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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-SB
GENERAL FORM FOR REGISTRATION OF SECURITIES OF SMALL BUSINESS ISSUERS
Under Section 12(b) or (g) of Securities Exchange Act of 1934
FREEREALTIME.COM, INC.
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(Exact Name of Small Business Issuer in Its Charter)
Colorado 84-1408716
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(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
3333 Michelson Drive, Suite 430, Irvine, California 92612
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(Address of Principal Executive Offices) (Zip Code)
(949) 833-2959
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Issuer's Telephone Number, Including Area Code
Securities registered under Section 12(b) of the Exchange Act: None
Securities registered under Section 12(g) of the Exchange Act: Common
Stock, no par value
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PART I
We have elected to file the information required by Alternative 3 of Form
10-SB and are filing this Form 10-SB on a voluntary basis to:
. provide current, public information to the investment community;
. to expand the availability of secondary trading exemptions under
the Blue Sky laws and thereby expand the trading market in our
securities; and
. to comply with prerequisites for quotation of our securities on
the Over-the-Counter Bulletin Board.
Item 1. Description of Business
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We are a Web-based provider of real-time financial market information
services and analytic tools. Through our Freerealtime.com Web site, we strive to
be a "one-stop" portal for real-time financial information by offering free,
real-time stock quotes and value-added content, including news, market
commentary, company research, and analytic tools such as charting and portfolio
stock tracking. We completed our fiscal year ended March 31, 1999 ("Fiscal
1999") with over 500,000 registered users, a portion of whom hit our site ("page
views") approximately 103 million times in March 1999. Our Web site traffic has
grown each quarter since the commencement of our service in February 1998. As of
March 31, 1999, we experienced in excess of 50% sequential growth in page views
from the fiscal quarter ended December 31, 1998 when we had approximately
353,000 registered users, along with approximately 64 million page-views for the
month of December 1998. Subsequent to the end of Fiscal 1999, we continued to
realize significant growth for the first quarter of Fiscal 2000, ended June 30,
1999, as we had over 660,000 registered users, serving approximately 136 million
page-views in June 1999. A majority of our page views are real-time quotes. The
Freerealtime.com Web site is offered free of charge to our registered users and
the sale of advertising represents our primary source of revenue from this Web
site.
We also own and operate the Web site, BullSession.com, where we offer
active investors a subscription service of "streaming" real-time quotes and
dynamically updating stock portfolios. Our subscriber count on this Web site has
also shown significant sequential quarterly growth during Fiscal 1999.
BullSession.com finished Fiscal 1999 with over 3,500 subscribers, up from
approximately 1,700 at the end of December 1998. By the end of June 1999,
BullSession.com had over 4,700 subscribers. Our source of revenue from the
BullSession.com Web site is the sale of subscriptions at monthly prices ranging
from $26 to $50.
Corporate History
Freerealtime.com, Inc. is the result of a merger between Pub Singin', Inc.,
a Colorado corporation ("Pub Singin") and First International Financial
Corporation, a Delaware corporation ("FIFC-Delaware"). The two companies merged
in September 1998 (the "Merger"). Immediately prior to the Merger, Pub Singin
changed its name to "Freerealtime.com" and Freerealtime.com became the surviving
entity in the merger. Pursuant to the merger agreement, all shares of FIFC-
Delaware were exchanged for shares of Freerealtime.com with the result that,
following the Merger, the former stockholders of FIFC-Delaware held
approximately a 90% controlling interest in Freerealtime.com. Pub Singin was
formed on May 3, 1989 under the laws of the State of Colorado for the purpose of
publishing and marketing song sheets. From inception through the merger with
FIFC-Delaware, Pub Singin had no material business or financial results of
operations. Our historical business began in Canada through First International
Financial Corporation, an Alberta corporation ("FIFC-Alberta"). FIFC-Alberta,
through a predecessor corporation, was formed in July 1994 under the laws of
Alberta, Canada by our founder Brad Gunn. FIFC-Alberta commenced business
operations in January 1996, when it initiated the sale of capital stock in
private placement transactions and began to develop its historical Internet
business. Mr. Gunn formed First
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International Financial Corporation, a Delaware corporation ("FIFC-Delaware")
on June 25, 1997 under the laws of the State of Delaware under the name First
International USA Corp. with the intent of moving the business of FIFC-Alberta
into the United States. FIFC-Delaware did not have any business operations until
July 31, 1998 when FIFC-Delaware acquired all of the outstanding capital stock
of FIFC-Alberta from the stockholders of FIFC-Alberta in exchange for the
issuance of shares of common stock of FIFC-Delaware. As a result of the
foregoing acquisition, FIFC-Alberta became a wholly-owned subsidiary of FIFC-
Delaware. See Risk Factors--Risks Related to Our Business--Historical
Transactions.
Industry Background
The Web as a New Medium. The Web has rapidly become a significant global
medium for communications, news, information and commerce. International Data
Corporation, a leading provider of information technology data, analysis and
consulting, has estimated that the number of individuals worldwide with access
to the Internet will reach approximately 200 million by the end of 1999, of
which 125 million will be accessing the Web. This growth is being driven by a
number of factors, including:
. a growing base of personal computers, or PCs, in the home and workplace;
. improvements in network infrastructure;
. more convenient, faster and inexpensive Internet access;
. advances in PCs and modems;
. increases in the quantity and quality of content available on the Web;
and
. the overall increase in public awareness of the Web.
The Web allows a broad range of users to easily access information on the
Internet and interact with individuals or organizations offering textual,
graphical and other information. With an increasing number of Web users both in
the U.S. and internationally, the Web has emerged as a new mass communications
medium. The ease and speed of publishing, distributing and communicating text,
graphics, audio and video over the Web has led to a proliferation of Internet-
based services.
The emergence and exponential growth of the Web as a mainstream consumer
medium is creating opportunities for marketing, sales, distribution, publishing
and communication for virtually any organization that has the skills and tools
to present their message over the Internet. Through the Web, companies can
deliver timely, personalized content in a manner not possible through other
media. Using the Web, corporate and financial-related information can be
continuously updated, distributed to a vast number of users on a real time
basis, and accessed by users at any time. The Web offers an exciting medium for
corporate and financial-related content because of the capacity for the
combination of graphics, audio and video elements. The interactive nature of the
Web further allows the consumer to access information tailored to the individual
user's preferences and system requirements and facilitates online electronic
trading and purchasing of relevant financial goods and services.
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The Web has also become an attractive medium for advertisers, offering a
level of targetability, flexibility, interactivity and measurability not
available in traditional media. With Internet advertising, advertisers have the
ability to gather demographic information and target their messages to specific
groups of consumers as well as change their advertisements frequently in
response to market factors, current events and consumer feedback. Moreover,
advertisers can more accurately track the effectiveness of their advertising
messages by receiving reports of the number of advertising "impressions"
delivered to consumers, and the resulting "hit" or "click through" rate to their
Web sites.
Demand for Business News and Financial Programming.
A number of trends have led to increased demand for comprehensive business
news and financial programming in all forms of media:
. Individuals are proactively managing their money and the American public
is investing an increasing percentage of their household wealth in
securities;
. The emergence of online trading of financial instruments has led many
investors to rely less on traditional brokers; and
. U.S. companies are competing globally, requiring increased real-time
knowledge of a broad range of financial information from around the
world.
According to data compiled by International Data Corporation, since online
brokerage services on the Internet first arrived in 1996, the number of online
brokerage accounts has increased from 1.5 million at the end of 1996, to 3.5
million at the end of 1997 and 6.4 million at the end of 1998 (representing
approximately $324 billion in assets). Online trading is estimated to have
reached an average of over 499,000 trades per day during the first quarter of
1999, and now accounts for an estimated 25% of all retail stock trades in the
U.S. Forrester Research, a publicly traded independent research firm which
provides analysis of a range of technology industries, predicts that the number
of online brokerage accounts will increase to 14.4 million by 2002.
Driven by these factors, numerous traditional and online information
sources such as newspapers, magazines, broadcasters and specialized financial
Web sites are seeking to address the demand for timely and relevant financial
information. However, these companies are often unable to effectively meet
consumers' needs for high-quality, compelling and relevant, real-time business
information. Newspapers and magazines cannot offer real-time data and
information, and broadcasters are limited in the depth and availability of their
content. Unlimited access to up-to-the-second information is critical for making
timely and profitable investment decisions.
We believe that a significant opportunity exists for a company to provide
an easy to access portal for real-time financial market information, financial
services and financial tools. By integrating real-time market information with
the best available financial tools, content and commentary, a Web-based service
can enable its audience to keep abreast of current business developments, track
industry and competitive trends, make informed, timely investment decisions and
manage their financial assets. We believe that by assembling a loyal base of
users who actively follow business and financial news, a Web site may be able to
create a targeted and demographically desirable audience that is attractive to
financial and non-financial advertisers, as well as have a significant
opportunity to sell related subscription services to such users.
The Company Strategy
Through our Freerealtime.com Web site, we are a leading Web-based provider
of free, real-time financial market data, financial programming, including news
and research, analytic tools and financial services. Freerealtime.com completed
June 1999 with over 660,000 registered users, a portion of whom hit our site
approximately 135 million times that month, causing in excess of 6 million page
views per market day.
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Our primary strategy is to develop a large and loyal community of users by
offering free stock quotes and other financial tools and content. As our user
base continues to grow, we are developing a sizeable audience with demographic
attributes that is attractive to advertisers and we expect to continue growing
our revenues through the sale of advertising. As a related strategy, we intend
to market subscription-based tools and services, as well as certain financial
transaction services, to our community of users. We currently generate, and
expect to experience growth in, revenues from these related strategies through
(i) the ownership of certain subscription-based tools and services, including
our BullSession.com dynamically updating portfolio management tool, and (ii)
revenue sharing and fee participation contracts with third party owners and
providers of subscription and transaction services. The specific elements of our
strategy include:
FREE FINANCIAL CONTENT & TOOLS. Freerealtime.com is the primary site
through which we will develop our brand as a leading provider of easy to use,
real-time financial information. The business model of our free site is driven
by the sale of advertising ("ads"); accordingly, our near-term strategies focus
on growing our audience with attractive demographics and include the following
specific elements:
BUILD TRAFFIC AND AUDIENCE LOYALTY. We intend to build our customer
base and page view traffic by expanding the financial content, tools and
services that we offer on our Web site. In addition to providing valuable
real-time market data for free, we intend to provide our members with free
real-time news, commentary, and analysis from quality third party
providers, such as Reuters and Briefing.com, as well as from proprietary
content that we develop, such as our stock watch and portfolio management
tools. We also plan continued development of community features such as our
"Stock Talk" message boards and free e-mail services, which we believe lead
our members to remain on our site longer and return more often.
DEVELOP "CO-BRAND," WEB-HOSTING AND OTHER MARKETING PROGRAMS. We are
actively pursuing "co-branding" contractual relationships with other high
traffic Web sites pursuant to which we produce and market a co-branded page
of content or tools with the co-brand partner. Such relationships build
users, site traffic and brand awareness for both parties, as well as,
typically generate revenue for us through ad sales and fee sharing
arrangements. We have a number of co-brand agreements, including agreements
entered subsequent to the end of Fiscal 1999, with various Web sites,
including BigCharts.com, Zacks.com, Infospace.com, MarketGuide.com,
JAGNotes.com, Telescan.com, WallstreetCity.com, INVESTools.com, and
Go2Net.com. Additionally, we will continue to rely on "cost effective"
marketing programs such as customer referrals, e-mail marketing campaigns
and free publicity. Upon the availability of additional capital resources,
we intend to initiate advertising of Freerealtime.com both on and off the
Internet.
BUILD AND CAPITALIZE ON ATTRACTIVE AUDIENCE DEMOGRAPHICS. We believe
our Web site attracts users who, as a group, are more affluent and better
educated than users of many other Web sites and therefore present an
attractive medium for companies that advertise and engage in commerce over
the Internet. Through data gathered from users who register for real-time
quotes and from periodic surveys, we have knowledge of and track user
activity on our Web site so that we can provide advertisers with detailed
demographic and other information that allows the advertisers to target
specific groups and tailor their advertisements to our users. We believe
this strategy will help attract new advertisers and increase the sales
prices we receive for our ad impressions, referred to as cost-per-thousand
("CPMs").
