U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED
December 31, 2000
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM
______________ TO ______________
COMMISSION FILE NUMBER: 000-9071
eCom.com, Inc.
(Exact name of registrant as specified in its charter)
Nevada 74-2026624
(State or jurisdiction of incorporation I.R.S. Employer
or organization) Identification No.)
3900 Birch Street, Suite 113, Newport Beach, California 92660
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (877) 613-3131
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $0.01 Par Value
Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the Registrant was required to
file such reports), and (2) been subject to such filing
requirements for the past 90 days. Yes X No .
As of December 31, 2000, the Registrant had 40,595,739 shares of common
stock issued and outstanding.
Transitional Small Business Disclosure Format (check one): Yes No X.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION PAGE
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEET
AS OF DECEMBER 31, 2000 3
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2000 AND DECEMBER 31, 1999 4
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 31, 2000 AND DECEMBER 31, 1999 5
NOTES TO FINANCIAL STATEMENTS 6
ITEM 2. PLAN OF OPERATION 11
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 13
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS 13
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 13
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 13
ITEM 5. OTHER INFORMATION 13
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURE 14
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCAL STATEMENTS.
eCom.com, Inc.
BALANCE SHEET
DECEMBER 31, 2000
(Unaudited)
ASSETS
Current Assets:
Cash $ 0
Total Current Assets 0
Fixed Assets
Equipment 534,886
Less Accumulated Depreciation (534,886)
Net Fixed Assets 0
Other Assets
eSEarchB2B Web Crawler 1,250,000
Rights' Title, net of amortization 1
Product Development Expenditures 60,962
Total Other Assets 1,310,963
Total Assets 1,310,963
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable 1,800
Long-Term Liabilities
Debenture Payable, Xanthos Management Corporation 578,570
Shareholders' Equity:
Preferred Stock, $0.01 par value,
10,000,000 shares authorized,
40,595,739 issued and outstanding 4,726,079
Paid-In-Capital (in excess of par value) 21,909,869
Accumulated Deficit (25,905,355)
Shareholders' Equity 730,593
Total Liabilities & Shareholders' Equity $ 1,310,963
The accompanying notes are an integral part of these financial statement
eCom.com, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31 December 31
2000 1999
Revenues $ 0 $ 0
General And Administrative Expenses:
Auto Expenses 3,000 3,000
Consulting Fees 50,000 21,000
Rent Expense 12,600 12,600
Telephone Expense 9,000 0,000
Travel and Promotions 45,000 45,000
Total General And
Administrative Expenses 119,600 90,600
Other (Income) Expenses
Write-off of Accounts Payable 0 (82,007)
Interest Expense 20,104 20,512
Total Other (Income) Expenses 20,104 (61,495)
Net Income (Loss) (139,704) (29,105)
Basic and Diluted
Earnings Per Share (.003) (.004)
Weighted Average Shares
Outstanding 40,479,739 22,145,739
The accompanying notes are an integral part of these financial statements
eCom.com, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Three Months Ended
December 31 December 31
Cash Flows From Operating Activities:
Net Loss $ (139,704) $ (20,105)
Adjustments to reconcile net loss to
net cash used by operating activities:
Decrease in accounts payable 0 (122,007)
Net cash used by operations (139,704) (151,112)
Cash Flows From Investing
Activities: 0 0
Cash Flows From Financing
Activities:
Increase (decrease) in debenture payable (160,795) (348,888)
Issuance of common stock 50,000 500,000
Net cash used in financing (110,795) 151,112
Net Increase (Decrease) in Cash (250,499) 0
Beginning Cash Balance 250,499 0
Ending Cash Balance 0 0
The accompanying notes are an integral part of these financial statements
eCom.com, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated financial statements have been
prepared in accordance with U.S. Securities and Exchange
Commission ("SEC") requirements for interim financial statements.
Therefore, they do not include all of the information and
footnotes required by generally accepted accounting principles
for complete financial statements. The financial statements
should be read in conjunction with the year ended September 30,
1999 financial statements of eCom.com, Inc. (formerly E.T.
Capital, Inc.) ("Registrant") included in the Form 10-K filed
with the SEC by the Registrant.
