.1 Term. This Agreement shall enter into effect on the date hereto, and shall remain in full force and effect until terminated by mutual agreement between the parties, or in accordance with the provisions of this Article X. 10.2 Termination for Cause. In the event that a party hereto (the "breaching party") shall commit any material breach or default of any of its obligations under this Agreement or under the Support and Maintenance Agreement, the other party hereto (the "non-breaching party") may give the breaching party written notice of such breach or default and demand that such breach or default be cured immediately. In the event that the breaching party fails to cure such breach or default within thirty (30) days after the date of the non-breaching party's written notice hereunder, the non-breaching party may terminate this Agreement, immediately upon giving written notice of termination to the breaching party. Termination of this Agreement in accordance with this Section 10.2 shall not affect or impair the non-breaching party's right to pursue any legal remedy, including the right to recover damages for all harm suffered or incurred as a result of the breaching party's breach or default hereunder. 10.3 Consequences of Termination. Upon termination, all rights and licenses granted hereunder will cease and 1401629 will immediately cease all operation of the VentureDrive Site and use of the Licensed Software. Within fifteen (15) days after the date of termination hereof: (a) 1401629 shall return to Springboard all copies of all documents and other materials that contain or embody any of the Licensed Software and/or Confidential Information of Springboard that are in the possession of 1401629 as of the date of termination; and (b) Springboard shall return to 1401629 all copies of all documents and other materials that contain or embody any of the 1401629 Content and/or 1401629's Confidential Information that are in the possession of Springboard as of the date of termination. 10.4 Survival. The rights and obligations of the parties which by their nature must survive termination or expiration of this Agreement in order to achieve its fundamental purposes including, without limitation, the provisions of Articles III, VII, VIII and IX shall survive any termination of this Agreement. ARTICLE XI. MISCELLANEOUS PROVISIONS 11.1 Independent Contractor. Nothing in this Agreement shall be construed to constitute either party as a partner, employee, or agent of the other, nor shall any party bind, attempt to bind, or have the authority to bind -13- the other party in any respect, it being intended that each party shall remain an independent contractor responsible for its or his own actions. Each party shall conduct its business in its own name and, to the extent consistent with this Agreement, in such manner as it may see fit; provided, however, that each party shall be responsible for the acts and expenses of its agents, employees, and associates. 11.2 Entire Agreement. This Agreement, including the Exhibits hereto, and the Support and Maintenance Agreement represent the entire Agreement between the parties concerning the licensing of the Licensed Software and supersede all prior discussions, Agreements and understandings of every kind and nature between them regarding the subject matter hereof. 11.3 Amendment. This Agreement may not be amended except by a written instrument in writing signed on behalf of each of the parties hereto. 11.4 Assignment. Neither Party to this Agreement may assign or transfer this Agreement or assign any of its rights or delegate any of its obligations thereunder (whether by contract, merger, sale of assets or securities, operation of law or otherwise), without the prior written consent of the other Party. 11.5 Non-Waiver of Rights. Failure of either party to enforce any of the provisions of this Agreement or any rights with respect thereto or failure to exercise any election provided for herein shall in no way be considered to be a waiver of such provisions, rights or elections or in any way effect the validity of this Agreement. The failure of either party to exercise any of said provisions, rights or elections shall not preclude or prejudice such party from later enforcing or exercising the same or other provisions, rights or elections which it may have under this Agreement. 11.6 Notices. Any notice to be given hereunder shall be sufficient if in writing and personally delivered, or sent by overnight courier (such as Federal Express), or sent by registered mail, postage prepaid, return receipt requested, or sent by facsimile transmission, to the parties hereto and addressed to the address set forth on the signature page hereof or to such address as the parties may from time to time provide in accordance herewith. Such notice shall be deemed given: (a) if personally served, at the time of delivery; (b) if sent by facsimile transmission with confirmation of receipt, 24 hours after transmission or the time of actual receipt, whichever is earlier; (c) if sent by overnight courier, on the third (3rd) day after being posted or on the date of actual receipt, whichever is earlier; or (d) if sent by registered mail, on the seventh (7th) day after being posted or on the date of actual receipt, whichever is earlier. 