SUBSCRIPTION-BASED INFORMATION SERVICES & ANALYTIC TOOLS. We market monthly
subscriptions for certain value-added content and tools to our large community
of users on our free Web site. Our strategy to grow our subscription users and
revenues includes the following elements:
EXPAND VALUE-ADDED CONTENT. We are actively pursuing the addition or
development of more subscription-based services in order to expand the
collection of such services that we offer beyond our BullSession.com site,
where we offer active investors a subscription service of "streaming" real-
time quotes and dynamically updating stock portfolios. We plan to expand
these services through internal
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development, acquisition, and marketing and license relationships. Our
current BullSession.com site had over 4,700 subscribers at the end of June
1999, and we have a second-generation service under development that we
plan to introduce during Fiscal 2000. Subsequent to the end of Fiscal 1999,
we entered into certain agreements under which we will market subscriptions
and share in ongoing subscription revenue, including subscription services
related to market commentary and analysis with JAGNotes.com and
INVESTools.com, and stock screening and technical analysis with
Telscan.com's ProSearch technology and WallStreetCity.com.
DRIVE SUBSCRIPTION GROWTH WITH MARKETING PROGRAMS. We intend to drive
subscription growth by "upselling" and cross-marketing our large community
of users, moving them from our high traffic Freerealtime.com site to our
BullSession.com service and other affiliated subscription services. During
Fiscal 1999 we extensively advertised BullSession.com on our free Web site
and we believe this marketing program contributed to our substantial growth
in subscribers. We also plan to expand our co-marketing contracts, such as
we have with JAGNotes.com, INVESTools.com, and Telescan.com, pursuant to
which one or both parties markets our respective subscription services to
new users and we share in the resulting revenues and fees.
ONLINE FINANCIAL TRANSACTION SERVICES. Similar to our strategies for
subscription services, we are pursuing opportunities to sponsor certain
transaction services and capabilities to our users and to participate in the
resulting transaction fees. Our strategies are based around "alliance" marketing
opportunities and include:
DEVELOP TRANSACTION FEE OPPORTUNITIES. We believe that our customers
often use our free and subscription content and services as "decision
tools" supporting a transaction event, including, for example, the purchase
or sale of securities, insurance, banking and other financial products and
services. We believe the fees realized by third parties from transactions
with our customers are substantial, and we plan to enter into fee
participation arrangements by sponsoring and promoting such third party
transaction providers on our Web sites.
EXPAND TRANSACTION SERVICES ALLIANCES. We are currently pursuing
marketing alliances to direct or network our customer's transaction
activity to particular third party providers in exchange for a
participation in the resulting transaction fees. This strategy allows us to
minimize the significant investment expenditures necessary to develop and
operate transaction capabilities. We have recently entered into a letter of
intent with Herzog, Heine & Geduld, Inc. to offer Web-based equities
trading on the Freerealtime.com Web site. Such transaction services will
initially be aimed at qualified small institutional investors and may be
expanded in the near term to include retail transaction services, however
there can be no assurance that a definitive agreement will ever be reached.
We are also pursuing an alliance agreement with LifeQuote Venture pursuant
to which we hope to offer our members the ability to receive a quote and
apply for and obtain life insurance.
Products
The Freerealtime.com Web Site
Our Freerealtime.com Web site provides unlimited, free, real-time stock
quotes. Through this site we also offer business and company news, market
statistics and commentary, fundamental company information and research, and
certain free analytic tools such as community "stock talk," charting and
portfolio stock tracking. We believe that offering comprehensive business news,
financial programming and analytic tools is critical to our success because the
combination of these services enables us to increase audience loyalty, average
usage time and repeat visits while also creating a sense of community.
Freerealtime.com completed Fiscal 1999, ended March 31, 1999, with over
500,000 registered users, a portion of whom hit our site ("page views")
approximately 103 million times in March 1999. Our Web site traffic has shown
significant sequential quarterly growth since the commencement of our service in
February 1998, including in excess of 50% sequential growth of page views from
the third fiscal quarter ended December 31, 1998 when we had
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approximately 353,000 registered users, along with approximately 64 million
page-views for the month of December 1998. Subsequent to the end of Fiscal 1999,
we continued to realize significant growth for the first quarter of the fiscal
year ended March 31, 2000 ("Fiscal 2000"), as we had over 660,000 registered
users, serving approximately 136 million page-views in June 1999. A majority of
our page views for each fiscal period have been real-time stock quotes. The
Freerealtime.com Web site is offered free of charge to our registered users and
the sale of advertising represents our primary source of revenue from this Web
site.
The Freerealtime.com Web site provides stock quotes from all major U.S.
stock markets (the "Exchanges"). These quotes are offered in real time. Through
these stock quote pages, our audience can access other valuable information
about a particular company, including stories from several news services, SEC
filings and annual reports, summaries of analysts' information and a variety of
fundamental and technical information. In addition to a wide variety of data on
specific securities, including trading share and dollar volume information, bid
and ask quotes and size, relative indices, stock split information and other
data, the Freerealtime.com Web site also provides information as to various
market and industry indices, commodity, options and currency markets.
The Freerealtime.com Web site aggregates numerous news feeds from around
the world, sorts and organizes articles according to industry, company, and type
of news. Our news feeds include BusinessWire, PRNewswire, Reuters, Associated
Press and United Press International. Commentary is provided by Comtex News,
Reuters, RealtimeTraders.com and Zacks Investment Research and is updated
throughout the day. Subsequent to the end of Fiscal 1999, we entered agreements
to provide additional market and company commentary and analysis from
JAGNotes.com, INVESTools.com, and WallStreetCity.com.
We believe that providing a place for our audience, financial journalists
and experts in the financial world to meet and share ideas about investing will
help increase our brand awareness, as well as motivate our users to return
frequently to spend more time on our Web site. Additionally, because we intend
to integrate related news, market data and charts offered throughout our
service, community members will be able to form niche user groups around their
specific interests, which can be targeted with relevant marketing campaigns and
transaction opportunities. In addition, by integrating other content with these
community features, community members will be exposed to other areas of the
site, increasing the awareness of the breadth of our programming and other
services.
The BullSession.com Web Site
While all the programming available on Freerealtime.com is currently free
of charge, a core element of our corporate strategy includes providing
subscription-based financial content and investment tools to sophisticated
investors through affiliated Web sites. Our initial entry into subscription
services, BullSession.com, is a trader's portfolio management tool that features
"streaming" real-time, ticker-tape quotes and dynamically updating stock
portfolios. BullSession.com also provides other value-added financial content,
including business and company news, company fundamentals, charting, detailed
quotes, exchange statistics and options listings.
Our subscriber count on this Web site realized significant sequential
quarterly growth during Fiscal 1999. BullSession.com finished Fiscal 1999 with
over 3,500 subscribers, up from approximately 1,700 at the end of December 1998.
By the end of June 1999, BullSession.com had over 4,700 subscribers. Our source
of revenue from the BullSession.com Web site is the sale of subscriptions at
monthly prices ranging from $26 to $50, with an average of $32 per month.
The central feature of the BullSession.com service is the sophisticated
TickerTracker(TM) which allows a subscriber to monitor a custom set of
portfolios consisting of stocks and indexes. Each portfolio is continuously
updated with real-time trading information and subscribers can view a variety of
information, including best bid and offer, last sale, trade volume, day high-
low, 52 week high-low, time of last sale, price targets, and company name.
TickerTracker also performs portfolio management and analytical functions,
including calculating the profit/loss position on a given stock or a given
portfolio. Users may also display their portfolios in a scrolling
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stock ticker tape format where the stock symbol and last price scroll by in a
small window that can be running at the same time as other software on the
subscriber's computer screen.
BullSession.com also The Detailed Quotes screen allows users to query more
detailed historical data such as P/E ratios, 52-week high and low, and dividend
and earnings information. The Exchange Statistics screen allows users to query a
variety of reports on each exchange (e.g., most active, percent gainers, dollar
amount gainers, etc.). The Option Listings screen allows users to query detailed
information about the options offered on a given security.
Other Products and Services
Subsequent to the end of Fiscal 1999, we have continued to pursue our
strategies to add content and tools to our Freerealtime.com Web site as well as
to develop or add subscription and transaction services. We have recently
entered "co-branding" agreements with several parties to enhance our community
services with free e-mail from Critical Path.com, and to add free content to our
Web site in the areas of market and company commentary and analysis from
JAGNotes.com and WallStreetCity.com, investment advisory newsletters from
INVESTools.com, and stock screening, searching and technical analysis from
Telescan.com. We are in the process of developing and launching these co-branded
pages and we can give no assurance that these relationships will help increase
our users, site traffic and brand awareness or that they will result in revenue
for us through the ad sales and fee sharing arrangements.
We also have pursued a number of new initiatives in subscription and
transaction services since the end of Fiscal 1999. We are developing a second-
generation BullSession tool that we expect to complete and introduce in Fiscal
2000. We have entered into several marketing and license contracts through which
we expect to realize a share of subscription revenues derived from our marketing
activities. Apart from the free content co-branding arrangements noted in the
paragraph above, we have agreements with JAGNotes.com, INVESTools.com, and
Telescan.com, pursuant to which we will market and sell subscriptions to their
respective subscription services and share in the resulting subscription
revenues and fees. We also have entered into an agreement with
WallStreetCity.com under which they will license a private label version of our
BullSession.com service and we will share in revenues that they generate from
the sale of subscriptions. Additionally, we have entered into a letter of intent
to launch an "order entry portal" through a joint effort with Herzog, Heine &
Geduld, Inc. to offer equities transaction services for qualified small
institutional investors. We are in the process of developing and launching these
license and marketing subscription and transaction services and we can give no
assurance that these relationships will help increase our subscribers and
transactions or that they will result in revenue for us through the subscription
sales and transaction fee sharing arrangements.
Advertising Sales on Freerealtime.com
We are focused on providing our advertisers with a large, demographically
desirable audience. We believe that our Web site attracts users who as a group
are more affluent and better educated than users of many other Web sites and
therefore represent an attractive medium for companies that advertise and engage
in commerce over the Internet. Advertisements are displayed on every page view
on our Web site, including when a user enters the service, reviews a news story,
accesses a quote or views a stock message board.
In March 1999, the final month of Fiscal 1999, we entered into an agency ad
sales contract with AdSmart, Inc., a company owned by CMGI, Inc., to represent
our Web site to advertisers and media buyers. Since that time, we have realized
average monthly growth rate of over 275% in advertising sales through June 30,
1999 as a result of both AdSmart's efforts and those of our in-house ad sales
force. Prior to AdSmart, we primarily utilized other ad sales firms and networks
to sell our ad impression inventory. Subsequent to the end of Fiscal 1999, we
have been expanding an in-house ad sales team, and expect that in-house ad sales
will represent a growing proportion of our total ad sales.
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We currently derive, and expect to continue to derive, a substantial
majority of our revenue on our free Web site from the sale of advertising and
sponsorships. Currently we offer the following advertising options on the
Freerealtime.com Web site:
. Run of Site. Run of site rotations are banner advertisements that rotate
on a random basis throughout the Freerealtime.com Web site, appealing to
advertisers seeking to establish general brand recognition across
Freerealtime.com's audience. Run of site rotations are typically sold in
blocks of 1,000 impressions and with a minimum of 100,000 guaranteed
impressions over the life of the advertising contract.
Freerealtime.com's current CPM rate for run of site rotations ranges
from $2 to $25 depending on length of contract and number of impressions
purchased. Subsequent to the end of Fiscal 1999, we added a second
banner ad at the bottom of each page view, but to date have used such
bottom banner for internal promotion and have not sold a significant
number of bottom banner impressions to outside advertisers.
. Targeted Advertisements. Targeted advertisements are banner
advertisements that are displayed when a user browses through specific
quote or other content pages, allowing advertisers to target users based
on page view interest and activity, region or country, time of day,
frequency of use, Internet Service Provider, type of operating system or
browser. Because every user of Freerealtime.com is a registered member
in our database, we can effectively target advertising to each
individual member. Like run of site rotations, targeted advertisements
are sold in blocks of 1,000 impressions. Due to the greater selectivity
of the audience and because users typically spend more time on non-quote
content pages than on quote pages, Freerealtime.com's current rates for
targeted advertisements are generally higher than run of site rotations.
