U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB/A
Amendment No. 1
To
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED
JANUARY 31, 1998.
Commission file number: 000-29518
SHOPPING.COM
(Exact name of small business issuer as specified in its charter)
CALIFORNIA 33-0733679
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2101 East Coast Highway, Garden Level
Corona Del Mar, California 92625
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 640-4393
SECURITIES REGISTERED PURSUANT TO SECTION 12 (b) OF THE ACT: NONE
SECURITIES REGISTERED PURSUANT TO SECTION 12 (g) OF THE ACT: COMMON STOCK NO PAR
VALUE
Indicate by check mark whether the registrant (1) filed all reports required to
be filed by Section 13 or 15(d) of the Exchange Act during the past 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 .....
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. [ ]
State issuer's revenues for the fiscal year ended January 31, 1998......$850,724
Aggregate market value of the Registrant's Common Stock (based on the price at
which such equity was sold on December 5, 1997) held by non-affiliates of the
Registrant. -- $19,632,610.
Number of shares of common stock outstanding as of May 28, 1998........4,049,059
Documents Incorporated By Reference
None
Transitional Small Business Disclosure Format
Yes ..... No ..X..
Exhibit Index on Page 19
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EXPLANATORY NOTE
This Annual Report on Form 10-KSB/A ("Form 10-KSB/A") is being filed as
Amendment No. 1 to the Registrant's Annual Report on Form 10-KSB for the fiscal
year ended January 31, 1998 filed with the Securities and Exchange Commission on
March 31, 1998 ("Form 10-KSB") for the purpose of amending Items 9, 10, 11, 12
and 13 of Part III of Shopping.com's Form 10-KSB.
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SHOPPING.COM
FORM 10-KSB/A
FOR THE FISCAL YEAR ENDED JANUARY 31, 1998
INDEX
Page
----
PART III
Item 9. Directors, Executive Officers, Promoters and
Control Persons; Compliance With Section 16(a)
of the Exchange Act....................................... 1
Item 10. Executive Compensation.................................... 4
Item 11. Security Ownership of Certain Beneficial Owners
and Management............................................ 6
Item 12. Certain Relationships and Related Transactions............ 8
Item 13. Exhibits and Reports on Form 8-K.......................... 10
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PART III
Item 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT(1)
Name Age Position with Shopping.com
- ---- --- --------------------------
Frank Denny 63 Chairman
Robert McNulty 43 President, Chief Executive Officer
and Director
Douglas Hay 44 Executive Vice President and Director
Kristine E. Webster 29 Senior Vice President, Chief Financial
Officer, and Secretary
Mark S. Winkler 39 Chief Information and Technology
Officer
Paul J. Hill 52 Director
Edward F. Bradley 57 Director
- -----------------------
(1) As of May 20, 1998.
FRANK W. DENNY. Mr. Denny joined Shopping.com in April 1998 as its Chairman of
the Board. He is also the President and CEO of Group InterCom, an international
marketing and consulting group headquartered in San Antonio, Texas, and has
served in those offices since 1991. Through its United States and International
offices Group InterCom is engaged in the sale, marketing and manufacture of
general hard lines retail merchandise. Group InterCom also is a consulting firm
specializing in retail concept development and implementation as well as mergers
and acquisitions.
Prior to this time, Mr. Denny was a founder, Chairman of the Board, President
and CEO of Builders Square, one of the largest retail home improvement warehouse
operations in the United States. Prior to Builders Square, Mr. Denny was
President of W.R. Grace Home Centers, a chain of home centers operating over 300
stores nationally.
Mr. Denny was an officer of the Home Center Institute and a charter member of
the National Home Center Congress and Exposition. He was also founder of the Do
It Yourself Research Institute based in Indianapolis, Indiana.
ROBERT J. MCNULTY. In November 1996 Mr. McNulty founded Shopping.com and has
been its President, Chief Executive Officer, and member of its Board of
Directors since its inception, and devotes substantially all of his business
time to the Company. Mr. McNulty also founded Cyber Depot, Shopping.com's
predecessor of Internet shopping, in February 1996. From September 1992 until
November 1994, Mr. McNulty held senior management positions with Auto Expo Inc.,
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a privately held corporation which operated retail auto parts stores in
California and Nevada. After his resignation in June of 1994, until March 1995,
he continued in an advisory position as a consultant to that company. The
subsequent management, which did not include Mr. McNulty and was unassociated
with Mr. McNulty, filed an assignment for the benefit of creditors in California
on November 22, 1995. From April 1995 until February 1996, Mr. McNulty worked as
an independent consultant. In 1983 Mr. McNulty founded and served as Chief
Executive Officer of HomeClub (now known as Home Base), until its merger with
Zayre Corp. in 1986. He also serves as Chairman of the Board of Directors of
U.S. Forest Industries, Inc., a forest products company. Mr. McNulty has also
founded and been involved with several other retail companies, both public and
private, in a broad range of merchandise categories including sporting goods,
home improvement, hardware, office products and automotive. Without admitting or
denying the allegations of a complaint, Mr. McNulty consented to an entry of a
final decree in the U.S. District Court on October 10, 1995, instructing him to
not violate certain provisions of the federal securities laws.
DOUGLAS HAY. Mr. Hay joined the Company in May, 1997 as its Executive Vice
President and was elected as a member of the Board of Directors in July, 1997.
Mr. Hay has spent over 25 years in the field of marketing consumer products and
services. From 1990 to April 1997, Mr. Hay was General Manager of Projects Et Al
Inc., a business consulting firm that developed marketing and merchandising
programs for some of the nations leading retail companies. Mr. Hay has also
served as Vice President of Marketing for Northern Automotive, Inc., an
automotive parts retail company.
KRISTINE E. WEBSTER. Ms. Webster joined the Company in July 1997 as its Senior
Vice President, Chief Financial Officer and Secretary. From July 1995 to August
1997, Ms. Webster served as an Assistant Professor of Accounting at La Sierra
University, a private four year university and as an adjunct professor at
California State University, San Bernardino. From April 1993 to July 1995 Ms.