The results of operations for the interim periods shown in this
report are not necessarily indicative of results to be expected
for the full year. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the
results of operations for the interim periods a fair statement of
such operation. All such adjustments are of a normal recurring
nature.
NOTE 2 - RELATED PARTY TRANSACTIONS
Due to related parties at December 31, 2000 consist of the following:
Advances payable to an entity controlled by an
officer and shareholder of the Registrant represent
advances, secured with floating debenture and due on demand $578,570
Total due to related parties $578,570
ITEM 2. PLAN OF OPERATION.
The following discussion should be read in conjunction with the
financial statements of the Registrant and notes thereto
contained elsewhere in this report.
Twelve-Month Plan of Operation.
The Registrant is continuing to expand its entry into "not-
for-profit" fund raising using "1-900" "pay-per-call" telephone
numbers as outlined in the Registrant's business plan in its Form
10-KSB. With campaign finance reform a central issue in the
Congress, the Registrant is negotiating agreements for the use of
the Registrant's two political "1-900" fund raising numbers: 1-
900-DEMOCRAT and 1-900-REPUBLICAN. These numbers could raise
hundreds of millions of dollars for both the Democratic and
Republican parties. To assist in the development process, the
Registrant has retained the services of Benjamin Cohen to attempt
to procure a contract with the Democratic National Committee for
the exclusive use by the DNC of the "pay-per-call" telephone
number 1 900 "DEMOCRAT" (see Exhibit 10.2 to this Form 10-QSB;
(although this agreement was executed in July 2000, it was
finalized by the initial payment of shares of common stock,
pursuant to a Form S-8, to Mr. Cohen in December 2000)).
To develop cash flow from the "1-900" concept, the Registrant
will continue to rely on Xanthos Management Corporation to
finance the Registrant's ongoing overhead under the terms of the
bearer debenture it holds until fund raising contracts have been
signed (see notes to September 30, 2000 audit as filed and as
part of the September 30, 2000 Form 10-KSB). The Registrant has
sufficient cash funds to maintain operations for the next twelve
months.
The Registrant's internet timeshare web sites
"timeshareonlinerealty.com" and "timeshareunitsales.com" are in
the final development stage. Once the sites are completed, the
Registrant will actively solicit registration of timeshare
properties from around the world to list for sale through these
web sites using the Registrant's new browser "esearchb2b.com".
The Registrant has previously acquired proprietary software for
an Internet Meta Crawler, "eSearchB2B". This web search engine
searches other search engines for users input. Revenues sources
from this web search engine are projected to start in 2001 from
this acquisition.
The Registrant continues in its efforts to finance the Paraguayan
hydrocarbon concessions. During early 2000, the increase in the
world price of oil and gas has led to an increase in interest in
hydrocarbon exploration and development. Activity in this field
has historically been cyclical and the Registrant considers that
this has already been taken into account.
Capital Expenditures.
There were no material capital expenditures during the quarter ended
December 31, 2000.
Risk Factors Connected with Plan of Operation.
(a) Limited Prior Operations.
The Registrant has only had limited prior operations and has
embarked on a new business direction within the past few years,
which has not generated any revenue for the Registrant. The
Registrant has incurred losses from operations: $139,704 for the
three months ended December 31, 2000, $424,431 for the fiscal
year ended September 30, 2000 and $403,642 for the fiscal year
ended September 30, 1999. At December 31, 2000, the Registrant
had an accumulated deficit of $25,905,355. Thus, the Registrant
is subject to all the risks inherent in the creation of a new
business. The likelihood of the success of the Registrant must
be considered in the light of the problems, expenses,
difficulties, complications, and delays frequently encountered in
connection with the expansion of a business and the competitive
environment in which the Registrant operates. Unanticipated
delays, expenses and other problems such as setbacks in product
development, and market acceptance are frequently encountered in
connection with the expansion of a business.
Consequently, there is only a limited operating history upon
which to base an assumption that the Registrant will be able to
achieve its business plans. In addition, the Registrant has only
limited assets. As a result, there can be no assurance that the
Registrant will generate significant revenues in the future; and
there can be no assurance that the Registrant will operate at a
profitable level. If the Registrant is unable to obtain
customers and generate sufficient revenues so that it can
profitably operate, the Registrant's business will not succeed.