During Fiscal 1999, the substantial majority of our ad impressions were
not sold as targeted ads. In August 1999, we re-launched an improved and
revised Freerealtime.com Web site, which included certain technical
enhancements to facilitate the sale of targeted ads.
. Sponsorships. Sponsorships allow advertisers to gain maximum exposure on
the Web site by featuring "buttons" and "boxes" on certain pages. For
example, the online brokerage services of Datek and Ameritrade have had
advertisements placed in fixed positions within our Web site allowing
users to move directly to the advertiser's site to establish an account
or place an order. We offer sponsorship opportunities throughout our
entire site. Sponsorships are usually a fixed monthly fee over the life
of the contract and may include other advertising components such as
general rotation or targeted banner advertisements. Subsequent to the
end of Fiscal 1999, we expanded the number of sponsorship buttons per
page view from two to six.
Historically, our advertisers have been from technology and financial
services industry, but we have recently attracted advertisers from brands
outside of these industries. We believe that attracting additional advertisers
from businesses outside of the financial and technology industries is important
to our future success and revenue growth.
Marketing and Distribution
We are seeking to establish the Freerealtime.com brand as one of the Web's
leading providers of free real time market data and financial content and tools,
and subscription and transaction services. Despite the lack of capital resources
to fund a media-based advertising campaign, we experienced substantial growth
during Fiscal 1999 in the number of users and page view traffic on our Web
sites. The substantial increase in the number of users on the site was primarily
due to a higher level of awareness of our Web sites by users of the Internet,
which we believe is a result of user referrals, the appearance of our Web sites
in the query lists of "search portal" Web sites, favorable publicity received
for both Freerealtime.com and BullSession.com, and user traffic from our web-
hosting and co-branding relationships. Due to limited capital resources we did
not expend material amounts on advertising of our Web sites during Fiscal 1999.
Upon the availability of capital resources, we intend to increase advertising
and marketing expenditures to continue to build brand awareness, users and
traffic on our Web sites.
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Our current primary marketing and distribution strategy consists of
actively pursuing Web-hosting and "co-branding" contractual relationships with
other high traffic Web sites. Such relationships build users, site traffic and
brand awareness for both parties, as well as, typically generate revenue for us
through ad sales or fee sharing arrangements. In these relationships, we and the
co-brand partner produce and market a co-branded page of content or tools, with
the parties, as negotiated, assuming responsibility for web-hosting operations,
programming production, subscription or advertising sales, and other
administrative functions. Currently, we have a number of co-branded arrangements
and contracts, including BigCharts.com, Zacks.com, Infospace.com,
MarketGuide.com, JAGNotes.com, Telescan.com, WallstreetCity.com, INVESTools.com,
and Go2Net.com. Additionally, until we can afford a significant advertising
campaign, we will continue to rely on other "cost effective" marketing programs
such as customer referrals, e-mail marketing campaigns and free publicity.
Infrastructure, Operations and Technology
The data center and network operations for our Web sites are currently
outsourced to a third party "co-location" firm, Exodus Communications, Inc., who
operates data centers for us in two locations: Jersey City, New Jersey and
Irvine, California. Freerealtime.com utilizes multiple Web servers running Sun
Microsystems Solaris 2.6 operating system and Apache Web Server. Internet access
is maintained by Exodus through multiple OC3 connections with four different
tier one backbone providers. The systems running the Web site are powered by
multiple uninteruptible power supplies backed up with multiple diesel power
generators. Full site redundancy is handled by Cisco's Global Director and
multiple Cisco Local Directors.
All of our market data serving software was created by and is owned by
Freerealtime.com. We are expanding our internal development group to create new,
and enhance existing, services, tools and features. We also utilize third party
technology for certain sections of our site, for example BigCharts for our
charting capability.
We obtain most of the information on our Web sites from suppliers of market
data and financial programming. Key contractual supply relationships include
quote and market data from the U.S. stock Exchanges, datafeed services from S&P
Comstock, and news programming from Comtex and Reuters. We depend on these
information providers to provide information and data feeds on a timely basis.
Our Web site could experience disruptions or interruptions in service due to the
failure or delay in the transmission or receipt of this information. Our
contracts with these information providers generally provide for payments based
on our volume of traffic on our Web sites, such as number of users or volume of
real-time quotes. The rapid growth in traffic on our Web sites has caused our
expenses for services from these suppliers to grow faster than the availability
of cash from revenues and internal operations or from external capital
contributions. Subsequent to the end of Fiscal 1999, certain of these data and
operations costs decreased substantially on a per-page view basis. In the first
quarter of Fiscal 2000 ending June 30, 1999, the NASDAQ reduced market data fees
by approximately 50%, and the NYSE and AMEX have announced similar fee
reductions that are expected to take effect prior to the end of Fiscal 1999.
Additionally, we renegotiated and amended our datafeed and co-location provider
contracts to result in significant reductions in our per-page view costs for
these services. Despite these declines in our unit costs, we anticipate that
these costs will continue to increase over the foreseeable future as we realize
growth in the users and page views on our Web sites. As of the date hereof, we
believe we have satisfactory relationships with all our suppliers of market data
and financial programming. For a more detailed discussion see Management's
Discussion and Analysis--Cost of Revenues.
Our market is characterized by rapidly changing technology, evolving
industry standards and frequent new product announcements. These are exacerbated
by the recent growth of the Web and the intense competition in our industry. To
be successful, we must adapt to our rapidly changing market by continually
improving the performance, features, and reliability of our services. We could
incur substantial costs if we need to modify our services or infrastructure in
order to adapt to these changes.
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Intellectual Property
We rely primarily on a combination of copyrights, trademarks, trade secret
laws, our user policy and restrictions on disclosure to protect our intellectual
property, such as our content, trademarks, trade names and trade secrets. We
plan to enter into confidentiality agreements with our employees and consultants
to control access to and distribution of our other proprietary information.
Despite these precautions, it may be possible for a third party to copy or
otherwise obtain and use the content on our Web site or our other intellectual
property without authorization. There can be no assurance that these precautions
will prevent misappropriation or infringement of our intellectual property. A
failure to protect our intellectual property in a meaningful manner could have a
material adverse effect on our business, operating results and financial
condition. In addition, we may need to engage in litigation in order to enforce
our intellectual property rights in the future or to determine the validity and
scope of the proprietary rights of others. Such litigation could result in
substantial costs and diversion of management and other resources, either of
which could have a material adverse effect on our business, operating results
and financial condition.
We also license certain data and content from third parties. In these
license agreements, the licensors have generally agreed to defend, indemnify and
hold us harmless with respect to any claim by a third party that the licensed
software or content infringes any person's proprietary rights. There can be no
assurance that the outcome of any litigation between such licensors and a third
party or between us and a third party will not lead to royalty obligations for
which we are not indemnified or for which such indemnification is insufficient,
or that we will be able to obtain any additional license on commercially
reasonable terms if at all. In the future, we may seek to license additional
technology or content in order to enhance our current features or to introduce
new services. There can be no assurance that any such licenses will be available
on commercially reasonable terms, if at all. The loss of or inability to obtain
or maintain any of these technology licenses could result in delays in
introduction of new services until equivalent technology, if available, is
identified, licensed and integrated, which could have a material adverse effect
on our business, results of operations and financial condition.
There can be no assurance that infringement or other claims will not be
asserted or prosecuted against us in the future whether resulting from our
internally developed intellectual property or licenses or content from third
parties. Any future assertions or prosecutions could materially adversely affect
our business, results of operations and financial condition. Any such claims,
with or without merit, could be time-consuming, result in costly litigation and
diversion of technical and management personnel or require us to introduce new
content or trademarks, develop non-infringing technology or enter into royalty
or licensing agreements. Such royalty or licensing agreements, if required, may
not be available on acceptable terms, if at all. In the event of a successful
claim of infringement and our failure or inability to introduce new content or
trademarks, develop non-infringing technology or license the infringed or
similar technology on a timely basis, our business, results of operations and
financial condition could be materially adversely affected.
Government Regulations
There are currently few laws or regulations that specifically regulate
communications or commerce on the Web. However, laws and regulations may be
adopted in the future that address issues such as user privacy, pricing, and the
characteristics and quality of products and services. For example, the
Telecommunications Act sought to prohibit transmitting certain types of
information and content over the Web. Several telecommunications companies have
petitioned the Federal Communications Commission to regulate Internet Service
Providers and online services providers in a manner similar to long distance
telephone carriers and to impose access fees on these companies. This could
increase the cost of transmitting data over the Internet. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
property ownership, libel and personal privacy are applicable to the Web. Any
new laws or regulations relating to the Web could adversely affect our business.
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Research and Development
For fiscal year ended March 31, 1999, we spent $60,000 on product
development. Our primary focus has been software and system development. For a
more detailed discussion see Management's Discussion and Analysis--Operating
Expenses--Product Development.
Employees and Consultants
As of June 1, 1999, there were 15 personnel dedicated to our business,
seven of whom worked in product and content development, two in sales and
marketing, three in customer support, and three in management and
administration. We have also contracted with three consulting executives to
advise in the management of the Company. We have never had a work stoppage and
we consider our employee relations to be good.
We believe that our future success will depend in part on our continued
ability to attract, integrate, retain and motivate highly qualified sales,
technical, and managerial personnel, and upon the continued service of our
senior management and key sales and technical personnel. None of our personnel
is bound by an employment agreement that prevents such person from terminating
his or her relationship at any time for any reason. Competition for qualified
personnel is intense, particularly in the Irvine, California area, where our
headquarters are located. At times we have experienced difficulties in
attracting new personnel. There can be no assurance that we will successfully
attract, integrate, retain and motivate a sufficient number of qualified
personnel to conduct our business in the future.
Reports to Security Holders
Following the effectiveness of this Form 10-SB, we will be subject to the
informational requirements of the Securities Act of 1934, as amended (the
"Exchange Act"), and, in accordance therewith, we will file reports, proxy
statements, and other information with the Securities and Exchange Commission
(the "Commission"). Such reports, proxy statements and other information can be
inspected and copied at the Commission's Public Reference Room at 450 Fifth
Street, N.W., Washington, D.C. 20549. The Commission also maintains a site on
the World Wide Web at http://www.sec.gov that contains reports, proxy statements
and other information filed electronically by us.
Risk Factors
Risks Related to Our Business
OUR LIMITED OPERATING HISTORY. We were incorporated in the state of
Colorado on May 3, 1989 under the name Pub Singin', Inc. and had no prior
operations and no assets other than the initial capitalization provided by Pub
Singin's founders. On or about August 27, 1998, we entered into an agreement of
merger with First International Financial Corporation, a Delaware corporation,
("FIFC") by which we acquired, among other things, all right, title and interest
in FIFC's Web sites Freerealtime.com and BullSession.com. Immediately prior to
the merger we changed our name to Freerealtime.com, Inc. The Web sites are at
early stage of development, as they did not begin significant operations until
February 1998. Accordingly, we have a limited history upon which an evaluation
of our prospects can be made. Stockholders in our company must consider the
risk, expenses and difficulties frequently encountered by early stage companies
in new and rapidly evolving markets, including Web-based financial information
companies. There can be no assurance that we will be able to achieve profitable
operations.
HISTORICAL TRANSACTIONS. Prior to the acquisition of FIFC-Alberta, FIFC-
Delaware had intended to file an amendment to its Certificate of Incorporation
to change its name and to increase its authorized capital stock. It failed to
make these filings and, as a result, certain stockholders received shares of
common stock in a corporation that had not legally changed its name and which
were in excess of the amount of shares of common stock authorized by the
Certificate of Incorporation of FIFC-Delaware. As a further result, we needed to
make certain corrective filings with respect to the name change and the Merger
with Colorado and Delaware. We discovered FIFC-Delaware's failure to make these
filings during the preparation of this report. The Company is making the
required state filings and the former stockholders of FIFC-Alberta and FIFC-
Delaware have approved the necessary corrective actions.
