<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED JANUARY 31, 2000
[ ] 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: 0-23491
GLOBAL MEDIA CORP.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
NEVADA 91-1842480
(State or other jurisdiction of incorporation (I.R.S. Employer Identification No.)
or organization)
</TABLE>
400 ROBSON STREET, VANCOUVER, BRITISH COLUMBIA, CANADA V6B 2B4
(Address of Principal Executive Offices; Zip Code)
Registrant's telephone number, including area code: (604) 688-9994
Check whether the issuer (1) 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) has been subject to such filing requirements for the past 90
days. Yes X No_____
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE
PRECEDING FIVE YEARS:
Check whether the registrant filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of
securities under a plan confirmed by court. Yes____ No____
APPLICABLE ONLY TO CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes of common
stock, as of the latest practicable date: AS OF MARCH 13, 2000, THERE WERE
23,396,236 SHARES OUTSTANDING OF THE COMPANY'S COMMON STOCK.
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
GLOBAL MEDIA CORP.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in US dollars)
JANUARY 31 JULY 31
2000 1999
$ $
---------- ---------
<S> <C> <C>
ASSETS
CURRENT
Cash and cash equivalents 2,542,833 5,649,073
Short-term investments 240,000 240,000
Trade and other receivables 182,200 84,336
Prepaid expenses 40,384 37,760
------------ ----------
3,005,417 6,011,169
Capital assets [NOTE 4] 4,849,440 1,537,434
------------ ----------
7,854,857 7,548,603
============ ==========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT
Accounts payable and accrued liabilities 395,359 368,094
Due to affiliated company [NOTE 5] 52,091 132,946
Due to shareholders [NOTE 5] 94,349 221,091
Current portion of long-term debt 66,180 --
------------ ----------
607,979 722,131
LONG-TERM DEBT
Lease payable 86,407 --
------------ ----------
694,386 722,131
------------ ----------
Commitments and contingencies [NOTE 9]
Convertible preferred shares [NOTE 7] -- 7,089,775
SHAREHOLDERS' EQUITY
Convertible preferred shares [NOTE 7] 5,709,104 --
100,000,000 authorized, 6,625 issued and outstanding
Common shares, par value $0.001 each, 200,000,000 authorized, 14,131 12,658
22,128,826 and 20,656,331 issued and outstanding [NOTE 6]
------------ ----------
5,723,235 12,658
Additional paid in capital [NOTE 7] 8,639,002 2,617,109
Deficit (7,201,766) (2,893,070)
------------ ----------
7,160,471 (263,303)
------------ ----------
7,854,857 7,548,603
============ ==========
</TABLE>
SEE ACCOMPANYING NOTES
2
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GLOBAL MEDIA CORP.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF LOSS
AND COMPREHENSIVE LOSS
(Unaudited)
(in US dollars)
FOR 3 MONTHS FOR 6 MONTHS
ENDED JANUARY 31 ENDED JANUARY 31
2000 1999 2000 1999
$ $ $ $
----------- --------- --------- ----------
<S> <C> <C> <C> <C>
SALES 58,635 -- 72,280 --
COST OF SALES 57,923 130,713
----------- --------- --------- ----------
GROSS PROFIT (LOSS) 712 -- (58,433) --
----------- --------- --------- ----------
OPERATING EXPENSES
Depreciation and amortization 256,267 22,230 347,851 35,277
General and administrative 500,701 113,868 790,792 203,269
Sales and marketing 1,114,037 25,265 1,661,171 33,967
Shareholder communications 59,395 52,317 126,595 93,286
Stock options compensation [NOTE 6] -- -- -- 548,800
Technical operations and development 577,817 -- 1,085,573 --
----------- --------- --------- ----------
2,508,217 213,680 4,011,982 914,599
LOSS FROM CONTINUING OPERATIONS AND
BEFORE OTHER ITEMS (2,507,505) (213,680) (4,070,415) (914,599)
----------- --------- --------- ----------
OTHER ITEMS
Interest 64,353 -- 76,626 --
Financing (74,517) (9,905) (74,517) (10,873)
Foreign exchange 9,279 (1,161) 4,644 (4,374)
----------- --------- --------- ----------
LOSS AND COMPREHENSIVE LOSS BEFORE
DISCONTINUED OPERATIONS (2,508,390) (224,746) (4,063,662) (929,846)
DISCONTINUED OPERATIONS [NOTE 3] -- 4,984 -- (2,065)
----------- --------- --------- ----------
LOSS AND COMPREHENSIVE LOSS FOR THE PERIOD
(2,508,390) (219,762) (4,063,662) (931,911)
=========== ========== =========== ==========
LOSS PER COMMON SHARE (0.11) (0.01) (0.19) (0.05)
=========== ========== =========== ==========
WEIGHTED AVERAGE SHARES USED IN THE
COMPUTATION OF LOSS PER SHARE 22,104,264 20,108,698 21,772,984 19,999,764
=========== ========== =========== ==========
</TABLE>
SEE ACCOMPANYING NOTES
3
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GLOBAL MEDIA CORP.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF
SHAREHOLDERS' EQUITY (DEFICIENCY)
(Unaudited)
(in US dollars)
ADDITIONAL RETAINED
PREFERRED STOCK COMMON STOCK PAID IN EARNINGS
SHARES AMOUNT SHARES AMOUNT CAPITAL (DEFICIT)
# $ # $ $ $
--------- ----------- ----------- ---------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, JULY 31, 1998 -- -- 19,890,831 11,892 543,525 (661,996)
Preferred shares issued [NOTE 7] 8,500 7,089,775 -- -- -- --
Warrants issued on financing [NOTE -- -- -- -- 1,000,000 --
7]
Stock options exercised -- -- 765,500 766 392,484 --
Compensatory stock options -- -- -- -- 681,100 --
Loss for the year -- -- -- -- -- (2,231,074)
--------- ----------- ----------- ---------- ----------- -------------
BALANCE, JULY 31, 1999 8,500 7,089,775 20,656,331 12,658 2,617,109 (2,893,070)
Stock options exercised -- -- 605,551 606 2,193,714 --
Conversion of preferred shares (1,875) (1,625,705) 495,426 495 1,625,210 __
[NOTE 7]
Conversion of amounts due to __ __ 32,535 33 203,313 __
shareholder __ __ 338,983 339 1,999,656 __
and affiliated company [NOTE 5]
Issue of restricted shares [NOTE 8]
Loss for the quarter -- __ -- -- --(4,063,662)
Accrued preferred share premium -- 245,034 -- -- -- (245,034)
--------- ----------- ----------- ---------- ----------- -------------
BALANCE, JANUARY 31, 2000 6,625 5,709,104 22,128,826 14,131 8,639,002 (7,201,766)
========= =========== =========== ========== =========== =============
</TABLE>
SEE ACCOMPANYING NOTES
4
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GLOBAL MEDIA CORP.
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in US dollars)
FOR 6 MONTHS
ENDED JANUARY 31
2000 1999
$ $
----------- ----------
<S> <C> <C>
OPERATING ACTIVITIES
Loss for the period (4,063,662) (931,911)
Items not requiring an outlay of cash
Share option compensation expense [NOTE 6] -- 548,800
Share option professional fees expense [NOTE 6] -- 12,600
Amortization 347,851 50,508
----------- ----------
(3,715,811) (320,003)
Changes in non-cash operating working capital
Trade and other receivables (97,864) --
Inventory -- 1,992
Prepaid expenses (2,624) 4,466
Accounts payable and accrued liabilities 27,265 (74,887)
----------- ----------
CASH USED IN OPERATING ACTIVITIES (3,789,034) (388,432)
----------- ----------
INVESTING ACTIVITIES
Capitalized development costs (2,970,337) --
Purchase of capital assets (728,014) (147,016)
----------- ----------
CASH USED IN INVESTING ACTIVITIES (3,698,351) (147,016)
----------- ----------
FINANCING ACTIVITIES
Advances (to) from shareholders (16,466) 150,131
Advances (to) from affiliated company (14,467) 154,104
Note payable -- 500,000
Lease payable 152,587 --
Issue of restricted shares 1,999,995 --
Stock options exercised 2,194,320 326,800
----------- ----------
CASH PROVIDED BY FINANCING ACTIVITIES 4,315,969 1,131,035
----------- ----------
Effect of exchange rate changes on cash 65,176 (207)
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS DURING THE (3,106,240) 595,380
QUARTER
Cash and cash equivalents, beginning of period 5,649,073 14,996
----------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD 2,542,833 610,376
=========== ==========
SUPPLEMENTAL CASH FLOW DISCLOSURE
Interest - paid 6,728 11,610
=========== ==========
</TABLE>
SEE ACCOMPANYING NOTES
5
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The following notes are to be read in conjunction with the notes to our audited
financial statements contained in our Annual Report on Form 10-KSB, filed with
the Securities and Exchange Commission on November 1, 1999.
1. NATURE OF BUSINESS
Global Media Corp. (the "Company") was incorporated on April 8, 1997 in the
State of Nevada and is headquartered in Vancouver, B.C., Canada. During the
third quarter of fiscal 1999, the company adopted an internet-focused business
plan. Since then, it has been engaged primarily in the development of an
electronic commerce web site, the development of a broadcast network over the
internet, including streaming services, a customized media player and simulated
live internet only radio stations, and the development of templates for the
application of the e-commerce back-end system to multiple sites on the internet.
On May 18, 1999 a beta version of the e-commerce web site was launched and in
September 1999, trial implementations were started for network associate
e-commerce storefronts. On August 31, 1999, the beta implementation of the
Global Media Broadcast Network began with the launch of three live network
associate stations. In October 1999, ten simulated live internet-only stations
were launched by the Company and integrated into the Global Media Player, at
that time in beta form. In November 1999, nine of the simulated live stations
were added to the stations directory presets of the RealPlayer. Also in November
1999, a revised version of the online store was launched. In January 2000, the
Global Media Player was commercially launched.
2. SIGNIFICANT ACCOUNTING POLICIES
The accompanying financial statements have been prepared in conformity with
accounting principles generally accepted in the United States.
COMPARATIVE FIGURES
Certain amounts for 1999 have been reclassified to conform with the current
quarter's presentation.
LOSS PER SHARE
Basic and fully diluted earnings per share has been computed using the weighted
average number of common shares outstanding during the applicable period. The
effect of common stock options and warrants would be anti-dilutive and therefore
is not included in the calculation of fully diluted earnings per share.
3. DISCONTINUED OPERATIONS
The Company withdrew from the home satellite business in late fiscal 1998 and
the call center business during the third quarter of fiscal 1999, and has
therefore accounted for these businesses as discontinued operations, segregated
in the accompanying consolidated statements of loss and comprehensive loss.
6
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<TABLE>
<CAPTION>
4. CAPITAL ASSETS
ACCUMULATED NET BOOK
COST AMORTIZATION VALUE
$ $ $
--------- ------------- -----------
<S> <C> <C> <C>
JANUARY 31, 2000
Broadcast network development 3,675,140 102,299 3,572,841
Communications infrastructure 91,787 64,075 27,712
Computer hardware 878,708 154,044 724,664
Leasehold improvements 43,993 9,838 34,155
Office furniture and equipment 124,971 25,767 99,204
Software 107,936 33,908 74,028
Web site development 530,322 213,486 316,836
--------- ------------- -----------
5,452,857 603,417 4,849,440
========= ============= ===========
JULY 31, 1999
Broadcast network development 704,803 -- 704,803
Communications infrastructure 89,391 44,463 44,928
Computer hardware 295,417 59,834 235,583
Leasehold improvements 14,925 2,269 12,656
Office furniture and equipment 50,661 6,477 44,184
Software 73,450 15,484 57,966
Web site development 525,859 88,545 437,314
--------- ------------- -----------
1,754,506 217,072 1,537,434
========= ============= ===========
</TABLE>
5. RELATED PARTY TRANSACTIONS
[i] AMOUNTS DUE TO SHAREHOLDER AND AFFILIATED COMPANY
As part of the Securities Purchase Agreement with RGC International
Investors LDC ("RGC") [see note 7], the Company agreed to restructure the
amounts due to a shareholder and an affiliated company of a shareholder.
The agreement provided that one half of the amounts due to the shareholder
and affiliated company will be repaid by the issue of common stock at a
conversion price of $6.25 per share.
In furtherance of this agreement, on July 26, 1999 the Company entered into
an agreement with the shareholder to convert 50% of the amount due plus
interest of $16,455 (for a total of $127,000) into common stock at $6.25
per share and to repay the remaining $127,000 in four quarterly
installments of $31,750. The first payment was made in November 1999.
On July 26, 1999 the Company entered into an agreement with the affiliated
company of a shareholder to convert 50% of the amount due plus interest of
$8,413 (for a total of $74,886) into common stock at $6.25 per share and to
repay the remaining $74,886 in four quarterly installments of $18,722. The
first payment was made in November 1999.
7
<PAGE>
6. SHARE CAPITAL
STOCK OPTION PLANS
As of January 31, 2000, the Company had stock options outstanding under two
plans: 180,500 pertain to the 1998 Stock Option Plan and 3,758,535 pertain to
the 1999 Stock Option Plan. All the plans are administered by the Board of
Directors who have sole discretion and authority to determine awards including
the conditions of exercise.
The 1998 plan, which became effective on August 21, 1998, provided for the
issuance of 1,000,000 options within a period of 10 years from the effective
date. All 1,000,000 options were granted during the 1999 fiscal year at an
exercise price of $0.50 per share, of which 980,000 were granted to employees
and 20,000 were granted to outside contractors. All options were vested on
grant. During the most recent quarter, 13,500 of these options were exercised.
The 180,500 outstanding options have a remaining life of approximately six
months.
At the time of granting options under the 1998 plan, the Company's shares were
not yet publicly traded. On the first day of public trading, the Company's
shares had a closing market price of $1.06 per share. The Company recognized
compensation expense in the first quarter of the 1999 fiscal year of $548,800
for the granting of these options to employees in accordance with APB 25. In
addition, the Company recognized compensation expense of $12,600 in the first
quarter of the 1999 fiscal year for the granting of 20,000 options to outside
contractors in accordance with SFAS 123.
The 1999 plan, which became effective on March 24, 1999, provides for the
issuance of a total of 4,000,000 options within a period of 10 years from the
effective date. During the most recent quarter, 285,000 options at an exercise
price of $5.13, and 418,210 at an exercise price of $6.25 were granted. Of the
3,812,660 options granted in total, 2,071,910 options vest immediately and
1,740,750 vest on a quarterly basis over one year. The options expire five years
from the date of grant. During the current quarter, 45,500 options were
exercised providing proceeds of $198,480.
Activity in the stock option plans for the current period and prior year is as
follows:
<TABLE>
<CAPTION>
FOR 6 MONTHS FOR THE FISCAL YEAR
ENDED JANUARY 31, 2000 ENDED JULY 31, 1999
------------------------------ -------------------------------
WEIGHTED WEIGHTED
AVERAGE AVERAGE
EXERCISE EXERCISE
OPTIONS PRICE OPTIONS PRICE
# $ # $
------------- ------------ ------------- --------------
<S> <C> <C> <C> <C>
Outstanding, beginning of period 3,257,000 3.81 -- --
Granted 784,535 6.02 4,022,500 3.18
Exercised (102,500) 2.21 (765,500) 0.51
------------- ------------ ------------- --------------
Outstanding, end of period 3,939,035 4.29 3,257,000 3.81
============= ============ ============= ==============
Options exercisable at the end of the
period 3,069,785 3.92 2,497,167 3.67
============= ============ ============= ==============
</TABLE>
8
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ACCOUNTING FOR STOCK BASED COMPENSATION
The Company applies APB 25 in accounting for its stock option plans for grants
to employees. Where the exercise price is equal to or greater than the fair
value of the stock at the date of the grant, no compensation is recorded. When
the exercise price is less than the fair value, compensation expense for each
option granted is recorded to the extent that the fair value exceeds the
exercise price.
7. CONVERTIBLE PREFERRED SHARES
On May 6, 1999, the Company entered into a Securities Purchase Agreement and
ancillary agreements with RGC International Investors LDC ("RGC") pursuant to
which the Company issued, for cash, a 5% convertible debenture to RGC in the
aggregate principal amount of $8,500,000. On July 19, 1999, the debenture was
converted into 8,500 convertible preferred shares having a stated value of
$1,000 per share. The convertible preferred shares are convertible from time to
time at RGC's option into shares of common stock of the Company as follows: the
stated value of each share of preferred stock together with a premium thereon
accruing at a per annum rate of 5%, is convertible at the lesser of a fixed
conversion price or a variable conversion price based on the market price of the
common shares at the time of conversion. During the quarter, 1,875 preferred
shares were converted to 495,426 common shares, leaving 6,625 convertible
preferred shares outstanding at quarter end. The conversion price of the
preferred shares is the lesser of:
[a] 80% of the average of the seven consecutive lowest closing bid prices of
the common shares reported on the OTC Bulletin Board (or Nasdaq Stock
Market) during the 35 trading days ending one day prior to the date that
RGC exercises its right to convert; or
[b] $6.435.
Upon conversion of preferred shares by RGC, RGC has an investment option to
acquire a number of additional common shares equal to the number of common
shares with respect to which RGC is converting the preferred shares, at an
exercise price equal to the conversion price. During the quarter, RGC exercised
options to purchase 495,426 common shares for net proceeds of $1,936,804. To the
extent any preferred shares are not converted prior to May 6, 2002, any
previously unconverted portion is converted automatically into common shares
under the same conversion terms described above.
In connection with the financing, RGC received warrants to purchase 680,000
common shares of the Company at an exercise price of $8.3475. The warrants have
a five-year term. In addition, the Company agreed to provide the financing
agents warrants to purchase 62,769 common shares at an exercise price of $8.125
which expire in five years.
The proceeds from RGC were allocated to the underlying instruments in accordance
with their fair values at the date of issuance such that $7,500,000 was
allocated to the preferred shares and the related investment options and
$1,000,000 was allocated to the warrants and included in additional paid in
capital. The unamoritzed finance costs are presented as a reduction of the
carrying value of the preferred shares.
9
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At July 31, 1999, the convertible preferred shares were required to be
classified as mezzanine equity as there was a potential mandatory redemption
event relating to the Company's obligation to register the common shares
issuable upon conversion of the preferred shares and upon exercise of the
related investment options and warrants for public resale. On August 26, 1999,
the Company's Form SB-2 registration statement registering the underlying shares
was declared effective by the SEC. As a result, the preferred shares from this
date onwards have been classified as shareholders' equity.
8. STRATEGIC RELATIONSHIP AGREEMENT
On December 7, 1999, the Company entered into a strategic relationship with
Standard Radio Inc. ("Standard"). Under the terms of this transaction, Standard
invested $2 million into the Company and received 338,983 restricted common
shares of the Company with customary piggy-back registration rights. Standard
also committed to cause all radio stations owned by it at the time or during the
three years following, to become network associates in the Global Media
E-Commerce Network and Broadcast Network.
In connection with the agreement, on December 7, 1999 Standard's Chief Executive
Officer was appointed to the Company's Board of Directors. Upon accepting his
position on the Board, Standard's CEO received 125,000 options in his capacity
as a director pursuant to the 1999 Stock Option Plan, at an exercise price equal
to the closing price of the common stock on the OTC Bulletin Board on the date
of the grant. The options vest over a three-year period on a quarterly basis
from the date of grant and will expire five years from the grant date.