Webster served as the Controller of National Xpress Logistics, a transportation
logistics brokerage company and a wholly-owned subsidiary of US Xpress
Enterprises, Inc. Prior to that she was with Ernst and Young, LLP form January
1988 to April 1992. From May 1992 to March 1993, she was a consultant and
contract professor. In addition, since December 1990, Ms. Webster has owned
Plaza travel, a travel agency specializing in group travel. Ms. Webster received
her Bachelor of Business Administration degree, summa cum laude, from Loma Linda
University in 1989 and her Master of Business Administration degree from La
Sierra University in 1991. She is a Certified Public Accountant in the State of
California.
MARK S. WINKLER. Mr. Winkler joined the Company in May 1997 as its Chief
Information and Technology Officer. From 1978 to April 1997, Mr. Winkler founded
and served as Chief Executive Officer of Winkler and Associates, a software
consulting company which provided consulting services for various companies
including Warner Brothers, IBM, Inc. - Broadcast Solutions Division, Pacificare
HMO, American Express Company, Los Angeles Times, Air Freight Forwarding
Company, Inc., Jefferies & Company, Inc., Alliance Logistics Resources, Inc.,
Bank of America State Trust Company, TRW, Inc., and Jet Propulsion Laboratory.
Mr. Winkler received his Bachelor of Science degree in Computer Science from the
University of California, Santa Barbara in 1981.
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PAUL J. HILL. Mr. Hill joined the Company as a member of its Board of Directors
in April 1997. He brings over 25 years of experience in managing diversified
integrated companies operating in areas such as insurance, real estate,
communications, resources and manufacturing. From June 1994 to the present, Mr.
Hill has served as Chairman of Crown Life Insurance Company. Mr. Hill has
participated as a board member and officer of many public and private companies
in both the United States and Canada. From 1978 to the present, Mr. Hill has
also been President of Harvard Developments Limited, a diversified company with
operations in real estate, broadcasting, manufacturing, oil and gas and
insurance. Mr. Hill received a Bachelor of Science and Bachelor of Arts degree
from Georgetown University in 1967 and a Master of Business Administration form
the University of Western Ontario in 1969.
EDWARD F. BRADLEY. Mr. Bradley joined the Company as a member of its Board of
Directors in April 1997. From December 1996 to the present, Mr. Bradley has been
President and Chairman of Cannon Industries, Inc., a business development and
venture capital firm. Prior to joining Cannon Industries, Inc., from January
1993 to December 1996, Mr. Bradley was the Corporate Director of Quality of
Geneva Steel Corp., an integrated steel manufacturer. From 1985 to January 1993,
Mr. Bradley carried on a management consulting business. From 1972 to 1985, Mr.
Bradley was President of his environmental consulting company with regional
offices in New York, Washington, D.C., Chicago, Detroit, and Milwaukee. From
October 1997 to the present, Mr. Bradley has been a director of Kyzen
Corporation, a company which manufactures and markets chemical cleaning
solutions. Mr. Bradley has also functioned as a Special Consultant to the U.S.
Environmental Protection Agency in Washington, D.C. Mr. Bradley received a
Bachelor of Science degree in Civil Engineering in 1961 and a Master of Science
degree in Civil Engineering in 1964 from the University of Notre Dame, and is a
Registered Professional Engineer. From 1988 to June 1996, Mr. Bradley was an
Adjunct Professor in Engineering Economics at the University of Utah.
Section 16(a) Beneficial Ownership Reporting Compliance
- -------------------------------------------------------
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's officers and directors, and persons who own more than ten percent of a
registered class of the Company's equity securities, to file reports of
ownership on Form 3 and changes in ownership on Form 4 or 5 with the Securities
and Exchange Commission (the "SEC"). Such officers, directors and ten-percent
shareholders are also required by SEC rules to furnish the Company with copies
of all forms that they file pursuant to Section 16(a). Based solely on its
review of the copies of such forms received by it, or written representations
from certain reporting persons that no other reports were required for such
persons, the Company believes that all Section 16(a) filing requirements
applicable to its officers, directors and ten-percent shareholders were complied
with in a timely fashion with the following exceptions:
(1) Frank Denny became a director in April 1998. He has not filed a Form
3. However, until May 15, 1998, Mr. Denny was not the beneficial owner of any
shares of the Company's securities. On May 15, 1998, Mr. Denny was granted
options to purchase 100,000 and 50,000 shares of the Company's Common stock at
an exercise price of $16.00 and $20.00 per share, respectively.
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(2) As of April 27, 1998, Robert McNulty had transferred 6,000 shares in
partial settlement of a legal claim against him. This transfer has not been
reported.
Item 10. EXECUTIVE COMPENSATION
Summary Compensation Table
- --------------------------
The following table shows as to the Chief Executive Officer and each
employee whose total annual salary and bonus exceeded $100,000 (the "Named
Officers").
<TABLE>
<CAPTION>
Long-term Compensation -
Annual Compensation Awards
--------------------------------------- -----------------------
Restricted Securities All Other
Name and Principal Fiscal Other Annual Stock Underlying Compensation
Position Year Salary($) Bonus($) Compensation($) Awards($) Options(#) ($)
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert McNulty, CEO 1998 113,801 104,105 44,588(1) 0 25,000 0
Mark S. Winkler, Chief 1998 133,177 0 0 75,000 0 0
Information &
Technology Officer
Michael Miramontes, 1998 116,200 0 11,000(2) 300,000 0 0
Administration and
Human Resources
</TABLE>
(1) Includes $14,508 automobile allowance.
(2) Automobile allowance.
Option Grants In The Last Fiscal Year
- -------------------------------------
The following table shows, as to each of the Named Officers, information
concerning stock options granted during the fiscal year ended January 31, 1998.