11.7 Governing Law and Attorneys' Fees. This Agreement shall be governed by and construed in all respects in accordance with the laws of the state of Ontario, Canada, without regard to its conflict of laws principles. In the event of any action or arbitration for the breach of this Agreement, the prevailing party shall be entitled to reasonable attorneys' fees, costs and expenses incurred in connection with such action or arbitration. -14- 11.8 Counterparts. This Agreement may be executed in one or more counterparts, including facsimile or photocopy counterparts, each of, which shall be deemed an original, but all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. "Springboard " "1401629" Springboard Technology Solutions Inc. 1401629 Ontario Inc. By: By: ---------------------------------- ------------------------------- Name: Name: Brian J. MacDonald -------------------------------- ------------------------------ Title: Title: President ------------------------------- ----------------------------- Address: Address: 2345 Yonge Street, Ste., 401 ------------------------------- ----------------------------- Toronto, Ontario, M4P 2E5 - ------------------------------------- ------------------------------ Facsimile: Facsimile: --------------------------- ------------------------ -15- Exhibit "A" Project Roadmap and Requirements The VentureDrive web site shall encompass: o A registration system for both entrepreneurs and investors whereby personal details will be captured for ongoing contact and communication. o Intellectual property needs to be delivered to paying entrepreneur clients as required. o A tracking mechanism needs to be put in place to track progress through the intellectual property. o Business partners need to be able to view how individual clients are doing as they progress through the intellectual property. o Preferred services providers need to be able to post "advertisements" with regard to their services. o Investors need to be able to view entrepreneur proposals and to email VentureDrive if they are interested in the entrepreneur's proposal. o Other products may be sold through the web site. o Payments for services and or product needs to be made through Visa and MasterCard. The business of VentureDrive.com is based upon an effective network created from ongoing interaction amongst, Certified Business Partners, Investors, Entrepreneurs, and Venture Drive's back-office-processing group. VentureDrive considers this interaction to be a complete business program designed for cost effective deal development known as the Accelerator Model. The steps of the process are: o Entrepreneurs register and enroll in The Expressway(TM) process (self-directed customized online deal development program); o Entrepreneurs complete a Business Summary online; o Corporate Back Office Staff prepare a Business Summary Review which details areas of the entrepreneur's business deal/opportunity that need improvement and recommends a customized course of action; o Corporate Back Office Staff assign the Entrepreneur to a specific Certified Business Partner; o The Entrepreneur and a Certified Business Partner meet to discuss the Summary Report, which allows the Certified Business Partner the opportunity to up-sell The Expressway(TM) process and the partner's own services as required; o Entrepreneurs complete the recommended online deal development modules (max. 4) and receive reports on weaknesses and strengths, which the Certified Business Partner can use to "mentor" the Entrepreneur through problem areas related to his or her specific deal; o A quality control step wherein the Certified Business Partner determines if the Entrepreneur's deal is deemed a Certified VentureDrive deal; o If Certified, the Entrepreneur and the Certified Business Partner prepare an executive overview of the deal for posting to the Certified deal section or "Showroom"; -16- o Investors subscribing to the VentureDrive.com deal area view the Certified deals and contact VentureDrive.com to be connected with the Certified Business Partner that has assisted in the development of the particular deal of interest to the investor; and, o The Certified Business Partner, the Investor and the Entrepreneur work together to conclude a financing transaction. In addition to the core business operations there are a number of additional Internet revenue components that are related to the company's target audience and which are incorporated into the company's business plan: o An Uncertified Business Opportunity/deal area ("The Boulevard") where Entrepreneurs can post summaries of their investment opportunities for review by potential investors. Summaries will not contain identifying information and potential business transactions will be facilitated through the Certified Business