Furthermore, effective December 7, 1999 the Company and each of the six general
managers of the Standard radio stations, Standard's national program director
and the general manager of Standard's syndication division entered into
consulting agreements. In exchange for future services granted, the Company
granted each individual up to 20,000 options pursuant to the 1999 Stock Option
Plan at an exercise price equal to the closing price of the common stock on the
OTC Bulletin Board on the date of the grant. The options vest over a one year
period from the date of grant depending on certain performance criteria being
met, and will expire five years from the grant date.
9. COMMITMENTS AND CONTINGENCIES
[i] The Company received notice from an interested party on September 27, 1999
that it believes the Company to be in violation of certain registered
trademarks which it possesses in certain Canadian provinces. While no legal
proceedings have been initiated by this party, the notice represents a
claim that is reasonably possible of assertion. Management believes the
claim is without merit and if asserted, will not be successful. However,
Management believes that if successfully asserted, the impact of the claim
will be immaterial.
[ii] No commitments outside of the regular course of business were entered into
during the quarter.
[iii]During the quarter, the Company entered into support and upgrade and
marketing agreements with RealNetworks, Inc. Combined, the agreements
represented total commitments of $5,320,000, of which $596,000 has been
paid by the Company to date. The remaining commitment will be paid as
follows: $596,000 in the third quarter of fiscal 2000; $4,096,000 in the
fourth quarter of fiscal 2000; and $32,000 in the first quarter of fiscal
2001.
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10. INCOME TAXES
For financial reporting purposes, a valuation allowance has been established for
all deferred tax assets due to the uncertainty of realization.
11. SUBSEQUENT EVENTS
[i] OPTIONS
Subsequent to quarter end, RGC International Investors LDC ("RGC")
exercised investment options to purchase 596,630 common shares of the
Company, in conjunction with an equivalent conversion of preferred shares.
The Company received net proceeds of $2,551,355 from the option exercises.
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
NOTE: The following discussion contains or may contain forward-looking
statements based on current expectations, estimates and projections about the
Company's industry, management's beliefs and certain assumptions made by
management. All statements, trends, analyses and other information contained
herein relative to trends in net sales, gross margin, anticipated expense
levels, liquidity and capital resources, as well as other statements, including,
but not limited to, words such as "anticipate," "believe," "plan," "estimate,"
"expect," "seek" and "intend," and other similar expressions, constitute
forward-looking statements. These forward-looking statements involve risks and
uncertainties, and actual results may differ materially from those anticipated
or expressed in such statements. Except as required by law, the Company
undertakes no obligation to update any forward-looking statement, whether as a
result of new information, future events or otherwise. Readers, however, should
carefully review the factors set forth in other reports or documents that the
Company files from time to time with the Securities and Exchange Commission (the
"SEC").
OVERVIEW
QUARTER ENDED JANUARY 31, 2000
During the quarter ended January 31, 2000, our management structure was
substantially enhanced by the addition of several senior executives, including
the addition of Jeff Mandelbaum as President. Mr. Mandelbaum comes to us from
RealNetworks, Inc. where he was Vice President of Media Systems Sales. In that
position, he had line responsibility for sales and services in the Americas
regions and drove strategic opportunities worldwide. Mr. Mandelbaum was brought
on to support the shift in our focus from development to sales.
During the quarter we continued to refine our e-commerce and streaming
infrastructure while expanding our clientele of network and broadcast
associates. Included in this development was the successful design and testing
of our video broadcasting solution which will be commercially implemented in the
third quarter of fiscal 2000. As of January 31, 2000, we had signed up 77
network associates (representing 161 unique e-commerce sites and 27 broadcast
associates). Of these, 134 e-commerce sites were online and 4 broadcasting
associates were streaming by quarter end. This compares to 59 network associates
(representing 104 unique e-commerce sites and 12 broadcasting associates)
signed up as of October 31, 1999, of which 68 e-commerce sites and 3
broadcasting associates were implemented at that time.
Also during the second quarter of fiscal 2000, nine of our proprietary simulated
live internet only radio stations were added to the station directory of the
RealPlayer 7 streaming media player, which was launched by RealNetworks on
November 8, 1999.
We commenced the quarter with 81 full time staff and ended the quarter with
101. We currently employ 108 full time staff members.
We have continued to experience significant growth subsequent to quarter end. As
of March 10, 2000, we had signed up 101 network associates (representing 173
unique e-commerce sites and 36 broadcast associates).
OUR BUSINESS
We offer an award winning streaming media broadcasting solution to radio and
television stations and internet sites through our Global Media Broadcast
Network program. The centerpiece of our Broadcast Network solution is the Global
Media Player, a streaming media player developed in conjunction with
RealNetworks, Inc. The Global Media Player is private-label branded for our
broadcasting associates and enables listeners to stream live and simulated
12
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live audio, video and other multimedia content such as radio feeds from our 10
proprietary music stations and from the stations of each of our broadcast
associates.
Our broadcasting solutions are integrated into an e-commerce backend. Through
this e-commerce facility, we sell music CDs and cassettes, home videos and
digital video discs (DVDs), books and other entertainment products. Sales are
made through our own online store and through the private-label storefronts
which we create for the network associates in our Global Media Network program.
Visitors to those storefronts can place merchandise orders from the storefront
on our network associates' Web sites, which we then process through our
e-commerce backend solution and fulfill through our fulfillment partners.
We commercially launched our Broadcast Network program with the alpha version of
the Global Media Player in January 2000, and expect to incorporate our streaming
video solution into the Broadcast Network during the third quarter of fiscal
2000. When our Broadcast Network is fully integrated with our e-commerce
solution, our network associates can offer their customers a tightly integrated
entertainment and online shopping experience. For example, accessing our
Broadcast Network will enable a network associate's customers to listen to live
music programming through the Global Media Player and purchase CDs of the
featured artists at the same time.
We launched a beta version of our own e-commerce site in May 1999 to demonstrate
our e-commerce solution, and commercially launched our own online store in
September 1999, which was significantly revised on November 29, 1999 to offer
greater functionality and ease of use. Our online store combines an extensive
catalogue of music, books, videos and other entertainment products, with
easy-to-use navigation and search capabilities and entertainment-focused
content. Additionally, visitors can download the Global Media Player for free.
We are continuing the further development of our online store and e-commerce
backend to provide additional features and content and expect that these
enhancements will improve the revenue generating potential of our own store and
the stores of our network associates.
Since inception of our internet-focused business plan, we have incurred
significant losses resulting primarily from costs related to developing our
e-commerce products and our Web sites, developing or acquiring technologies to
be used in our business and general corporate overhead, and have generated
minimal revenues from our operations. We expect to continue incurring net losses
for the foreseeable future, as we plan to invest in:
- promoting our Network Associate program;
- enhancing our e-commerce site and improving its reliability and
functionality;
- developing our infrastructure and applications; and
- hiring additional employees.
Our revenues for the foreseeable future will likely derive primarily from
advertising, product sales and broadcasting related fees and will depend
primarily on the number of network and broadcast associates that we sign up, the
number of listeners on our simulated live stations and
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the live stations of our network associates, the number of visitors that we are
able to attract to our online store and that our network associates are able to
attract to their stores, and on how many of those visitors purchase products we
offer for sale. Our Broadcast Network revenues will also depend to a significant
extent on our ability to attract customers (such as radio and television
stations) for these streaming media services. We have initiated a program to
market streaming media consulting and development services and expect that over
time this service line could become a significant revenue contributor. We cannot
forecast with any degree of certainty the number of visitors to our online store
or the stores of our network associates, the number of visitors that will become
customers or the number of customers we will be able to secure for our streaming
media services. If our revenue growth is slower than anticipated or our
operating expenses exceed our expectations, our losses will be significantly
greater than anticipated. We may never achieve or sustain profitability.
Because of the development stage of our business and the seasonality inherent in
a retail business, our results of operations discussed below are not necessarily
indicative of the results you should expect for any future comparable period.
SEE " - Seasonality". Inflation has not historically had any material effect on
our operations
We were incorporated in April 1997 and acquired Westcoast Wireless Cable Ltd. in
May 1997 from our controlling shareholder. We discontinued Westcoast's
historical operations, the sale and servicing of direct-to-home satellite
broadcast hardware and programming services, in the fourth quarter of fiscal
1998, and discontinued our other historical operations, the operation of a call
center, in the third quarter of fiscal 1999.
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RESULTS OF CONTINUING OPERATIONS
NOTE: The financial results contained in the following discussion exclude
results of our discontinued call center and home satellite businesses.
For summary financial results from those operations, SEE " - Note 3 to
the Consolidated Financial Statements."
QUARTER ENDED JANUARY 31, 2000 COMPARED TO QUARTER ENDED JANUARY 31, 1999
SALES. Revenues of $58,635 were generated from the Company's e-commerce
and broadcasting operations in the second quarter of fiscal 2000, compared to
none in the second quarter of fiscal 1999. The Company's internet-focused
business did not commence until the third quarter of fiscal 1999.
COST OF SALES. Expenditures of $57,923 were recorded in the second
quarter of fiscal 2000, compared to none in the second quarter of fiscal 1999,
due primarily from incurring minimum contractual broadcasting related charges
that were payable as we continued to develop our network.
OPERATING EXPENSES. Our operating expenses increased to $2,508,217 in
the second quarter of fiscal 2000, from $213,680 in the second quarter of fiscal
1999. This increase was due primarily to increased marketing expenditures,
professional fees and other expenses related to being a public reporting
company, and personnel, capital assets and other costs associated with the
development and launch of our internet sites and our network associate programs,
as follows:
- Amortization increased to $256,267 in the second quarter of fiscal 2000,
from $22,230 in the second quarter of fiscal 1999, due primarily to the
significant acquisition of additional capital assets.
- General and administrative expenses increased to $500,701 in the second
quarter of fiscal 2000, from $113,868 in the second quarter of fiscal 1999,
due primarily to the costs associated with multiple office locations and
the administration required for a significantly larger organization.
- Sales and marketing expenses increased to $1,114,037 in the second quarter
of fiscal 2000, compared to $25,265 in the second quarter of fiscal 1999.
The increase was primarily due to payments of $596,000 to RealNetworks,
Inc. under various marketing agreements, the costs associated with
attending industry related conferences, marketing of the Network Associate
program and expenses of the developing sales force.
- Shareholder communication expenses increased 14% to $59,395 in the second
quarter of fiscal 2000, from $52,317 in the second quarter of fiscal 1999,
due primarily to the costs of improving the communications with, and
materials provided to our shareholders.
- Technical operations and development expenses were $577,817 in the second
quarter of fiscal 2000, as compared to none in the second quarter of fiscal
1999. These expenses were primarily due to the costs of developing our
e-commerce and streaming media technologies.
NET LOSS FROM CONTINUING OPERATIONS. We experienced a $2,507,505 net
loss from continuing operations for the second quarter of fiscal 2000, up from
our $213,680 net loss from continuing operations for the second quarter of
fiscal 1999, due primarily to the increase in operating expenses as we continue
to implement our internet-focused business plan.
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INTEREST. We earned $64,353 in interest income in the second quarter of
fiscal 2000, compared to none in the second quarter of fiscal 1999, due to
higher bank balances.
NET LOSS FROM ALL OPERATIONS. We experienced a $2,508,390 net loss from
all operations for the second quarter of fiscal 2000, up from our $219,762 net
loss from all operations for the second quarter of fiscal 1999.
6 MONTHS ENDED JANUARY 31, 2000 COMPARED TO 6 MONTHS ENDED JANUARY 31, 1999
SALES. Revenues of $72,280 were generated from the Company's e-commerce
and broadcasting operations in the 6 months ended January 31, 2000, compared to
none in the 6 months ended January 31, 1999. The Company's internet-focused
business did not commence until the third quarter of fiscal 1999.
COST OF SALES. Expenditures of $130,713 were recorded in the 6 months
ended January 31, 2000, compared to none in the 6 months ended January 31, 1999,
due primarily from incurring minimum contractual broadcasting related charges
that were payable as we continued to develop our network.
OPERATING EXPENSES. Our operating expenses increased to $4,011,982 in
the 6 months ended January 31, 2000, from $914,599 in the 6 months ended January
31, 1999. This increase was due primarily to increased marketing expenditures,
professional fees and other expenses related to being a public reporting
company, and personnel, capital assets and other costs associated with the
development and launch of our internet sites and our network associate programs,
as follows:
- Amortization increased to $347,851 in the 6 months ended January 31, 2000,
from $35,277 in the 6 months ended January 31, 1999, due primarily to the
significant acquisition of additional capital assets.
- General and administrative expenses increased to $790,792 in the 6 months
ended January 31, 2000, from $203,269 in the 6 months ended January 31,
1999, due primarily to the costs associated with multiple office locations
and the administration required for a significantly larger organization.
- Sales and marketing expenses increased to $1,661,171 in the 6 months ended
January 31, 2000, compared to $33,967 in the 6 months ended January 31,
1999. The increase was primarily due to payments of $596,000 to
RealNetworks, Inc. under various marketing agreements, the costs associated
with attending industry related conferences, marketing of the Network
Associate program and expenses of the developing sales force.
- Shareholder communication expenses increased 36% to $126,595 in the 6
months ended January 31, 2000, from $93,286 in the 6 months ended January
31, 1999, due primarily to the costs of improving the communications with,
and materials provided to our shareholders.
- Technical operations and development expenses were $1,085,573 in the 6
months ended January 31, 2000, as compared to none in the 6 months ended
January 31, 1999. These expenses were primarily due to the costs of
developing our e-commerce and streaming media technologies.
- We incurred no stock option compensation expense in the 6 months ended
January 31, 2000, compared to $548,800 in the 6 months ended January 31,
1999. SEE " - Note 6 to the Consolidated Financial Statements."
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NET LOSS FROM CONTINUING OPERATIONS. We experienced a $4,070,415 net
loss from continuing operations for the 6 months ended January 31, 2000, up from
our $914,599 net loss from continuing operations for the 6 months ended January
31, 1999, due primarily to the increase in operating expenses as we continue to
implement our internet focused business plan.
INTEREST. We earned $76,626 in interest income in the 6 months ended
January 31, 2000, compared to none in the 6 months ended January 31, 1999, due
to higher bank balances.
NET LOSS FROM ALL OPERATIONS. We experienced a $4,063,622 net loss from
all operations for the 6 months ended January 31, 2000, up from our $931,911 net
loss from all operations for the 6 months ended January 31, 1999.
LIQUIDITY AND CAPITAL RESOURCES
NOTE: The financial results contained in the following discussion have been
restated to exclude our discontinued call center and home satellite
businesses. See " - Note 3 to the Consolidated Financial Statements."
QUARTER ENDED JANUARY 31, 2000 COMPARED TO QUARTER ENDED JANUARY 31, 1999
FINANCING ACTIVITIES. We financed our operations and capital
expenditures in second quarter fiscal 2000 primarily from the exercise of stock
options and the sale of shares of common stock in a private transaction. Cash
received upon the exercise of stock options including exercises by RGC of
investment options for 495,426 shares, was $2,194,320 in second quarter fiscal
2000. We also issued 338,983 restricted common shares to Standard Radio Inc. for
net proceeds of $1,999,995.
CAPITAL EXPENDITURES AND COMMITMENTS. Our capital expenditures
increased to $1,151,082 in second quarter fiscal 2000, from $147,016 in second
quarter fiscal 1999, primarily as the result of capitalized development costs
for our Broadcast Network and Global Media Player, and computer hardware,
software and operating equipment purchases.
WORKING CAPITAL (DEFICIENCY). At January 31, 2000, we had positive
working capital of $2,397,438 and a working capital ratio of 4.94. This
represents an improvement from our January 31, 1999 working capital deficiency
of $419,640 and working capital ratio of 0.60.
FUTURE CAPITAL REQUIREMENTS. We expect negative cash flow from operations to
continue for fiscal 2000, as we continue to develop and market our
internet-focused operations, and anticipate achieving cash flow breakeven in the
fourth quarter of fiscal 2001 and accounting profitability during fiscal 2002.
We currently anticipate rapidly expanding our sales, marketing and technical
teams in conjunction with raising new equity financing over the next five
months. We are in discussions with a number of potential strategic and financial
investors to obtain additional financing to fund our operating and capital
expenditure needs. If we are able to secure such additional financing, we expect
that such financing, together with proceeds from the exercise of existing
options and warrants, will enable us to meet all of our existing operating and
capital expenditure needs, including financial obligations to RealNetworks, Inc.
under the agreements we recently entered into with them, until the fourth fiscal
quarter of 2001. However, there can be no assurance that additional financing
will be available on terms favorable to us or at all. If adequate funds are not
available or are not available on acceptable terms, this could negatively impact
our business. In particular, we would be unlikely to meet our payment
obligations to RealNetworks, Inc. under the contracts recently entered into.
Default on these payments would negatively impact our business.
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If additional funds are raised through the issuance of equity or convertible
debt securities, the percentage ownership of our current stockholders will be
reduced, stockholders may experience additional dilution and such securities may
have rights, preferences and privileges senior to those of our common stock.
RECENT EVENTS
NASDAQ LISTING
We filed a listing application with Nasdaq on November 15, 1999, for inclusion
on its Small Cap market. We received Nasdaq's initial comment letter on February
22, 2000 and responded to it on March 13, 2000. There is no assurance that our
application will be approved.
STRATEGIC RELATIONSHIP WITH STANDARD RADIO INC.
On December 7, 1999, we entered into a strategic relationship with Standard
Radio Inc. We expect this relationship to provide significant opportunities for
future revenues and growth, in addition to the initial cash investment. In that
transaction (a) Standard invested $2,000,000 into Global Media in exchange for
338,983 shares of common stock at a purchase price of $5.90 per share, (b)
Standard's president and chief executive officer, Gary Slaight, was appointed to
a seat on our Board of Directors and granted options to purchase 125,000 shares
of common stock, (c) eight members of Standard's management team formed a
marketing advisory committee to Global Media, for which each will receive
unvested options to purchase up to 20,000 shares of common stock, (d) Standard
agrees to cause each of the radio stations owned and controlled by it now and
for the next three years to become e-commerce and broadcast associates of Global
Media, and (e) Standard received the right to approve agreements between Global
Media and radio stations which compete in the same genre and locale as each of
Standard's stations in Canada.
REAL NETWORKS, INC.
Recently, we signed several material contracts with RealNetworks which further
define and extend our strategic relationship with them:
STREAMING MEDIA SERVICES AGREEMENT. We signed a new Streaming Media
Services Agreement with RealNetworks under which they will continue to develop
our Global Media Player. We will continue to rely on RealNetwork's streaming
media infrastructure, the Real Broadcast Network, to deliver streaming media
services to our network associates in the Global Media Broadcast Network. Among
other things, the new Streaming Media Services Agreement extends the term of our
existing Streaming Media Services Agreement to five years and provides for
increased payments for such services. Similar to the provisions in the 1999
Streaming Media Services Agreement, we agreed that RealNetworks will be our
exclusive provider of streaming media services.
REALCHANNELS AGREEMENT. We entered into a one-year RealChannels
Agreement with RealNetworks under which they will promote and distribute links
to our media content and headlines as part of their RealChannels program using
their RealPlayer software.
LIVESTATIONS AGREEMENT. We entered into a one-year LiveStations
Agreement with RealNetworks under which the promote and distribute links to our
RealMedia content as part of RealNetworks' LiveStations program. As part of this
agreement, RealNetworks agreed to include five of our LiveStations in the
appropriate genres on RealNetworks' LiveStations Guide
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Page. At the time we entered into the new Streaming Media Services Agreement and
RealChannels Agreement described above, we amended the LiveStations Agreement to
extend it to ten additional LiveStations (for a total of 15), for additional
consideration.