As a result of the fixed nature of many of the Registrant's expenses,
the Registrant may be unable to adjust spending in a timely manner to
compensate for any unexpected delays in the development and marketing of
the Registrant's products or any capital raising or revenue shortfall. Any
such delays or shortfalls will have an immediate adverse impact on the
Registrant's business, operations and financial condition.
(b) Significant Working Capital Requirements.
The working capital requirements associated with the plan of business
of the Registrant will continue to be significant. The Registrant anticipates,
based on currently proposed assumptions relating to its operations (including
with respect to costs and expenditures and projected cash flow from
operations), that it can generate sufficient financing through a
floating debenture with Xanthos Management Corporation to continue its
operations for an indefinite period at the current level without requiring
additional financing. The Registrant does not anticipate, at the present time,
needing to raise any additional capital in the next twelve months to implement
its sales and marketing strategy and grow. In the event that the
Registrant's plans change or its assumptions change (due to
unanticipated expenses, technical difficulties, or otherwise), the
Registrant would be required to seek additional financing sooner than
currently anticipated or may be required to significantly curtail or cease its
operations.
(c) Success of Registrant Dependent on Management.
The Registrant's success is dependent upon the hiring of key
administrative personnel. None of the Registrant's officers,
directors, and key employees have an employment agreement with
the Registrant; therefore, there can be no assurance that these
personnel will remain employed by the Registrant after the
termination of such agreements. Should any of these individuals
cease to be affiliated with the Registrant for any reason before
qualified replacements could be found, there could be material
adverse effects on the Registrant's business and prospects. In
addition, management has no experience is managing companies in
the same business as the Registrant.
In addition, all decisions with respect to the management of
the Registrant will be made exclusively by the officers and
directors of the Registrant. Investors will only have rights
associated with minority ownership interest rights to make
decision which effect the Registrant. The success of the
Registrant, to a large extent, will depend on the quality of the
directors and officers of the Registrant. Accordingly, no person
should invest in the shares unless he is willing to entrust all
aspects of the management of the Registrant to the officers and
directors.
(d) Control of the Registrant by Officers and Directors.
The Registrant's officers and directors beneficially
own approximately 4% of the outstanding shares of the
Registrant's common stock. As a result, such persons, acting
together, have the ability to influence over all matters
requiring stockholder approval (especially since the remainder of
the 40,595,739 issued and outstanding shares are owned by over
9,000 shareholders). Accordingly, it could be difficult for an
individual investor to effectuate control over the affairs of the
Registrant. Therefore, it should be assumed that the officers,
directors, and principal common shareholders who control the
majority of voting rights will be able, by virtue of their stock
holdings, to control the affairs and policies of the Registrant.
(f) Indemnification of Directors and Officers.
The Registrant's Articles of Incorporation include provisions to
eliminate, to the fullest extent permitted by the Nevada Revised
Statutes as in effect from time to time, the personal liability of
directors of the Registrant for monetary damages arising from a breach
of their fiduciary duties as directors. The By-Laws of the Registrant include
provisions to the effect that the Registrant may, to the maximum extent
permitted from time to time under applicable law, indemnify any director,
officer, or employee to the extent that such indemnification and advancement
of expense is permitted under such law, as it may from time to time be in
effect. Any limitation on the liability of any director, or indemnification
of directors, officer, or employees, could result in substantial
expenditures being made by the Registrant in covering any
liability of such persons or in indemnifying them.
(h) Potential Conflicts of Interest Involving Management.
The officers and directors have other interests to which they
devote time, either individually or through partnerships and
corporations in which they have an interest, hold an office, or
serve on boards of directors, and each will continue to do so
notwithstanding the fact that management time may be necessary to
the business of the Registrant. As a result, certain conflicts of
interest may exist between the Registrant and its officers and/or
directors which may not be susceptible to resolution. All of the
potential conflicts of interest will be resolved only through
exercise by the directors of such judgment as is consistent with
their fiduciary duties to the Registrant. It is the intention of
management, so as to minimize any potential conflicts of
interest, to present first to the board of directors to the
Registrant, any proposed investments for its evaluation.
(i) Influence of Other External Factors on Prospects for Registrant.