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<TABLE>
Option Grants in Fiscal 1998
(Individual Grants)
<CAPTION>
Percent Of
Total Options
Number of Granted to
Securities Employees In Exercise Or
Underlying Fiscal Year Base Price
Name Options 1998 ($/Sh) Expiration Date
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert McNulty, CEO 25,000 15.9% 3.00 July 16, 2002
Mark S. Winkler, 0 -- -- --
Chief Information &
Technology Officer
Michael Miramontes, 0 -- -- --
Administration and
Human Resources
</TABLE>
Option Exercises And Holdings
- -----------------------------
The following table sets forth, for each of the Named Officers, certain
information concerning the number of shares subject to both exercisable and
unexercisable stock options as of January 31, 1998. Also reported are values for
"in-the-money" options that represent the positive spread between the respective
exercise prices of outstanding stock options and the fair market value of
Shopping.com's Common Stock as of January 31, 1998. No options were exercised by
any Named Officer in fiscal 1998.
<TABLE>
<CAPTION>
Number Of
Securities Underlying Unexercised Value Of Unexercised In-The-Money
Options At Fiscal Year End(#) Options at Fiscal Year End ($) (1)
--------------------------------------- ------------------------------------
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert McNulty, CEO 25,000 0 293,750 0
Mark S. Winkler, 0 0 0 0
Chief Information
& Technology Officer
Michael Miramontes, 0 0 0 0
Administration and
Human Resources
(1) Market value of underlying securities based on the closing price of Shopping.com's Common Stock on January 30, 1998
(the last trading day of fiscal 1998) of $14.75 minus the exercise price.
</TABLE>
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Director Compensation
- ---------------------
Each of the Company's directors in fiscal 1998 were granted options to
purchase 25,000 shares of the Company's Common Stock at an exercise price of
$3.00 per share. One such director, Bill Gross, has since left the board and was
replaced by Frank Denny.
Employment Agreements
- ---------------------
The Company has entered into written employment agreements with with Mr.
McNulty for five years terminating on April 30, 2002 and with Mr. Winkler for
one year ending May 20, 1998 with the contract automatically renewing
thereafter. Under his employment agreement, Mr. Winkler may only be terminated
for cause. Mr. McNulty's and Mr. Winkler's agrements provide for base annual
salaries of $75,000 and $200,000, respectively. The Board of Directors has since
increased Mr. McNulty's base annual salary to $175,000.
Item 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth as of January 31, 1998 certain
information with respect to the beneficial ownership of the Company's Common
Stock by (i) any person (including any "group" as that term is used in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) known by the Company to be the beneficial owner of more than 5% of the
Company's voting securities, (ii) each director and each nominee for director of
the Company, (iii) each of the executive officers named in the Summary
Compensation Table appearing herein, and (iv) all directors and executive
officers of the Company as a group.
Number of Percent
Name and Address (1) Shares of Total
- -------------------- ------ --------
Robert J. McNulty (2) ....................................1,322,500 31.4%
2401 Bayshore Dr.
Newport Beach, CA
Mark S. Winkler..............................................25,000 *
27863 Longhill Dr.
Rancho Palos Verdes, CA
Douglas A. Hay (3)...........................................95,000 2.4%
4630 East Sunnyside Lane
Phoenix, AZ
Frank W. Denny..................................................-0- *
8221 Pimlico
Boerne, TX
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Paul J. Hill (4)............................................125,001 3.1%
2000-1874 Scarth St.
Regina, Saskatchewan
Canada
Kipling Isle, Ltd. (5)......................................125,001 3.1%
2425 E. Camelback Road
Phoenix, AZ 85016
Edward F. Bradley (6)........................................25,000 *
1515 N. 600 E.
Mapleton, UT
Kristine E. Webster (7)......................................45,000 1.1%
25510 Buckly
Murrieta, CA 92563
Bill Gross' idealab! (8)....................................787,500 18.8%
130 West Union Street
Pasadena, CA 91103
Cyber Depot, Inc. (9).......................................250,000 6.2%
3334 E. Coast Highway, #306
Corona del Mar, CA 92625
Edward F. Harris (10) ......................................326,431 8.2%
P.O. Box 593
Glenbrook, Nevada
William D. Long (11)........................................321,301 8.0%
P.O. Box 522
Glenbrook, Nevada
All directors and executive officers as a group (seven
persons) ................................................1,627,335 40.7%
- -------------------
* Less than 1% of the total.
(1) Except as otherwise indicated below, the persons whose names appear
in the table above have sole voting and investment power with respect to all
shares of stock shown as beneficially owned by them subject to community
property laws, where applicable.
(2) Includes 250,000 shares owned by Cyber Depot, Inc. Mr. McNulty is
the principal shareholder of Cyber Depot, Inc. Also included are warrants to
purchase 187,500 shares of Common Stock at an exercise price of $3.00 per share
and options to purchase 25,000 shares of Common Stock at an exercise price of
$3.00 per share held by Mr. McNulty. In addition, Mr. McNulty has voting power
for 35,000 shares of Common Stock held by other shareholders which have been
included in Mr. McNulty's beneficial ownership.
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(3) Includes options to purchase 25,000 shares of Common Stock at an
exercise price of $3.00 per share.
(4) Includes 66,667 shares of Common Stock, warrants to purchase 33,334
shares of Common Stock at an exercise price of $3.00 per share and options to
purchase 25,000 shares of Common Stock at an exercise price of $3.00 per share
held by Kipling Isle, Ltd., a corporation controlled by Paul J. Hill.
(5) Includes warrants to purchase 33,334 shares of Common Stock at an
exercise price of $3.00 per share and options to purchase 25,000 shares of
Common Stock at an exercise price of $3.00 per share.
(6) Includes options to purchase 25,000 shares of Common Stock at an
exercise price of $3.00 per share.
(7) Includes warrants to purchase 4,166 shares of Common Stock at an
exercise price of $3.00 per share and options to purchase 12,500 shares of
Common Stock at an exercise price of $3.00 per share.
(8) Includes warrants to purchase 187,500 shares of Common Stock at an
exercise price of $3.00 per share. As of January 31, 1998, Bill Gross, a
director of Bill Gross' idealab!, was also a director of the Company.
(9) Includes warrants to purchase 187,500 shares of Common Stock at an
exercise price of $3.00 per share.
(10) Includes 16,795 shares of Common Stock held by The Harris Assets
Revocable Trust, 59,823 shares of Common Stock held by Ed Harris Rollover IRA,
220,000 shares of Common Stock held by the Harris Family Trust and 29,813 shares
of Common Stock held by The Harris Family Charitable Remainder Unitrust.