RELIANCE ON MANAGEMENT. All decisions regarding our management are made
exclusively by our officers and directors. Stockholders may not participate in
our management, and therefore, are dependent upon the management abilities of
our officers and directors. In addition the Company contracts with several
consultants who are advising us on certain executive management functions. These
consultants are not officers and directors of the Company and our officers and
directors have no obligation to accept or follow their advice. The only
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assurance that our stockholders have that our officers and directors will not
abuse their discretion in making decisions with respect to the affairs of the
Company and other business decisions is the fiduciary obligations and business
integrity of our officers and directors. Accordingly, no person should purchase
the shares of our common stock unless that person is willing to entrust all
aspects of management to our officers and directors or their successors.
POTENTIAL FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS; UNPREDICTABILITY
OF FUTURE REVENUE; EXPECTED FUTURE LOSSES; SEASONALITY. Our quarterly operating
results may fluctuate significantly in the future as a result of a variety of
factors, many of which are outside our control. These factors include:
. the early stage of our development, particularly given that our Web
sites did not begin significant operations until February 1998;
. the level of Web usage;
. traffic levels on our Web site, which can fluctuate significantly as a
result of business and financial news events and volume and price
volatility on the various securities exchanges;
. the demand for advertising on our Web site as well as on the Web in
general;
. changes in Web advertising rates resulting from competition or other
factors;
. our ability to enter into, renegotiate or renew key agreements;
. the amount and timing of our costs related to our marketing efforts or
other initiatives;
. fees we may pay for data feed and distribution or content agreements or
other costs we incur as we expand our operations;
. new services introduced by us or our competitors;
. competitive factors;
. technical difficulties or system downtime affecting the Web generally or
the operation of our Web sites; or
. economic conditions specific to the Web as well as general economic
conditions.
Therefore, our operating results for any particular quarter may not be
indicative of future operating results.
We expect that over time our revenues will come from a mix of advertising,
content licensing, e-commerce or transaction relationships and subscription
service fees. However, we expect the majority of our revenues to come from the
sale of advertising for the foreseeable future. Therefore, our quarterly
revenues and operating results are likely to be particularly affected by the
level of our advertising revenue in each quarter. Our operating expenses are
based on our expectations of future revenues and are relatively fixed in the
short term. If we have lower revenues, particularly advertising revenues, than
we expect, we may not be able to quickly reduce our spending in response. In
addition, we intend to significantly increase our operating expenses to grow our
business. Any shortfall in our revenues would have a direct impact on our
operating results for a particular quarter and these fluctuations could affect
the market price of our common stock in a manner unrelated to our long-term
operating performance or prospects.
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We have incurred operating losses in each fiscal quarter since we were
formed. We expect operating losses and negative cash flows to continue for the
foreseeable future as our current expenses are significantly greater than our
revenues and we intend to significantly increase our operating expenses to grow
our business.
We believe that advertising sales in traditional media, such as television
and radio, generally are lower in the first and third calendar quarters of each
year. If our market makes the transition from an emerging to a more developed
medium, seasonal and cyclical patterns in our industry may develop in the
future. Therefore, if our industry follows the same seasonal patterns as those
in the traditional media, we may experience lower advertising revenues in the
first and third calendar quarters of each year. Furthermore, traffic levels on
our Web site typically fluctuate with the occurrence of significant events in
the business and financial news, such as fluctuations in trading volumes and
prices on the stock markets, which could cause changes in our audience size or
page view volume.
NEED TO MAINTAIN AND RENEW KEY SUPPLIER RELATIONSHIPS. We depend on
maintaining good relationships with our suppliers of market data and financial
programming to our Web sites. Key contractual supply relationships include quote
and market data from the Exchanges, data feed services from S&P Comstock, news
programming from Comtex, and co-location and communication services from Exodus
Communications. We depend on these information providers to provide information
and data feeds on a timely basis. Our Web site could experience disruptions or
interruptions in service due to the failure or delay in the transmission or
receipt of this information. The rapid growth in traffic on our Web sites has
caused our expenses for services from these suppliers to grow faster than the
availability of cash from revenues and internal operations or from external
capital contributions. As of our Fiscal Year end of March 31, 1999, we had
significant accrued and past due liabilities payable to these suppliers, which
are reflected in our significant negative working capital balance as of that
date. Subsequent to the end of Fiscal 1999, we obtained sufficient capital
financing to repay these past due liabilities and we believe we have
satisfactory relationships with these suppliers. In the future, we will need to
raise additional capital to fund our ongoing negative cash flow from operations,
including payments to these suppliers. We cannot assure you that we will be
able to raise additional capital on terms favorable to us or at all. The loss
of certain of these supply relationships, especially those with the Exchanges,
could have a material adverse effect on our business.
INTENSE COMPETITION FOR WEB-BASED BUSINESS AND FINANCIAL CONTENT. Many Web
sites compete for consumers' and advertisers' attention and spending,
particularly in the business and financial information and news area. We expect
this competition to continue to increase. We compete for advertisers, users and
content providers with many types of companies, including the following:
. publishers and distributors of traditional media, including television,
radio and print, such as CNN, CNBC, and The Wall Street Journal;
. general purpose consumer online services such as America Online and
Microsoft Network;
. online services or Web sites targeted to business, finance and investing
needs, such as MarketWatch.com, The Wall Street Journal Interactive
Edition, TheStreet.com and certain of the online brokerage firms,
including Schwab.com and E*TRADE;
. providers of terminal-based financial news and data, such as Bloomberg
Business News, Reuters News Service, Dow Jones Markets and Bridge News
Service; and
. Web retrieval and other Web "portal" companies, such as Excite, Inc.;
Infoseek Corporation; Lycos, Inc.; Yahoo! Inc.; and Netscape
Communications Corporation.
Increased competition could result in price reductions, reduced margins or loss
of market share, any of which would adversely affect our business.
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RISKS OF DEVELOPING NEW AND ENHANCED SERVICES AND FEATURES FOR OUR WEB
SITE. We believe that our Freerealtime.com Web site will be more attractive to
advertisers if we develop a larger audience comprised of demographically-
favorable users. We also believe our subscription-based content and analytic
tools services, as represented by our BullSession.com Web site, will be more
attractive to subscribers if we improve and expand our portfolio of higher-value
content and tools. Accordingly, we intend to introduce on our Web sites
additional or enhanced content and tools services in the future in order to
retain our current users and attract new users. If we introduce a service that
is not favorably received our current users may not continue using our services
as frequently. New users could also choose a competitive service over ours.
We may also experience difficulties that could delay or prevent us from
introducing new services, including difficulties in acquiring or allying with
content and tools providers and in developing such services internally.
Furthermore, these services may contain errors that are discovered after the
services are introduced. We may need to significantly modify the design of these
services on our Web site to correct these errors. Our business could be
adversely affected if we experience difficulties in introducing new services or
if our users do not accept these new services.
NEED TO ESTABLISH AND MAINTAIN STRATEGIC RELATIONSHIPS WITH OTHER SITES.
We depend on establishing and maintaining licensing, co-brand and revenue
sharing relationships with high-traffic Web sites. Currently, such relationships
do not account for a significant portion of our traffic or revenues. For
example, approximately 5% of our traffic and less than 10% of our projected
revenues come from our transaction, licensing and co-brand relationships.
However, increasing the number of these relationships is a key element of our
strategic plan, and we may not be able to enter into such relationships on
commercially reasonable terms or at all. Even if we enter into relationships
with these Web sites, we may not realize additional users or revenues from these
relationships. Additionally, many companies we may pursue for a strategic
relationship also offer competing services. As a result, these competitors may
be reluctant to enter into strategic relationships with us. Our business could
be adversely affected if we do not establish and maintain additional strategic
relationships on commercially reasonable terms or if any of our strategic
relationships do not result in increased use of our Web site or additional
revenues.
LETTERS OF INTENT MAY NOT MATERIALIZE INTO FINAL AGREEMENTS. Recently we
entered Letters of Intent regarding new strategic relationships for a co-
branding arrangement with JAGnotes.com and for transaction services with (i)
Herzog, Heine & Geduld, Inc for an online order execution system for qualified
institutional investors and (ii) the LifeQuote Venture for online term life
insurance quotes and application processing. We cannot assure you that we will
be able to execute final agreements on terms favorable to us or at all.
DEPENDENCE ON KEY PERSONNEL, INCLUDING MANAGEMENT CONSULTANTS. Our future
success will depend in part on the service of our key personnel and,
additionally, on our ability to identify, hire and retain additional qualified
personnel. There is intense competition for qualified personnel in our areas of
activity, and there can be no assurance that we will be able to continue to
attract and retain such personnel necessary for our development. Failure to
attract and retain key personnel could have a material adverse effect on our
business. In addition, three individuals joined us in 1999 as consultants and
they are not officers of the Company. Each consultant is providing us a
significant amount of his time and is operating under short-term consulting
agreements. As a result we face certain risks associated with this management
structure, including that our senior managers may not work sufficiently or
effectively as a team to successfully manage our growth and that, upon
expiration, we may not be able to renew these consulting arrangements on
reasonable terms to us or attract and retain new managers to replace the
consultants.
RISKS OF INCREASED USERS STRAINING OUR SYSTEMS AND OTHER SYSTEM
MALFUNCTIONS. In the past, our Web sites have experienced significant increases
in traffic when there are significant business or financial news events,
including stock market volatility. In addition, the number of our users has
continued to increase over time and we are seeking to further increase our user
base. Therefore, our Web sites must accommodate a high volume of traffic and
deliver frequently updated information. Our Web sites have in the past and may
in the future experience slower response times or other problems for a variety
of reasons.
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We also depend on information providers to provide information and data
feeds on a timely basis. Our Web sites could experience disruptions or
interruptions in service due to the failure or delay in the transmission or
receipt of this information. In addition, our users depend on Internet service
providers, online service providers and other Web site operators for access to
our Web sites. Each of them has experienced significant outages in the past, and
could experience outages, delays and other difficulties due to system failures
unrelated to our systems in the future. These types of occurrences could cause
users to perceive our Web sites as not functioning properly and therefore cause
them to use other methods to obtain their business and financial information.
NEED TO EXPAND OUR BUSINESS AND RELATED PROBLEMS. We believe that we will
need to expand our business and operations in order to grow our business. This
growth is likely to continue to place a significant strain on our resources. As
we grow, we will also have to implement new operational and financial systems,
procedures and controls. If we are unable to accomplish any of these, our
business could be adversely affected. In addition, several members of our senior
management joined us in 1999, including three members who are consultants and
not officers of the Company. As a result we face a number of risks associated
with this management structure, including that our senior managers may not work
together effectively as a team to successfully manage our growth.
FOREIGN CURRENCY RISK. We are exposed to changes in the currency exchange
rate between U.S. Dollars and Canadian Dollars, to the extent that the Company's
wholly-owned Canadian subsidiary (First International Financial Corporation,
Calgary) has an inter-company obligation to Freerealtime.com, Inc, as it had in
the amount of approximately $467,000 U.S. as of March 31, 1999. Any future
repayment of that obligation to Freerealtime.com will result in a currency
exchange loss if re-paid at a time when the Canadian Dollar weakens against the
U.S. Dollar. Under our current policies, we do not use currency hedges (forward
contracts, options, etc) to manage exposure to currency risk.
Risks Relating to Advertising
RISKS ASSOCIATED WITH OUR BUSINESS MODEL WHICH DEPENDS ON WEB ADVERTISING.
We expect to derive the majority of our revenues in the foreseeable future from
advertising. No standards have been widely accepted to measure the effectiveness
of Web advertising. If such standards do not develop, existing advertisers may
not continue their current levels of Web advertising. Furthermore, advertisers
that have traditionally relied upon other advertising media may be reluctant to
advertise on the Web. Advertisers that already have invested substantial
resources in other advertising methods may be reluctant to adopt a new strategy.
Our business would be adversely affected if the market for Web advertising fails
to develop or develops more slowly than expected.
Different pricing models are used to sell advertising on the Web. It is
difficult to predict which, if any, will emerge as the industry standard. This
makes it difficult to project our future advertising rates and revenues. For
example, advertising rates based on the number of "click throughs," or user
requests for additional information made by clicking on the advertisement,
instead of rates based solely on the number of impressions, or times an
advertisement is displayed, could adversely affect our revenues because
impression-based advertising comprises a substantial majority of our current
advertising revenues. Our advertising revenues could be adversely affected if we
are unable to adapt to new forms of Web advertising. Moreover, "filter" software
programs that limit or prevent advertising from being delivered to a Web user's
computer are available. Widespread adoption of this software could adversely
affect the commercial viability of Web advertising.