The industry of the Registrant in general is a speculative
venture necessarily involving some substantial risk. There is no
certainty that the expenditures to be made by the Registrant will
result in a commercially profitable business. The marketability
of its products will be affected by numerous factors beyond the
control of the Registrant. These factors include market
fluctuations, and the general state of the economy (including the
rate of inflation, and local economic conditions), which can
affect companies' spending. Factors which leave less money in
the hands of potential customers of the Registrant will likely
have an adverse effect on the Registrant. The exact effect of
these factors cannot be accurately predicted, but the
combination of these factors may result in the Registrant not
receiving an adequate return on invested capital.
(j) Non-Cumulative Voting
Holders of the shares are not entitled to accumulate their votes
for the election of directors or otherwise. Accordingly, the
holders of a majority of the shares present at a meeting of
shareholders will be able to elect all of the directors of the
Registrant, and the minority shareholders will not be able to
elect a representative to the Registrant's board of directors.
(k) Absence of Cash Dividends
The board of directors does not anticipate paying cash dividends
on the shares for the foreseeable future and intends to retain
any future earnings to finance the growth of the Registrant's
business. Payment of dividends, if any, will depend, among other
factors, on earnings, capital requirements, and the general
operating and financial condition of the Registrant, and will be
subject to legal limitations on the payment of dividends out of
paid-in capital.
(l) Limited Public Market for Registrant's Securities.
There has been only a limited public market for the shares of
common stock of the Registrant. There can be no assurance that
an active trading market will develop or that purchasers of the
shares will be able to resell their securities at prices equal to
or greater than the respective initial public offering prices.
The market price of the shares may be affected significantly by
factors such as announcements by the Registrant or its
competitors, variations in the Registrant's results of
operations, and market conditions in the retail, electronic
commerce, and internet industries in general. The market price
may also be affected by movements in prices of stock in general.
As a result of these factors, investors in the Registrant may not
be able to liquidate an investment in the shares readily, or at
all.
(m) No Assurance of Continued Public Trading Market; Risk of Low
Priced Securities.
There has been only a limited public market for the common stock of the
Registrant. The common stock of the Registrant is currently quoted on the
Over the Counter Bulletin Board. As a result, an investor may find it
difficult to dispose of, or to obtain accurate quotations as to the market
value of the Registrant's securities. In addition, the common stock is
subject to the low-priced security or so called "penny stock" rules that
impose additional sales practice requirements on broker-dealers who sell such
securities. The Securities Enforcement and Penny Stock Reform Act of 1990
requires additional disclosure in connection with any trades involving a
stock defined as a penny stock (generally, according to recent regulations
adopted by the U.S. Securities and Exchange Commission, any equity security
that has a market price of less than $5.00 per share, subject to certain
exceptions), including the delivery, prior to any penny stock transaction, of
a disclosure schedule explaining the penny stock market and the
risks associated therewith. The regulations governing low-
priced or penny stocks sometimes limit the ability of broker-
dealers to sell the Registrant's common stock and thus,
ultimately, the ability of the investors to sell their securities
in the secondary market.
(n) Effects of Failure to Maintain Market Makers.
If the Registrant is unable to maintain a National
Association of Securities Dealers, Inc. member broker/dealers as
market makers, the liquidity of the common stock could be
impaired, not only in the number of shares of common stock which
could be bought and sold, but also through possible delays in the
timing of transactions, and lower prices for the common stock
than might otherwise prevail. Furthermore, the lack of market
makers could result in persons being unable to buy or sell shares
of the common stock on any secondary market. There can be no
assurance the Registrant will be able to maintain such market
makers.
(o) Shares Eligible For Future Sale.
All of the 1,754,233 shares of common stock which are currently
held, directly or indirectly, by management have been issued in
reliance on the private placement exemption under the Securities
Act of 1933. Such shares will not be available for sale in the
open market without separate registration except in reliance upon
Rule 144 under the Securities Act of 1933. In general, under
Rule 144 a person (or persons whose shares are aggregated) who
has beneficially owned shares acquired in a non-public
transaction for at least one year, including persons who may be
deemed affiliates of the Registrant (as that term is defined
under that rule) would be entitled to sell within any three-month
period a number of shares that does not exceed the greater of 1%
of the then outstanding shares of common stock, or the average
weekly reported trading volume during the four calendar weeks
preceding such sale, provided that certain current public
information is then available. If a substantial number of the
shares owned by these shareholders were sold pursuant to Rule 144
or a registered offering, the market price of the common stock
could be adversely affected.