(11) Includes 192,000 shares of Common Stock held by William D. Long &
Kay K. Long TTEES UTD 12/31/86 FBO The Long Family Trust and 11,000 shares of
Common Stock held by William D. Long, Ken Thomson and Edward Harris TTEES: BEK
Investment Trust, UTD 2/16/94.
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
In November 1996, Mr. McNulty subscribed to purchase 1,150,000 shares of
the Common Stock at $0.02 per share. In March 1997, the Company issued 250,000
shares of its Series A Preferred Stock to Cyber Depot, Inc. ("Cyber Depot"), in
exchange for certain assets and liabilities of Cyber Depot relating to Internet
shopping, including hardware, software and certain furniture and fixtures. Mr.
McNulty is the controlling shareholder of Cyber Depot and is also the President,
Chief Executive Officer and a Director of the Company. In connection with such
transaction, Mr. McNulty was issued five year warrants to purchase 187,500
shares of Common Stock with an exercise price of $3.00 per share, as well as
registration rights providing for one demand and unlimited piggy-back
registration rights.
In April 1997, in a private placement, the Company sold 500,000 shares
of its Series A Preferred Stock at a price of $0.40 per share and 100,000 shares
of its Common Stock at $0.02 per share to idealab!, a corporation of which Bill
Gross, a former director of the Company, is a director. In connection therewith,
idealab! was issued five year warrants to purchase 187,500 shares of Common
Stock with an exercise price of $3.00 per share, as well as registration rights
providing for one demand and unlimited piggy-back registration rights.
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In May 1997, the Company sold 66,667 shares of its Series B Preferred
Stock in a private placement at a price of $3.00 per share to Kipling Isle,
Ltd., a company controlled by Paul J. Hill, a Director of the Company. In
connection therewith, Kipling Isle, Ltd. was issued five year warrants to
purchase 33,333 shares of Common Stock with an exercise price of $3.00 per
share, as well as registration rights providing for one demand and unlimited
piggy-back registration rights.
In May 1997, the Company sold 100,000 shares of Series B Preferred Stock
in a private placement at a price of $3.00 per share to Christopher B. Cannon
who controls Cannon Industries, Inc., in which Edward Bradley, a Director of the
Company, is an executive officer. Mr. Cannon was issued five year warrants to
purchase 50,000 shares of Common Stock with an exercise price of $3.00, as well
as registration rights providing for one demand and unlimited piggy-back
registration rights.
In June 1997, the Company, through idealab!, purchased its domain name,
Shopping.com, from Magdalena Yesil. As consideration, Ms. Yesil received 30,000
shares of the common stock of idealab!, 30,000 shares of Common Stock of the
Company and $30,000 from the Company.
In August 1997, the Company sold 8,333 shares of its Series B Preferred
Stock in a private placement at a price of $3.00 per share to Ms. Webster, the
Company's Chief Financial Officer and Secretary. In connection therewith, Ms.
Webster was issued five year warrants to purchase 4,166 shares of Common Stock
with an exercise price of $3.00 per share, as well as registration rights
providing for one demand and unlimited piggy-back registration rights.
On August 19, 1997, Shopping.com signed an agreement with CitySearch, a
market innovator in providing community-based online information services for
the Web, to provide necessary back office transactions support for CitySearch's
new electronic commerce pilot program. According to the agreement, Shopping.com
will provide "shopping cart" tools, customer credit authentication and
verification, coordination with the merchant that an order has been placed,
communication with the customer when the order will be shipped, collection of
payment from the user and disbursement of payments to the merchant. CitySearch
plans to develop, manage, and monitor the electronic commerce program, select
customers for participation in the pilot program, as well as market the program
through its Austin CitySearch Web site. The pilot program will be launched in
early September and will run for a minimum of two months. In October 1995, Mr.
Gross, a former director of the Company, co-founded City-Search, a web-based
city directory which operates in eight cities, and has served on its Board since
such time.
In connection with its underwriting agreement, the Company paid Waldron
& Co., Inc. ("Waldron"), the Company's lead underwriter in its initial public
offering ("IPO"), commissions and an allowance for expenses in the amount of 10%
and 3%, respectively, of the gross proceeds of the IPO. Additionally, the
Company had product sales to Waldron of approximately $342,000 during the year
ended January 31, 1998.
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During the year ended January 31, 1998, the Company obtained short-term
non-interest bearing promissory notes in the amount of $305,000 from affiliates
of Waldron, which were fully repaid subsequent to the IPO.
The Company made advances to Robert McNulty of approximately $156,000,
which were repaid during the year ended January 31, 1998. Approximately $98,000
of such repayments were made by Cyber Depot. In addition. during the year ended
January 31, 1998, the Company made advances of $16,000 to Cyber Depot which were
fully repaid during the year.
Certain employees of the Company have entered into shareholder
agreements with Mr. McNulty and the Company and have given irrevocable proxies
to Mr. McNulty.
The Company believes that all of the transactions set forth above were
made on terms no less favorable to the Company than could have been obtained on
an arms-length basis from unaffiliated third parties. The Company has adopted
a policy pursuant to which all transactions (including, without limitation, the
borrowing of money) between the Company and its officers, directors and
affiliates will be on terms no less favorable for the Company than could be
obtained on an arms-length basis from unrelated third parties and will be
approved by a majority of the independent and disinterested members of the
Company's Board of Directors.
Item 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
Exhibit No. Description
- ----------- -----------
3.1(*) Amended and Restated Articles of Incorporation of Shopping.com.
Incorporated herein by reference from Exhibit 3.1 to Registrant's
Annual Report on Form 10-KSB for the fiscal year ended January
31, 1998. (Filed with the SEC on May 1, 1998, File No.
000-29518.)
3.2(*) Bylaws of Shopping.com. Incorporated herein by reference from
Exhibit 3.02 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.1(*) See Articles of Incorporation (Exhibit 3.1) for definition of the
rights of the Preferred and Common Stock.