INABILITY TO TRACK AND MEASURE THE DELIVERY OF ADVERTISEMENTS. It is
important to our advertisers that we accurately measure the demographics of our
user base and the delivery of advertisements on our Web site. We depend on third
parties to provide a majority of these measurement and ad-serving services. If
those third parties are unable to provide these services in the future, we would
be required to perform them ourselves or obtain them from another provider. This
could cause us to incur additional costs or cause interruptions in our business
during the time we are replacing these services. We are implementing additional
systems designed to record demographic data on our users. If we do not develop
these systems successfully, we may not be able to accurately evaluate the
demographic characteristics of our users. Companies may not advertise
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on our Web site or may pay less for advertising if they do not perceive our
measurements or measurements made by third parties to be reliable.
RELIANCE ON THIRD PARTY ADVERTISING SALES FORCE. We have a small internal
sales force consisting of only two members, one of whom is a consultant to our
Company. We are attempting to expand our internal sales force by hiring
additional members. The success of our internal sales effort is subject to
various risks, including competition in hiring and retaining sales personnel and
the length of time required for a new hire to become productive. For the
foreseeable future we expect to rely upon third parties to sell a majority of
the advertisements on our Freerealtime.com Web site. In March 1999, we entered a
one-year contract with ADSmart, a leading Internet ad sales firm. We depend on
maintaining our contractual relationship with AdSmart to sell our advertisements
and to serve advertisements on our free site. ADSmart has recently merged with
another firm and internal disruption and turnover related to integration of the
merger could materially effect their ability to sell our advertising inventory.
Our business would be adversely affected if our third party sales force fails to
attract advertisements to our free Web site. Our business could also be
adversely affected if there is a material breach of our contract or we are not
able, upon expiration, to renew or replace our contract with AdSmart on
reasonable terms to us or at all.
DEPENDENCE ON FINANCIAL INDUSTRY ADVERTISERS. Prior to entering our
advertising sales relationship with ADSmart in March 1999, financial services
companies have accounted for the substantial majority of our advertising
revenues. Subsequently, advertisers other than financial firms have accounted
for the majority of our advertisers. We need to continue to sell advertising to
customers outside of the financial services industry in order to increase our
revenues. To date, relatively few advertisers from industries other than the
technology and financial services industries have devoted a significant portion
of their advertising budgets to Web advertising. If we are not successful in
continuing to attract and maintain advertisers from other industries, our
business could be adversely affected.
Risks Related to Our Industry
DEPENDENCE ON CONTINUED GROWTH IN USE OF THE WEB. Our market is new and
rapidly evolving. Our business would be adversely affected if Web usage does not
continue to grow. Web usage may be inhibited for a number of reasons, such as:
. inadequate network infrastructure;
. security concerns;
. inconsistent quality of service; and
. unavailability of cost-effective, high-speed service.
If Web usage grows, the Internet infrastructure may not be able to support
the demands placed on it by its current growth or its performance and
reliability may decline. In addition, Web sites have experienced interruptions
in their service as a result of outages and other delays occurring throughout
the Internet network infrastructure. If these outages or delays frequently occur
in the future, Web usage, as well as usage of our Web sites, could grow more
slowly or decline.
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES RELATING TO THE WEB. There
are currently few laws or regulations that specifically regulate communications
or commerce on the Web. However, laws and regulations may be adopted in the
future that address issues such as user privacy, pricing, and the
characteristics and quality of products and services. For example, the
Telecommunications Act sought to prohibit transmitting certain types of
information and content over the Web. Several telecommunications companies have
petitioned the Federal Communications Commission to regulate Internet Service
Providers and online service providers in a manner similar to long distance
telephone carriers and to impose access fees on these companies. This could
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increase the cost of transmitting data over the Internet. Moreover, it may take
years to determine the extent to which existing laws relating to issues such as
property ownership, libel and personal privacy are applicable to the Web. Any
new laws or regulations relating to the Web could adversely affect our business.
WEB SECURITY CONCERNS COULD HINDER INTERNET COMMERCE. The need to securely
transmit confidential information over the Internet has been a significant
barrier to electronic commerce and communications over the Web. Any well-
publicized compromise of security could deter more people from using the Web or
from using it to conduct transactions that involve transmitting confidential
information, such as stock trades or purchases of goods or services. Because
many of our advertisers seek to advertise on our Web site to encourage people to
use the Web to purchase goods or services, our business could be adversely
affected.
We may also incur significant costs to protect against the threat of
security breaches or to alleviate problems caused by such breaches.
STORAGE OF PERSONAL INFORMATION ABOUT OUR USERS. We have a non-disclosure
policy displayed on our Web sites. Our policy is not to willfully disclose any
individually identifiable information about any user to a third party without
the user's consent. This policy is accessible to users of our personalized
services when they initially register. Despite this policy, however, if third
persons were able to penetrate our network security or otherwise misappropriate
our users' personal information or credit card information, we could be subject
to liability. These could include claims for unauthorized purchases with credit
card information, impersonation or other similar fraud claims. They could also
include claims for other misuses of personal information, such as for
unauthorized marketing purposes. These claims could result in litigation. In
addition, the Federal Trade Commission and other states have been investigating
certain Internet companies regarding their use of personal information. We could
incur additional expenses if new regulations regarding the use of personal
information are introduced or if they chose to investigate our privacy
practices.
LIABILITY FOR INFORMATION DISPLAYED ON OUR WEB SITES. We may be subjected
to claims for defamation, negligence, copyright or trademark infringement or
based on other theories relating to the information we publish on our Web site.
These types of claims have been brought, sometimes successfully, against online
services as well as other print publications in the past. We could also be
subjected to claims based upon the content that is accessible from our Web sites
through links to other Web sites. Our insurance may not adequately protect us
against these types of claims.
Risk Related to Year 2000 Readiness
Many currently installed computer systems and software products are coded
to accept only two-digit entries in the date code field and cannot distinguish
21st century dates from 20th century dates. These date code fields will need to
distinguish 21st century dates from 20th century dates and, as a result, many
companies' software and computer systems may need to be upgraded or replaced in
order to comply with such "Year 2000" requirements. We are in the process of
assessing the Year 2000 issue and expect to complete the program by the fall of
1999. We have not incurred material costs to date in this process, and currently
do not believe that the cost of additional actions will have a material effect
on our results of operations or financial condition.
Although we currently believe that our systems are Year 2000 compliant in
all material respects, the current systems and products may contain undetected
errors or defects with Year 2000 date functions that may result in material
costs. Although we are not aware of any material operational issues or costs
associated with preparing our internal systems for the Year 2000, we may
experience serious unanticipated negative consequences (such as significant
downtime for one or more media properties) or material costs caused by
undetected errors or defects in the technology used in its internal systems. In
addition, we utilize third-party equipment, software and content, including non-
information technology systems ("non-IT systems"), such as our security system,
building equipment, and non-IT systems embedded microcontrollers that may not be
Year 2000 compliant. We are in the process of developing a plan to assess
whether these third parties are adequately addressing the Year 2000 issue and
whether any of our non-IT systems have material Year 2000 compliance problems.
Failure of such third-party
17
<PAGE>
equipment, software, or content to operate properly with regard to the year 2000
and thereafter could require us to incur unanticipated expenses to remedy any
problems, which could have a material adverse effect on our business, results of
operations, and financial condition. We are in the process of fully developing a
comprehensive contingency plan to address situations that may result if we are
unable to achieve Year 2000 readiness of our critical operations. Finally, we
are also subject to external forces that might generally affect industry and
commerce, such as utility or transportation company Year 2000 compliance
failures and related service interruptions. Furthermore, the purchasing patterns
of advertisers may be affected by Year 2000 issues as companies expend
significant resources to correct their current systems for Year 2000 compliance.
We do not currently have any information about the Year 2000 status of its
advertising customers. However, these expenditures may result in reduced funds
available for Web advertising or sponsorship of Web services, which could have a
material adverse effect on our business, results of operations, and financial
condition.
Item 2. Management's Discussion and Analysis or Plan of Operation
- -----------------------------------------------------------------
Selected Financial Data
The following selected financial data is qualified by reference to, and
should be read in conjunction with the financial statements of Freerealtime.com,
Inc. and the notes thereto included elsewhere in this Form 10-SB, as well as the
discussion hereunder "Management's Discussion and Analysis or Plan of
Operation", also included elsewhere in this Form 10-SB. Prior to the year ended
March 31, 1999 ("Fiscal 1999), our operating activities consisted largely of
developing our Freerealtime.com and BullSession.com Web sites, along with the
systems and infrastructure necessary to support these sites. As we did not
generate significant revenue or incur significant costs in prior years, and in
view of the rapidly evolving nature of our business and very limited operating
history, we believe that prior-year comparisons of our financial results are not
meaningful or indicative of future performance. The selected statement of data
for the year-ended March 31, 1999 has been derived from the financial statements
of Freerealtime.com, Inc as audited by KPMG LLP, independent auditors, and are
included elsewhere in this Form 10-SB.
18
<PAGE>
Year ended March 31, 1999
(in thousands, except share and per share data)
Statement of Operations Data:
<TABLE>
<CAPTION>
Revenues
- --------
<S> <C>
Advertising Revenue (gross) $ 631
Web-Host/Co-Brand Revenue 179
Subscription Revenue 586
----------
Total Revenues 1,396
- ----------------------------------------------------------
Cost of Revenues
Market Data 1,896
Co-location and Communications 588
Programming 54
Other 29
----------
Total Cost of Revenues 2,567
Gross Profit (1,171)
General, Administrative, Selling
and Development Expenses
Sales and Marketing 404
General and Administrative 552
Product Development 60
Non Cash Charges-Stock Option Grants 316
----------
Total General, Administrative, Selling
and Development Expenses 1,332
Interest Expense (18)
Goodwill Impairment (528)
----------
Loss before income tax provision/benefit (3,049)
Income tax provision/benefit -0-
----------
Net Loss $ (3049)
- ----------------------------------------------------------
Net Loss per share:
Basic and diluted (.54)
Shares used to compute basic and diluted 5,601,073
net loss per share
Balance Sheet Data:
Cash and cash equivalents $493
Working capital (deficit) (1,676)
Total assets 1,132
Total stockholders equity (deficit) (1,461)
</TABLE>
Overview
Prior to the fiscal year commencing April 1, 1998 and ending March 31, 1999
("Fiscal 1999), our operating activities consisted largely of developing our
Freerealtime.com and BullSession.com Web sites, along with the systems and
infrastructure necessary to support these sites. As we did not generate
significant revenue or incur significant costs in prior years, and in view of
the rapidly evolving nature of our business and very limited operating history,
we believe that prior-year comparisons of our financial results are not
meaningful or indicative of future performance. We have incurred substantial
costs to date in creating and developing our Web sites. These costs include
significant purchases of computer hardware and software, the hiring of
programmers, software developers, systems administrators, technical support
personnel, executive management, key strategic consultants, sales and marketing
staff, accounting personnel, and administrative support. Our spending has been
focused on building brand awareness, financial related content, and providing
our users with seamless access to real-time market data. As a result, we have
incurred significant net losses in each fiscal quarter since inception. We
expect
19
<PAGE>
these net losses, as well as negative cash flow from operations, to continue for
the foreseeable future as we plan to substantially increase our operating and
capital expenditures in order to continue building site traffic and brand
awareness. Our current sources of revenue with respect to the Freerealtime.com
site include ad sales, sponsorship fees, web-hosting fees and co-branding
revenues. For BullSession.com, our source of revenue is subscription fees.
Our management efforts and strategies are oriented to enhancing our
existing revenue stream, as well as developing new revenue opportunities. These
efforts include (i) launching a new Freerealtime.com site in August 1999 that
exhibits more robust functionality, additional content, and greater ease-of-use,
(ii) building our in-house direct sales force to increase revenues, (iii)
pursuing higher prices, referred to as cost-per-thousand ("CPM"), for our ad
impressions through greater use of user "targeting" ad serving technology and
the addition of non-quote content pages, and (iv) focusing on revenue
alternatives to ad sales including sponsorship fees, new co-branding ventures,
and existing and to be identified opportunities in on-line transaction services.