ADDENDUM: CUSTOM SOFTWARE UPGRADE AND SUPPORT TERMS AND CONDITIONS.
This Addendum amends the Consulting Agreement between us and RealNetworks, Inc.
dated April 20, 1999. This Addendum further defines our obligations and the
obligations of RealNetworks in providing support services.
Together, these agreements require us to make aggregate payments of
approximately $5 million to RealNetworks over an approximately five-month period
ending June 15, 2000, of which $500,000 has been paid to date.
SEASONALITY
We expect our operating results to fluctuate significantly from period to
period. Both seasonal fluctuations in internet usage and traditional retail
seasonality may affect our business. Internet usage generally declines during
the summer. Sales in the traditional retail book and music industries usually
increase significantly in the fourth calendar quarter of each year and are
correspondingly lower in other quarters. If similar seasonal patterns emerge in
e-commerce, our revenues may vary significantly from period to period.
FOREIGN CURRENCY TRANSLATION
We have translated our monetary assets and liabilities which are denominated in
a foreign currency into U.S. dollars at the period-end exchange rates. We have
translated our income and expense items at the average exchange rates prevailing
during the fiscal period. Exchange gains and losses arising on translation are
reflected in net income for the period.
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PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
From time to time, we may be subject to legal proceedings and claims which may
have a material adverse effect on our business. We are not aware of any current
legal proceedings or claims that will have, individually or in the aggregate, a
material adverse effect on our business, prospects, financial condition or
results of operations.
ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
1) On December 7, 1999, we entered into a strategic relationship with
Standard Radio Inc. In that transaction Standard invested $2,000,000 into Global
Media in exchange for 338,983 shares of Common Stock at a purchase price of
$5.90 per share. The sale of Common Stock to Standard Radio Inc. was an
exempt transaction under Section 4(2) of the Securities Act of 1933 because
the sale did not involve any public offering by Global Media.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
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
a. EXHIBITS.
The following documents are filed as exhibits to this Quarterly Report:
EXHIBIT
NUMBER DESCRIPTION
10.27 Executive Employment Agreement dated December 17, 1999, between
Global Media and Mr. Jeff Mandelbaum.
10.28 Streaming Media Services Agreement between Global Media and
RealNetworks, Inc.
10.29 RealChannels Agreement between Global Media and RealNetworks,
Inc.
10.30 LiveStations Agreement between Global Media and RealNetworks,
Inc.
10.31 Custom Software Upgrades and Support Terms and Conditions
between Global Media and RealNetworks, Inc.
10.32 Advertising Insertion Order between Global Media and
RealNetworks, Inc.
10.33 Sponsorship Insertion Order between Global Media and
RealNetworks, Inc.
27 Financial Data Schedule.
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b. REPORTS ON FORM 8-K.
None during the reporting period.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: March 15, 2000 /S/ L. JAMES PORTER
_________________________
L. James Porter
Chief Financial Officer
(Principal Financial and Accounting Officer,
and authorized signatory for the registrant)
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EXHIBIT INDEX
The following documents are filed as exhibits to this Quarterly Report:
EXHIBIT
NUMBER DESCRIPTION
10.27 Executive Employment Agreement dated December 17, 1999, between
Global Media and Mr. Jeff Mandelbaum.
10.28 Streaming Media Services Agreement between Global Media and
RealNetworks, Inc.
10.29 RealChannels Agreement between Global Media and RealNetworks,
Inc.
10.30 LiveStations Agreement between Global Media and RealNetworks,
Inc.
10.31 Custom Software Upgrades and Support Terms and Conditions
between Global Media and RealNetworks, Inc.
10.32 Advertising Insertion Order between Global Media and
RealNetworks, Inc.
10.33 Sponsorship Insertion Order between Global Media and
RealNetworks, Inc.
27 Financial Data Schedule.
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Exhibit 10.27
EXECUTIVE AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (the "Agreement") is made and
entered into as of this 17th day of December, 1999, by and between GLOBAL MEDIA
CORP., a Nevada corporation (the "Company"), and Jeff Mandelbaum (the
"Executive").
RECITALS
The Company desires to retain the services of the Executive as its
President on the terms and subject to the conditions set forth in this
Agreement, and the Executive desires to make his services available to the
Company on the terms and subject to the conditions set forth in this Agreement.
AGREEMENT
1. EMPLOYMENT.
1.1 GENERAL. The Company hereby agrees to employ the Executive as
President during the Term of this Agreement on the terms and subject to the
conditions contained in this Agreement, and the Executive hereby agrees to
accept such employment on the terms and subject to the conditions contained in
this Agreement. On the Commencement Date (as hereinafter defined), the Board of
Directors shall resolve to increase the size of the Board of Directors by one
director and appoint Executive to fill the resulting vacancy. During the Term
(as hereinafter defined), so long as Executive is employed by the Company as its
President, the Company agrees to nominate Executive for election to the Board of
Directors at meetings of the Company's shareholders called for the election of
directors. Executive agrees that if his employment as President is terminated
for any reason whatsoever, he shall immediately resign from the Board of
Directors. Payment of any Severance Benefits to which Executive may otherwise be
entitled under Section 5.2 may be conditioned upon Executive's tender of such
resignation.
1.2 DUTIES OF EXECUTIVE. During the Term of this Agreement, the
Executive shall diligently perform all duties and responsibilities as may be
assigned to him by the Chairman of the Board and, to the extent not inconsistent
with such duties and responsibilities as are assigned by the Chairman, those
assigned by the CEO. The Executive shall devote his full business time and
attention to the business and affairs of the Company as necessary to perform his
duties and responsibilities hereunder, render such services to the best of his
ability, and use his best efforts to promote the interests of the Company.
Further, during the Term, Executive will not, without Company's prior written
consent, directly or indirectly engage in any employment, consulting, or other
activity that would interfere or conflict with the performance of Executive's
duties or obligations to Company or which would directly or indirectly compete
with Company. Executive acknowledges that at least during the first year after
the Commencement Date, he shall be required to spend a reasonable portion of his
working time in the Company's Vancouver, B.C. headquarters to the extent not
otherwise travelling on Company business.
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2. COMMENCEMENT. Employment shall commence January 17, 2000 or such
later date as the parties may mutually agree (not to exceed 30 days after
January 17, 2000) in order to enable Executive to satisfy obligations to his
current employer ("Commencement Date").
3. TERM. Subject to Paragraph 4, below, the term of employment (the
"Term") shall be for a period of two (2) years from the Commencement Date. ----
4. COMPENSATION.
4.1 SALARY. During the first year of the Term, Executive shall receive
an annual salary of Three Hundred Thousand United States Dollars (US$300,000)
("Base Compensation") payable after the Commencement Date in installments
consistent with the Company's normal payroll schedule on or about either the
first or fifteenth day of the month, subject to all withholding as is legally
required or directed by Executive. Executive's salary for the second year of the
Term shall be reviewed by the Board of Directors of the Company and shall be no
less than Base Compensation for the first year.
4.2 MILESTONE BONUS. Executive shall be eligible for a bonus of up to
One Hundred Thousand United States Dollars (US$100,000) per year, to be paid
based upon achievement of goals and milestones, the terms and achievement of
which shall be determined at the discretion of the Board of Directors.
4.3 STOCK OPTIONS. In connection with the commencement of Executive's
employment, the Company shall grant Executive an option to purchase 350,000
shares of Company's Common Stock at the current market value of the Common Stock
as of the Commencement Date. The stock options shall vest at 20% on the
Commencement Date, with an additional 20% vesting at the end of each full
quarter of continuous service during the first year of the Term; provided,
however, that if Executive's employment is terminated without Cause prior to the
end of the first year of the Term, vesting of any unvested stock options shall
be immediately and fully accelerated. The stock options shall be granted under
the Company's 1999 Stock Option Plan and the Company's standard form option
agreement (consistent with the terms described above), to be entered into as of
the Commencement Date. Executive acknowledges that the grant of such options,
Executive's exercise of such options, and the disposition of shares issued on
exercise shall be subject to all requirements under the Securities Act, the
Securities Exchange Act of 1934 and the rules and regulations thereunder.
4.4 RESTRICTED STOCK SALES.
(A) INITIAL STOCK SALE. On the Commencement Date, Michael Metcalfe,
the principal shareholder of the Company ("Metcalfe"), will sell to Executive
500,000 shares of Company Common Stock owned by Metcalfe (the "Initial Stock")
at a price per share of $0.01 and, on that date, the Executive will pay to
Metcalfe the purchase price for the Initial Stock by cash or certified check.
Executive acknowledges that (i) he will acquire the Initial Stock for investment
only, not with a view to the distribution or other disposition thereof in
violation of the Securities Act of 1933, as amended (the "Securities Act"), (ii)
the Initial Stock shall be "restricted securities" within the meaning of Rule
144 under the Securities Act and the stock certificate evidencing the Initial
Stock will bear customary restricted securities legends, (iii) Executive's
holding period with respect to those shares under Rule 144(d) shall commence on
the Commencement Date, (iv) such shares may not be sold or otherwise transferred
(other than a
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transfer without consideration pursuant to Executive's will or the laws of
intestacy) for a period of one (1) year after the Commencement Date (the
"Initial Lockup Period"), (v) the Company is under no obligation to register
such shares for public resale under the Securities Act at any time, (vi) the
grant of such shares, Executive's holding of such shares and any disposition of
such shares shall otherwise be subject to all requirements under the Securities
Act, the Securities Exchange Act of 1934 and the rules and regulations
thereunder. The Initial Stock shall be held in escrow by the Company until the
end of the Initial Lockup Period at which time, subject to the following
sentence, such shares shall be released to Executive. In the event that
Executive's employment is terminated at any time prior to the end of the Initial
Lockup Period for Cause (as defined in Section 5.1) or due to Executive's
Voluntary Termination (as defined in Section 5.1), such shares shall be subject
to a right of repurchase, exercisable upon written notice to Executive within
sixty (60) days following the effective date of such termination, and payment by
cash or certified check to Executive of the repurchase price of $0.01 per share.
The Initial Stock shall be sold pursuant to a mutually acceptable written
agreement between Executive, Metcalfe and the Company, consistent with the
foregoing terms, to be entered into on the Commencement Date (the "Restricted
Stock Purchase Agreement").
(B) ADDITIONAL STOCK SALE. On the first anniversary of the
Commencement Date, Metcalfe will sell to Executive an additional 500,000 shares
of Common Stock owned by Metcalfe (the "Additional Stock") at a price per share
of $0.01 and, on that date, the Executive will pay to Metcalfe the purchase
price for the Initial Stock by cash or certified check; provided, however, that
if Executive's employment has been terminated for any reason prior to such date,
Executive shall not be entitled to, and Metcalfe shall not have any obligation
with respect to the sale of, the Additional Stock. Executive acknowledges that
(i) he will acquire the Additional Stock shares for investment only, not with a
view to the distribution or other disposition thereof in violation of the
Securities Act of 1933, as amended (the "Securities Act"), (iii) the Additional
Stock will be "restricted securities" within the meaning of Rule 144 under the
Securities Act and the stock certificate evidencing the Additional Stock will
bear customary restricted securities legends, (iv) Executive's holding period
with respect to those shares under Rule 144(d) shall commence on the effective
date of the sale of the Additional Stock by Metcalfe to Mandelbaum, (v) such
shares may not be sold or otherwise transferred (other than a transfer without
consideration pursuant to Executive's will or the laws of intestacy) for a
period of one (1) year after the effective date of the of the sale of the
Additional Stock (the "Extended Lockup Period"), (vi) the Company is under no
obligation to register such shares for public resale under the Securities Act at
any time, (vii) the grant of such shares, Executive's holding of such shares and
any disposition of such shares shall otherwise be subject to all requirements
under the Securities Act, the Securities Exchange Act of 1934 and the rules and
regulations thereunder. The Additional Stock shall be held in escrow by the
Company until the end of the Extended Lockup Period at which time, subject to
the following sentence, such shares shall be released to Executive. In the event
that Executive's employment is terminated at any time prior to the end of the
Extended Lockup Period for Cause (as defined in Section 5.1) or due to
Executive's Voluntary Termination, such shares shall be subject to a right of
repurchase, exercisable upon written notice to Executive within sixty (60) days
following the effective date of such termination, and payment to Executive of
the repurchase price of $0.01 per share. The sale of the Additional Stock shall
be subject to the terms of the Restricted Stock Purchase Agreement referred to
in Section 4.4(a) above.
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4.5 VACATION. Executive shall be entitled to fifteen (15) business
days paid vacation plus government holidays during the Initial Period and, if
applicable, the Extended Period; provided that Executive agrees that he will not
be entitled to more than ten (10) consecutive days vacation during any one year.
Such vacation shall be taken at a time mutually convenient to Company and
Executive. During each year of continuous service under this Agreement, up to
five (5) days of unused vacation time may be accumulated and carried over to the
succeeding year. In the event this Agreement is terminated by either Company or
Executive, except for "Cause," Executive shall be paid for any unused vacation
time from the current year (on a pro rata basis) plus any unused approved
carry-over vacation time from the prior year.
4.6 BENEFIT PLANS. During the Term of this Agreement, the Executive
shall be entitled to participate in all perquisites and benefit plans adopted
for the general benefit of the Company's executives, such as pension plans,
profit sharing plans, medical plans, group or other insurance plans and
benefits, if any, to the extent that the Executive is and remains eligible to
participate therein and subject to the eligibility provisions of such plans in
effect from time to time. In lieu of medical and dental benefits under Company
plans, the Company may reimburse Executive for the cost of continuing coverage
under Executive's prior employer for the maximum period allowable under COBRA.
4.7 LIVING AND OTHER EXPENSES. For the first six months following
the Commencement Date, Executive shall, at the Company's option, (i) be
reimbursed for the reasonable rental cost of an apartment in Vancouver, British
Columbia, or (ii) use of a corporate apartment in Vancouver, British Columbia.
All other living expenses shall be Executive's responsibility. Executive shall
be entitled to reimbursement of reasonable business expenses in accordance with
Company policies in effect from time to time.
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS.
5.1 TERMINATION OF EMPLOYMENT. Executive's employment may be
terminated upon the occurrence of any of the following events, and subject to
the following conditions:
A. TERMINATION FOR CAUSE. The Company may terminate Executive
for Cause (as hereafter defined) which shall be effective
immediately after the Company provides to the Executive written
notice of such termination. For purposes of this Agreement, "Cause"
means dishonesty, gross neglect of duties, conflict of interest,
professional negligence, fraud or misrepresentation, refusal or
repeated failure to carry out reasonable directives of the Chairman
and CEO, conviction of or pleading guilty or no contest to a felony
or crime involving moral turpitude, any material breach of this
Agreement, or any other act or failure to act that, in the
reasonable good faith business judgment of the Board of Directors,
substantially impairs Company's business or reputation.
B. TERMINATION WITHOUT CAUSE. The Company may terminate
Executive's employment without cause, which determination may be
made by the Company at any time at the Company's sole discretion,
for any or no reason. Termination without cause shall be
immediately upon written notice to the Executive of such
termination
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C. VOLUNTARY TERMINATION. Executive may terminate his
employment with the Company at any time for any reason ("Voluntary
Termination"). The effective date shall be at least ninety (90)
days after written notice to the Company from Executive.
D. DEATH. Executive's employment will terminate immediately
upon Executive's death.
E. DISABILITY. Executive's employment will terminate
immediately upon Executive's Disability (as defined in paragraph
5.3 below).
5.2 COMPENSATION AND SEVERANCE BENEFITS.
A. TERMINATION UNDER ANY CIRCUMSTANCE. Upon termination of
Executive's employment for any reason, Executive shall be paid at the next
regularly scheduled pay period(s) for Base Compensation, Bonus Compensation, if
any, which has been declared by the Board of Directors but is unpaid as of the
date of termination, and vacation benefits to which Executive is entitled under
Section 4.5 above through the effective date of Executive's termination of
employment. Except as specifically contemplated in Section 4.3, vesting of any
unvested stock options held by Executive as of the date of Executive's
termination of employment shall terminate as of the effective date of
Executive's termination of employment. Executive shall have ninety (90) days
from the effective date of termination to exercise any options that are vested
as of the effective date of Executive's termination of employment (including any
options for which vesting has been accelerated pursuant to Section 4.3), after
which the options shall terminate.
B. SEVERANCE BENEFITS UNDER CERTAIN CIRCUMSTANCES. Executive
shall be entitled to receive Severance Benefits (as hereinafter defined) upon
termination of employment only to the extent specifically set forth below.
Severance Benefits will consist of Base Compensation for the Severance Period
(as defined below), and, except in the case of termination under Section 5.1(d),
Company health insurance (or separate insurance providing comparable coverage)
and other employee benefits, if any, in which Executive is participating at the
time of termination of employment. Severance Benefits shall immediately cease
upon Executive's acceptance of other employment.
I. VOLUNTARY TERMINATION. If Executive's employment
terminates by Voluntary Termination with proper notice, then
Executive shall be entitled to no Severance Benefits whatsoever.
II. INVOLUNTARY TERMINATION. If Executive's employment is
terminated under Section 5.1(b) or (d) above (an "Involuntary
Termination"), Executive (or his estate) will be entitled to
receive Severance Benefits equal to the longer of (i) the remaining
Term or (ii) ninety (90) days. Such payments shall be made ratably
over the Severance Period according to the Company's standard
payroll schedule.
III. TERMINATION FOR CAUSE. If Executive's employment is
terminated for "Cause" Executive shall receive no severance
benefits.
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5.3 DEFINITION OF DISABILITY. "Disability" shall mean that
Executive has been unable to perform his duties hereunder as a
result of his incapacity due to physical or mental illness, and
such inability, which continues for at least 60 consecutive
calendar days or 90 nonconsecutive days during any consecutive 12
month period after its commencement, and which is determined to be
total and permanent by a physician selected by Company.
6. AGREEMENT NOT TO COMPETE.
6.1 As used in this Agreement, "Competing Business" shall
mean any business or enterprise that is engaged in (i) streaming media services
or the sale or licensing of technologies related thereto, or (ii) consumer
e-commerce or the sale or licensing of technologies related thereto.
6.2 The Executive agrees that Company is engaged in a highly
competitive business in an international marketplace, and that during the Term
of this Agreement and for a period of one year following the termination or
expiration of his employment for any reason whatsoever, he will not, without the
prior written consent of the Company, either directly or indirectly, on his own
behalf or in the service of or on behalf of others as a shareholder, director,
officer, trustee, consultant, independent contractor, employee or agent, engage
in, or be employed by, or solicit business for, or provide services to, any
Competing Business, in North America.
7. AGREEMENT NOT TO ESTRANGE CUSTOMERS. The Executive agrees that,
during the Term of this Agreement and for two years following the termination or
expiration of his employment for any reason whatsoever, he will not, without the
prior written consent of the Company, either directly or indirectly attempt to
or induce any actual or prospective client or customer of the Company to cease
to do business or to reduce or limit its business with Company or any of its
subsidiaries or affiliates. A prospective customer is one with whom Company or
its subsidiaries or affiliates have had discussion or contact during the Term of
this Agreement, or with whom Executive has been notified that the Company or its
subsidiaries or affiliates are contemplating doing business.