4.2(*) Stock Option Plan of 1997. Incorporated herein by reference from
Exhibit 4.01 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
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4.3(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (McNulty). Incorporated herein by reference from
Exhibit 4.02 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.4(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Hay). Incorporated herein by reference from Exhibit
4.03 to Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
4.5(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Non-Employee). Incorporated herein by reference
from Exhibit 4.04 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
4.6(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Employee). Incorporated herein by reference from
Exhibit 4.05 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.7(*) Form of $3.00 Warrant Certificate. Incorporated herein by
reference from Exhibit 4.06 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.8(*) Form of $1.50 Warrant Certificate. Incorporated herein by
reference from Exhibit 4.07 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.9(*) Form of Underwriter's Warrant Certificate. Incorporated herein by
reference from Exhibit 4.08 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.10(*) Form of Demand Registration Rights Agreement. Incorporated herein
by reference from Exhibit 4.09 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.11(*) Form of Piggy Back Registration Rights Agreement. Incorporated
herein by reference from Exhibit 4.10 to Registrant's
Registration Statement on Form SB-2 filed on September 24, 1997
(Registration No. 333-36215).
4.12(*) Form of Irrevocable Proxy. Incorporated herein by reference from
Exhibit 4.11 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.13(*) Form of Irrevocable Proxy. Incorporated herein by reference from
Exhibit 4.12 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
-11-
Page 14 of 27
<PAGE>
4.14(*) Domain Name Transfer and Stock Purchase Agreement. Incorporated
herein by reference from Exhibit 4.13 to Registrant's
Registration Statement on Form SB-2 filed on September 24, 1997
(Registration No. 333-36215).
4.15(*) Form of Lock-up Agreement. Incorporated herein by reference from
Exhibit 4.15 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.16(*) Specimen of Stock Certificate. Incorporated herein by reference
from Exhibit 4.16 to Registrant's Amendment No. 2 to Registration
Statement on Form SB-2/A filed on November 21, 1997 (Registration
No. 333-36215).
10.1(*) Employment Agreement between the Company and Robert J. McNulty.
Incorporated herein by reference from Exhibit 10.01 to
Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
10.2(*) Employment Agreement between the Company and Mark S. Winkler.
Incorporated herein by reference from Exhibit 10.02 to
Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
10.3(*) Employment Agreement between the Company and Pat DeMicco.
Incorporated herein by reference from Exhibit 10.3 to
Registrant's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1998. (Filed with the SEC on May 1, 1998, File
No. 000-29518.)
10.4(*) Amendment to Employment Agreement between the Company and Pat
DeMicco. Incorporated herein by reference from Exhibit 10.4 to
Registrant's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1998. (Filed with the SEC on May 1, 1998, File
No. 000-29518.)
10.5(*) Form of Indemnification Agreement. Incorporated herein by
reference from Exhibit 10.03 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.6(*) Form of Confidentiality and Non-Solicitation Agreement
(independent contractors/outside vendor). Incorporated herein by
reference from Exhibit 10.04 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.7(*) Asset Purchase Agreement and Bill of Sale dated March 31, 1997 in
which Cyber Depot., Inc. sells to Shoppers Source title and
interest in the hardware, software, customer lists and vendor
lists in connection with retail sales operations through the
Internet .Form of Confidentiality and Non-Solicitation Agreement
-12-
Page 15 of 27
<PAGE>
(independent contractors/outside vendor). Incorporated herein by
reference from Exhibit 10.05 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.8(*) Asset Purchase Agreement. Incorporated herein by reference from
Exhibit 10.06 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
10.9(*) Office lease between ARAI Corporation of American and the
Shoppers Source, and Amendment. Incorporated herein by reference
from Exhibit 10.07 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
10.10(*) Assignment of Property Rights. Incorporated herein by reference
from Exhibit 10.08 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
10.11(*) Form of Subordinated Promissory. Incorporated herein by reference
from Exhibit 10.10 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
10.12(*) En Point Agreement. (Confidential treatment requested for certain
portions.) Incorporated herein by reference from Exhibit 10.12 to
Amendment No. 1 to Registrant's Registration Statement on Form
SB-2/A filed on October 31, 1997 (Registration No. 333-36215).
10.13(*) Agreement with Typhoon Capital Consultants LLC. Incorporated
herein by reference from Exhibit 10.11 to Amendment No. 1 to
Registrant's Registration Statement on Form SB-2/A filed on
October 31, 1997 (Registration No. 333-36215).
10.14(*) Domain name Transfer. Incorporated herein by reference from
Exhibit 4.13 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
10.15(*) Marketing Agreement between the Company and En Point Technologies
Sales, Inc. dated February 10, 1998. Incorporated herein by
reference from Exhibit 10.15 to Registrant's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1998. (Filed
with the SEC on May 1, 1998, File No. 000-29518.)
10.16(*) Subscription Agreement between the Company and Premiere Radio
Networks, Inc. dated February 19, 1998. Incorporated herein by
reference from Exhibit 10.16 to Registrant's Annual Report on
Form 10-KSB for the fiscal year ended January 31, 1998. (Filed
with the SEC on May 1, 1998, File No. 000-29518.)
10.17(*) Master Lease Agreement No. 6325 between the Company and Insight
Investments, Corp. dated December 18, 1997 (Equipment lease).
Incorporated herein by reference from Exhibit 10.17 to
Registrant's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1998. (Filed with the SEC on May 1, 1998, File
No. 000-29518.)
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<PAGE>
10.18(*) Agreement with Home Network dated December 15, 1997. Incorporated
herein by reference from Exhibit 10.13 to Registrant's Current
Report on Form 8-K dated January 12, 1998. (Filed with the SEC on
January 12, 1998, File No. 000-29518.)
10.19 Consulting Agreement between the Company, Shopping.com and
Double 12, Ltd. Dated March 26, 1998. This corrects the prior
exhibit previously filed as Exhibit 10.19 to Registrant's
Annual Report on Form 10-KSB for the fiscal year ended
January 31, 1998. (Filed with the SEC on May 1, 1998,
File No. 000-29518.)
20.1(*) Resignation Letter of Bill Gross dated March 24, 1998.