Partner network; o A Preferred Service Provider ("PSP") area where Entrepreneurs and Investors can contact or learn about services relevant to their needs (Valuators, Insurers, Lawyers, various ASP's or other outsourcing services, etc.), VentureDrive will charge PSP's a fee for posting to this area. o A capability to market other learning products and services, which pertain to the aggregated audience. Many other 3rd party products and services could be linked to the company's Internet site over time as the company move toward a "destination site Investors and Entrepreneurs" concept. Examples of these products include: o Business insurance services; o Personnel recruiting services; o Health and Group Insurance services; o Business Application Service Providers - Accounting software, Marketing, etc. o Other services that Certified Business Partners may wish to offer through the network. -17- Exhibit B Springboard WebAPPs Software: The Springboard WebAPP's software suite consists of modules related to specific functions that many web sites need to enable sites to have the following functions within a business environment. o Data base management o Admin Tools o Registration System o Email response o Collaboration Tools o Web Cast technology o Compression Algorithms o Payment Interface o Tracking System o Inventory System o Catalog System o Order Processing o Data Collection o POS -18- Exhibit C 1401629 Marks The following are the registered and unregistered marks of 1401629 Ontario Inc. to be used in connection with the VentureDrive web site. o VentureDrive.com o VentureDrive o Entrepreneur Expressway o Entrepreneur Showroom o Entrepreneur Driveway o Partner Parkway o Investor Interchange o Certified Deal o Uncertified Investment Opportunity o Certified Investment Opportunity o Certified Business Partner o Preferred Services Provider o Deal Development Modules EX-10.3 6 0006.txt CONSULTING AGREEMENT CONSULTING AGREEMENT This Consulting Agreement ("Agreement") is made by and between Gordon Walker Consulting Associates ("Consultant") with a mailing address at 11499 Durham Road 30, Mount Albert, ON L0G 1M0 and VentureDrive.com Inc., ("VentureDrive") an Ontario registered company with offices at 2345 Yonge Street, Suite 401, Toronto, Ontario M4P 2E5. WITNESSETH WHEREAS, Consultant or its employees have substantial skill and experience in the field of entrepreneurship, venture capital and investment and, WHEREAS, VentureDrive desires to hire Consultant and Consultant desires to provide services to VentureDrive, NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to the terms and conditions set forth herein. ARTICLE 1: STATEMENT OF WORK Consultant shall provide the following services to VentureDrive: o Assist with general corporate management and marketing to venture capital partners, stakeholders and other participants in the VentureDrive network. These services shall be provided under the direction of Peter Hamilton, President and CEO. ARTICLE 2: COMPENSATION For the complete, satisfactory, and timely performance of services hereunder Consultant will be paid a professional fee at a rate of Eight Thousand Canadian Dollars pro rata for the portion of the month worked, currently ($2,666.00) per month, and will be reimbursed for reasonable out of pocket expenses incurred in performance hereof in accordance with company expense policies. ARTICLE 3: PROGRESS REPORTING AND PAYMENT Consultant shall provide to VentureDrive progress reports from time to time stating accomplishments and work completed. Invoices should be submitted on a monthly basis, and will be paid within 14 days by VentureDrive, or bear interest at 10% per annum from the date of their submission. ARTICLE 4: PLACE OF PERFORMANCE VentureDrive will provide from time to time work facilities at 2345 Yonge Street, Suite 401, Toronto or other locations as may be in effect from time to time for use by the Consultant on an as needed basis at the Consultant's request. However Consultant shall be responsible for maintaining Consultant's own office facilities. ARTICLE 5: INDEPENDENT CONSULTANT STATUS Consultant shall perform work hereunder solely as an independent contractor to, and not as an employee, agent, partner or joint venturer of VentureDrive. Consultant shall not be entitled to benefits that may be afforded from time to time to VentureDrive employees, including without limitation vacation pay, holidays, sick leave, worker's compensation and unemployment insurance. Further VentureDrive shall not be responsible for withholding or paying any taxes or social security on behalf of Consultant. Consultant shall be fully responsible for any such withholding or paying of taxes or social security. ARTICLE 6: ASSIGNMENT AND DELEGATION Neither party shall assign or delegate this Agreement or any rights, duties or obligations hereunder without the express written consent of the other ARTICLE 7: ENTIRE AGREEMENT This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior negotiations or representations or independent contract agreements