8. AGREEMENT NOT TO ESTRANGE PERSONNEL. The Executive agrees that
during the Term of this Agreement and for two years following the termination or
expiration of his employment for any reason whatsoever, he will not, either
directly or indirectly, on his own behalf or in the service or on behalf of
others, solicit, divert, or attempt to solicit, divert or in any way induce any
person employed by the Company or any subsidiary or affiliate to discontinue or
reduce employment or association therewith, whether or not such person is a full
time employee, consultant, contractor, or temporary employee of the Company or
any subsidiary or affiliate and whether or not such employment is for a
determined period or is at will.
9. AGREEMENT NOT TO ESTRANGE SUPPLIERS AND VENDORS. The Executive
agrees that during the Term of the Agreement and for two years following the
termination or expiration of his employment for any reason whatsoever, he will
not, either directly or indirectly, on his own behalf or in the service or on
behalf of others, solicit, divert, or attempt to induce any supplier, vendor or
other provider to discontinue or limit its association with the Company or any
subsidiary or affiliate thereof.
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10. OWNERSHIP AND NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL
INFORMATION.
10.1 Company and Executive contemplate, that during the period of
this Agreement, Executive will be assisting in the development of new business
strategies, products, and services, and will gain access to confidential and
proprietary information of the Company. As used in this Agreement, "Confidential
Information" includes all material and information that is considered
confidential or a trade secret of Company under RCW 19.108, the value of which
arises from the fact that it is not generally known to others who might be able
to benefit from it, and also includes but is not limited to customer sales and
marketing information, customer account records, proprietary receipts and/or
processing techniques, information regarding vendors and products, training and
operations memoranda and similar information, personnel records, pricing
information, financial information and information concerning or relating to the
business, accounts, customers, employees and affairs of the Company, or any
subsidiary or affiliate thereof, created or obtained by or furnished, disclosed
or disseminated to the Executive, or obtained, assembled or compiled by the
Executive or under his supervision during the course of his employment by the
Company, and all physical embodiments of the foregoing, all of which are hereby
agreed to be the property of and confidential to the Company.
10.2 The Executive acknowledges and agrees that all Confidential
Information, and all physical embodiments thereof, are confidential to and shall
be and remain the sole and exclusive property of the Company. Upon request by
the Company, and in any event upon termination of the Executive's employment
with the Company, as a prior condition to the Executive's receipt of any final
salary or benefit payments hereunder, the Executive shall deliver to the Company
all property belonging to the Company or any of its subsidiaries or affiliates,
including, without limitation, all Confidential Information (and all embodiments
thereof), then in his custody, control or possession, but any forfeiture of such
salary or benefit shall not be considered a satisfaction or a release of or
liquidated damages for any claim(s) for damages against the Executive which may
accrue to the Company, as a result of any breach of this Section 9 by the
Executive.
10.3 The Executive agrees that he will not, either during the Term
of this Agreement or at any time thereafter, without the prior written consent
of the Company, use, disclose or make available any Confidential Information to
any person or entity, nor shall he use, disclose, make available or cause to be
used, disclosed or made available, or permit or allow, either on his own behalf
or on behalf of others, any use or disclosure of such Confidential Information
other than in the proper performance of the Executive's duties hereunder.
11. INVENTIONS AND WORK PRODUCT. The Executive shall disclose promptly
to the Company any and all conceptions and ideas for inventions, improvements,
valuable discoveries, marketing or other plans, customer lists, or ideas
(including but not limited to manuals, software, training programs, databases,
techniques, improvements, and other developments), and all tangible
manifestations thereof, whether patentable or not that are conceived or made by
the Executive, solely or jointly with another, during the Term of this Agreement
and that are related to the business or activities of the Company regardless of
whether or not such ideas, inventions, or improvements qualify as "works for
hire." The Executive hereby assigns and agrees to assign all his interests
therein to the Company or its nominee, excepting only to the extent that the
invention is one for which no equipment, supplies, facility or trade secret
information of the Company was used and which was developed entirely on the
Executive's own time, unless
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(a) the invention relates (i) directly to the business of the Company, or (ii)
to the Executive's actual or demonstrably anticipated research or development,
or (b) the invention results from any work performed by the Executive for the
Company. Whenever requested to do so by the Company, the Executive shall execute
any and all applications, assignments or other instruments that the Company
shall deem necessary to apply for and obtain Letters Patent of the United States
or any foreign country or to otherwise protect the Company's interest therein.
12. REASONABLENESS OF RESTRICTIONS. In the event that any provision
relating to time period or geographic area of any restriction set forth in
Sections 6, 7, 8 or 9 in this Agreement shall be declared by a court of
competent jurisdiction to exceed the maximum time period or area of restriction
that the court deems reasonable and enforceable, the time period or area of
restriction which the court finds to be reasonable and enforceable shall be
deemed to become, and thereafter shall be, the maximum time period or geographic
area of such restriction as to Executive.
13. ENFORCEABILITY. Any provision of Sections 5, 6, 7, 8 and 9 which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, but shall be enforced to the
maximum extent permitted by law, and any such prohibition or unenforceability in
any jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
14. REMEDIES. Executive recognizes and agrees that the obligations in
Sections 6, 7, 8, 9, 10, and 11 are the essence of this Agreement, and are
reasonable and necessary to protect the legitimate business interest and
goodwill of Company. Executive acknowledges that the restrictions placed upon
him by these provisions do not unreasonably interfere with his ability to earn a
living during the restricted period.
A. INJUNCTION. It is recognized and hereby acknowledged and
admitted by Executive that a breach by the Executive of any of the
covenants contained in Sections 6, 7, 8, 9, 10 or 11 of this
Agreement will, cause immediate and irreparable harm and damage to
the Company and that Company's ability to seek monetary damages,
including liquidated damages, is not sufficient to prevent such
irreparable harm. As a result, the Executive recognizes and
acknowledges that the Company shall be entitled to an injunction
from any court of competent jurisdiction enjoining and restraining
any violation of any or all of the covenants contained in Sections
6, 7, 8, 9, 10 or 11 of this Agreement by the Executive or any of
his affiliates, associates, partners, or agents, either directly or
indirectly, and that such right to injunction shall be cumulative
and in addition to whatever other remedies the Company may possess.
B. LIQUIDATED DAMAGES. In the event that Executive violates
paragraph 6 of this Agreement, Executive agrees that, in addition
to Company's right to injunctive relief, Executive will pay
liquidated damages if any Company clients or customers begin doing
business with any person, business, or other entity to whom
Executive has provided services in violation of this Agreement. The
parties agree that Executive will pay to Company thirty-five
percent (35%) of the gross of any and all fees paid to or incurred
by any such customers or clients
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to any such person, business, or entity during the thirty-six (36)
months after Executive leaves the employ of Company. In the event
that Executive violates paragraph 8 of this Agreement, Executive
agrees that, in addition to Company's right to injunctive relief,
Executive will pay liquidated damages equal to one-half (1/2) the
annual compensation payable any employee, consultant, or contractor
who leaves or, on a pro rata basis reduces, his or her employment
with Company due to Executive's conduct. The parties agree that
these amounts are not intended to be a penalty, but rather
represent a reasonable forecast of the actual damages that would be
suffered by Company, which would otherwise be incapable or very
difficult to ascertain.
15. SECTION HEADINGS. The section headings contained in this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
16. NOTICES. Any notice required or permitted to be given under this
Agreement shall be in writing and shall be deemed to have been given when
delivered by hand or three (3) days after sent by registered or certified United
States mail, return receipt requested, postage prepaid, or the next business day
following dispatch by a reputable overnight courier service, addressed as
follows,
(i) If to the Executive:
---------------------
---------------------
---------------------
(ii) If to the Company
Global Media Corp.
Attn: Chief Financial Officer and Chairman of the
Board 400 Robson Street Vancouver, British Columbia
V6B 2B4 Canada
or to such other addresses as either party hereto may from time to time give
notice of to the other party hereto in the aforesaid manner.
17. ASSIGNMENT. Executive agrees that his obligations under this
Agreement are in the nature of requiring his personal service, and that he will
not assign, sell, transfer, or delegate any rights or obligations under this
Agreement. Any such purported assignment, transfer, or delegation shall be null
and void. The Company shall have the right to assign its rights and obligations
under this Agreement to any or all of its qualifying subsidiary or affiliated
companies, or the majority owner of Company or any of its affiliated or
subsidiary companies.
18. NO THIRD PARTY BENEFICIARY. Nothing expressed or implied in this
Agreement is intended, or shall be construed, to confer upon or give any person
other than the parties hereto
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and their respective heirs, executors, personal representative, legal
representative, successors and assigns, any rights or remedies under or by
reason of this Agreement.
19. BINDING EFFECT. This Agreement shall be for the benefit of and
binding upon the parties hereto and their respective heirs, personal
representatives, legal representatives, successors and assigns.
20. SEVERABILITY. The invalidity of any one or more of the words,
phrases, sentences, clauses, sections or subsections contained in this Agreement
shall not affect the enforceability of the remaining portions of this Agreement
or any part thereof, all of which are inserted conditionally on their being
valid in law, and, in the event that any one or more of the words, phrases,
sentences, clauses, sections or subsections contained in this Agreement or any
put thereof shall be declared invalid, this Agreement shall be construed as if
such invalid word or words, phrase or phrases, sentence or sentences, clause or
clauses, section or sections or subsection or subsections had not been inserted.
If such invalidity is caused by length of time or size of area or both, the
otherwise invalid provision will be considered to be reduced to a period or area
which would cure such invalidity.
21. GOVERNING LAW. This Agreement, the rights and obligations of the
parties hereto, and any claims or disputes relating thereto, shall be governed
by and construed in accordance with the laws of the State of Washington,
excluding the choice of law rules thereof. The Company and the Executive each
hereby irrevocably submit to the jurisdiction of the state or federal courts
located in Washington in connection with any suit, action or other proceeding
arising out of or relating to this Agreement and hereby agree not to assert, by
way of motion, as a defense, or otherwise in any such suit, action or proceeding
that the suit, action or proceeding is brought in an inconvenient forum. that
the venue of the suit, action or proceeding is improper or that this Agreement
or the subject matter hereof may not be enforced by such courts.
22. RESOLUTION OF CLAIMS.
A. ARBITRATION. A claim by either party for breach or
enforcement of a provision of this Agreement and any other
claim or dispute related to or arising out of Executive's
employment by Company is subject to binding arbitration, and
the parties hereby waive their right to jury trial. The
arbitration shall be conducted through the American
Arbitration Association ("AAA"), and held before such
arbitrator as the parties may agree or, if they are unable to
do so, to be selected by obtaining nine proposed arbitrators
from AAA and alternatively striking names (Executive shall
strike first) until one name remains. The arbitration shall be
conducted in Seattle, Washington according to the AAA
Commercial Arbitration Rules then in effect. A claim may be
initiated by either party by submitting a written claim to
AAA, with a copy to the other party. The decision of the
arbitrator shall be final and conclusive, and the parties
waive the right to trial de novo or appeal, excepting only for
the purpose of enforcing the arbitrator's decision, for which
purpose the parties agree that the Superior Court for King
County, Washington shall have jurisdiction. The substantially
prevailing party will be entitled to recover reasonable
attorneys' fees and costs of the arbitration and any action
necessary for enforcement, the amount of the award to be
determined by the arbitrator and court, respectively. This
arbitration provision
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shall not apply to any claims for benefits under a benefits
plan that contains an arbitration provision.
B. TEMPORARY RESTRAINING ORDER / INJUNCTION. Irrespective of
the foregoing, Company may, at its option, proceed directly to
King County Superior Court to seek a temporary restraining
order, preliminary injunction, and/or other injunctive relief
for any violations by Executive of paragraphs 5, 6, 7, 8, 9,
and 10. The substantially prevailing party shall be entitled
to recover its reasonable costs and attorneys' fees.
23. AMENDMENT; MODIFICATION; WAIVER. No amendment, modification or
waiver of the terms of this Agreement shall be valid unless made in writing and
duly executed by the Company and the Executive. No delay or failure at any time
on the part of the Company in exercising any right, power or privilege under
this Agreement, or in enforcing any provision of this Agreement, shall impair
any such right therein, or shall affect the right of the Company thereafter to
enforce each and every provision of, power or privilege, or be construed as a
waiver of any default or as any acquiescence this Agreement in accordance with
its terms. The waiver by either party hereto of a breach or violation of any
term or provision of this Agreement shall neither operate nor be construed as a
waiver of any subsequent breach or violation.
24. CONFIDENTIALITY OF AGREEMENT. The terms of this Agreement shall be
held in confidence by each of the parties and shall not be disclosed by either
party without the other party's consent, except to the extent that disclosure is
required by applicable law, including the rules and regulations of the
Securities and Exchange Commission, or by order of a court of competent
jurisdiction.
25. BOARD APPROVAL. The Company represents and warrants to Executive
that the terms of this Agreement have been approved by the Company's Board of
Directors prior to its execution by the Company.
26. OBLIGATIONS TO OTHERS. Executive represents that his employment by
the Company and the performance of services hereunder will not result in a
breach of any non-competition or similar obligations to any former employer or
other party. Executive agrees that in the course of his employment with the
Company, he will not use, disclose or otherwise make available to the Company
any information, documents or other items which Executive may have received from
any other person (such as a former employer) and which Executive is prohibited
from so using or making available (whether by reason of any contract, court
order, law or other legal obligation by which Employee is bound).
27. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements, understandings and arrangements, both oral and
written, between the parties hereto with respect to such subject matter. This
Agreement may not be modified in any way, unless by a written instrument signed
by both the Company and the Executive.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
GLOBAL MEDIA CORP.
By: /s/ Rob Fuller
---------------------
Name: Rob Fuller
-------------------
Title: CEO
------------------
EXECUTIVE:
/s/ Jeff Mandelbaum
---------------------
JEFF MANDELBAUM
By signing below, the
undersigned acknowledges
and agrees to be bound by
the provisions of Section
4.4 of this Agreement (and
solely those provisions):
/s/ Michael Metcalfe
---------------------
MICHAEL METCALFE
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit 10.28
REAL BROADCAST NETWORK
Streaming Media Services Agreement
with
GLOBAL MEDIA CORP.
JANUARY 19, 2000
PREPARED BY:
RICHARD EASTERN
SENIOR ACCOUNT EXECUTIVE
REALNETWORKS, INC.
2601 ELLIOTT AVENUE
SEATTLE, WA 98121
TEL: (206) 674-2248
FAX: (206) 674-2697
[email protected]
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This Streaming Media Services Agreement ("Agreement") is effective as
of the last date signed below, by and between GLOBAL MEDIA CORP., with its
principal place of business at 400 Robson Street, Vancouver, British Columbia,
Canada V6B 2B4 ("Company"), and RealNetworks, Inc., a Washington corporation
with its principal place of business at 2601 Elliott Avenue, Seattle, Washington
98121 ("RN"). Company desires that RN supply certain streaming media services in
connection with the Internet products or activities of Company, and RN desires
to supply such services. In consideration of the mutual promises and covenants
contained herein, the parties agree as follows:
1. DEFINITIONS
1.1 "Content" means all audio, video or other streaming materials
supplied by or for Company to RN in connection with the performance of Services
by RN pursuant to this Agreement.
1.2 "Services" means the services to be provided by RN to Company
pursuant to this Agreement, as more fully described in Exhibit 2 attached
hereto.
1.3 "Site" means the World Wide Web site located at www.globalmedia.com
and affiliated radio station sites.
1.4 "System" means the equipment and communications network via which
Services are provided, as more fully described in Exhibit 2.
2. COMPANY OBLIGATIONS
2.1 SUPPLY OF CONTENT. Company shall supply Content to RN via telephone
line, ISDN, frame relay, satellite feed or via FTP, according to the schedule
and specifications to be agreed to by the parties.
2.2 LICENSE GRANT. Company hereby grants RN, during the term of this
Agreement, the nonexclusive, worldwide, royalty-free right and license to:
2.2.1 use, reproduce, encode, transmit, publicly perform,
publicly display and distribute Content as necessary or desirable for RN's
performance of Services under this Agreement; and
2.2.2 use the trademarks, logos and trade names of Company and
any third-parties contained in the Content solely in connection with RN's
performance of Services.
2.3 RESPONSIBILITY FOR CONTENT AND THE SITE. Except for the Services to
be provided by RN hereunder, as between Company and RN, Company shall be
completely and solely responsible for all matters relating to Content and the
Site, including, without limitation, all costs, activities, obligations and
liabilities associated with the creation, production, editing, supply,
correction and maintenance of the Content and the Site. Company shall notify RN
when it desires to remove material from Content, which material RN shall
promptly remove. RN assumes no responsibility for editing, reviewing,
controlling or conducting any other activities associated with publishing any
Content, or (except for the Services) operating or maintaining the Site, nor
shall it have any liability to any third party in connection with such
activities. Company shall have the right to alter, modify or delete Content
under its control at any time, or, if RN's assistance is needed, upon prior
notice to RN.
2.4 SUPPORT. Company shall provide RN with reasonable support and
assistance, as set forth in Exhibit 1 hereto, in connection with RN's provision
of Services throughout the term of this Agreement.
2.5 CLEARANCE. Company shall be solely responsible for obtaining any
necessary rebroadcast or retransmission rights or permissions if it desires RN
to acquire any broadcast signals using DBS, and shall bear all costs,
obligations and liabilities associated therewith.
2.6 ATTRIBUTION. Company agrees to indicate on its Site that the
Content is being delivered on the Real Broadcast Network. Company must indicate
which publicly available files are in the RealAudio (.ra) or RealVideo (.rm)
format. RN hereby grants Company a non-exclusive, worldwide, limited license
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to use, and Company agrees that Company shall always use, RN's trademarks in
accordance with RN's Trademark and Logo Usage Policy at
http://www.real.com/corporate/logos/policy.html., and for the sole purpose of
informing web page visitors that RealAudio or RealVideo content is available at
Company's web page. Company agrees that it shall not use any RN trademark in a
way that may imply that it is an agency or branch of RN, or that may imply that
RN endorses, is affiliated with, or sponsors Company or Company's products,
without RN's express written permission. Company also agrees that Company may
not link directly to any media file or .ram file made available from the RN
website.
2.7 EXCLUSIVITY. Company agrees that RN will be the exclusive provider
of streaming media services to Company during the Term. Company also agrees to
exclusively use RN's format for all media delivery during the Term.
2.8 NO HIRE. During the Term of the Agreement and for a period of two
(2) years after termination of this Agreement, Company agrees not to hire, as an
employee, contractor or consultant, or to appoint to its board of directors, any
then-current RN employee or any former employee who has left RN within the
then-preceding twelve (12) months or who is otherwise prohibited by the terms of
an non-competition agreement from working for a competitor of RN, in which case
Company shall not hire such former employee until the expiration of said 12
month period or the term of his or her noncompete, whichever is later. A breach
of this Section by Company shall give RN the right to terminate this Agreement
as provided in Section 8.2 below.
2.9 INFRASTRUCTURE BUILD-OUT. If Company chooses to build out its own
hosting infrastructure during the Term of this Agreement, Company will negotiate
terms with RN for the required software, services and license agreements
associated with infrastructure build-out.
3. RN OBLIGATIONS
3.1 SERVICES. RN shall supply the Services to Company, and perform such
Services in a workmanlike manner in accordance with the standards generally
prevailing in the industry for similar services. RN shall use commercially
reasonable best efforts to maintain the System and provide the Services in
accordance with Exhibit 2, but shall not be liable to Company or any third party
for any failure to do so due to reasons: (i) beyond RN's reasonable control,
(ii) arising from other than RN's obligations as expressly set forth in Exhibit
2, (iii) arising in connection with viewer and listener use of Content in excess
of the maximum burstable System capacity level, and/or (iv) arising from or in
connection with problems attributable to Content. Company acknowledges that RN
may use third-party service providers to supply certain components of the System
or the Services.