We also have strategies to drive growth in our subscriber base, and thereby
increase our subscription fee revenue, by enhancing our BullSession.com service
and adding new subscription-based tools and content services. Apart from our
efforts to grow our revenues, we believe that our costs per page view should
continue to decline over time due to declining costs in programming, datafeed
and other services from our suppliers as well as from the effect of spreading
certain fixed costs over greater page view traffic. Though we expect to continue
incurring net losses for the foreseeable future, we plan to continue to execute
on these and other measures which are designed with an objective of achieving
profitable operations, although we can not give any assurances that we will
achieve such objective.
Results of Operations
Revenues (Fiscal Year ended March 31, 1999)
For Fiscal 1999, total net revenue amounted to $1,396,000 and consisted
primarily of the sale of on-line banner ads and sponsorships on Freerealtime.com
(collectively 45% of total revenues) and subscriptions sold on BullSession.com
(42% of total revenues). Additional net revenue was derived from Web-Hosting and
Co-Branding contracts (13%).
Revenue from advertising on FreeRealTime.com. For the twelve-months ended
March 31, 1999, the company experienced sequential month-to-month growth in both
page-views and, consequently, ad revenues. Total advertising revenue for this
period was $631,000. Ad revenue during the first six months of Fiscal 1999
amounted to $198,000, versus the last six months of the fiscal year which
totaled $433,000, representing growth of approximately 119%. This growth during
the second half of the year was primarily due to the substantial increase in the
number of users, page views, and ad impressions on the Freerealtime.com Web site
during that period. The substantial increase in the number of users on the site
was primarily due to a higher level of awareness of our Web sites by users of
the Internet, which we believe is a result of user referrals, the appearance of
our Web sites in the query lists of "search portal" Web sites, favorable
publicity received for both Freerealtime.com and BullSession.com, and user
traffic from our web-hosting and co-branding relationships. Due to limited
capital resources we did not expend material amounts on advertising of our Web
sites during Fiscal 1999.
The ad revenue that we generate as a user views a page on our Web site is a
function of the number of ad impressions on that page and the price, or CPM, at
which we sold the ad impression to an advertiser. An "ad impression" is an
advertisement that is displayed on a page view. We can have multiple impressions
on a single page view. During the course of Fiscal 1999, and subsequent to the
end of the fiscal year, we have increased the number of ad impressions per page.
We are also attempting to increase the CPM for the ads that we sell. We believe
that if we are successful in developing new content, enhancing existing quote
and non-quote content pages, and building our in-house ad sales force, then our
average CPMs are likely to increase, although there can be no assurance that we
will be successful in realizing an increase in CPMs or that advertisers will
continue to purchase ad space on the Internet, including on Freerealtime.com, at
similar levels or on the same terms as they have in the past. We recognize
revenue from the sale of banner advertisements as the ad impression is served or
20
<PAGE>
displayed. We recognize revenue from the sale of sponsorships over the period in
which the sponsorship advertisement is served or displayed. In both cases,
revenue is recognized only after there exists no further obligations on the part
of the advertiser or Freerealtime.com, Inc. During Fiscal 1999 we relied on
third party ad sales firms and networks to sell the substantial majority of our
ad impressions. Subsequent to the end of Fiscal 1999, we added additional in-
house salespeople and began to supplement the sales efforts of these ad sales
networks. We record an appropriate allowance against potentially uncollectible
accounts and/or write-off certain receivables as bad debts if they are deemed
uncollectible. Our obligations typically include guarantees of a minimum number
of impressions to the advertiser. To the extent minimum guaranteed impressions
are not met, we have no contractual obligation to the advertiser to compensate
them for un-filled impressions, nor does the advertiser have an obligation to
pay for those un-filled impressions. We defer revenue recognition with respect
to un-filled impressions until they are filled, if at all. If we were paid for
un-filled impressions, we would either return such payment to the advertiser or
issue credit to the advertiser against future impressions.
REVENUE FROM SUBSCRIPTIONS SOLD ON BULLSESSION.COM. For Fiscal 1999, we
experienced sequential month-to-month growth in both the number of subscribers
and total subscription revenue. Total subscription revenue for this period was
$586,000. Subscription revenue for the first six months of the year amounted to
$140,000, versus the last six months of the year that totaled $446,000,
representing growth of approximately 218%. This growth in subscription revenue
is primarily attributable to the increase in the number of subscribers
throughout the year resulting from increased marketing efforts and favorable
publicity received for both Freerealtime.com and BullSession.com. Because we
regularly advertise BullSession.com on our Freerealtime.com Web site, we believe
the increased traffic on the Freerealtime.com site has contributed to the
increase in subscribers on BullSession.com.
Subscribers to our BullSession.com service generally use a credit card to
purchase the service on either a monthly, quarterly or annual basis. We
recognize subscription revenue on a monthly basis for the month in which the
service is delivered. Any amounts prepaid for a quarterly or annual subscription
are recorded as deferred revenue and amortized to revenue over the period the
service is rendered. Monthly prices for the subscription service range from $26
to $50, depending on the level of services.
REVENUES FROM WEB-HOSTING AND CO-BRANDING VENTURES. For Fiscal 1999, total
revenues from these web-hosting and co-branding ventures amounted to $179,000,
of which $163,000 (approximately 91%) resulted from our Web-hosting
relationships with Infospace.com and Zacks.com. Pursuant to agreements that may
expire, if not renewed, during Fiscal 2000, we receive a monthly fee to host Web
traffic for Infospace.com and Zacks.com by registering their users and providing
them access to our market data and financial content on Freerealtime.com. Co-
branding relationships with BigCharts.com, Marketguide.com, and WWQuote.com
resulted in $16,000 in total revenue for Fiscal 1999, reflecting our share of
net advertising revenue generated from the sale of ad impressions on co-branded
pages. Under co-branding arrangements, we either provide content to or receive
content from a third party Web site and arrange such content on a page, which
may be on either our or the co-brand partner's Web site, with brand
identification for both parties. Typically one of the parties is responsible for
selling the ad impressions on the page views and both parties share, on a
negotiated basis, in the ad revenue generated on the co-branded page views.
Subsequent to the end of Fiscal 1999, we have entered into new co-branding
contracts and we expect that co-branded ad revenues will represent a material
portion of our revenue in future periods.
Cost of Revenues
Cost of revenues include the following expenditures: payments to the stock
exchanges for real-time market data, costs for data center operations incurred
with a third party "co-location" provider, datafeed, programming and other
content costs, and other costs. Cost of revenues for the twelve-months ended
March 31, 1999 amounted to $2,567,000, or 184% of revenues. Stock exchange fees
represented the majority of these costs and amounted to $1,896,000or 74% of
total cost of revenues. Subsequent to the end of Fiscal 1999, certain costs of
revenues decreased substantially on a per-page view basis. In the first quarter
of Fiscal 2000 ending June 30, 1999, the NASDAQ reduced market data fees by
approximately 50%, and the NYSE and AMEX Exchanges
21
<PAGE>
have announced similar fee reductions that are expected to take effect prior to
the end of Fiscal 2000. Additionally, we renegotiated and amended our datafeed
and co-location provider contracts to result in significant reductions in our
per-page view costs for these services. Despite these declines in our unit
costs, we anticipate that total cost of revenues will continue to increase over
the foreseeable future as we realize growth in the users and page views on our
Web sites.
Operating Expenses
SALES AND MARKETING. Sales and Marketing expense for the twelve months
ended March 31, 1999 totaled $404,000 (29% of revenues), and primarily reflected
advertising commissions paid to third party ad sales firms and networks that
represented the Freerealtime.com Web site to advertisers and media buyers, and
amounts paid to a marketing consulting firm engaged to manage our advertising
sales function and to direct the overall marketing efforts of the company,
including managing our relationships with AdSmart and other ad sales networks
and building an in-house ad sales force responsible for selling banner ads,
buttons, and sponsorships on Freerealtime.com. Subject to the availability of
sufficient funds, we plan to hire additional sales and marketing personnel, and
to implement new marketing programs during Fiscal 2000. As such, we anticipate
that total sales and marketing expense will increase over the foreseeable
future; however, sales and marketing expense as a percentage of net revenues may
fluctuate depending on the timing of the addition of new sales and marketing
personnel and on new marketing initiatives.
GENERAL AND ADMINISTRATIVE. General and administrative expense totaled
$552,000, (40% of revenues), for Fiscal 1999. General and administrative expense
consists primarily of compensation and benefits for various administrative and
technical personnel, fees for independent consultants providing executive
management and investor relations services, occupancy costs, legal and
accounting fees, depreciation, insurance, telecommunications costs, provision
for uncollectible amounts, and other overhead costs. We plan to hire additional
personnel in all areas of the organization including management, customer
support, accounting, and administrative support during Fiscal 2000. As such, we
anticipate that general and administrative expenses will increase over the
foreseeable future; however, general and administrative expense as a percentage
of net revenues may fluctuate depending on the timing of the addition of these
new personnel and of future expenditures in general and administrative related
activities.
PRODUCT DEVELOPMENT. Product development expense primarily consists of
compensation and benefits for software developers, as well as fees paid to third
party developers and systems consultants. These individuals are located
primarily in Calgary, Alberta. Total Product Development expense for the twelve
months ended March 31, 1999 was $60,000 (4% of revenues). This represents cash
compensation paid to these individuals for the period. In addition, certain of
these employees have received non-cash compensation in the form of stock option
grants. Such non-cash compensation is reflected in our financial statements as
unearned compensation and is amortized as an expense to the company as described
below under "Non Cash Charges-Stock Option Grants". We employ a technical staff
that includes a Vice President of Development, several developers and
programmers, and a Systems Administrator. These individuals, along with third
party consultants, have developed and maintained our Web sites during Fiscal
1999. To date, all internal product development costs have been expensed as
incurred. We believe that significant investments in product development are
required to remain competitive. Consequently, we plan to hire additional
personnel in this area of the organization including product managers,
additional software developers, and quality assurance personnel. As such, we
anticipate that product development expense will increase over the foreseeable
future as we continue to enhance our existing Web sites and develop new
products; however, product development expense as a percentage of net revenues
may fluctuate depending on the timing of the addition of these new personnel and
related overhead.
GOODWILL. We incurred $528,000 of goodwill upon the merger of
FreeRealtime.com and FIFC-Delaware, of which the entire amount was charged to
expense during the fiscal year ended March 31, 1999. For a more detailed
discussion see Note 6 to Notes to Financial Statements.
22
<PAGE>
NON CASH CHARGES-STOCK OPTION GRANTS. During Fiscal 1999, we recorded
aggregate unearned compensation of $520,000 reflecting the grant of stock
options to employees and non-employees. These options were granted at exercise
prices less than the deemed fair market value of the underlying common stock on
the grant date. We also expect to record additional unearned compensation in the
first quarter ended June 30, 1999 to reflect additional option grants at
exercise prices less than the deemed fair market value of common stock on the
grant date. The deferred compensation is being amortized to compensation expense
over the vesting period of the options. Of the total deferred compensation of
$520,000 recorded during Fiscal 1999, $316,000 of was amortized as a non-cash
charge during Fiscal 1999 and the balance of $204,000 will be amortized in
future periods. See Note 6 of Notes to Financial Statements.
Interest Income (Expense), Net
Net interest expense of $18,000 for the year ended March 31, 1999 primarily
resulted from interest incurred on debt obligations, including a bank loan,
capital leases, and loans from an officer and director; partially offset by
interest income earned on our cash balances.
Income Taxes
We have incurred losses since inception, and anticipate losses for the
foreseeable future. We have therefore recorded no provision for income taxes in
Fiscal 1999. Deferred tax assets for the year ended March 31, 1999 which would
otherwise reflect the tax net operating loss carryforwards existing at the
balance sheet date, as well as the taxable temporary differences in the
treatment of certain items are fully offset by valuation allowances. We will re-
assess the need to record such valuation allowances, or a current or deferred
tax liability as appropriate, over future periods. For a more detailed
discussion see Note 5 of Notes to Financial Statements.