whether written or oral. This agreement may be amended only by written instrument signed by the Parties. ARTICLE 8: HOLD HARMLESS The Parties shall indemnify, defend and hold each other harmless from and against any suits, claims, damages, expenses, costs and liabilities arising out of the other Party's negligent acts, omissions or wrongful conduct in the course of performance of this agreement including, without limitation, the breach or failure of the warranties and representations set forth herein. Consultant shall indemnify, defend and hold VentureDrive harmless from and against any claim of infringement of any patent or copyright with respect to all information, documents and systems developed and/or delivered by Consultant pursuant to this agreement. Should any information, documents and systems developed and/or delivered by the Consultant under this Agreement become or in the Consultant's opinion be likely to become the subject of a claim of infringement of a copyright or patent, Consultant shall at its option use its best efforts to either procure for VentureDrive the right to continue using the information, documents and systems developed and/or delivered by the Consultant under this Agreement, or shall replace or modify the information, documents and systems and/or delivered by the Consultant under this Agreement to make it non-infringing. ARTICLE 9: CONFIDENTIAL INFORMATION Consultant acknowledges and agrees that in the course of the performance of the services pursuant to this Agreement, Consultant may be given access to, or come into possession of confidential information of VentureDrive and its clients which may relate to trade secrets, proprietary data or other confidential matters. Consultant acknowledges and agrees that it will not use, duplicate or divulge to others any such confidential information, including without limitation trade secrets from VentureDrive or any of its customers. Confidential information as used herein includes information, materials, products and deliverables developed during, and discoveries and contributions made by Consultant in the performance of this Agreement. All tangible embodiments of such information shall be delivered to VentureDrive by Consultant upon termination hereof, or upon request by VentureDrive, whichever first occurs. ARTICLE 10: TERM AND TERMINATION Either party may terminate under this Agreement at anytime by giving the other party seven (7) days written notice, by mail or delivery to the address listed on the first page hereof. On said termination if such is purely for the parties' convenience, Consultant shall be paid for all services provided up to termination. Unless earlier terminated as provided herein, this Agreement shall be in effect for a period of one year from May 1, 2000 with the option to renew by a signed written amendment by both parties for an additional period of one (1) year. Further renewals of this agreement are at the option of the parties. The provisions of Articles 8, 9, and 11 shall survive termination or expiration hereof. ARTICLE 11: WARRANTIES AND REPRESENTATIONS Consultant warrants and represents that neither the execution, delivery nor performance of this Agreement constitutes a breach or violation of any contract or agreement to which it is a party or by which it is in any manner bound. Consultant further warrants and represents that it has no interests or obligations, nor during the term hereof will it acquire any interests or obligations, which conflict with or hamper its ability to perform as required hereby. ARTICLE 12: INSURANCE Consultant shall provide statutory workmen's compensation and general insurance and contractual liability insurance in sufficient amounts to cover liability of Consultant that may arise hereunder. ARTICLE 13: INTELLECTUAL PROPERTY Consultant hereby assigns any and all rights, title and interest, including but not limited to, copyrights, trade secrets, moral and proprietary rights to the information, materials, products and deliverables developed during the performance of this Agreement to VentureDrive. Provided that the Consultant has been paid in full for all amounts owing, all work performed under this Agreement and all information, materials, products and deliverables developed pursuant to this Agreement shall be the exclusive property of VentureDrive and all title and interest therein shall vest in VentureDrive. All such information, materials, products and deliverables shall be deemed to be "works made for hire" under the Untied States Federal and Canadian Copyright Law. Pursuant to its exclusive proprietary rights, VentureDrive shall have the sole and exclusive right inter alia to use, modify or adapt the information, materials, products or deliverables that Consultant have developed during the performance of this Agreement. Consultant agrees to give VentureDrive all necessary assistance required to perfect such assignment of rights defined in this Article 13. ARTICLE 14: RESTRICTIVE COVENANT During the term of this Agreement and for a period