3.2 REPORTING. RN will generate daily on-line reports, accessible via a
web page, that include the total number of viewers and listeners accessing the
Content and the average time duration observed by RN with respect to each
Content piece.
4. FEES AND PAYMENT
4.1 FEES. Pricing for the Services ("Service Fees") shall be as set
forth in Exhibit 3 attached hereto.
4.2 PAYMENT. RN shall invoice Company for Service Fees performed on a
monthly basis. Company shall pay all taxes, duties and similar charges that
apply to or arise from this Agreement, excluding taxes on RN's income. All
invoices are due and payable in full within 30 calendar days of the invoice
date, to the account and in the manner designated by RN. Notwithstanding the
termination provisions of this Agreement, RN reserves the right to terminate its
Services and this Agreement immediately without further notice if payment is not
received in accordance with invoice terms. Invoiced amounts not paid when due
shall be subject to late fees equal to the lower of 1.5% per month or the
maximum amount allowed by applicable law. Termination of this Agreement and/or
payment of such late fees shall not prejudice any other rights or remedies that
may be available to RN with respect to any
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nonpayment or late payment of applicable Service Fees. Service Fee payments
are nonrefundable and not subject to offset.
5. PROPRIETARY RIGHTS
5.1 COMPANY'S OWNERSHIP. As between RN and Company, Company shall be
the sole owner of all right, title and interest in and to Content and the Site,
and all copyrights and other intellectual property rights therein. Company shall
retain title to and ownership in information relating to viewers and listeners;
provided, however, that RN shall have the nonexclusive, perpetual, irrevocable,
royalty-free, worldwide right to use viewer and listener data and statistics
gathered by the System or obtained by RN during the performance of the Services.
5.2 RN'S OWNERSHIP. RN shall be the sole owner of all right, title and
interest in and to the System, computer programs, materials, processes and other
works of authorship developed or used by or for RN in connection with the
Content, the Site and/or the provision of Services hereunder, and all
copyrights, patents and other intellectual property rights therein.
6. WARRANTIES AND INDEMNIFICATION
6.1 CONTENT AND AUTHORIZATION WARRANTIES.
6.1.1 Company warrants and represents that: (i) the Content
and any portion thereof does not in any way violate any existing law, infringe
upon or misappropriate any copyright, patent, trademark, trade secret, right of
publicity, right of privacy or other proprietary rights of any third party,
either in whole or in part; (ii) the Content contains no matter which, if
published, will be libelous or defamatory; (iii) it has obtained or will obtain
all necessary consents, licenses, permissions and releases necessary to grant RN
the rights granted hereunder; (iv) the Content complies with all federal, state
and local laws and regulations (including those governing export and import)
that are applicable to the transmission or use of the Content as permitted or
contemplated by this Agreement for each country in which the Content is intended
to be transmitted or delivered; (v) there exist no outstanding obligations to
accord credit to any third party with respect to, or to respect any third
party's rights against changes to, the Content; (vi) it has the full power and
authority to enter into this Agreement and to perform its obligations hereunder;
and (v) Company is solely responsible for, and has paid or will promptly pay,
all amounts due any third-party content provider or other person or entity that
has a right to receive any royalty or other payment as a result of the
transmission or other use of the Content as contemplated by or provided under
this Agreement. Notwithstanding the foregoing, Company shall not be liable for
any material inserted in the Content by RN other than as supplied, permitted or
instructed by Company.
6.1.2 RN warrants and represents that: (i) to the best of its
knowledge, the System does not in any way violate any existing law, infringe
upon or misappropriate any third party proprietary rights, either in whole or in
part; (ii) it has all necessary right, title and interest in and to the System,
including, without limitation, the right to grant Company the rights granted
hereunder; and (iii) it has the full power and authority to enter into this
Agreement and to perform its obligations hereunder.
6.2 INDEMNITIES.
6.2.1 Company hereby agrees to indemnify, hold harmless and
defend RN, its affiliated companies and partners, and their respective officers,
directors, employees and agents from and against any and all claims, damages,
costs and expenses, including reasonable attorneys' fees and litigation
expenses, arising out of or in connection with any Content or the Site, or act
or failure to act of Company or any person or entity other than RN, or act by RN
pursuant to this Agreement or as otherwise instructed or authorized by Company,
including, without limitation: (i) infringement or violation, or alleged
infringement or violation, of any copyright, patent, trademark, trade secret,
right of publicity, right of privacy, or other third-party proprietary rights;
(ii) unfair trade practice, defamation or
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misrepresentation; or (iii) Company's breach of the warranties and
representations in Section 6.1.1 and/or the obligations in Section 4.2.
6.2.2 RN hereby agrees to indemnify, hold harmless and defend
Company, its affiliated companies and partners, and their respective officers,
directors, employees and agents from and against any and all claims, damages,
costs and expenses, including reasonable attorneys' fees and litigation
expenses, arising out of or in connection with (i) RN's breach of the warranties
and representations in Section 6.1.2; (ii) any material inserted in the Content
by RN other than as supplied, permitted or instructed by Company; or (iii)
infringement or violation of any copyright, patent, trademark or trade secret of
any third party.
6.2.3 The parties' obligations of indemnification under this
Section 6.2 shall apply to any claims brought by one party against the other
with respect to the indemnified claims. The indemnifying party's obligations
under this Section 6.2 shall be subject to the indemnified party providing the
indemnifying party (i) reasonably prompt written notice of any such claim or
action and permit the indemnifying party, through its counsel, to answer and
defend such claim or action, and (ii) with all reasonably required information,
assistance and authority to assist in defending such claim or action. The
indemnified party, at its own expense, shall have the right to employ separate
counsel and participate in the defense thereof. The indemnifying party shall
reimburse the indemnified party upon demand for any payments made or loss
suffered by it at any time after the date hereof based on the judgment of any
court of competent jurisdiction or pursuant to a bona fide compromise or
settlement of claims in respect to any damages to which the foregoing relates
and to which the indemnifying party agrees in writing in advance.
7. CONFIDENTIALITY
"Confidential Information" means any term of this Agreement and any
proprietary information or data, either oral or written, received from and
designated as confidential by the disclosing party. It does not, however,
include information that (i) is already known by the recipient, (ii) becomes
publicly known through no wrongful act of the recipient, or (iii) is received by
the recipient from a third party without similar restriction and without breach
of this Agreement. Each party agrees that it will use the same care to protect
against the unauthorized duplication, use, publication or disclosure of any such
Confidential Information of the other party as it uses to protect its own
proprietary and confidential information, and will not use or disclose such
Confidential Information except in connection with and in furtherance of the
purposes of this Agreement, unless authorized in writing by the other party. All
materials, including copies and summaries, containing the other party's
Confidential Information shall be destroyed or returned to such party, as
instructed by such party, by the recipient promptly upon termination of this
Agreement.
8. TERM AND TERMINATION
8.1 TERM. Unless sooner terminated as provided herein, the initial term
of this Agreement shall commence on the last date signed and accepted by both
parties below and expire FIVE (5) YEARS thereafter.
8.2 TERMINATION FOR BREACH. If either party breaches any material
provision of this Agreement and such breach has not been cured within 10 days
after the non-breaching party has given written notice to the breaching party of
such breach, then the non-breaching party may terminate this Agreement effective
upon three business days' written notice to the breaching party.
8.3 TERMINATION FOR INSOLVENCY. Either party may, at its option and upon written
notice, terminate this Agreement, effective immediately, should the other party
(i) admit in writing its inability to pay its debts generally as they become
due; (ii) make a general assignment for the benefit of its creditors; (iii)
institute proceedings to be adjudicated a voluntary bankrupt, or consent to the
filing of a petition of bankruptcy against it; (iv) seek reorganization under
any bankruptcy act, or consent to the filing of a petition seeking such
reorganization; or (v) have a decree entered against it by a court of
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competent jurisdiction appointing a receiver, liquidator, trustee or assignee
in bankruptcy or in insolvency covering all or substantially all of such
party's property or providing for the liquidation of such party's property or
business affairs, provided such decree is not dismissed within 45 days.
8.4 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement for any reason, the licenses granted in Section 2.2 shall terminate,
and RN shall remove all Content from the System within 30 days following such
termination or expiration; provided, however, that Company shall incur any
Service Fees accrued during such 30-day period. Except as provided in Section
8.3, the termination or expiration of this Agreement shall have no effect on
Company's obligation to pay for Services performed prior to the effective date
of such termination or expiration. The provisions of Sections 5 through 11 shall
survive the termination or expiration of this Agreement.
9. WARRANTY DISCLAIMER AND LIMITATIONS OF LIABILITY
9.1 WARRANTY DISCLAIMER. EXCEPT AS SPECIFICALLY SET FORTH ABOVE,
NEITHER PARTY MAKES ANY WARRANTY, AND BOTH PARTIES HEREBY DISCLAIM ALL OTHER
WARRANTIES, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY IMPLIED
WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE, WITH RESPECT
TO CONTENT OR SERVICES TO BE PROVIDED HEREUNDER.
9.2 LIMITATION OF LIABILITY. NEITHER PARTY SHALL BE LIABLE TO THE OTHER
IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY CONSEQUENTIAL,
INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGE ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGE
OCCURRING.
10. NOTICE
Any notice or payment to be made or given to either party shall be
sufficiently made or given on the date of receipt if addressed to RN or Company
as set forth below and (i) if delivered personally with receipt acknowledged; or
(ii) sent by DHL Worldwide Express or comparable international courier service
for the soonest possible delivery. Either party may change its notice and
contact information by providing notice, in the manner set forth above, to the
other party.
RN: COMPANY:
Vice President, Real Broadcast Networks President
RealNetworks, Inc. Global Media Corp.
2601 Elliott Ave. 400 Robson Street
Seattle, Washington 98121 Vancouver, British Columbia,
U.S.A. Canada V6B 2B4
With a copy to: With copy to General Counsel
VP & General Counsel at the same address
at the same address
11. MISCELLANEOUS
This Agreement and Exhibits 1-3 attached hereto, incorporated herein
by this reference, constitute the final agreement between the parties, and
supersede and cancel all prior negotiations, understandings, correspondence
and agreements, oral and written, express or implied, between the parties
relating to the subject matter hereof (including specifically but not limited
to the Streaming Media Services Agreement between the parties dated April 19,
1999), and shall be binding only when executed by both parties
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hereto. No waiver, amendment or modification of any provision of this
Agreement shall be effective unless it is in a document that expressly refers
to this Agreement and is signed by both parties. Failure or delay by either
party in exercising any rights or remedy under this Agreement shall not
operate as a waiver of any such right or remedy. If any provision of this
Agreement shall be held by a court of competent jurisdiction to be illegal,
invalid or unenforceable, the legality, validity and enforceability of the
remaining provisions shall not, in any way, be affected or impaired thereby.
This Agreement shall be governed by the laws of the State of Washington,
excluding that body of law known as conflicts of law. Any and all unresolved
disputes arising under this Agreement shall be submitted to arbitration in
the State of Washington. The arbitration shall be conducted under the rules
then prevailing of the American Arbitration Association. The award of the
arbitrator shall be binding and may be entered as a judgment in any court of
competent jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement by their duly
authorized representatives the day and year first written below.
REALNETWORKS, INC. GLOBAL MEDIA CORP.
By: Ian Freed By: Rob Fuller
------------------------------
Name
General Manager, RBN CEO
------------------------------
Title
/s/ Ian Freed /s/ Rob Fuller
---------------------------- ------------------------------
Signature Signature
---------------------------- ------------------------------
Date Date
BILL TO INFORMATION:
NAME:
----------------------------------
TITLE:
----------------------------------
ADDRESS:
--------------------------------
CITY:
-----------------------------------
STATE:
----------------------------------
ZIP CODE:
-------------------------------
PHONE:
----------------------------------
FAX:
------------------------------------
EMAIL:
----------------------------------
PO NUMBER (IF AVAILABLE):
---------------
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EXHIBIT 1
COMPANY SUPPORT
PREPARING AUDIO AND VIDEO
1. Company will provide all on-demand media files using the Encoding Software
(e.g., audio, video, animation and other media file types as they become
supported by the Real Broadcast Network and as Company may then elect to
provide) encoded in the file format appropriate for each stream type to the
Broadcast Operations Center (BOC) via the File Transfer Protocol (FTP).
2. Company agrees to utilize the virtual file name convention established by
RN for all streaming media files, including those encoded by RN and those
encoded by Company.
3. Company agrees to furnish RN with the URL for each live or simulated live
stream remotely encoded by Company. Using the conventions established by
RBN operations.
FEED ACQUISITION
4. Company shall take the appropriate measures to ensure that all live or
simulated live feeds will be delivered continuously to the BOC 24
hours/day, 7 days/week, except for scheduled maintenance. If feed is
provided to RN via satellite and Company intends to utilize transmission
methods which are proprietary or uncommon, Company agrees to provide the
receiver equipment to RN and to allow adequate time for setup and testing
of equipment prior to delivery of live content.
5. At Company's election, Company agrees to deliver live feeds to the BOC via
satellite, frame relay or ISDN.
6. Company will encode feeds to be delivered to BOC via ISDN and dedicated
frame relay. If program archive is desired, Company will be responsible for
archiving live broadcasts and delivering the files to the BOC via FTP.
7. Company agrees to provide the following to RN prior to the delivery of any
live feed to the BOC via frame relay:
- Dedicated point-to-point frame relay connection between Company's
encoder and BOC- Exact date and time of frame relay activation.
- At least sixty (60) calendar days notice for before activation of
full-time (24 hrs/day, 7 days/week) feed delivery.
- At least 15 minutes of full system testing time at least five working
days before activation of full-time feed delivery. Working day is
defined as Monday - Friday, 9am - 6pm, Pacific Time.
- Company agrees to utilize frame relay equipment that has been certified
by Real Broadcast Network (RBN) Operations. Both parties shall be
responsible to ensure that Company's live feeds can interface with the
RBN frame relay system.
8. Company shall provide the following to RN prior to the delivery of any live
feed to the BOC via ISDN:
- Dedicated point-to-point ISDN connection between Company's encoder and
BOC
- Exact date, time and duration of ISDN call.
- At least five working days notice for single events, and seven working
days notice for multiple events
- Calling ISDN number. For Church pricing located in Exhibit 3, Individual
churches are responsible for calling into BOC at time of event.
- At least 15 minutes of full system testing time at least 2 working days
in advance of any event that uses a new or unique configuration. Full
system tests require Company to make content available via ISDN
utilizing the same telephone number which will be used for the actual
event. Working day is defined as Monday - Friday, 9am - 6pm, Pacific
Time.
- Company agrees to utilize ISDN equipment that has been certified by Real
Broadcast Network (RBN) Operations. Both parties shall be responsible to
ensure that Company's live feeds can interface with the RBN ISDN system.
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9. Company shall provide the following to RN prior to the delivery of any live
feed to the BOC via satellite:
- Exact date & time of satellite transmission
- At least 5 working days notice for single events, and 7 working days
notice for multiple events
- Satellite name, coordinates, transponder number, required receiver
type, decoder type and decoder authorization (if required).
- At least 30 minutes of full system testing time at least 2 working
days in advance of any Event that uses a new or unique configuration.
Full system tests require company to uplink content to satellite
utilizing same transponder and encoding system as that which will be
used for the actual event.
GENERAL TERMS
10. Upon notification by RN, Company shall use commercially reasonable best
efforts to remove Content files from RBN system that meet either of the
following criteria:
- Content files that have not been accessed for 6 months.
- Content files for which no public URLs exist.
11. Company gives permission to RealNetworks to use sample media clip and
company logo for promotional purposes. RN will adhere to company
trademark and usage policies.
12. Company will be the first point of contact for all customer service
issues including but not limited to RBN installation, Real Player, and
sales questions. RBN technical support will be available if additional
support is needed for RBN related services.
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EXHIBIT 2
RN OBLIGATIONS
SERVICES
1. RN will use commercially reasonable means to serve as many simultaneous
streams as are required to meet the demand for live and on-demand
content.
2. RN will provide setup support and provide 24x7 network management and
monitoring support.
3. RN will provide Company the URL for each live stream encoded by RN
within the Broadcast Operations Center.
4. RN will provide usage statistics for all Company content hosted on Real
Broadcast Network. RN will provide Company with daily online reports.
5. RN will provide storage up to the amount listed in Exhibit 3 for encoded
live and on-demand files.
6. RN will deliver the Broadcast Services in accordance with published
specifications and the provisions of Exhibit 3.
7. RN will serve live and stored content 24 hours per day, 7 days per week
except for at times of scheduled maintenance for the term of the
agreement.
8. RN agrees to make commercially reasonable efforts to promote Company
programming on various RealNetworks web sites, including RealGuide and
others. RN agrees to list Company properties in all relevant categories
in all guide listings and searches including RealGuide. Additional
promotion is contingent on the nature of the Global Media programming;
on available space on RealGuide and future promotional vehicles; and on
Global Media notifying RN of programming Global Media wishes to promote
at least one week in advance for scheduled events and as quickly as
possible for breaking news. Global Media may notify RN of specific audio
and video programming by sending e-mail to [email protected].
9. RN and Company will treat the terms of this agreement as confidential
information.
10. RN will encode feeds acquired from satellite transmission.
11. RN will provide encoding software to Company for use in creating
on-demand files in accordance with the terms of RN's software licensing
agreement.
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PRICING
FROM: JANUARY 19, 2000 TO JANUARY 18, 2005
GENERAL TERMS
Special charges may apply if RealNetworks needs to acquire special equipment to
serve Company's needs. These charges will be discussed with Company prior to
Company's performing any obligations under this Agreement.
Pricing is as follows:
1) ALWAYS ON AUDIO FEEDS AND MB CHARGES
Monthly feed billing will begin when first station is connected and will be
priced as follows:
QUARTERLY PREPAYMENTS
Company shall pay RN * at the commencement of each calendar quarter
in the term of this Agreement which shall be used to prepay for usage during
that quarter up to * MB. MB of usage over * in a quarter will
be priced as follows.
USAGE FEES
1. Usage will be measured in total Megabytes (MB) of streaming media files
delivered to end users per month.
2. Usage will be aggregated over all of Company's programming.
3. Pricing for all MB (over and above the MB usage included in the Quarterly
Prepayment above) will be applied to the following $/MB rate.
<TABLE>
<CAPTION>
- -----------------------------------------
FEES PRICE / MB
- -----------------------------------------
<S> <C>
MB CHARGES *
- -----------------------------------------
</TABLE>
*
Pricing above includes:
Simulated Live Stations
24x7 live radio/TV stations
On-demand audio/video (up to 300 kbps)
GM purchases hardware for SLTAs
Collocation details:
PHYSICAL ACCESS 24X7. Requires notification of RN's System Administrator on
duty.
RBN HANDS-ON. Will be limited to rebooting only. Requires notification of the
Network Operations Center (NOC), or system admin on duty if NOC is not
available. Global Media to provide written instructions for rebooting the
systems when the systems are installed.
Network connectivity problems, 7x24 support. Requires notification of NOC, or
Network Engineer on duty if NOC is not available.