Incorporated herein by reference from Exhibit 20.1 to
Registrant's Current Report on Form 8-K dated March 24, 1998.
(Filed with the SEC on March 31, 1998, File No. 000-29518.)
27.1(*) Financial Data Schedule.
- -----------
* Previously filed with the Securities and Exchange Commission.
(b) Reports on Form 8-K
On January 22, 1998 a report on Form 8-K dated January 12, 1998 (the
"January Report") was filed with the Securities and Exchange Commission (the
"SEC"). Pursuant to Item 5 of Form 8-K, the January Report announced an 18-month
agreement with ATHome Corporation, a high speed interactive services provider
via its @Home Network. No financial statements were included with the January
Report.
On February 17, 1998 a report on Form 8-K dated February 10, 1998 (the
"February Report") was filed with the SEC. Pursuant to Item 5 of Form 8-K, the
February Report announced (1) a two year agreement with En Pointe, a national
provider of information technology and services, to use En Pointe's sales
network to sell business and office products directly to companies and (2) a
three year agreement with Profit Pro, Inc., a provider of cataloging software,
to use Profit Pro, Inc.'s cataloging software which will look up auto parts on
the Shopping.com Web site. No financial statements were included with the
February Report.
On March 31, 1998 a report on Form 8-K dated March 24, 1998 (the "March
Report") was filed with the SEC. The March Report was made pursuant to Item 5 of
Form 8-K. The Company reported that on March 24, 1998, the SEC had ordered
trading in the Company's securities suspended for the period from 9:30 a.m. EST,
March 24, 1998 through 11:59 p.m. EDT, on April 6, 1998. The SEC did not allege
any violations but alleged that there appeared to be a "lack of current and
accurate information concerning the securities of Shopping.com because of recent
market activity in the stock that may have been the result of manipulative
conduct." Ref. SEC Release File No. 500-1. The Company also reported that Bill
Gross had resigned form Board of Directors for personal reasons unrelated to the
SEC inquiry. The Company announced that Frank W. Denny had been appointed to the
Board of Directors to fill the vacancy created by Mr. Gross' resignation.
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Page 17 of 27
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
SHOPPING.COM
Date: May 29, 1998 /s/ Robert J. McNulty
-------------------------------------
Robert J. McNulty,
President and Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
Registrant and in the capacities and dates indicated.
Signature Title Date
- --------- ----- ----
Chief Executive Officer
/s/ Robert J. NcNulty President
- ----------------------- Director
Robert J. McNulty (Principal Executive Officer) May 29, 1998
/s/ Frank W. Denny
- ----------------------- Chairman of the Board of Directors May 29, 1998
Frank W. Denny
Senior Vice President
/s/ Kristine E. Webster Chief Financial Officer
- ----------------------- Secretary
Kristine E. Webster (Principal Accounting Officer) May 29, 1998
/s/ Douglas Hay
- ----------------------- Director May 29, 1998
Douglas Hay
/s/ Paul J. Hill
- ----------------------- Director May 29, 1998
Paul J. Hill
- ----------------------- Director May __, 1998
Edward F. Bradley
Page 18 of 27
<PAGE>
EXHIBIT INDEX
Exhibit Page
- ------- ----
3.1(*) Amended and Restated Articles of Incorporation of Shopping.com.
Incorporated herein by reference from Exhibit 3.1 to Registrant's
Annual Report on Form 10-KSB for the fiscal year ended January 31,
1998. (Filed with the SEC on May 1, 1998, File No. 000-29518.)
3.2(*) Bylaws of Shopping.com. Incorporated herein by reference from
Exhibit 3.02 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.1(*) See Articles of Incorporation (Exhibit 3.1) for definition of the
rights of the Preferred and Common Stock.
4.2(*) Stock Option Plan of 1997. Incorporated herein by reference from
Exhibit 4.01 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.3(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (McNulty). Incorporated herein by reference from
Exhibit 4.02 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.4(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Hay). Incorporated herein by reference from Exhibit
4.03 to Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
4.5(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Non-Employee). Incorporated herein by reference from
Exhibit 4.04 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.6(*) Form of Incentive Stock Option Agreement form under Stock Option
Plan of 1997 (Employee). Incorporated herein by reference from
Exhibit 4.05 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.7(*) Form of $3.00 Warrant Certificate. Incorporated herein by
reference from Exhibit 4.06 to Registrant's Registration Statement
on Form SB-2 filed on September 24, 1997 (Registration No.
333-36215).
-1-
Page 19 of 27
<PAGE>
4.8(*) Form of $1.50 Warrant Certificate. Incorporated herein by
reference from Exhibit 4.07 to Registrant's Registration Statement
on Form SB-2 filed on September 24, 1997 (Registration No.
333-36215).
4.9(*) Form of Underwriter's Warrant Certificate. Incorporated herein by
reference from Exhibit 4.08 to Registrant's Registration Statement
on Form SB-2 filed on September 24, 1997 (Registration No.
333-36215).
4.10(*) Form of Demand Registration Rights Agreement. Incorporated herein
by reference from Exhibit 4.09 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.11(*) Form of Piggy Back Registration Rights Agreement. Incorporated
herein by reference from Exhibit 4.10 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.12(*) Form of Irrevocable Proxy. Incorporated herein by reference from
Exhibit 4.11 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.13(*) Form of Irrevocable Proxy. Incorporated herein by reference from
Exhibit 4.12 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.14(*) Domain Name Transfer and Stock Purchase Agreement. Incorporated
herein by reference from Exhibit 4.13 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
4.15(*) Form of Lock-up Agreement. Incorporated herein by reference from
Exhibit 4.15 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
4.16(*) Specimen of Stock Certificate. Incorporated herein by reference
from Exhibit 4.16 to Registrant's Amendment No. 2 to Registration
Statement on Form SB-2/A filed on November 21, 1997 (Registration
No. 333-36215).
10.1(*) Employment Agreement between the Company and Robert J. McNulty.
Incorporated herein by reference from Exhibit 10.01 to
Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
10.2(*) Employment Agreement between the Company and Mark S. Winkler.