of one year after the last date of services to VentureDrive, Consultant agrees that he will provide no services to any other party using the information gained from performing services for VentureDrive save and except the experience gained in the Venture Capital market. Consultant agrees that, for a period of one year, after termination he/she will seek the approval of VentureDrive prior to signing a service agreement or entering employment with another party where he/she will use the information gained from performing services for VentureDrive, which approval will not be unreasonably withheld. ARTICLE 15: APPLICABLE LAW This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario. IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives. Consultant Name: VentureDrive.com Inc. Signature: Signature: - ------------------------------------------------------------------------------- Date: April 1, 2000 Date: April 1, 2000 - ------------------------------------------------------------------------------- EX-10.4 7 0007.txt CONSULTING AGREEMENT CONSULTING AGREEMENT This Consulting Agreement ("Agreement") is made by and between Peter Hamilton Consulting ("Consultant") with a mailing address at 201 Elton Park Road, Oakville, Ontario L6J 4C2 and VentureDrive.com Inc., ("VentureDrive") an Ontario registered company with offices at 2345 Yonge Street, Suite 401, Toronto, Ontario M4P 2E5. WITNESSETH WHEREAS, Consultant or its employees have substantial skill and experience in the field of entrepreneurship, venture capital and investment and, WHEREAS, VentureDrive desires to hire Consultant and Consultant desires to provide services to VentureDrive, NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to the terms and conditions set forth herein. ARTICLE 1: STATEMENT OF WORK Consultant shall provide the following services to VentureDrive: o Perform duties of President and CEO These services shall be provided under the direction of the Board of Directors. ARTICLE 2: COMPENSATION For the complete, satisfactory, and timely performance of services hereunder Consultant will be paid a professional fee of Eight Thousand Dollars Canadian ($8,000.00) per month and will be reimbursed for reasonable out of pocket expenses incurred in performance hereof in accordance with company expense policies. ARTICLE 3: PROGRESS REPORTING AND PAYMENT Consultant shall provide to VentureDrive progress reports from time to time stating accomplishments and work completed. Invoices should be submitted on a monthly basis. ARTICLE 4: PLACE OF PERFORMANCE VentureDrive will provide from time to time work facilities at 2345 Yonge Street, Suite 401, Toronto or other locations as may be in effect from time to time for use by the Consultant on an as needed basis at the Consultant's request. However Consultant shall be responsible for maintaining Consultant's own office facilities. ARTICLE 5: INDEPENDENT CONSULTANT STATUS Consultant shall perform work hereunder solely as an independent contractor to, and not as an employee, agent, partner or joint venturer of VentureDrive. Consultant shall not be entitled to benefits that may be afforded from time to time to VentureDrive employees, including without limitation vacation pay, holidays, sick leave, worker's compensation and unemployment insurance. Further VentureDrive shall not be responsible for withholding or paying any taxes or social security on behalf of Consultant. Consultant shall be fully responsible for any such withholding or paying of taxes or social security. ARTICLE 6: ASSIGNMENT AND DELEGATION Neither party shall assign or delegate this Agreement or any rights, duties or obligations hereunder without the express written consent of the other ARTICLE 7: ENTIRE AGREEMENT This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior negotiations or representations or independent contract agreements whether written or oral. This agreement may be amended only by written instrument signed by the Parties. ARTICLE 8: HOLD HARMLESS Consultant, shall indemnify, defend and hold VentureDrive harmless from and against any suits, claims, damages, expenses, costs and liabilities arising out of Consultant's negligent acts, omissions or wrongful conduct in the course of performance of this agreement including, without limitation, the breach or failure of the warranties and representations set forth herein. Consultant shall indemnify, defend and hold VentureDrive harmless from and against any claim of infringement of any patent or copyright with respect to all information, documents and systems developed and/or delivered by Consultant pursuant to this agreement. Should any information, documents and systems developed and/or delivered by the Consultant under this Agreement become or in the Consultant's opinion be likely to become the subject of a claim of infringement of a copyright or patent, Consultant shall at its option use its best efforts to either procure for VentureDrive the right to continue using the information, documents and systems developed and/or delivered by the