Forward Looking Statements.
The foregoing Plan of Operation contains "forward looking
statements" within the meaning of Rule 175 of the Securities Act
of 1933, as amended, and Rule 3b-6 of the Securities Act of 1934,
as amended, including statements regarding, among other items,
the Registrant's business strategies, continued growth in the
Registrant's markets, projections, and anticipated trends in the
Registrant's business and the industry in which it operates. The
words "believe," "expect," "anticipate," "intends," "forecast,"
"project," and similar expressions identify forward-looking
statements. These forward-looking statements are based largely
on the Registrant's expectations and are subject to a number of
risks and uncertainties, certain of which are beyond the
Registrant's control. The Registrant cautions that these
statements are further qualified by important factors that could
cause actual results to differ materially from those in the
forward looking statements, including, among others, the
following: reduced or lack of increase in demand for the
Registrant's products, competitive pricing pressures, changes in
the market price of ingredients used in the Registrant's products
and the level of expenses incurred in the Registrant's
operations. In light of these risks and uncertainties, there can
be no assurance that the forward-looking information contained
herein will in fact transpire or prove to be accurate. The
Registrant disclaims any intent or obligation to update "forward
looking statements."
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Registrant and its counsel are taking the position that
certain individuals, corporations and/or financial institutions
that either profited from or participated in the hydrocarbon
financing transaction with the Registrant through Barclay's Bank
should compensate the Registrant for breach of the original
contractual agreements. The Registrant has consulted with
counsel and is considering all legal alternatives with regard to
this matter.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS.
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
ITEM 5. OTHER INFORMATION.
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
Reports on Form 8-K.
No reports on Form 8-K was filed during the first quarter of
the fiscal year covered by this Form 10-QSB.
Exhibits.
Exhibits included or incorporated by reference herein: See
Exhibit Index.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
eCom.com, Inc.
Dated: February 12, 2000 By: /s/ Sidney B. Fowlds
Sidney B. Fowlds, President
EXHIBIT INDEX
Exhibit Description
No.
2.1 Debenture issued by Xanthos Management Corporation (formerly
known as Texas Petroleum Corporation) to the Registrant, dated
October 31, 1992 (incorporated by reference to Exhibit 2.1 to the
Form 10-KSB filed on January 17, 2001).
2.2 Agreement and Plan of Merger between eCom.com, Inc., a
Colorado corporation, and eCom.com, Inc., a Nevada corporation
(incorporated by reference to Exhibit 2 to the Form 8-K filed on
August 21, 2000).
3.1 Articles of Incorporation of the Registrant, dated May
30, 2000 (incorporated by reference to Exhibit 3.1 of the Form
10-QSB filed on August 21, 2000).
3.2 Bylaws of the Registrant, dated June 10, 2000 (incorporated
by reference to Exhibit 3.2 of the Form 10-QSB filed on August
21, 2000).
4.1 Employee Stock Incentive Plan, dated June 1, 2000
(incorporated by reference to Exhibit 4.1 of the Form S-8 filed
on June 2, 2000).
4.2 Retainer Stock Plan for Non-Employee Directors and
Consultants, dated June 1, 2000 (incorporated by reference to
Exhibit 4.2 of the Form S-8 filed on June 2, 2000).
10.1 Acquisition Agreement between the Registrant and Rukos
Security Advice AG, dated June 5, 2000 (incorporated by reference
to Exhibit 10 of the Form 8-K filed on August 21, 2000).
10.2 Consulting Services Agreement between the Registrant and
Benjamin Cohen, dated July 15, 2000 (see below).
EX-10.2
CONSULTING SERVICES AGREEMENT
This Consulting Agreement, dated as of July 15, 2000, (this
"Agreement") is made by and between Benjamin Cohen
("Consultant"), whose address is 301 Park Avenue, New York, New
York, and eCom.com, Inc., a Colorado corporation ("Client"),
having its principal place of business at 650 West Georgia
Street, Suite 315, Vancouver, British Columbia V6B 4N7.