Liquidity and Capital Resources
To date, our operations have been financed primarily from, the sale of
equity securities, and to a lesser extent, a non-revolving loan from Royal Bank
in Calgary, loans from stockholders, Directors, and other outside parties, and
from capital lease arrangements. As of March 31, 1999, approximately $493,000 in
cash and cash equivalents was on hand. All but $50,000, which was restricted as
collateral by Royal Bank, was available to the company.
Operating Activities
We used net cash in our operating activities in the amount of $374,000
during Fiscal 1999, which was primarily the result of our net loss for the
period and an increase in accounts receivable, partially offset by an increase
in accounts payable and accrued liabilities, as specified below:
. Net loss of approximately $3,049,000;
. An increase in accounts receivable of approximately $424,000;
. An increase in accounts payable and accrued expenses of
approximately $2,078,000;
. Depreciation of approximately $47,000;
. Non-cash charges-stock-option grants of approximately $316,000;
. Goodwill impairment charge $528,000.
Accounts payable increased as a result of an overall increase in our cost of
sales and operating expenses over the course of Fiscal 1999, as our business has
grown during this same period. This increase in accounts payable primarily
reflects amounts due in arrears as of March 31, 1999 to our major suppliers of
market data. Subsequent to the end of Fiscal 1999, we have received sufficient
net proceeds from the sale of equity securities to fund the payment of these
accrued accounts payable. The amount of our accounts receivable at each period-
end varies, primarily due to the timing of revenue recognition associated with
the running of our advertising and sponsorship campaigns, and the growth in our
Web-host related revenue and subscription revenue. To date, we have not
23
<PAGE>
experienced material collection difficulties, but have recorded certain write-
offs of bad debts as well as an allowance for uncollectible accounts.
Investing Activities
Cash used in investing activities during the year ended March 31, 1999 was
approximately $246,000, and consisted of property and equipment expenditures.
Financing Activities
Net cash provided by financing activities during the year ended March 31,
1999 was approximately $1,058,000. Cash used in financing activities during
that same period was approximately $157,000, and consisted of payments of debt
obligations and stock issuance costs. Cash provided by financing activities
during that same period was approximately $1,215,000, which consisted primarily
of net proceeds from the sale of common stock.
We have no material financial commitments other than obligations under our
bank loan agreements, and to several of our stockholders, and under our leases.
Subject to cash availability, we anticipate significant increases in our
operating and capital expenditures over the foreseeable future, including:
. web-site development and enhancement for Freerealtime.com and
BullSession.com, including functionality, content, and back-end
systems;
. computer servers and other computer equipment to support growth in
site traffic;
. software developers and computer programmers;
. information systems management;
. bandwidth and networking equipment and infrastructure;
. computer equipment and furniture and fixtures for new employees and
facilities expansion;
. additional personnel in the areas of sales, marketing, business
development, customer support, accounting, and administration;
. increased promotional activities and branding efforts;
. content development and acquisition;
In addition to purchasing computer hardware, software, and office
equipment, we also lease certain equipment under short term and long term leases
with terms ranging from one to three years. We may exercise purchase options at
the end of the lease terms if determined to be favorable to replacing such items
at that time through lease renewal or capital acquisition. During Fiscal 2000 we
plan to spend up to $500,000 for additional computer hardware, software, office
equipment, and tenant improvements. We lease our Irvine, California facility
under a noncancelable operating lease that expires on May 31, 2000. We lease our
Calgary, Alberta facility under a noncancelable operating lease which expires on
February 28, 2000. We currently intend to renew our Irvine lease, whereas we
intend to relocate our Calgary operations to a larger facility sometime in
Fiscal 2000. We will incur additional costs related to the relocation of the
Calgary facility and may have to pay rent on two leases for a period of time.
The timing of these additional capital and operating expenditures as well
as the timing of hiring additional personnel to support our growth plans and our
ability to continue sustaining net losses and negative cash flows from
operations will depend largely on our ability to continue to obtain additional
capital through financing transactions. The failure to raise such capital when
needed could have a material adverse effect on our business, operating results,
and our financial condition. If additional funds are raised through the sale of
equity, or convertible debt securities, the percentage ownership of our
stockholders will be reduced, our stockholders may experience significant
dilution and these securities may have rights, preferences, or privileges senior
to those of our common stockholders. There can be no assurance that additional
financing will be available to us or on terms favorable to us. If adequate
capital funds are not available or are not available on acceptable terms, our
ability
24
<PAGE>
to fund our current growth plans and to take advantage of unanticipated
opportunities, develop or enhance our Web sites, or otherwise respond to
competitive pressures, could be significantly limited. Based on net proceeds
received from the sale of equity securities subsequent to the end of Fiscal
1999, and management contingency plans to curtail our growth plans and reduce
our current scope of operations in the event that additional capital funds are
not available to us, management believes we can continue our operations through
Fiscal 2000.
During Fiscal 1999 we completed two private equity financings in which we
sold an aggregate of 965,000 shares of common stock for a total proceeds of
$965,000. Subsequent to the end of Fiscal 1999 we completed two private equity
financings in which we sold an aggregate of 910,300 shares of Common Stock and
stock purchase warrants to purchase 182,500 shares of Common Stock for total
proceeds of $4,369,000. For a more detailed discussion see "Market for Common
Equity and Related Stockholder Matters --- Recent Sales of Unregistered
Securities." Concurrent with the second private equity financing in September
1999, we entered into a strategic co-marketing and cross-licensing agreement
with Telescan, Inc. ("Telescan") covering certain of each other's Web-based
products and services. Telescan purchased $3,000,000 of the shares of Common
Stock sold in the private equity financing.
Item 3. Description of Property
- -------------------------------
Our principal administrative, marketing, and management facilities are
located in approximately 3,800 square feet of office space in Irvine, California
which is subleased from South Coast Financial Securities, Inc., a California
corporation. The term of the sublease began on February 22, 1999 and will
terminate on May 31, 2000. There is no existing option to extend the sublease.
Our research development facilities are located in approximately 1,900 square
feet of office space in Calgary, Alberta, Canada. The term of the lease is for
one year for the period covering August 1, 1998 through July 31, 1999. This
lease was extended through February 28, 2000 commencing on August 1, 1999, and
provides us with an option to renew for an additional year beyond February 28,
2000. Due to our growth, we believe we will require more office space beginning
in 2000. All of our communications, network, and server infrastructure are
hosted in the Exodus Communications data centers in Jersey City, New Jersey and
Irvine, California. Any system failure at these locations could lead to
interruptions, delays, or cessations in service to our members, which could have
a material adverse effect on our business, results of operations and financial
condition.
Item 4. Security Ownership of Certain Beneficial Owners and Management.
- ----------------------------------------------------------------------
The following table sets forth, as of September 29, 1999, the number of
shares and percentage of voting interest (on a fully diluted basis) represented
by shares of Common Stock held by each of our directors and executive officers
and of each person who beneficially owns more than 5% of our Common Stock.
Except as specified below, management is not aware of any individual or entity
that owns 5% or more of the voting securities of the Company; unless otherwise
stated, each of the stockholders below has sole voting and dispositive power
with respect to shares beneficially owned by stockholder
<TABLE>
<CAPTION>
Name and Address of Number of Shares of Percentage of
Beneficial Owner/(1)/ Common Stock Class
-------------------- ------------------- -------------
<S> <C> <C>
Brad Gunn 2,675,551/(2)/ 34.7
Stuart Robson 619,251/(3)/ 8.0
John Gunn 303,771 3.9
Telescan 600,000 7.8
All directors and officers
as a group 3,598,573 46.6
</TABLE>
(1) The address for each of Messrs. Gunn, Robson and Gunn is 3333 Michelson
Drive, Suite 430, Irvine, California 92612. The address for Telescan is
5959 Corporate Drive, Suite 2000, Houston, Texas 77036.
25
<PAGE>
(2) Includes 118,901 shares which Mr. Gunn has the option to acquire at an
exercise price of $0.40 per share.
(3) Includes 143,870 shares which Mr. Robson has the option to acquire at an
exercise price of $0.10.
Item 5. Directors, Executive Officers, Promoters and Control Persons
- ----------------------------------------------------------------------
The following table sets forth the names and principal positions of the
directors and executive officers of the Company as of September 29, 1999:
<TABLE>
<CAPTION>
Name Age Title
- --------------------------------- -------------------------- ------------------------------------------------
<S> <C> <C>
Brad G. Gunn 30 President, Chief Executive Officer, Chief
Financial Officer & Director
Stuart Robson 38 Executive Vice President of Operations &
Director
Darrell Nash 23 Vice President, Development
John Gunn 57 Director
</TABLE>
Brad G. Gunn, is our President, Chief Executive Officer and Chief Financial
Officer. He has operated in this capacity since 1996. As a co-founder, Mr. Gunn
has spent the last two years with the Company involved in strategic planning,
overseeing the development teams, overseeing revenue initiatives, raising
financing, acting as a subscriber liaison and overseeing market research,
developing new products, developing new strategic alliances, and managing
existing strategic relationships. Mr. Gunn was previously an equities trader
with the Toronto Dominion Bank, and an equities trader and options specialist
with Royal Bank of Canada. In 1992, Mr. Gunn received a bachelor's degree in
Economics with a minor in Management from The University of Calgary. Mr. Gunn is
also a member of the Board of Directors and has served as such since 1996.
Stuart Robson, has been our Executive Vice President of Operations since 1996.
Mr. Robson is responsible for. the orderly operation and administration of
billing, customer service, contract administration and negotiation, and data
operations. Prior to joining us, Mr. Robson worked as Vice President Marketing
for Netway Internetworking Technologies, Inc., an Internet software startup. Mr.
Robson's previous experience includes owning and operating an international
grain marketing company. Mr. Robson is also a member of the Board of Directors
and has served as such since 1996.
Darrell Nash, is our Vice President of Development. Mr. Nash oversees all
technical responsibilities for the company, including managing the development
teams, designing and implementing the system architecture, capacity planning,
ordering and installing hardware, and dealing with our strategic alliance
technical groups. He has been with us since our inception. Prior to joining us,
Mr. Nash worked as a system administrator and web site administrator for the
Department of Computer Science. In 1997, Mr. Nash received a bachelor's in
Computer Science from the University of Calgary.
John Gunn, is a Director of the Company. Mr. Gunn has 28 years of general
business and management experience and has particular expertise in the area of
corporate negotiations in an international setting. Mr. Gunn received his Master
of Science in Engineering from The University of Alberta in 1968. Mr. Gunn has
served as a member of the Board of Directors since 1997.
26
<PAGE>
Family Relationships
John Gunn, a member of the Board of Directors, is the father of Brad Gunn,
our President, Chief Executive Officer, and Chief Financial Officer.
Item 6. Executive Compensation
- ------------------------------
The tables below set forth certain information concerning the annual rates
of compensation paid by us to our executive managers, for each of the last three
completed fiscal years ending March 31, 1999.
Summary Compensation Table
<TABLE>
<CAPTION> Annual Compensation Long-Term Compensation
----------------------------------- --------------------------------------
Securities
Name and Restricted Stock Underlying
Position Year Salary Awards Options
- ------------------------------- ------------ -------------------- --------------------- -----------
<S> <C> <C> <C> <C>
Brad G. Gunn 1997 $ 5,300 $0 0
CEO, CFO and President 1998 0 0 0
1999 0 0 356,703
Stuart Robson 1997 0 0 0
EVP Operations 1998 4,700 0 0
1999 64,652 0 302,405
Darrell Nash 1997 0 0 0
VP Development 1998 6,060 0 0
1999 27,327 87,194 44,390
</TABLE>
27
<PAGE>
The following table sets forth certain information with respect to grants
of options during Fiscal 1999 to our Executive Officers.
Option Grants in Last Fiscal Year(1)
<TABLE>
<CAPTION>
Number of Percent of Total
Securities Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted (#) Fiscal Year (per Share) Date
-------------------------- ----------- ---------------- ----------- ----------
<S> <C> <C> <C> <C>
Brad Gunn 118,901 15.2% $0.40 06/10/2000
237,802 30.3% 1.00 06/01/2001
Subtotal................. 356,703 45.5%
Stuart Robson 143,870 18.4% 0.10 06/10/2000
158,535 20.2% 0.10 12/10/2000
Subtotal................. 302,405 38.6%
Darrell Nash 44,390 5.7% 0.10 06/10/2000
(1) There were no SAR awards in the last fiscal year.