Collocation charges:
Non-recurring charges:
- $5,000 non-recurring charge for initial site setup and first rack
installation
* Subject to confidential treatment request
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- $1,500 non-recurring charge for each additional rack installation
Monthly recurring charges:
- $500 monthly recurring charge per rack
Other charges:
- - $75 per hour escort fee for on-site customer visits outside the hours of 7:00
A.M. to 7 P.M. Monday through Friday
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Exhibit 10.29
REALNETWORKS, INC.
REALCHANNELS AGREEMENT
This Agreement is made as of January 19th, 2000 ("Effective Date")
between RealNetworks, Inc., a Washington corporation located at 2601 Elliott
Ave., Suite 1000, Seattle, Washington 98121 ("RN"), and Global Media
("Participant"), with an address as set forth on Exhibit A.
This Agreement sets forth the terms and conditions under which RN
agrees to promote and distribute links to Participant's RealMedia content
(RealAudio, RealVideo, and other RN media types) and content headlines
described on Exhibit A (collectively "Content") as part of RN's RealChannels
program. In consideration for the mutual promises and covenants contained
herein, the parties agree as follows:
1. DESCRIPTION OF REALCHANNELS PROGRAM
1.1 REALCHANNELS ON THE REALPLAYER. Current versions of RN's RealPlayer
G2 software include buttons that link directly to live or simulated live
streaming media content delivered via the Internet ("RealChannels"). In this
Agreement, "RealPlayer" means all versions of RN's proprietary RealPlayer G2
software or subsequent versions that RN may introduce and distribute during
the Term, and includes both free and pay versions. RN may, in its discretion,
name, re-name, or change the branding or trademarks associated with the
RealChannels program, or any other aspect of the RealPlayer, at any time
without notice.
1.2 CONTENT DELIVERY CHANNELS. The RealChannels drive pointers (defined
as the related descriptions and pointers) to the Content into Web sites and
"push" applications delivering information directly to PC desktops via the
publicly accessible Internet and into proprietary online services and other
specialized services (collectively, "Content Delivery Channels").
2. RN OBLIGATIONS
2.1 INCLUSION ON CUSTOMIZATION PAGE. RN's Customization Page
("Customization Page") is a publicly accessible Web site that includes a list
of RealChannels from various RN content partners. Currently, the
Customization Page can be found at
http://208.147.89.194//customize.rxml?GU=9330211032a02&PV=6.0.3.143&os=
Win95%204.0.50240&category=0&tier=0&id=0&l=en&lid=0. RN may change the
location of the Customization Page at any time. End-users of the RealPlayer
can customize the RealChannels of the RealPlayer by selecting content
providers from the RealChannels Customization Page. RN will include
Participant's RealChannel on the Customization Page during the Term.
2.2 DEFAULT REALCHANNEL. A version of the RealPlayer in the language set
forth on Exhibit A (the "Local Language" RealPlayer) is distributed to end
users with certain pre-installed "default" RealChannels. RN agrees to include
Participant as a default RealChannel in the English Language RealPlayers
distributed by RN during the Term, subject to the limitations herein.
Participant's RealChannel will be a pre-installed default only in all
standard, non-custom English Language RealPlayers downloaded directly from RN
Web sites, or sold in non-bundled and non-customized versions through retail
distribution. Participant acknowledges that RealChannels may be customized by
individual end-users and that any RealChannel, including default
RealChannels, may be removed or repositioned by end-users.
2.3 DISTRIBUTION OF CONTENT HEADLINES AND POINTERS. RN may use and/or
distribute the Content Headlines or pointers to Participant's Content, but is
under no obligation to do so.
3. PARTICIPANT OBLIGATIONS
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3.1 CONTENT HEADLINE SPECIFICATIONS. Participant shall, on a daily
basis, provide Content Headlines and information about the foregoing to RN in
compliance with RN's Technical Specifications, currently available at
http://presets6.real.com/channelspartners/index.html, which RN may revise
from time to time.
3.2 NATURE OF CONTENT. Participant will provide Content for its
RealChannel in compliance with RN's Technical Specifications. Without
limiting the foregoing, the Content must be: (i) newsworthy, informational,
educational or produced for entertainment purposes, and not merely
promotional in nature; (ii) updated at least daily by Participant; and (iii)
encoded in the specified RN media formats available during the Term.
Participant shall, within thirty (30) days after the Agreement has been
executed, provide RN with at least three (3) clips of Content that are each
at least ten (10) minutes in length. Thereafter, Participant shall always
ensure that at least three ten-minute clips of Content are available at any
given time. The Content can be hosted by Participant or hosted by RN pursuant
to the terms of RN's standard Real Broadcast Network Services Agreement, if
Participant has signed such an agreement.
3.3 CONTENT QUALITY. RN reserves the right, in its sole discretion, to
terminate this Agreement under Section 9.2 below if the quality of the
Content does not meet RN's commercially reasonable standards concerning the
RealChannels program in any way. In the event of termination under this
Section 3.3, RN will offer Participant a pro-rata refund based on the
Participation Fee as set forth in Section 5.1 and the number of weeks left in
the Term.
3.4 DOWNLOAD REALPLAYER BUTTON. Throughout the Term, Participant will
prominently display above the fold on the home page of Participant's World
Wide Web site located at the URL set forth on Exhibit A ("Participant's
Site"), an RN-approved standard "Download RealPlayer" button, in the form
provided by RN, the current form of which is shown on Exhibit B. Such button
will link to the download area of RN's Web page from which end users may
download free and/or pay (or "plus") versions of the RealPlayer, in the Local
Language version. As used in this Section 3.4 and in Section 3.5, "above the
fold" means placement on a Web page in a manner such that an end user viewing
the page in a browser window of 640x480 pixels can view the entire button
without scrolling.
3.5 REALGUIDE BUTTON. During the Term of this Agreement, Participant
will display on Participant's Site an RN approved standard "RealGuide" button
that will directly link to RN's RealGuide. The current version of such button
is shown on Exhibit B.
3.6 USE OF REALMEDIA FORMATS ON PARTICIPANT'S WEB SITES. Participant
agrees that any content made available in streaming media formats on
Participant's Site during the Term will be made available in RealMedia
formats (e.g., RealAudio, RealVideo, or other RN proprietary media formats).
Participant will not promote any other streaming media format on
Participant's Site more prominently that RN's. Participant shall link to its
RealChannel from a relevant, prominent location on Participant's Site. If
Participant chooses to provide a link from its RealChannel to Participant's
Site, such link must be to a Web page containing only RealMedia formatted
content, if Participant includes streaming media content on that Web page.
3.7 EXCLUSIVITY. Participant will not promote any other streaming media
player on Participant's Site more prominently than the RealPlayer, provided
that Participant will not promote or provide opportunities to download any
other streaming media player on the linked-to page of Participant's Site. If
Participant chooses to provide a link from its RealChannel to Participant's
Site, or to any Web site, no more that ten percent (10%) of the
non-Participant linked-to pages on the Web sites at any time may provide the
opportunity to download any software media player other than the RealPlayer.
3.8 MAINTENANCE OF CONTENT. As between RN and Participant, and except as
expressly provided herein, Participant is solely responsible and liable for
the Content, and RN assumes no responsibility for editing, reviewing,
controlling or any other activities associated with distributing any of the
Content and shall not be liable to any third party in connection with such
activities, unless RN undertakes such responsibilities. Participant shall be
solely responsible for all costs and activities associated with the creation,
maintenance, licensing, use and correction of the Content.
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3.9 NO HIRE. During the Term of this Agreement and for a period of two
(2) years after termination of this Agreement, Participant agrees not to
hire, as an employee, contractor or consultant, or to appoint to its board of
directors, any then-current RN employee or any former employee who has left
RN within the then-preceding twelve (12) months or who is otherwise
prohibited by the terms of an non-competition agreement from working for a
competitor of RN, in which case Participant shall not hire such former
employee until the expiration of said 12 month period or the term of his or
her non-compete, whichever is later. A breach of this Section by Participant
shall give RN the right to terminate this Agreement as provided in Section
9.2 below.
4. LICENSE
4.1 CONTENT HEADLINES AND POINTERS. Participant hereby grants RN a
non-transferable, worldwide, royalty-free license to: (i) link to the Content
from the Content Headlines and Participant's RealChannel button through the
Local Language RealPlayer; and (ii) use, transmit, distribute and
redistribute Content pointers and other Participant links and descriptions of
Content or Participant's RealChannel(s) to Content Delivery Channels in order
to make Participant's Content accessible to Content Delivery Channels'
end-users. RN shall have the right to include links to Participant's Content
from all versions of RN's RealGuide, including syndicated versions, however
named or distributed.
4.2 TRADEMARK LICENSE. Participant grants RN a non-exclusive,
nontransferable, worldwide, royalty-free license to use Participant's
trademarks and logos in connection with this Agreement, in the style and
manner currently used by Participant and as communicated to RN. Subject to
such style and manner restrictions, RN may use Participant's name,
trademarks, logo, and RealChannel graphics in RN's marketing and advertising
materials. Except as expressly provided herein, RN shall not be deemed by
anything contained in this Agreement to acquire any right, title or interest
in any trademark of Participant, and shall do nothing to prejudice the value
or validity of Participant's rights therein or ownership thereof.
5. PAYMENTS
5.1 PAYMENT TO RN. Participant shall pay to RN a participation fee (the
"Participation Fee") of Two Million Nine Hundred Twenty Thousand
dollars ($2,920,000) for participation throughout the initial Term as a
hard default RealChannel within the RealPlayer, as set forth in Exhibit
A. The Participation Fee is due in full upon execution of this
Agreement and is nonrefundable. The Participation Fee shall be paid as
follows:
$ 300,000 on signing of this Agreement;
$ 220,000 on March 31, 2000
$ 1,200,000 on May 1, 2000
$ 1,200,000 on June 15, 2000
5.2 EXCLUSIVE OF TAXES. All payments due hereunder are exclusive of any
applicable taxes. Participant shall be responsible for all applicable
national, state, and local taxes, value added or sales taxes, tariffs,
exchange, interest, banking, collection, and other charges and levies and
assessments pertaining to payments other than U.S. taxes based on RN's income.
5.3 NO WITHHOLDING. All payments by Participant to RN pursuant to this
Agreement shall be made without any withholding or deduction of any
withholding tax or other tax or mandatory payment to government agencies. If
Participant is legally required to make any such withholding or deduction
from any payment to RN under this Agreement, the sum payable by Participant
upon which such withholding or deduction is based shall be increased to the
extent necessary to ensure that, after such withholding or deduction, RN
receives and retains, fee from liability for such withholding or deduction, a
net amount equal to the amount RN would have received and retained in the
absence of such required withholding or deduction.
5.4 PROVIDE RECEIPTS. In order to assist RN in obtaining tax credits or
deductions, Participant shall provide to RN, in form acceptable to RN,
original or certified copies of all tax payment receipts or other evidence of
payment of taxes by Participant with respect to transactions or payments
under this Agreement.
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6. ADVERTISING
6.1 INTRA-STREAM ADS. Participant shall retain one hundred percent
(100%) of the revenue from its sale of audio, video, multimedia, banner, or
other advertising embedded in the Content by Participant ("Intra-Stream
Ads"). Participant shall at all times clearly differentiate advertising from
Content.
6.2 OTHER ADS. RN agrees that it will not insert pointers to RN's own
media-based advertisements prior to pointers to the Content clips that RN
distributes to Content Delivery Channels.
6.3 NO "AMBUSH" ADVERTISING. Participant shall not run Intra-Stream Ads
or non-Intra-Stream Ads in Participant's Live Station for streaming media
technology, streaming media players or streaming media websites owned or
operated by Microsoft Corporation or Apple Computer.
7. PROPRIETARY RIGHTS
7.1 OWNERSHIP OF CONTENT. As between RN and Participant, Participant
remains the owner of all right, title and interest in and to the Content and
any Content Headlines, and all copyrights, trademarks, and other intellectual
property rights therein. Notwithstanding the foregoing, RN will retain all
right, title, and interest in and to any Content Headlines authored by RN if
Participant fails to provide a headline for Content as specified in the
Technical Specifications.
7.2 RN'S OWNERSHIP. Except as provided in Section 7.1, RN shall be the
sole owner of all right, title and interest in and to any content made,
created, developed or used by RN in connection with the Content on RN's Web
sites, the RealChannels, and all copyrights, trademarks, patents and other
intellectual property rights therein. Participant represents and warrants
that it has not and shall not acquire any right or interest in any trademark
or trade name owned or used by RN, and that under no circumstances will it
use, register or attempt to register any trademark, service mark, trade name,
domain name or similar indicia containing the word "Real," or any other mark
or domain name used by or confusingly similar to a mark used by RN,
regardless of spelling or translation thereof.
8. WARRANTIES/INDEMNIFICATIONS
8.1 PARTICIPANT WARRANTIES. Participant warrants and represents that:
(i) the Content does not in any way violate any existing law, infringe upon
or misappropriate any copyright, patent, trademark, trade secret, right of
publicity, right of privacy or other proprietary rights of any third party,
either in whole or in part; (ii) the Content contains no matter which, if
published, will be libelous or defamatory; (iii) Participant has the
necessary rights to grant RN the rights granted hereunder; (iv) the Content
complies with all laws applicable to the transmission or use of the Content
as specified in this Agreement for each country in which the Content is
intended to be delivered; and (v) it is solely responsible for, and has paid
or will pay, all amounts due any person or entity that has a right to receive
any royalty or other payment as a result of RN's authorized use of the
Content pursuant to this Agreement. Participant acknowledges that RN and its
affiliates are the owners and/or licensees of the trademarks, service marks,
commercial symbols and trade names used by RN.
8.2 PARTICIPANT INDEMNITY. Participant hereby agrees to indemnify, hold
harmless and defend RN from all claims, damages, costs and expenses,
including reasonable attorneys' fees and litigation expenses, arising out of
or as a result of Participant's breach of the above warranties and
representations or this Agreement. Notwithstanding the foregoing, Participant
shall not be liable for any material not contained in or a part of the
Content Headlines and inserted in the Content Headlines by RN, whether with
or without the permission of Participant. Participant, at its own expense,
shall have the right to employ separate counsel and participate in the
defense thereof.
8.3 RN WARRANTIES AND INDEMNITY. RN hereby warrants and represents to
Participant that (i) the RN trademarks, service marks and trade names do not
in any way violate existing laws or infringe upon or misappropriate any
rights of third parties, and (ii) RN has all rights, title and authority
necessary to enter into this Agreement and perform as herein required. RN
agrees to indemnify and hold harmless and defend Participant from
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all claims, damages, costs and expenses including reasonable attorneys' fees
and litigation expenses, arising out of or as a result of RN's breach of the
warranties set forth in this Section 8.3.
9. TERM AND TERMINATION
9.1 TERM. Unless sooner terminated as provided herein, the Initial Term
of this Agreement shall commence as of the Effective Date and expire one year
thereafter. This Agreement will renew automatically for additional one year
periods, unless either party notifies the other party in writing of its
intent not to renew at least thirty (30) days prior to the end of the initial
Term or any subsequent renewal Term. As used herein, "Term" means the initial
Term and any renewal Term.
9.2 TERMINATION FOR BREACH. If either party materially breaches any
provision of this Agreement and such breach has not been cured within fifteen
(15) days after the other party has given written notice of such breach, the
non-breaching party may terminate this Agreement upon fifteen (15) days'
written notice to the breaching party. RN may terminate this Agreement
immediately without further notice if payment is not received in accordance
with this Agreement.
9.3 TERMINATION FOR INSOLVENCY. RN may, at its option and upon written
notice, terminate this Agreement, effective immediately, should Participant:
(i) admit in writing its inability to pay its debts generally as they become
due; (ii) make a general assignment for the benefit of its creditors; (iii)
institute proceedings to be adjudicated a voluntary bankrupt, or consent to
the filing of a petition of bankruptcy against it; (iv) seek reorganization
under any bankruptcy act, or consent to the filing of a petition seeking such
reorganization; or (v) have a decree entered against it by a court of
competent jurisdiction appointing a receiver, liquidator, trustee or assignee
in bankruptcy or in insolvency covering all or substantially all of such
party's property or providing for the liquidation of such party's property or
business affairs, provided such decree is not dismissed within forty-five
(45) days.
9.4 EFFECT OF TERMINATION. Upon termination or expiration of this
Agreement for any reason, all licenses granted herein shall terminate except
that RN shall have five (5) business days to remove Participant's RealChannel
and Content Headlines from Content Delivery Channels. Sections 5, 6, 7, 8,
9.4, and 10.4 shall survive the expiration or termination of this Agreement
for any reason.
10. MISCELLANEOUS
10.1 EXCLUSION OF CERTAIN DAMAGES. EXCEPT WITH RESPECT TO PARTICIPANT'S
OBLIGATIONS UNDER SECTION 8.2, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY
CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGES ARISING OUT OF
THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.
10.2 NOTICES AND CONTACT INFORMATION. Any notice or payment to be made or
given to either party shall be sufficiently made or given on the date of
receipt if addressed to RN as set forth below or to Participant as set forth
on Exhibit A and (i) if delivered personally with receipt acknowledged; or
(ii) sent by DHL Worldwide Express or comparable international courier
service for the soonest possible delivery. Either party may change its notice
and contact information by providing notice, in the manner set forth above,
to the other party.
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RN:
Vice President, Media & Distribution
RealNetworks, Inc.
2601 Elliott Ave.
Seattle, Washington 98121
U.S.A.
Fax: (206) 448-0427
With a copy to:
VP & General Counsel
at the same address
Fax: (206) 674-2695
10.3 NON-ASSIGNMENT. This Agreement is personal to Participant.
Participant may sublicense, assign, or otherwise transfer any of its rights
in this Agreement (whether by merger or transfer of control), only with the
prior express written consent of RN which consent will not be unreasonably
withheld, provided that transfers of stock in Participant to wholly owned
affiliates or related entities of Participant, in which no actual change in
ultimate ownership or control takes place, are permitted upon prior written
notice to RN.
10.4 GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be
governed by the laws of the State of Washington, United States of America,
without regard to conflicts of law provisions, and Participant consents to
the exclusive jurisdiction and venue of the state and federal courts sitting
in the State of Washington. This Agreement shall not be governed by the
United Nations Convention of Contracts for the International Sale of Goods,
the application of which is hereby expressly excluded. Upon request by RN,
Participant shall execute any document or instrument, undertake any action,
or refrain from any action if such execution or action is reasonably
necessary to make the foregoing choice of law and choice of forum effective
and enforceable.
10.5 PRESS RELEASES. Neither party shall issue any press releases
relating to this Agreement or the relationship between the parties without
the other party's review of and written consent to the press release.
10.6 GENERAL. No waiver, amendment or modification of any provision of
this Agreement shall be effective unless it is in a document that expressly
refers to this Agreement and is signed by both parties. Except as
specifically provided herein, failure or delay by either party in exercising
any rights or remedy under this Agreement shall not operate as a waiver of
any such right or remedy. The parties are separate and independent legal
entities, and the relationship between the parties shall be that of
independent contractors. It is expressly understood that the parties do not
by this Agreement intend to form, nor shall this Agreement be construed to
constitute, a partnership or joint venture between them. If any provision of
this Agreement shall be held by a court of competent jurisdiction to be
illegal, invalid or unenforceable, the legality, validity and enforceability
of the remaining provisions shall not, in any way, be affected or impaired
thereby. This Agreement and the attached Exhibits, which are incorporated
herein by this reference, constitute the complete and entire agreement
between the parties, and supersede and cancel all prior negotiations,
understandings, correspondence and agreements, oral and written, express or
implied, between the parties relating to the subject matter hereof, and shall
be binding only when executed by both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement by
their duly authorized representatives.