WHEREAS, Consultant has knowledge and expertise in many areas,
including Political Fund Raising and obtaining access to high
ranking political officials;
WHEREAS, Consultant desires to be engaged by Client to provide
Client an introduction to the Democratic National Committee
("DNC") for purposes of the Client and the DNC entering into a
possible contract relating to the DNC's exclusive use of its 1
900 "pay-per-call" telephone number 1 900 "DEMOCRAT";
WHEREAS, Client is a publicly held corporation with its common
stock trading on the Over the Counter Bulletin Board under the
ticker symbol "ECMM," and desires to further develop its business
and increase it's common stock share's value by among other
things, entering into contracts with third parties.
WHEREAS, Client desires to engage Consultant to provide the
consulting services to the Client described in this Agreement, on
the terms and subject to the conditions set forth herein.
NOW, THEREFORE, in consideration for those services Consultant
provides to Client, the parties agree as follows:
1. Services of Consultant.
Consultant agrees to perform for the Client all services and
consulting related to the Client obtaining a contract with the
DNC for the exclusive use by the DNC of the "pay-per-call"
telephone number 1 900 "DEMOCRAT", including by providing the
Client with an introduction to the DNC. At the request of the
Consultant, the Client will make itself available to meet with
representatives of the DNC and to discuss with the
representatives of the DNC any possible contractual arrangement
between the Client and the DNC. The Client acknowledges that
there is no assurance or guaranty that the Client will be able to
enter into any contractual relationship with the DNC as a result
of the consulting services to be provided to the Consultant
hereunder, nor has the Consultant made any representations or
warranty to the Client regarding any such contractual arrangement.
2. Consideration.
Client agrees to pay Consultant, as a fee and as consideration
for services provided, four million shares (4,000,000) shares of
the Client's common stock. One million (1,000,000) of such
shares shall be payable upon the execution and delivery of this
Agreement, in consideration of the Consultant entering into this
Agreement and the remaining three million shares (3,000,000) will
be issued to the Consultant upon the Client entering into an
agreement with the DNC or any affiliate thereof with respect to
the "pay per call" telephone number 1 900 "DEMOCRAT". Within ten
(10) days of the date of this Agreement the Client shall file a
registration statement on Form S-8 with the United States
Securities and Exchange Commission (the "SEC") with respect to
those shares of common stock then issued to the Consultant (being
at least 1,000,000 shares), and the Client shall cause such
registration to be declared effective by the SEC and all
applicable state securities authorities. Promptly upon the
issuance of any other shares of common stock to the Consultant
hereunder, the Company shall cause such shares to be registered
on a Form S-8 registration statement (or another registration
statement if Form S-8 is no longer available) with the SEC and
any other state securities authorities, and the Company shall use
its best efforts to cause such registration statement to become
effective.
3. Confidentiality.
Each party agrees that during the course of this Agreement,
information that is confidential or of a proprietary nature may
be disclosed to the other party, including, but not limited to,
product and business plans, software, technical processes and
formulas, source codes, product designs, sales, costs and other
unpublished financial information, advertising revenues, usage
rates, advertising relationships, projections, and marketing data
("Confidential Information"). Confidential Information shall not
include information that the receiving party can demonstrate (a)
is, as of the time of its disclosure, or thereafter becomes part
of the public domain through a source other than the receiving
party, (b) was known to the receiving party as of the time of its
disclosure, (c) is independently developed by the receiving
party, or (d) is subsequently learned from a third party not
under a confidentiality obligation to the providing party. The
provisions of this Section 3 shall not prohibit disclosure of any
Confidential Information by the receiving party pursuant to
applicable law, regulation or subpoena, which the receiving party
is advised by its legal counsel is required to be disclosed;
provided that to the extent practicable, the receiving party will
notify the other party hereto in advance of such intended
disclosure so that such other party, if it desires, can attempt
to obtain an appropriate protective order.
4. Late Payment.
Client shall pay to Consultant all fees within ten (10) days of
the due date thereof (the due date for the initial 1,000,000
shares, the date of execution of this Agreement by both parties).