Consultant under this Agreement, or shall replace or modify the information, documents and systems and/or delivered by the Consultant under this Agreement to make it non-infringing. ARTICLE 9: CONFIDENTIAL INFORMATION Consultant acknowledges and agrees that in the course of the performance of the services pursuant to this Agreement, Consultant may be given access to, or come into possession of confidential information of VentureDrive and its clients which may relate to trade secrets, proprietary data or other confidential matters. Consultant acknowledges and agrees that it will not use, duplicate or divulge to others any such confidential information, including without limitation trade secrets from VentureDrive or any of its customers. Confidential information as used herein includes information, materials, products and deliverables developed during, and discoveries and contributions made by Consultant in the performance of this Agreement. All tangible embodiments of such information shall be delivered to VentureDrive by Consultant upon termination hereof, or upon request by VentureDrive, whichever first occurs. ARTICLE 10: TERM AND TERMINATION Either party may terminate under this Agreement at anytime by giving the other party seven (7) days written notice, by mail or delivery to the address listed on the first page hereof. On said termination if such is purely for the parties' convenience, Consultant shall be paid for all services provided up to termination. Unless earlier terminated as provided herein, this Agreement shall be in effect for a period of one year from May 1, 2000 with the option to renew by a signed written amendment by both parties for an additional period of one (1) year. Further renewals of this agreement are at the option of the parties. The provisions of Articles 8, 9, and 11 shall survive termination or expiration hereof. ARTICLE 11: WARRANTIES AND REPRESENTATIONS Consultant warrants and represents that neither the execution, delivery nor performance of this Agreement constitutes a breach or violation of any contract or agreement to which it is a party or by which it is in any manner bound. Consultant further warrants and represents that it has no interests or obligations, nor during the term hereof will it acquire any interests or obligations, which conflict with or hamper its ability to perform as required hereby. ARTICLE 12: INSURANCE Consultant shall provide statutory workmen's compensation and general insurance and contractual liability insurance in sufficient amounts to cover liability of Consultant that may arise hereunder. ARTICLE 13: INTELLECTUAL PROPERTY Consultant hereby assigns any and all rights, title and interest, including but not limited to, copyrights, trade secrets, moral and proprietary rights to the information, materials, products and deliverables specifically developed at the request of VentureDrive during the performance of this Agreement to VentureDrive. VentureDrive acknowledges that Consultant may have from time to time obligations to develop other products not related to venture capital and investment and specifically excludes copyrights, trade secrets, moral and proprietary rights to the information, materials, products and deliverables developed for others. Provided that the Consultant has been paid in full for all amounts owing, all work performed under this Agreement and all information, materials, products and deliverables developed specifically for VentureDrive pursuant to this Agreement shall be the exclusive property of VentureDrive and all title and interest therein shall vest in VentureDrive. All such information, materials, products and deliverables shall be deemed to be "works made for hire" under the Untied States Federal and Canadian Copyright Law. Pursuant to its exclusive proprietary rights, VentureDrive shall have the sole and exclusive right inter alia to use, modify or adapt the information, materials, products or deliverables that Consultant has developed during the performance of this Agreement. Consultant agrees to give VentureDrive all necessary assistance required to perfect such assignment of rights defined in this Article 13. ARTICLE 14: RESTRICTIVE COVENANT During the term of this Agreement and for a period of one year after the last date of services to VentureDrive, Consultant agrees that he will provide no services to any other party using the information gained from performing services for VentureDrive save and except the experience gained in the Venture Capital market. Consultant agrees that after termination he/she will seek the approval of VentureDrive prior to signing a service agreement or entering employment with another party which approval will not be unreasonably withheld. ARTICLE 15: APPLICABLE LAW This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario. IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives. Consultant Name: VentureDrive.com Inc. Signature: Signature: - ------------------------------------------------------------------------------- Date: Date: - ------------------------------------------------------------------------------- EX-10.5 8 0008.txt CONSULTING AGREEMENT CONSULTING AGREEMENT This Consulting Agreement ("Agreement") is made by and between Brian MacDonald Consulting ("Consultant") with a mailing address at 16 Wetherfield Place, Toronto, Ontario M3B 2E1 and VentureDrive.com Inc., ("VentureDrive") an Ontario registered company with offices at 2345 Yonge Street, Suite 401, Toronto, Ontario M4P 2E5. WITNESSETH WHEREAS, Consultant or its employees have substantial skill and experience in the field of entrepreneurship, venture capital and investment and, WHEREAS, VentureDrive desires to hire Consultant and Consultant desires to provide services to VentureDrive, NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree to the terms and conditions set forth herein. ARTICLE 1: STATEMENT OF WORK Consultant shall provide the following services to VentureDrive: o Perform duties of EVP and Chief Financial Officer These services shall be provided under the direction of the President and CEO. ARTICLE 2: COMPENSATION For the complete, satisfactory, and timely performance of services hereunder Consultant will be paid a professional fee of Eight Thousand Dollars Canadian ($8,000.00) per month and will be reimbursed for reasonable out of pocket expenses incurred in performance hereof in accordance with company expense policies. ARTICLE 3: PROGRESS REPORTING AND PAYMENT Consultant shall provide to VentureDrive progress reports from time to time stating accomplishments and work completed. Invoices should be submitted on a monthly basis. ARTICLE 4: PLACE OF PERFORMANCE VentureDrive will provide from time to time work facilities at 2345 Yonge Street, Suite 401, Toronto or other locations as may be in effect from time to time for use by the Consultant on an as needed basis at the Consultant's request. However Consultant shall be responsible for maintaining Consultant's own office facilities. ARTICLE 5: INDEPENDENT CONSULTANT STATUS Consultant shall perform work hereunder solely as an independent contractor to, and not as an employee, agent, partner or joint venturer of VentureDrive. Consultant shall not be entitled to benefits that may be afforded from time to time to VentureDrive employees, including without limitation vacation pay, holidays, sick leave, worker's compensation and unemployment insurance. Further VentureDrive shall not be responsible for withholding or paying any taxes or social security on behalf of Consultant. Consultant shall be fully responsible for any such withholding or paying of taxes or social security. ARTICLE 6: ASSIGNMENT AND DELEGATION Neither party shall assign or delegate this Agreement or any rights, duties or obligations hereunder without the express written consent of the other. ARTICLE 7: ENTIRE AGREEMENT This Agreement represents the entire agreement between the parties with respect to the subject matter hereof and supercedes all prior negotiations or representations or independent contract agreements whether written or oral. This agreement may be amended only by written instrument signed by the Parties. ARTICLE 8: HOLD HARMLESS Consultant, shall indemnify, defend and hold VentureDrive harmless from and against any suits, claims, damages, expenses, costs and liabilities arising out of Consultant's negligent acts, omissions or wrongful conduct in the course of performance of this agreement including, without limitation, the breach or failure of the warranties and representations set forth herein. Consultant shall indemnify, defend and hold VentureDrive harmless from and against any claim of infringement of any patent or copyright with respect to all information, documents and systems developed and/or delivered by Consultant pursuant to this agreement. Should any information, documents and systems developed and/or delivered by the Consultant under this Agreement become or in the Consultant's opinion be likely to become the subject of a claim of infringement of a copyright or patent, Consultant shall at its option use its best efforts to either procure for VentureDrive the right to continue using the information, documents and systems developed and/or delivered by the Consultant under this Agreement, or shall replace or modify the information, documents and systems and/or delivered by the Consultant under this Agreement to make it non-infringing. ARTICLE 9: CONFIDENTIAL INFORMATION Consultant acknowledges and agrees that in the course of the performance of the services pursuant to this Agreement, Consultant may be given access to, or come into possession of confidential information of VentureDrive and its clients which may relate to trade secrets, proprietary data or other confidential matters. Consultant acknowledges and agrees that it will not use, duplicate or divulge to others any such confidential information, including without limitation trade secrets from VentureDrive or any of its customers. Confidential information as used herein includes information, materials, products and deliverables developed during, and