REALNETWORKS, INC. GLOBAL MEDIA CORP.
By: /s/ T. F. Frank By: /s/ Rob Fuller
--------------------------------- ----------------------------------
Name: Thomas F. Frank Name: Rob Fuller
------------------------------- --------------------------------
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Title: COO Title: CEO
------------------------------ -------------------------------
Date: Date:
------------------------------- --------------------------------
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EXHIBIT A
DESCRIPTION OF CONTENT
PARTICIPANT CONTACT INFORMATION:
FULL CORPORATE NAME: Global Media Corporation
-------------------------------------------
Address: 400 Robson Street
-------------------------------------------
-------------------------------------------
City, State/Country, Vancouver, BC, Canada
Postal Code (if any): V6B 2B4
-------------------------------------------
CONTACT PERSON: Winston Barta
-------------------------------------------
Title: Vice President & Director
-------------------------------------------
Phone: (604)688-9994
-------------------------------------------
Fax: (604)688-9996
-------------------------------------------
Email: [email protected]
-------------------------------------------
-------------------------------------------
WITH COPY TO:
-------------------------------------------
Title:
-------------------------------------------
Phone:
-------------------------------------------
Fax:
-------------------------------------------
Email:
-------------------------------------------
-------------------------------------------
PARTICIPANT'S CONTENT:
Participant's Content will consist of the following: (insert short
description): music and video/entertainment programming
-----------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
Participant's RealChannel Category: Hard
Default
----------------------------------------------------
Content to be hosted in the following datatypes (E.G., RealAudio, RealVideo,
RealPix): G2 RA RV
------------------------------------------------------------
- ------------------------------------------------------------------------------
LOCAL LANGUAGE VERSION: Yes (English Language Version)
----------------------------------------------
PARTICIPANT'S URL: www.globalmedia.com
----------------------------------------------
PARTICIPATION FEE: $2,920,000
----------------------------------------------
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EXHIBIT B
SPECIFICATIONS OF REALPLAYER BUTTON
RN Graphic for RN Search = 88 x 33- bitmap
[GRAPHIC OMITTED]
SPECIFICATIONS OF REALGUIDE BUTTON
RN Graphic for RN Search = 128 x 67- bitmap
[GRAPHIC OMITTED]
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Exhibit 10.30
REALNETWORKS, INC.
LIVESTATIONS AGREEMENT
This Agreement is made as of November 1, 1999 ("Effective Date")
between RealNetworks, Inc., a Washington corporation located at 2601 Elliott
Ave., Suite 1000, Seattle, Washington 98121 ("RN"), and Global Media Corporation
("Participant"), with an address as set forth on Exhibit A.
This Agreement sets forth the terms and conditions under which RN
agrees to promote and distribute links to Participant's RealMedia content
(RealAudio and other RN media types) described in Exhibit A ("Content") as part
of RN's LiveStations program. In consideration for the mutual promises and
covenants contained herein, the parties agree as follows:
1. DESCRIPTION OF LIVESTATIONS PROGRAM
1.1 LIVESTATIONS ON THE REALPLAYER. Current versions of RN's RealPlayer G2
software include listings in a pull-down menu and/or buttons that link directly
to live or simulated live RealAudio content delivered via the Internet
("LiveStations"). End-users of the RealPlayer G2 can customize the LiveStations
in their individual RealPlayers through the LiveStations Guide Page, described
herein. In this Agreement, "RealPlayer," unless otherwise specified, means all
versions of RN's proprietary RealPlayer G2 software or subsequent versions that
RN may introduce and distribute during the Term, and includes both free and pay
versions. RN may, in its discretion, name, re-name, or change the branding or
trademarks associated with LiveStations, or any other aspect of the RealPlayer,
at any time without notice.
1.2 CONTENT DELIVERY CHANNELS. The LiveStations program distributes links
to the Content and related descriptions and buttons (together, "pointers") to
Web sites and "push" applications delivering information to end users via the
publicly accessible Internet, proprietary online services, and other
specialized services (collectively, "Content Delivery Channels").
2. RN OBLIGATIONS
2.1 INCLUSION ON LIVESTATIONS GUIDE PAGE. RN will include Participant's
fifteen (15) LiveStations in the appropriate genres on RN's LiveStations
Guide Page (currently located at http://realguide.real.com/stations/) during
the Term.
2.2 DEFAULT LIVESTATION. A version of the RealPlayer in the language set forth
in Exhibit A (the "English Language" RealPlayer) is distributed to end users
with certain pre-installed "default" LiveStations. RN agrees to include
Participant's fifteen (15) LiveStations as default LiveStations in the
appropriate genres in the English Language RealPlayers distributed by RN during
the Term, subject to the limitations herein. RN may include Participant's
LiveStations as a pre-installed default LiveStation in any or all RealPlayers
distributed during the Term, but is only obligated to do so in all standard,
non-custom English Language RealPlayers intended for distribution to North
American end users through electronic download directly from RN Web sites or
sold in non-bundled and non-customized versions through retail distribution.
Participant acknowledges that LiveStations may be customized by individual
end-users and that any LiveStation, including default LiveStations, may be
removed or repositioned by end-users. During the Term, and subject to the
limitations herein, Participant's LiveStation shall be included as a default so
long as RN maintains the LiveStations program.
2.3 DISTRIBUTION OF POINTERS. RN may use and/or distribute the pointers to
Participant's Content, but is under no obligation to do so.
3. PARTICIPANT OBLIGATIONS
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3.1 NATURE OF CONTENT. Participant will provide Content for its fifteen (15)
LiveStations in compliance with RN's Technical Specifications. Without limiting
the foregoing, the Content must be: (i) newsworthy, informational, educational
or produced for entertainment purposes, and not merely promotional in nature;
(ii) streamed live or simulated live twenty-four hours per day, seven days per
week, throughout the Term; and (iii) encoded in the specified RealAudio or other
RN formats available during the Term. Content can be hosted by Participant or
hosted by RN pursuant to the terms of RN's standard Real Broadcast Network
Services Agreement, if Participant has signed such an agreement.
3.2 CONTENT QUALITY. RN reserves the right, in its sole discretion, to
terminate this Agreement under Section 9.2 below if the quality of the
Content does not meet RN's commercially reasonable standards concerning the
LiveStations program in any way. In the event of termination under this
Section 3.2, RN will offer Participant a pro-rata refund based on the
Participation Fee as set forth in Section 5.1 and the number of weeks left in
the Term.
3.3 DOWNLOAD REALPLAYER BUTTON. Throughout the Term, Participant will
prominently display above the fold on the home page of Participant's World Wide
Web site located at the URL set forth in Exhibit A ("Participant's Site"), a
"Download Global Media Player" Button, or, at Participant's discretion, an
RN-approved standard "Download RealPlayer" button, in the form provided by RN,
the current form of which is shown on Exhibit B. Such button will link to the
download area of RN's Web page from which end users may download free and/or pay
(or "plus") versions of the RealPlayer in the English Language version. As used
in this Section 3.3 and in Section 3.4, "above the fold" means placement on a
Web page in a manner such that an end user viewing the page in a browser window
of 640x480 pixels can view the entire button without scrolling.
3.4 REALGUIDE BUTTON. During the Term of this Agreement, Participant will
display on Participant's Site, an RN-approved standard "RealGuide" button
that will directly link to RN's RealGuide. The current version of such button
is shown in Exhibit B.
3.5 QUALITY OF SERVICE. Participant's fifteen (15) LiveStations shall
conform to the Technical Specifications set forth in Exhibit C. At a minimum,
Participant agrees to insure that at least 400 concurrent user connections
are available to end users through Participant's LiveStation regardless
whether Participant, RN, or a third party selected by Participant serves the
Content.
3.6 USE OF REALMEDIA FORMATS AND LIVESTATIONS LINKS ON PARTICIPANT'S WEB SITE.
Participant agrees that any content made available in streaming media formats on
Participant's Site during the Term will be made available in RealMedia formats
(e.g., RealAudio, RealVideo, or other RN proprietary media formats). Participant
will not promote any other streaming media format on Participant's Site more
prominently than the RealMedia formats. Participant shall link to its Fifteen
(15) LiveStations from a relevant, prominent location on Participant's Site. If
Participant chooses to provide links from its fifteen (15) LiveStations to
Participant's Site, such links must be to a Web page containing only RealMedia
formatted content, if Participant includes streaming media content on that Web
page.
3.7 EXCLUSIVITY. Participant will not promote any competing streaming media
player on Participant's Sites more prominently than the RealPlayer. If
Participant chooses to provide links from its fifteen (15) LiveStations to
Participant's Site, or to any Web site, such link must be to a Web page that
does not provide the opportunity to download any software media player other
than the RealPlayer.
3.8 MAINTENANCE OF CONTENT. As between RN and Participant, and except as
expressly provided herein, Participant is solely responsible and liable for
the Content, and RN assumes no responsibility for editing, reviewing,
controlling or any other activities associated with distributing any of the
Content and shall not be liable to any third party in connection with such
activities, unless RN undertakes such responsibilities. Participant shall be
solely responsible for all costs and activities associated with the creation,
maintenance, licensing, use and correction of the Content.
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3.9 NO HIRE. During the Term of this Agreement and for a period of two (2)
years after termination of this Agreement, Participant agrees not to hire, as
an employee, contractor or consultant, or to appoint to its board of
directors, any then-current RN employee or any former employee who has left
RN within the then-preceding twelve (12) months or who is otherwise
prohibited by the terms of an non-competition agreement from working for a
competitor of RN, in which case Participant shall not hire such former
employee until the expiration of said 12 month period or the term of his or
her non-compete, whichever is later. A breach of this Section by Participant
shall give RN the right to terminate this Agreement as provided in Section 9.2
below.
4. LICENSE
4.1 CONTENT LICENSE. Participant hereby grants RN a non-transferable,
worldwide, royalty-free license to: (i) link to the Content through the
English Language RealPlayer; and (ii) use, transmit, distribute, and
redistribute Content pointers and other Participant links and descriptions of
Content or Participant's LiveStation(s) to Content Delivery Channels in order
to make Participant's Content accessible to Content Delivery Channels'
end-users. RN shall have the right to include links to Participant's Content
from all versions of RN's RealGuide, including syndicated versions, however
named or distributed.
4.2 TRADEMARK LICENSE. Participant grants RN a non-exclusive, nontransferable,
worldwide, royalty-free license to use Participant's trademarks and logos in
connection with this Agreement, in the style and manner currently used by
Participant and as communicated to RN. Subject to such style and manner
restrictions, RN may use Participant's name, trademarks, logo, and LiveStation
graphics in RN's marketing and advertising materials. Except as expressly
provided herein, RN shall not be deemed by anything contained in this Agreement
to acquire any right, title or interest in any trademark of Participant, and
shall do nothing to prejudice the value or validity of Participant's rights
therein or ownership thereof.
5. PAYMENTS
5.1 PAYMENT TO RN. Participant shall pay to RN a participation fee (the
"Participation Fee") of Seven Hundred Fifty Thousand Dollars ($750,000)
for participation throughout the initial Term as fifteen (15) default
LiveStations within the English Language RealPlayer, as set forth in
Exhibit A. The Participation Fee shall be due in full upon execution of
this Agreement and is nonrefundable. The Participation Fee shall be
paid as follows:
$100,000 on November 1, 1999;
$100,000 on January 3, 2000;
$35,000 on signing of this Agreement;
$35,000 on March 31, 2000;
$100,000 on April 1, 2000;
$135,000 on May 1, 2000;
$145,000 on June 15, 2000; and
$100,000 on July 1, 2000.
5.2 EXCLUSIVE OF TAXES. All payments due hereunder are exclusive of any
applicable taxes. Participant shall be responsible for all applicable
national, state, and English taxes, value added or sales taxes, tariffs,
exchange, interest, banking, collection, and other charges and levies and
assessments pertaining to payments other than U.S. taxes based on RN's income.
5.3 NO WITHHOLDING. All payments by Participant to RN pursuant to this
Agreement shall be made without any withholding or deduction of any
withholding tax or other tax or mandatory payment to government agencies. If
Participant is legally required to make any such withholding or deduction
from any payment to RN under this
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Agreement, the sum payable by Participant upon which such withholding or
deduction is based shall be increased to the extent necessary to ensure that,
after such withholding or deduction, RN receives and retains, fee from liability
for such withholding or deduction, a net amount equal to the amount RN would
have received and retained in the absence of such required withholding or
deduction.
5.4 PROVIDE RECEIPTS. In order to assist RN in obtaining tax credits or
deductions, Participant shall provide to RN, in a form acceptable to RN,
original or certified copies of all tax payment receipts or other evidence of
payment of taxes by Participant with respect to transactions or payments
under this Agreement.
6. ADVERTISING
6.1 INTRA-STREAM ADS. Participant shall retain one hundred percent (100%)
of the revenue from its sale of audio, video, multimedia, banner, or other
advertising embedded in the Content by Participant ("Intra-Stream Ads").
Participant shall at all times clearly differentiate advertising from Content.
6.2 OTHER ADS. Participant agrees that RN may insert pointers to RN's own
media-based advertisements prior to pointers to the Content clips that RN
distributes to Content Delivery Channels. RN shall at all times clearly
differentiate advertising from Content. RN will retain one hundred percent
(100%) of the revenue from its sale of any non-Intra-Stream Ads. RN agrees that
such advertisements will not be for companies or persons competitive in the
internet radio business.
7. PROPRIETARY RIGHTS
7.1 OWNERSHIP OF CONTENT. As between RN and Participant, Participant
remains the owner of all right, title and interest in and to the Content and
any Content Headlines, and all copyrights, trademarks, and other intellectual
property rights therein. Notwithstanding the foregoing, RN will retain all
right, title, and interest in and to any Content Headlines authored by RN if
Participant fails to provide a headline for Content as specified in the
Technical Specifications.
7.2 RN'S OWNERSHIP. Except as provided in Section 7.1, RN shall be the sole
owner of all right, title and interest in and to any content made, created,
developed or used by RN in connection with the Content on RN's Web sites, the
LiveStations, and all copyrights, trademarks, patents and other intellectual
property rights therein. Participant represents and warrants that it has not and
shall not acquire any right or interest in any trademark or trade name owned or
used by RN, and that under no circumstances will it use, register or attempt to
register any trademark, service mark, trade name, domain name or similar indicia
containing the word "Real" or any other mark or domain name used by or
confusingly similar to a mark used by RN, regardless of spelling or translation
thereof.
8. WARRANTIES/INDEMNIFICATIONS
8.1 PARTICIPANT'S WARRANTY. Participant warrants and represents that: (i) the
Content does not in any way violate any existing law, infringe upon or
misappropriate any copyright, patent, trademark, trade secret, right of
publicity, right of privacy or other proprietary rights of any third party,
either in whole or in part; (ii) the Content contains no matter which, if
published, will be libelous or defamatory; (iii) Participant has the necessary
rights to grant RN the rights granted hereunder; (iv) the Content complies with
all laws applicable to the transmission or use of the Content as specified in
this Agreement for each country in which the Content is intended to be
delivered; and (v) Participant is solely responsible for, and has paid or will
pay, all amounts due any person or entity that has a right to receive any
royalty or other payment as a result of RN's authorized use of the Content
pursuant to this Agreement. Participant acknowledges that RN and its affiliates
are the owners and/or licensees of the trademarks, service marks, commercial
symbols and trade names used by RN.
8.2 PARTICIPANT'S INDEMNITY. Participant hereby agrees to indemnify, hold
harmless and defend RN from all claims, damages, costs and expenses, including
reasonable attorneys' fees and litigation expenses, arising out of or as a
result of Participant's breach of the above warranties and representations or
this Agreement. Participant, at its own expense, shall have the right to employ
separate counsel and participate in the defense thereof.
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Notwithstanding the foregoing, Participant shall not be liable for any
material not contained in or a part of the Content or Content Headlines
provided by Participant, or inserted in the Content or Content Headlines by
RN without the permission or ratification of Participant.
8.3 RN WARRANTIES AND INDEMNITY. RN hereby warrants and represents to
Participant that (i) the RN trademarks, service marks and trade names do not
in any way violate existing laws or infringe upon or misappropriate any
rights of third parties, and (ii) RN has all rights, title and authority
necessary to enter into this Agreement and perform as herein required. RN
agrees to indemnify and hold harmless and defend Participant from all claims,
damages, costs and expenses including reasonable attorneys' fees and
litigation expenses, arising out of or as a result of RN's breach of the
warranties set forth in this Section 8.3.
9. TERM AND TERMINATION
9.1 TERM. Unless sooner terminated as provided herein, the initial Term of
this Agreement shall commence as of the Effective Date and expire one year
thereafter. As used herein, "Term" means the initial Term and any
mutually-agreed upon renewal Term.
9.2 TERMINATION FOR BREACH. If either party materially breaches any
provision of this Agreement and such breach has not been cured within fifteen
(15) days after the other party has given written notice of such breach, the
non-breaching party may terminate this Agreement upon fifteen (15) days'
written notice to the breaching party. RN may terminate this Agreement
immediately without further notice if payment is not received in accordance
with this Agreement.
9.3 TERMINATION FOR INSOLVENCY. RN may, at its option and upon written
notice, terminate this Agreement, effective immediately, should Participant:
(i) admit in writing its inability to pay its debts generally as they become
due; (ii) make a general assignment for the benefit of its creditors;
(iii) institute proceedings to be adjudicated a voluntary bankrupt, or
consent to the filing of a petition of bankruptcy against it; (iv) seek
reorganization under any bankruptcy act, or consent to the filing of a
petition seeking such reorganization; or (v) have a decree entered against it
by a court of competent jurisdiction appointing a receiver, liquidator,
trustee or assignee in bankruptcy or in insolvency covering all or
substantially all of such party's property or providing for the liquidation
of such party's property or business affairs, provided such decree is not
dismissed within forty-five (45) days.
9.4 EFFECT OF TERMINATION. Upon termination or expiration of this Agreement
for any reason, all licenses granted herein shall terminate except that RN
shall have five (5) business days to remove Participant's LiveStation and
Content Headlines from Content Delivery Channels. Sections 5, 6, 7, 8, 9.4,
and 10.4 shall survive the expiration or termination of this Agreement for
any reason.
10. MISCELLANEOUS
10.1 EXCLUSION OF CERTAIN DAMAGES. EXCEPT WITH RESPECT TO PARTICIPANT'S
OBLIGATIONS UNDER SECTION 8.2, NEITHER PARTY SHALL BE LIABLE TO THE OTHER
PARTY IN TORT, CONTRACT OR UNDER ANY OTHER LEGAL THEORY FOR ANY
CONSEQUENTIAL, INCIDENTAL, PUNITIVE OR SPECIAL LOSS OR DAMAGES ARISING OUT OF
THIS AGREEMENT, EVEN IF APPRISED OF THE LIKELIHOOD OF SUCH DAMAGES OCCURRING.
10.2 NOTICES AND CONTACT INFORMATION. Any notice or payment to be made or
given to either party shall be sufficiently made or given on the date of
receipt if addressed to RN as set forth below or to Participant as set forth
on Exhibit A and (i) if delivered personally with receipt acknowledged; or
(ii) sent by DHL Worldwide Express or comparable international courier
service for the soonest possible delivery. Either party may change its notice
and contact information by providing notice, in the manner set forth above,
to the other party.
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RN:
Vice President, Advertising Sales
RealNetworks, Inc.