Fees shall be considered paid when the transfer agent of the
Client has caused the shares to be delivered to the Consultant or
an account for the Consultant's benefit. Failure of Client to
pay any fees within ten (10) days after the applicable due date
shall be deemed a material breach of this Agreement by Client,
justifying suspension of the performance of the "Services"
provided by Consultant, and, at the option of the Consultant,
immediate termination of this Agreement. Any such suspension or
termination will in no way relieve Client from its obligation for
payment of all fees due to the Consultant hereunder.
5. Indemnification.
(a) Client.
Client agrees to indemnify, defend and shall hold harmless
Consultant and/or his agents, heirs, estate, personal
representatives, and the successors and assigns of each of them,
and to defend any action brought against said parties with
respect to any claim, demand, cause of action, debt, liability,
damages, loss, cost and expense, including reasonable attorneys'
fees to the extent that any such action or claim is based upon,
relates to, or arises out of (i) a breach by the Consultant of
any of the Consultant's representations, warranties or agreements
hereunder; or (ii) the breach of any of Client's representations,
warranties, or agreements hereunder; or (iii) the gross
negligence or willful misconduct of Client.
(b) Consultant.
Consultant agrees to indemnify, defend, and shall hold harmless
Client, its directors, officers, employees and agents, and the
successors and assigns of each of them, and defend any action
brought against same with respect to any claim, demand, cause of
action, debt, liability damages, loss, cost and expense,
including reasonable attorneys' fees, to the extent that any such
action is base upon, relates to, or arises out of (i) a breach by
the Consultant of any of the Consultant's representatives,
warranties or agreements hereunder or (ii) the gross negligence
or willful misconduct of Consultant.
(c) Notice.
In claiming any indemnification hereunder, the indemnified party
shall promptly provide the indemnifying party with written notice
of any claim, which the indemnified party believes falls within
the scope of the foregoing paragraphs. The indemnified party
shall, at the cost and expense of the indemnifying party, assist
in the defense if it so chooses, provided that the indemnifying
party shall control such defense, and all negotiations relative
to the settlement of any such claim. Any settlement intended to
bind the indemnified party shall not be final without the
indemnified party's written consent, which shall not be
unreasonably withheld but which consent may be withheld if the
settlement does not include an unconditional release of the
indemnified party.
6. Limitation of Liability.
Consultant shall have no liability with respect to Consultant's
obligations under this Agreement or otherwise for consequential,
exemplary, special, incidental or punitive damages even if
Consultant has been advised of the possibility of such damages.
In any event, the liability of Consultant to Client for any
reason and upon any cause of action, regardless of the form in
which the legal or equitable action may be brought, including,
without limitation, any action in tort or contract, shall not
exceed ten percent (10%) of the fee paid by Client to Consultant
hereunder.
7. Termination.
(a) Term.
This Agreement shall become effective on the date appearing next
to the signatures below and terminate one (1) year thereafter, or
upon the earlier execution of a contract between the Client and
the DNC as contemplated hereby.
(b) Termination.
Either party may terminate this Agreement upon any of the
following: (i) on thirty (30) calendar days written notice,
without cause; (ii) upon the breach by the other party upon the
breach by such other party of any of its material
representations, covenants or agreements, set forth herein which
is not cured within ten (10) days after written notice of such
breach by the non-breaching party; or (iii) the commencement of
bankruptcy, insolvency, reorganization or similar proceedings
relating to the other party hereto under any applicable laws
relating to bankruptcy or insolvency or the assignment by a party
hereto for the benefit of its creditors; provided that with
respect to any such involuntary proceeding, such proceeding is
not stayed or dismissed within sixty (60) days of the
commencement thereof.
(c) Termination and Payment.
The right to terminate this Agreement as provided in Sections
7(b)(i) and (ii) of this Agreement shall not limit or be the
exclusive remedy to the party exercising the right to terminate
this Agreement, and such party shall be entitled to reimbursement
for all damages, costs and expenses (including, without
limitation, attorneys' fees and expenses) incurred in connection
with any such termination.
8. Miscellaneous.
(a) Independent Contractor.
This Agreement establishes an "independent contractor"
relationship between Consultant and Client. Nothing in this
Agreement establishes a partnership, joint venture or fiduciary
relationship between the Consultant and the Client.
(b) Rights Cumulative; Waivers.