discoveries and contributions made by Consultant in the performance of this Agreement. All tangible embodiments of such information shall be delivered to VentureDrive by Consultant upon termination hereof, or upon request by VentureDrive, whichever first occurs. ARTICLE 10: TERM AND TERMINATION Either party may terminate under this Agreement at anytime by giving the other party seven (7) days written notice, by mail or delivery to the address listed on the first page hereof. On said termination if such is purely for the parties' convenience, Consultant shall be paid for all services provided up to termination. Unless earlier terminated as provided herein, this Agreement shall be in effect for a period of one year from May 1, 2000 with the option to renew by a signed written amendment by both parties for an additional period of one (1) year. Further renewals of this agreement are at the option of the parties. The provisions of Articles 8, 9, and 11 shall survive termination or expiration hereof. ARTICLE 11: WARRANTIES AND REPRESENTATIONS Consultant warrants and represents that neither the execution, delivery nor performance of this Agreement constitutes a breach or violation of any contract or agreement to which it is a party or by which it is in any manner bound. Consultant further warrants and represents that it has no interests or obligations, nor during the term hereof will it acquire any interests or obligations, which conflict with or hamper its ability to perform as required hereby. ARTICLE 12: INSURANCE Consultant shall provide statutory workmen's compensation and general insurance and contractual liability insurance in sufficient amounts to cover liability of Consultant that may arise hereunder. ARTICLE 13: INTELLECTUAL PROPERTY Consultant hereby assigns any and all rights, title and interest, including but not limited to, copyrights, trade secrets, moral and proprietary rights to the information, materials, products and deliverables specifically developed at the request of VentureDrive during the performance of this Agreement to VentureDrive. VentureDrive acknowledges that Consultant may have from time to time have obligations to develop other products related to venture capital and investment and specifically excludes copyrights, trade secrets, moral and proprietary rights to the information, materials, products and deliverables developed for others or for his own account. Provided that the Consultant has been paid in full for all amounts owing, all work performed under this Agreement specifically for VentureDrive.com Inc. and all information, materials, products and deliverables developed specifically for VentureDrive, Inc. pursuant to this Agreement shall be the exclusive property of VentureDrive Inc. and all title and interest therein shall vest in VentureDrive. All such information, materials, products and deliverables shall be deemed to be "works made for hire" under the Untied States Federal and Canadian Copyright Law. Pursuant to its exclusive proprietary rights, VentureDrive shall have the sole and exclusive right inter alia to use, modify or adapt the information, materials, products or deliverables that Consultant has developed during the performance of this Agreement. Consultant agrees to give VentureDrive all necessary assistance required to perfect such assignment of rights defined in this Article 13. ARTICLE 14: RESTRICTIVE COVENANT During the term of this Agreement and for a period of one year after the last date of services to VentureDrive, Consultant agrees that he will provide no services to any other party using the information gained from performing services for VentureDrive save and except the experience gained in the Venture Capital market. Consultant agrees that after termination he/she will seek the approval of VentureDrive prior to signing a service agreement or entering employment with another party in the field of investments which approval will not be unreasonably withheld. ARTICLE 15: APPLICABLE LAW This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario. IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized representatives. Consultant Name: VentureDrive.com Inc. Brian J. MacDonald Signature: Signature: - ------------------------------------------------------------------------------- Date: April 1, 2000 Date: April 1, 2000 - ------------------------------------------------------------------------------- EX-23.1 9 0009.txt CONSENT Exhibit 23.1 Consent of Independent Accountants SIMON KROWITZ BOLIN & ASSOCIATES, P.A. 11300 ROCKVILLE PIKE, SUITE ROCKVILLE, MARYLAND 20852 Consent of Independent Certified Public Accountants As independent public accountants, we hereby consent to all references to this form under the heading "Experts" and to the incorporation of our report dated December 5, 2000 in this Registration Statement (Form SB-2) and related prospectus of VentureDrive, Inc. /s/ Simon Krowitz Bolin & Associates, P.A. Simon Krowitz Bolin & Associates, P.A. February 6, 2001 February 6, 2001 -----END PRIVACY-ENHANCED MESSAGE-----