2601 Elliott Ave.
Seattle, Washington 98121
U.S.A.
Fax: (206) 448-0427
With a copy to:
VP & General Counsel
at the same address
Fax: (206) 674-2695
10.3 NON-ASSIGNMENT. This Agreement is personal to Participant. Participant
may sublicense, assign, or otherwise transfer any of its rights (including by
merger or transfer of control) in this Agreement, only with the express
written consent of RN which will not be unreasonably withheld, provided that
transfers of stock in Participant to wholly owned affiliates or related
entities of Participant, in which no actual change in ultimate ownership or
control takes place, are permitted upon prior written notice to RN.
10.4 GOVERNING LAW AND DISPUTE RESOLUTION. This Agreement shall be governed by
the laws of the State of Washington, United States of America, without regard to
conflicts of law provisions, and Participant consents to the exclusive
jurisdiction and venue of the state and federal courts sitting in the State of
Washington. This Agreement shall not be governed by the United Nations
Convention of Contracts for the International Sale of Goods, the application of
which is hereby expressly excluded. Upon request by RN, Participant shall
execute any document or instrument, undertake any action, or refrain from any
action if such execution or action is reasonably necessary to make the foregoing
choice of law and choice of forum effective and enforceable.
10.5 PRESS RELEASES. Neither party shall issue any press releases relating to
this Agreement or the relationship between the parties without the other party's
review of and written consent to the press release.
10.6 GENERAL. No waiver, amendment or modification of any provision of this
Agreement shall be effective unless it is in a document that expressly refers to
this Agreement and is signed by both parties. Except as specifically provided
herein, failure or delay by either party in exercising any rights or remedy
under this Agreement shall not operate as a waiver of any such right or remedy.
The parties are separate and independent legal entities, and the relationship
between the parties shall be that of independent contractors. It is expressly
understood that the parties do not by this Agreement intend to form, nor shall
this Agreement be construed to constitute, a partnership or joint venture
between them. If any provision of this Agreement shall be held by a court of
competent jurisdiction to be illegal, invalid or unenforceable, the legality,
validity and enforceability of the remaining provisions shall not, in any way,
be affected or impaired thereby. This Agreement and the attached Exhibits, which
are incorporated herein by this reference, constitute the complete and entire
agreement between the parties, and supersede and cancel all prior negotiations,
understandings, correspondence and agreements, oral and written, express or
implied, between the parties relating to the subject matter hereof, and shall be
binding only when executed by both parties hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement by their
duly authorized representatives.
REALNETWORKS, INC. GLOBAL MEDIA CORP
By: /s/ T. F. Frank By: /s/ Rob Fuller
------------------------- -------------------------
Name: Thomas F. Frank Name: Rob Fuller
----------------------- -----------------------
6
<PAGE>
Title: C0O Title: CEO
---------------------- ----------------------
Date: Date:
----------------------- -----------------------
7
<PAGE>
EXHIBIT A
DESCRIPTION OF CONTENT
PARTICIPANT CONTACT INFORMATION:
FULL CORPORATE NAME: Global Media Corporation
-------------------------------------------
Address: 400 Robson Street
-------------------------------------------
-------------------------------------------
City, State/Country, Vancouver, BC, Canada
Postal Code (if any): V6B 2B4
-------------------------------------------
CONTACT PERSON: Winston Barta
-------------------------------------------
Title: Vice President & Director
-------------------------------------------
Phone: 604-688-9994
-------------------------------------------
Fax: 604-688-9996
-------------------------------------------
Email: [email protected]
-------------------------------------------
-------------------------------------------
WITH COPY TO:
-------------------------------------------
Title:
-------------------------------------------
Phone:
-------------------------------------------
Fax:
-------------------------------------------
Email:
-------------------------------------------
-------------------------------------------
PARTICIPANT'S CONTENT:
Participant's Content will consist of the following: (insert short description):
FIFTEEN (15) LIVESTATIONS INTENDED FOR INTERNET RADIO BROADCASTING:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Participant's LiveStation Genre: Alternative, Pop, Rock, Dance, Electronic, Hip
Hop/rap
- --------------------------------------------------------------------------------
Content to be hosted in the following datatypes (E.G., RealAudio, RealVideo,
RealPix): REALAUDIO, SMIL
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
ENGLISH LANGUAGE VERSION: Yes
-------------------------------------------
PARTICIPANT'S URL: www.globalmedia.com
-------------------------------------------
PARTICIPATION FEE: $750,000
-------------------------------------------
8
<PAGE>
EXHIBIT B
SPECIFICATIONS OF REALPLAYER BUTTON
RN Graphic for RN Search = 88 x 33- bitmap
[GRAPHIC OMITTED]
SPECIFICATIONS OF REALGUIDE BUTTON
RN Graphic for RN Search = 128 x 67- bitmap
[GRAPHIC OMITTED]
9
<PAGE>
EXHIBIT C
TECHNICAL SPECIFICATIONS
TECHNICAL SPECIFICATIONS
Participant must, at all times throughout the Term, meet these minimum
specifications as a condition of participating in the Service:
Professional Level RealServer G2, current version as of the Effective Date,
minimum 400 concurrent user connections;
T1 Bandwidth.
CONTENT CREATION REQUIREMENTS:
Encoded with RealProducer G2, using the SureStream feature;
Served with RealServer's RTSP protocol;
Content streamed 24 hours a day, seven days a week, except as necessary for
maintenance;
Notify RealNetworks 24 hours in advance if a stream needs to be taken down for
maintenance or other needs.
USING SMIL
Preset partners are encouraged to use Synchronized Multimedia Integration
Language (or "SMIL"), a recommended W3C standard for creating multimedia
presentations for broadcast on the Internet.
10
<PAGE>
Exhibit 10.31
ADDENDUM
CUSTOM SOFTWARE UPGRADES AND SUPPORT
TERMS AND CONDITIONS
This agreement ("Addendum") amends effective January 19, 2000 as set forth
herein the letter Consulting Services Agreement between the parties dated April
20, 1999 (the "Agreement") and sets forth the support obligations of RN and
related obligations of the Customer.
1. DEFINITIONS.
1.1 In addition to the capitalized terms defined elsewhere in this
Addendum, the following terms used herein shall have the meanings ascribed to
them below:
(a) "Error" shall mean any instance in which the Custom
Software does not materially conform to the Documentation and any
condition (i) that precludes one or more functions of the Custom
Software from being performed due to suspected or actual Errors in the
Custom Software; or (ii) in which The Customer's technical support
personnel need reasonable assistance or information regarding the
Custom Software; provided, however, that an Error shall not include any
material nonconformance that is due to hardware, software, or other
equipment not referred to in the Documentation as being compatible with
the Custom Software.
(b) "First Level Support" shall consist of accepting and
handling end user calls and troubleshooting to the point of verifying
that there is an Error and that the Error, if any, is in the Custom
Software.
(c) "Second Level Support" shall consist of telephone and
remote diagnostic support to The Customer Contact (not directly to end
users or other third parties) with regard to the operation and
utilization of the Custom Software and maintenance modifications, error
corrections or bug fixes necessary to bring the Custom Software into
conformance with the Documentation therefor.
(d) "Customer Contact" shall mean an individual designated in
writing by The Customer who is authorized to contact the Support
Center. Customer may substitute the Customer Contacts at any time upon
written notice thereof to RN.
(e) "Support Center" shall mean the RN facility or facilities
from which support obligations are to be provided hereunder. As of the
Effective Date, RealNetwork's Support Center is located at 2601 Elliott
Avenue, Seattle, Washington.
(f) "Workaround" shall mean: (i) a modification to the Custom
Software; (ii) an alteration to the configuration of the end user's
computer or software; or (iii) a change in the way the end user
accomplishes a task using the Custom Software; any of which may be of a
temporary nature, to help avoid the Error.
(g) "Upgrade" shall mean the modification to the Custom
Software to support updated versions of Gold releases of RealSystem G2
products (e.g., RealProducer, RealServer, RealPlayer).
1.2 All other capitalized terms used in this Addendum and not otherwise
defined herein shall have the meanings ascribed to them in the Agreement.
2. CUSTOMER OBLIGATIONS
2.1 The Customer shall be responsible for providing First Level Support
for the Custom Software. RN shall not be required to have direct contact with
the Customer's distributors or end users with regard to Technical Support.
2.2 The Customer shall ascertain the nature of each reported Error, and
the circumstances under which such Error occurs. The Customer shall use
reasonable commercial efforts to provide RN with information, traces, server
access or documentation sufficient for RN to duplicate the Error. Upon RN's
duplication of such Error, the parties shall mutually determine in good faith
the reasonable classification of such Error.
- 1 -
<PAGE>
2.3 The Customer shall designate a reasonable number of the Customer
Contacts, not to exceed three (3) individuals at any given time, for
communication with RN's representatives at the Support Center and shall make
reasonable efforts to minimize redundancy in support requests. All the Customer
support requests must be made through a Customer Contact. Each Customer Contact
shall have adequate technical expertise, training and experience to fulfill his
or her responsibilities. The Customer shall immediately provide RN with the
name, title and 24-hour contact information for each Customer Contact.
2.4 The Customer agrees that when requesting support services, it shall
follow the following procedures: (i) the Customer shall first contact the
Support Center through standard support channels. (ii) If the Customer does not
receive a response from the Support Center within the requisite time frame set
forth in Section 3.3 below, it shall escalate issue to appropriate RN management
level. Specific contact information will be provided to the Customer once Custom
Software Support Services are initiated.
3. RN SUPPORT OBLIGATIONS.
3.1 Support Center personnel shall be available for telephone contact
Monday through Friday, 8:00 AM to 5:00 PM Pacific Time, at the Support Center,
exclusive of RN's local holidays. RN shall also provide the Customer with a
means of reporting Errors to RN by electronic mail, voice mail, or telephonic
recording capability. Specific contact information will be provided to the
Customer once Custom Software Support Services are initiated.
3.2 RN will provide Support Services for a period commencing January
19, 2000 and ending August 31, 2000. The fees for Support Services will be
due in full at the signing of this Addendum and will be nonrefundable. The
fees will be paid as follows: $100,000 on signing of this Addendum, $100,000
on March 31, 2000, $400,000 on May 1, 2000 and $400,000 on June 15, 2000.
3.3 RN shall provide Second Level Support to the Customer in connection
with the Custom Software as follows: (i) assist the Customer Contacts in
determining the cause of Errors encountered by the Customer or end users in the
use of Custom Software; and (ii) make commercially reasonable efforts to
classify and correct all Errors that a Customer Contact identifies, classifies
and reports to RN and that RN can substantiate. RN shall not be required to
correct any Error caused by any failure to implement any Upgrades to the Custom
Software that are provided by RN to the Customer. RN will provide reasonable
response times from having been alerted of the Error (within two business days)
and implement a patch, Workaround or temporary fix as soon as a reasonable
solution is available.
3.4 If the Customer desires to receive on-site technical support at any
of its locations, it shall pay RN based on RN's quoted prices for such support
or consulting services, and shall pay all direct RN expenses associated
therewith, including transportation, accommodations and meals.
3.5 For the avoidance of doubt, RN shall not have any support
obligations with respect to beta versions of Custom Software.
3.6 RN shall deliver an upgrade release of the Custom Software on an as
needed basis and upon completion of RN development of the upgrade release of the
Custom Software to operate with the Gold release of the RealSystem G2 software
in use by the Customer.
4. Fees.
Custom Software Upgrade and Support Fees for the period 1-19-00 to
8-31-00 US$ 1,000,000
Agreed and Accepted by:
Global Media Corp. RealNetworks, Inc.
By: /s/ Rob Fuller By: /s/ T. F. Frank
-------------- ---------------
CEO COO
- 2 -
<PAGE>
Exhibit 10.32
<TABLE>
<S><C>
- --------------------------------------------------------------------------------------
REALNETWORKS INSERTION ORDER [LOGO]
- --------------------------------------------------------------------------------------
======================================================================================
CLIENT: Global Media BILLING CONTACT: Please Fill in
- --------------------------------------------------------------------------------------
CAMPAIGN: On-going Advertising COMPANY: Global Media
- --------------------------------------------------------------------------------------
CONTACT: Winston Barta ADDRESS: 400 Robson Street
- --------------------------------------------------------------------------------------
TELEPHONE: (888)322-2282 CITY, STATE, ZIP: Vancouver, BC,V6B 2B4
- --------------------------------------------------------------------------------------
EMAIL: [email protected] TELEPHONE: (888)322-2282
=========================================---------------------------------------------
TRAFFIC CONTACT: Please Fill in FAX: (604)688-9996
- --------------------------------------------------------------------------------------
TELEPHONE: EMAIL:
- --------------------------------------------------------------------------------------
EMAIL: BILLING/CLIENT NUMBER:
=========================================---------------------------------------------
AGENCY: IO NUMBER:
- --------------------------------------------------------------------------------------
CONTACT: ESTIMATE NUMBER:
- --------------------------------------------------------------------------------------
TELEPHONE: SPECIAL BILLING
- --------------------------------------- INSTRUCTIONS:
EMAIL:
======================================================================================
======================================================================================
PROPERTY DELIVERY LEVEL SECTION/CATEGORY AD TYPE DOLLAR AMOUNT (NET)
- --------------------------------------------------------------------------------------
RealSites 36,000,000 Run Of Network (Space Avail
- --------------------------------------------------------------------------------------
Channels 20,000,000 Run Of Channels Instream Ad
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: Payment will be as follows: $65,000 on signing, $65,000 on
3-31-00, $265,000 on 5-1-00 and remainder $255,000 on 6-15-00.
Placement will be evenly distributed across the Real.com Network.
- --------------------------------------------------------------------------------------
FLIGHT DATES: 1/17/00 - 1/16/01 SOLD BY: DR
- --------------------------------------------------------------------------------------
TOTAL DELIVERY AMOUNT: 56,000,0000 TOTAL AMOUNT DUE: $650,000 NET
======================================================================================
CLIENT SIGNATURE: /s/ Rob Fuller DATE:
- --------------------------------------------------------------------------------------
SALES REP SIGNATURE: /s/ Shelley Morrison DATE:
======================================================================================
- --------------------------------------------------------------------------------------
For Traffic Department Use Only:
- --------------------------------------------------------------------------------------
Received: Processed: Live: Finance:
- --------------------------------------------------------------------------------------
</TABLE>
Signed Insertion Orders should be faxed to 206-674-2696, Attn: Cam Keeley
All materials must be sent to [email protected]. Banners must be 468x60, 11k, 3
loop limit, gif format EXCEPT for RollingStone Radio which must be 468x60, 10k,
3 loop limit. All encoded material must be encoded in RealNetworks 5.0 format.
DAT tapes and Beta SP tapes should be sent to Cam Keeley, 1111 Third Ave. Suite
2900, Seattle, WA 98101, 206-674-2661. Please reference
http://www.real.com/company/advertising/mediakit/specs.html for detailed spec
information.
By accepting this Insertion Order you agree to all Terms and Conditions listed
at http://www.real.com/company/advertising/mediakit/terms.html
<PAGE>
Exhibit 10.33
<TABLE>
<S><C>
- --------------------------------------------------------------------------------
REALNETWORKS INSERTION ORDER [LOGO]
- --------------------------------------------------------------------------------
================================================================================
CLIENT: Global Media BILLING CONTACT: Please Fill in
- --------------------------------------------------------------------------------
CAMPAIGN: "Gidget Sponsorship" COMPANY: Global Media
- --------------------------------------------------------------------------------
CONTACT: Winston Barta ADDRESS: 400 Robson Street
- --------------------------------------------------------------------------------
TELEPHONE: (888)322-2282 CITY, STATE, ZIP: Vancouver, BC,V6B 2B4
- --------------------------------------------------------------------------------
EMAIL: [email protected] TELEPHONE: (888)322-2282
=======================================-----------------------------------------
TRAFFIC CONTACT: Please Fill in FAX: (604)688-9996
- --------------------------------------------------------------------------------
TELEPHONE: EMAIL:
- --------------------------------------------------------------------------------
EMAIL: BILLING/CLIENT NUMBER:
=======================================-----------------------------------------
AGENCY: IO NUMBER:
- --------------------------------------------------------------------------------
CONTACT: ESTIMATE NUMBER:
- --------------------------------------------------------------------------------
TELEPHONE: SPECIAL BILLING
- --------------------------------------- INSTRUCTIONS:
EMAIL:
================================================================================
================================================================================
PROPERTY DELIVERY LEVEL SECTION/CATEGORY AD TYPE DOLLAR AMOUNT (NET)
- --------------------------------------------------------------------------------
60,000,000 Commerce Button $400,000.00 NET
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SPECIAL INSTRUCTIONS: This Insertion Order replaces in full the prior Gidget
Sponsorship Insertion Order dated _______________, 1999.
Placement: "Gidget"E-commerce button-
1st month payment due upon signing. Billing for $320,000 of total will be
monthly over 12 month term. Additional payments will be due 15th of each month
Initial Payment: $33,333.00
2nd Payment: Due on the 15th of November - $33,333.00
Each additional payment due on the 15th of each of the following 10 months.
Remaining $80,000 of total will be paid in one lump sum progress payment of
$80,000 due on March 31, 2000.
- --------------------------------------------------------------------------------
FLIGHT DATES: 11/8/99 - 11/7/00 SOLD BY: DR
- --------------------------------------------------------------------------------
TOTAL DELIVERY AMOUNT: 60,000,0000 TOTAL AMOUNT DUE: $400,000.00 NET
================================================================================
CLIENT SIGNATURE: /s/ Rob Fuller DATE:
- --------------------------------------------------------------------------------
SALES REP SIGNATURE: /s/ Shelley Morrison DATE:
================================================================================
- --------------------------------------------------------------------------------
For Traffic Department Use Only:
- --------------------------------------------------------------------------------
Received: Processed: Live: Finance:
- --------------------------------------------------------------------------------
</TABLE>
Signed Insertion Orders should be faxed to 206-674-2696, Attn: Cam Keeley
All materials must be sent to [email protected]. Banners must be 468x60, 11k, 3
loop limit, gif format EXCEPT for RollingStone Radio which must be 468x60, 10k,
3 loop limit. All encoded material must be encoded in RealNetworks 5.0 format.
DAT tapes and Beta SP tapes should be sent to Cam Keeley, 1111 Third Ave. Suite
2900, Seattle, WA 98101, 206-674-2661. Please reference
http://www.real.com/company/advertising/mediakit/specs.html for detailed spec
information.
By accepting this Insertion Order you agree to all Terms and Conditions listed
at http://www.real.com/company/advertising/mediakit/terms.html
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
unaudited consolidated financial statements of Global Media Corporation for the
quarter and three months ended January 31, 2000, and is qualified it its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-2000
<PERIOD-END> JAN-31-2000
<CASH> 2,542,833
<SECURITIES> 0
<RECEIVABLES> 182,200
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,005,417
<PP&E> 4,849,440
<DEPRECIATION> 603,417
<TOTAL-ASSETS> 7,854,857
<CURRENT-LIABILITIES> 607,979
<BONDS> 86,407
0
5,709,104
<COMMON> 14,131
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 7,854,857
<SALES> 0
<TOTAL-REVENUES> 58,635
<CGS> 57,923
<TOTAL-COSTS> 57,923
<OTHER-EXPENSES> 2,508,217
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (2,507,505)
<INCOME-TAX> 0
<INCOME-CONTINUING> (2,508,390)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,508,390)
<EPS-BASIC> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