The rights and remedies of each of the parties under this
Agreement are cumulative. The rights of each of the parties
hereunder shall not be capable of being waived or varied other
than by an express waiver or variation in writing. Any failure
to exercise or any delay in exercising any of such rights shall
not operate as a waiver or variation of that or any other such
right. Any defective or partial exercise of any of such rights
shall not preclude any other or further exercise of that or any
other such right. No act or course of conduct or negotiation on
the part of any party shall in any way preclude such party from
exercising any such right or constitute a suspension or any
variation of any such right.
(c) Benefit; Successors Bound.
This Agreement and the terms, covenants, conditions, provisions,
obligations, undertakings, rights, and benefits hereof, shall be
binding upon, and shall inure to the benefit of, the undersigned
parties and their heirs, executors, administrators,
representatives, successors, and permitted assigns.
(d) Entire Agreement.
This Agreement contains the entire understanding and agreement
between the parties with respect to the subject matter hereof.
There are no promises, agreements, conditions, undertakings,
understandings, warranties, covenants or representations, oral or
written, express or implied, between them with respect to this
Agreement or the matters described in this Agreement, except as
set forth in this Agreement. Any such negotiations, promises, or
understandings shall not be used to interpret or constitute this
Agreement and any prior and/or contemporaneous promises,
agreements, conditions, undertakings, understandings, covenants
and warranties are merged herein.
(e) Assignment.
Neither this Agreement nor any other benefit to accrue hereunder
shall be assigned or transferred by either party, either in whole
or in part, without the written consent of the other party, and
any purported assignment in violation hereof shall be void.
(f) Amendment.
This Agreement may be amended only by an instrument in writing
executed by each of the parties hereto.
(g) Severability.
Each part of this Agreement is intended to be severable. In the
event that any provision of this Agreement is found by any court
or other authority of competent jurisdiction to be illegal or
unenforceable, such provision shall be severed or modified to the
extent necessary to render it enforceable and as so severed or
modified, this Agreement shall continue in full force and effect.
(h) Section Headings.
The section headings in this Agreement are for reference purposes
only and shall not affect in any way the meaning or
interpretation of this Agreement.
(i) Construction.
Unless the context otherwise requires, when used herein, the
singular shall be deemed to include the plural, the plural shall
be deemed to include each of the singular, and pronouns of one or
no gender shall be deemed to include the equivalent pronoun of
the other or no gender.
(j) Further Assurances.
In addition to the instruments and documents to be made, executed
and delivered pursuant to this Agreement, the parties hereto
agree to make, execute and deliver or cause to be made, executed
and delivered, to the requesting party such other instruments and
to take such other actions as the requesting party may reasonably
require to carry out the terms of this Agreement and the
transactions contemplated hereby.
(k) Notices.
Any notice or other communication hereunder or other
communication hereunder which is required or desired under this
Agreement shall be given in writing and may be sent by personal
delivery or by mail (either a. United States mail, postage
prepaid, or b. Federal Express or similar generally recognized
overnight carrier), addressed as follows (subject to the right to
designate a different address by notice similarly given):
To Client:
Sidney B. Fowlds, President
eCom.com, Inc.
650 West Georgia Street, Suite 315
Vancouver, British Columbia V6B 4N7
To Consultant:
Benjamin Cohen
301 Park Avenue
New York, New York 10022
Any notice or other communication given as provided in Section
8(k) shall be effective upon its receipt by the intended
recipient.
(l) Governing Law.
This Agreement shall be governed by the interpreted in accordance
with the laws of the State of New York without reference to its
conflicts of laws rules or principles. Each of the parties
consents to the exclusive jurisdiction of the state and federal
courts of the State of New York located in New York County and
the Federal District Court for the Southern District Court of New
York in connection with any dispute arising under this Agreement
and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non coveniens,
to the bringing of any such proceeding in such jurisdictions.
(m) Consents.
The person signing this Agreement on behalf of each party hereby
represents and warrants that he has the necessary power, consent
and authority to execute and deliver this Agreement on behalf of
such party.
(n) Execution in Counterparts.
This Agreement may be executed in any number of counterparts,
each of which shall be deemed an original and all of which
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and have agreed to and accepted the terms herein on the
date written above.
eCom.com, Inc.
By : /s/ Sidney B. Fowlds
Sidney B. Fowlds, President
/s/ Benjamin Cohen
Benjamin Cohen