Incorporated herein by reference from Exhibit 10.02 to
Registrant's Registration Statement on Form SB-2 filed on
September 24, 1997 (Registration No. 333-36215).
-2-
Page 20 of 27
<PAGE>
10.3(*) Employment Agreement between the Company and Pat DeMicco.
Incorporated herein by reference from Exhibit 10.3 to Registrant's
Annual Report on Form 10-KSB for the fiscal year ended January 31,
1998. (Filed with the SEC on May 1, 1998, File No. 000-29518.)
10.4(*) Amendment to Employment Agreement between the Company and Pat
DeMicco. Incorporated herein by reference from Exhibit 10.4 to
Registrant's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1998. (Filed with the SEC on May 1, 1998, File
No. 000-29518.)
10.5(*) Form of Indemnification Agreement. Incorporated herein by
reference from Exhibit 10.03 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.6(*) Form of Confidentiality and Non-Solicitation Agreement
(independent contractors/outside vendor). Incorporated herein by
reference from Exhibit 10.04 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.7(*) Asset Purchase Agreement and Bill of Sale dated March 31, 1997 in
which Cyber Depot., Inc. sells to Shoppers Source title and
interest in the hardware, software, customer lists and vendor
lists in connection with retail sales operations through the
Internet. Form of Confidentiality and Non-Solicitation Agreement
(independent contractors/outside vendor). Incorporated herein by
reference from Exhibit 10.05 to Registrant's Registration
Statement on Form SB-2 filed on September 24, 1997 (Registration
No. 333-36215).
10.8(*) Asset Purchase Agreement. Incorporated herein by reference from
Exhibit 10.06 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
10.9(*) Office lease between ARAI Corporation of American and the Shoppers
Source, and Amendment. Incorporated herein by reference from
Exhibit 10.07 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
10.10(*) Assignment of Property Rights. Incorporated herein by reference
from Exhibit 10.08 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
10.11(*) Form of Subordinated Promissory. Incorporated herein by reference
from Exhibit 10.10 to Registrant's Registration Statement on Form
SB-2 filed on September 24, 1997 (Registration No. 333-36215).
10.12(*) En Point Agreement. (Confidential treatment requested for certain
portions.) Incorporated herein by reference from Exhibit 10.12 to
Amendment No. 1 to Registrant's Registration Statement on Form
SB-2/A filed on October 31, 1997 (Registration No. 333-36215).
-3-
Page 21 of 27
<PAGE>
10.13(*) Agreement with Typhoon Capital Consultants LLC. Incorporated
herein by reference from Exhibit 10.11 to Amendment No. 1 to
Registrant's Registration Statement on Form SB-2/A filed on
October 31, 1997 (Registration No. 333-36215).
10.14(*) Domain name Transfer. Incorporated herein by reference from
Exhibit 4.13 to Registrant's Registration Statement on Form SB-2
filed on September 24, 1997 (Registration No. 333-36215).
10.15(*) Marketing Agreement between the Company and En Point Technologies
Sales, Inc. dated February 10, 1998. Incorporated herein by
reference from Exhibit 10.15 to Registrant's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1998. (Filed with the
SEC on May 1, 1998, File No. 000-29518.)
10.16(*) Subscription Agreement between the Company and Premiere Radio
Networks, Inc. dated February 19, 1998. Incorporated herein by
reference from Exhibit 10.16 to Registrant's Annual Report on Form
10-KSB for the fiscal year ended January 31, 1998. (Filed with the
SEC on May 1, 1998, File No. 000-29518.)
10.17(*) Master Lease Agreement No. 6325 between the Company and Insight
Investments, Corp. dated December 18, 1997 (Equipment lease).
Incorporated herein by reference from Exhibit 10.17 to
Registrant's Annual Report on Form 10-KSB for the fiscal year
ended January 31, 1998. (Filed with the SEC on May 1, 1998, File
No. 000-29518.)
10.18(*) Agreement with Home Network dated December 15, 1997. Incorporated
herein by reference from Exhibit 10.13 to Registrant's Current
Report on Form 8-K dated January 12, 1998. (Filed wit the SEC on
January 12, 1998, File No. 000-29518.)
10.19 Consulting Agreement between the Company, Shopping.com and 24
Double 12, Ltd. Dated March 26, 1998. This corrects the prior
exhibit previously filed as Exhibit 10.19 to Registrant's
Annual Report on Form 10-KSB for the fiscal year ended
January 31, 1998. (Filed with the SEC on May 1, 1998,
File No. 000-29518.)
20.1(*) Resignation Letter of Bill Gross dated March 24, 1998.
Incorporated herein by reference from Exhibit 20.1 to Registrant's
Current Report on Form 8-K dated March 24, 1998. (Filed with the
SEC on March 31, 1998, File No. 000-29518.)
-4-
Page 22 of 27
<PAGE>
27.1** Financial Data Schedule.
- --------------
* Previously filed with the Securities and Exchange Commission.
-5-
Page 23 of 27
<PAGE>
EXHIBIT 10.19
CONSULTING AGREEMENT
This Consulting Agreement dated and effective March 26, 1998 is
entered into by and between Double 12, Ltd., a California corporation
("Consultant") and Shopping.com, a California corporation (the "Company").
The parties to this Agreement agree to the following terms and
conditions:
1. SERVICES. Consultant shall provide the Company with advice,
counsel, and recommendations only regarding matters relating to strategic
partnerships, public relations, communications, and business development.
2. TERM. The term ("Term") of this Agreement shall be twelve (12)
months. Consultant shall have the option to extend the Term for an additional
six (6) months.
3. METHOD OF PERFORMANCE. Consultant will determine the method,
details and means of performing the above-described services. Consultant shall
only devote to the Company so much of its time and attention as it, in its sole
discretion, deem to be necessary or advisable to accomplish the goals and
purposes of the Company.
4. EMPLOYMENT OF ASSISTANTS; SUBCONTRACTORS. Consultant may employ the
service of any third party for the rendering of services or products for the
benefit of the Company. The Company will pay Consultant a fee of twenty percent
(20%) in addition to the fee charged by the third party in advance of any
services rendered and C.O.D. for any goods purchased and delivered. No third
party will be engaged by the Consultant to render services or for the sale of
goods without the prior express written consent of the Company.
5. COMPENSATION. In consideration of the services to be rendered by
the Consultant on behalf of the Company, the Company hereby agrees to pay
Consultant Forty Thousand Dollars ($40,000.00) on the thirtieth day prior to
the beginning of each three month period during the Term.
6. INDEPENDENT CONTRACTOR STATUS. Consultant shall perform the
services hereunder as an independent contractor and, as such, shall not
represent or consider itself as an officer, employee, partner, agent or
principal of the Company. Nothing herein shall be deemed or construed as
creating a joint venture, fiduciary relationship, agency, partnership, or
unincorporated association between Consultant and the Company. Company shall
-1-
Page 24 of 27
<PAGE>
not be obligated to, and shall not, withhold any amounts from Consultant's
compensation for the payment of taxes. Consultant is solely responsible for all
taxes which may be due as a result of payment of the Consultant's compensation.
7. OTHER BUSINESS VENTURES. Subject to paragraph 8 below, during the
Term of this Agreement, Consultant or any affiliate or other person holding a
legal or beneficial interest in Consultant, may engage in or possess an interest
in other business ventures of every nature and description, independently or
with others, provided such ventures do not compete with the Company; and neither
the Company nor any affiliate of the Company shall have any right by virtue of
this Agreement in or to such independent ventures or to the income or profits
derived therefrom.
8. NON-DISCLOSURE AND SECRECY.
Consultant agrees that, during the term of this Agreement, and at
all times thereafter, it will keep and cause all of its employees, agents,
representative as well as consultants to keep all Company information in the
strictest confidence and will not itself, directly or indirectly, use or allow
to be used for its benefit, or the benefit of others, disseminate or disclose
any Confidential Information or Trade Secrets (as such terms are defined below)
used and/or obtained in providing the services hereunder, except to the Company,
regardless of whether the Confidential Information or Trade Secrets have been
conceived or developed, in whole or in part by Consultant.
Consultant acknowledges and agrees that the terms "Confidential
Information" and "Trade Secrets" as used in this Agreement include, without
limitation, the whole or any portion or phase of any design, process, service,
procedure, formula, improvement, customer list, information with respect to
customer requirements and practices, marketing research and development
information, statistical data, sources of merchandise, technical information,
computer models or programs, and all other information concerning the industry
and business in which the Company operates and which is of value in the
operation of the Company's business, or otherwise understood to be, a
confidential character and which has not been published or otherwise become a
matter of general public record. Consultant agrees that all Confidential
Information and Trade Secrets are and shall be the property of the Company
regardless of whether conceived or developed by Consultant in connection with
the services provided hereunder. Upon termination or earlier expiration of this
-2-
Page 25 of 27
<PAGE>
Agreement, Consultant shall immediately surrender to the Company all material
of a confidential or secret nature, including without limitation, the
Confidential Information and Trade Secrets, and any other documents of a
proprietary nature as may then be in the Consultant's possession or control.
Consultant acknowledges and agrees that any and all Trade
Secrets, Confidential Information, computer programs, documentation and other
copyrightable or trademark materials that Consultant is asked to prepare or
work on as part of Consultant's consulting services hereunder shall be the
property of Company. To that end, Consultant hereby irrevocably assigns,
transfers, sets over and conveys to Company all of Consultant's right, title
and interest in and to all such information, including, without limitation,
Consultant's copyrights or rights of trademark. Consultant's irrevocable
assignment hereunder shall be deemed to have been coupled with an interest.
9. MISCELLANEOUS.
(a) ENTIRE AGREEMENT; WAIVER. This Consulting Agreement
constitutes the entire agreement between the parties pertaining to the subject
matter contained in it and supersedes all prior or contemporaneous agreements,
representations and understanding of the parties. No supplement, modification
or amendment of this Consulting Agreement shall be binding unless executed in
writing by all of the parties. No waiver of any of the provisions of this
Consulting Agreement shall be deemed, or shall constitute, a waiver of any
other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless executed in writing by
the party making the waiver.
(b) BINDING EFFECT AND ASSIGNABILITY. This Consulting Agreement
shall be binding on, and shall inure to the benefit of, the parties to it, and
their respective heirs, legal representatives and successors. This Consulting
Agreement or any right hereunder is not assignable to any party.
(c) LEGAL FEES. If any legal or arbitration or other
proceeding is brought for the enforcement of this Consulting Agreement, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Consulting Agreement, the
successful or prevailing party or parties as defined by the California Code of
Civil Procedure shall be entitled to recover reasonable attorneys fees and other
costs incurred in that action or proceeding, in addition to any other relief
to which it or they may be entitled.
-3-
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<PAGE>
(d) INTERPRETATION. To the extent that this Consulting Agreement
modifies or conflicts with the terms of any prior agreement between the parties
hereto, or any of them, the terms of this Consulting Agreement shall control.
This Consulting Agreement has been negotiated at arms-length between persons
knowledgeable in the matters dealt with herein. In addition, each party has been
represented or had the opportunity to be represented by experienced and
knowledgeable legal counsel. Accordingly, any rule of law, including, but not
limited to, California Civil Code Section 1654, or any other statutes, legal
decisions, or common law principles of similar effect, that would require
interpretation of any ambiguities in this Consulting Agreement against the party
that has drafted it is of no application and is hereby expressly waived. The
provisions of this Consulting Agreement shall be interpreted in an reasonable
manner to the effect the intentions of the parties hereto and of this Consulting
Agreement.
(e) GOVERNING LAW. This Consulting Agreement shall be construed
in accordance with, and governed by, the laws of the state of California.
IN WITNESS WHEREOF, the parties have executed this Settlement Agreement
as of the date and year set forth adjacent to each of their respective
signatures.
Dated: March 29, 1998 SHOPPING.COM, a California corporation
By: /s/ Robert McNulty
----------------------------------
Its: CEO
---------------------------------
Dated: March 29, 1998 DOUBLE 12 LTD., a California corporation
By: /s/ [illegible]
----------------------------------
Its: President
---------------------------------
-4-
Page 27 of 27