</TABLE>
The following table sets forth certain information with respect to options
exercised during Fiscal 1999 and exercisable and unexercisable options held by
the Executive Officers as of March 31, 1999.
Aggregated Year-End Option Values/(1)/
<TABLE>
<CAPTION>
Number of Securities Underlying Value Of Unexercised In-The-Money Options
Unexercised Options at Fiscal Year At Fiscal Year End(2)
Name Exercisable Unexercisable Exercisable Unexercisable
- ------------------ ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C>
Brad Gunn 0 356,703 $0 $71,341(3)
Stuart Robson 0 302,405 0 272,165(4)
Darrell Nash 0 44,390 0 39,951
</TABLE>
- -----------------------
(1) There were no options exercised in this last Fiscal Year.
(2) Based on the fair market value as determined by the Board of Directors of
$1.00, minus the exercise price of the option, multiplied by the number of
shares to which the option relates.
(3) This number reflects 118,901 options to purchase shares of Common Stock at
an exercise price of $0.40 and 237,802 options to purchase shares of Common
Stock at an exercise price of $1.00.
(4) This number reflects 143,870 options to purchase shares of Common Stock at
an exercise price of $0.10 and 158,535 options to purchase shares of Common
Stock at an exercise price of $0.10.
28
<PAGE>
Item 7. Certain Relationships and Related Transactions
- ------------------------------------------------------
We are unaware of any transactions during the last two years in which we
were a party and any of our directors or executive officers, or any family
member of our directors or officers, had a direct or indirect material interest.
Item 8. Description of Securities.
- ---------------------------------
The following description of our capital stock and certain provisions of
our Articles of Amendment and Restatement of Articles of Incorporation (the
"Articles") and Bylaws is a summary and is qualified in its entirety by the
provisions of the Articles and Bylaws, which have been filed as exhibits hereto.
General
Our Articles provide that we are authorized to issue 50,000,000 shares of
Common Stock, no par value per share. As of September 29, 1999, 7,448,290 shares
of Common Stock were outstanding and held of record by 74 stockholders. We are
also authorized to issue 5,000,000 shares of preferred stock, no par value per
share. No shares of preferred stock are currently issued and outstanding.
Common Stock
The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. The holders of Common Stock are
not entitled to cumulative voting rights with respect to election of directors,
and as a consequence, minority stockholders will not be able to elect directors
on the basis of their shares alone. Holders of Common Stock are entitled to
receive ratably such dividends, if any, as may be declared by the Board of
Directors of legally available funds, subject to any preferences that may be
applicable to any shares of preferred stock issued in the future. In the event
of our liquidation, dissolution and winding up, holders of Common Stock are
entitled to share ratably in all assets remaining after payment of liabilities
and the liquidation preference of any outstanding preferred stock. Holders of
Common Stock have no preemptive, subscription, redemption or conversion rights.
All outstanding shares of Common Stock are fully paid and nonassessable.
Preferred Stock
The Board of Directors has the authority to issue up to 5,000,000 shares of
preferred stock. The holders of Preferred Stock, as a group, are entitled to
preference upon our dissolution or winding up to 10% of our assets to be
distributed pro rata to the holders of the Preferred Stock prior to any
distributions to holders of the Common Stock. Our Board of Directors has the
authority to issue the remaining unissued authorized preferred shares and to fix
the powers, preferences, rights and limitations of such shares or any class or
series thereof, without shareholder approval. Persons acquiring such shares
could have preferential rights with respect to voting, liquidation, dissolution
or dividends over existing stockholders. Shares could be issued to deter or
delay a takeover or other change in control. We have no current plans to issue
any shares of preferred stock.
PART II
Item 1. Market Price of and Dividends on Our Common Equity and Other Shareholder
- --------------------------------------------------------------------------------
Matters.
- -------
Our Common Stock has been quoted and traded in the over-the-counter market
on the NASD OTC Bulletin Board system under the symbol "FRTI" since September
1998. The following table indicates high and
29
<PAGE>
low bid and asked quotations for our Common Stock for the periods indicated.
These quotations reflect inter-dealer prices, without retail mark-up, mark-down
or commissions, and may not reflect actual transactions.
<TABLE>
<CAPTION>
Calendar 1999 Calendar 1998
---------------------- -----------------------
Calendar Quarter High Low High Low
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Quarter One 20.000 4.750
Quarter Two 10.125 6.625
Quarter Three(1) 7.188 6.500
Quarter Four 9.500 4.000
</TABLE>
- -------------------
(1) Third quarter results for Calendar 1998 reflect information available for
September 21 through September 30 only.
As of September 1999, there were 74 holders of record of our Common Stock.
We have not declared any dividends and do not intend to declare any dividends in
the foreseeable future.
Item 2. Legal Proceedings
- -------------------------
We are aware of no pending or active legal proceedings involving
Freerealtime.com or any of our properties.
Item 3. Changes in and Disagreements with Accountants.
- -----------------------------------------------------
Our principal accountant is KPMG LLP of Costa Mesa, California. Their
report through March 31, 1999 did not contain any adverse opinion or disclaimer,
nor were there any disagreements between management and our accountants.
Item 4. Recent Sales of Unregistered Securities
- -----------------------------------------------
As discussed above, Freerealtime.com resulted from the merger of FIFC-
Delaware and Pub Singin. Accordingly, information concerning the recent sales of
unregistered securities is provided for each of the entities that collectively
constitute Freerealtime.com.
FIFC-Delaware. FIFC-Delaware was merged into Freerealtime.com in September
1998. Prior to the merger, FIFC-Delaware had completed two issuances of its
common stock. The first occurred on July 31, 1998, pursuant to the acquisition
of FIFC-Alberta by FIFC-Delaware. In this offering, FIFC-Delaware issued
4,544,990 shares of common stock to the former stockholders of FIFC-Alberta in
exchange for their shares of common stock of FIFC-Alberta. FIFC-Delaware relied
on the registration exemption in Section 4(2) of the Securities Act of 1933 (the
"1933 Act") to issue these shares without registration. As a result of this
acquisition, FIFC-Alberta became a wholly owned subsidiary of FIFC-Delaware. The
second offering occurred in August 1998. In this offering, the FIFC-Delaware
issued 215,000 shares of its common stock at $1.00 per share for a total of
$215,000. FIFC-Delaware relied on the registration exemption in Section 4(2) of
the 1933 Act to issue these shares without registration. The offering was
subscribed to by eleven investors. No underwriters were involved in either of
these sales.
Pub Singin. In September 1997, Pub Singin issued 5,680,000 shares common
stock at $.005 per share for a total of $2,840. The shares were sold to
approximately 29 investors all of whom executed subscription agreements in
connection with their purchases. Pub Singin relied on the registration exemption
in Rule 504 of the 1933 Act to issue these shares without registration. The
primary qualifying factor for a Rule 504 exemption is an offering price of less
that $1,000,000. Pub Singin changed its name to Freerealtime.com, Inc.,
immediately prior to its merger with FIFC-Delaware.
30
<PAGE>
Freerealtime.com. Since our merger with FIFC-Delaware, we have completed
two issuances of additional common stock. In October 1998, we sold a total of
750,000 shares to three investors for $750,000 (less cash costs incurred of
approximately $75,000 and excluding issuance costs paid by issuing 500,000
shares of common stock valued at $500,000). We relied on the registration
exemption in Rule 504 of the 1933 Act to issue these shares without
registration. No underwriters were involved in this offering.
The second issuance occurred in June 1999. In this issuance we offered
1,250,000 units at $4.00 per unit consisting of one share of common stock and
one warrant to purchase an additional share of common stock at $4.75. Seven
elected to participate and 182,500 units were sold for a total of $730,000 (less
costs incurred of approximately $73,000). We relied on the registration
exemption in Section 4(2) of the 1933 Act to issue these units without
registering the underlying securities. No underwriters were involved in this
offering.
The third issuance occurred in September 1999. We relied on the
registration exemption in Section 4(2) of the Securities Act of 1933 to issue
these shares without registration. Nine investors purchased 727,800 shares for a
total purchase price of $3,639,000 (less costs incurred of approximately
$375,000) as of the date of the filing of this Form 10-SB. No underwriters were
involved in this offering. The offering was still open as of the date of the
filing of this Form 10-SB.
While we believe that all of the issuances discussed above qualified for
either the Rule 504 or Section 4(2) exemption from registration, a court could
determine that these issuances did not qualify for either exemption. If that
were to occur, we would be in violation of the Securities Laws and we could be
exposed to liability for damages suffered by our investors.
Item 5. Indemnification of Directors and Officers.
- -------------------------------------------------
Our Amended and Restated of the Articles of Incorporation give our Board of
Directors the power to indemnify any person who is or was our director, officer,
or agent, or any person who served or is serving at our request as a director,
officer, or agent of another enterprise. The indemnification covers instances
where the present or former director, officer or agent is a party, or is
threatened to be made a party, to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in our right), by reason of the fact that he is or
was our director, officer or agent.
We may indemnify such director, officer or agent against expenses
(including attorney's fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed to
be in our best interests and, with respect to any criminal action or
proceedings, had no reasonable cause to believe his conduct was unlawful. In the
case of any threatened, pending or completed action or suit by or in our right,
the indemnification available to such an director, officer or agent is limited
to expenses (including attorney's fees) actually or reasonably incurred by him
in connection with the defense or settlement of such action, if he acted in good
faith and in a manner he reasonably believed to be in our best interests. In
this instance however, no indemnification shall be made in respect of any claim,
issue or matter as to which such person has been adjudged to be liable for
negligence or misconduct in the performance of his to duty to us unless and only
to the extent that the court in such action or suit determines that such person
is fairly and reasonably entitled to indemnification for such expenses which
court deems proper.
Additionally, we may (i) pay such expenses in advance of the final
disposition on any action, suit or proceeding upon receipt of an undertaking by
or on behalf of the potentially indemnified person to repay such amount unless
it is ultimately determined that he is entitled to be indemnified by us, and
(ii) purchase insurance on behalf of any person who is our director, officer or
agent against any liability asserted against him whether or not we would have
the power to indemnify him against such liability.
PART F/S
The Financial Statements and Notes thereto can be found beginning on page
FS-1 "Index to Financial Statements" following the signature page hereof.
31
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Act of 1934,
as amended, the registrant has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, on this the
29th day of September 1999.
FREEREALTIME.COM
By: /s/ Brad G. Gunn
--------------------------------------
Brad G. Gunn
President, Chief Executive Officer
and Chief Financial Officer
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature
appears below constitutes and appoints Brad G. Gunn his or her true and lawful
attorney-in-fact, and agent with full power of substitution, for him or her and
in his or her name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this registration
statement, and to file the same, with all exhibits thereto and all documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorney-in-fact and agent, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done
in and about the premises, as fully to all intents and purposes as he or she
might or could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent, or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1934, as amended,
this Registration Statement has been signed by the following persons in the
capacities indicated on this the 29th day of September, 1999.
Name Title
---- -----
/s/ Brad G. Gunn President, Chief Executive Officer, Chief
- ---------------------------- Financial Officer & Director
Brad G. Gunn
/s/ Stuart Robson Executive Vice President, Business Development,
- ---------------------------- & Director
Stuart Robson
/s/ John Gunn Director
- ----------------------------
John Gunn
1
<PAGE>
Exhibit
No. Description
- ------- -----------
2.1.1 Articles of Amendment and Restatement of the Articles of Incorporation
2.1.2 Articles of Amendment
2.2 Bylaws
6.1 Agreement for Receipt and Use of Market Data between First
International Financial Corporation and the New York Stock Exchange,
Inc., dated December 23, 1997 pursuant to which Freerealtime.com
obtains certain information relating to the New York Stock Exchange
and the American Stock Exchange
6.2.1+ NQDS Information Vendor Agreement between The Nasdaq Stock Market,
Inc. and First International Financial Corporation (Alberta), dated
March 25, 1997 pursuant to which Freerealtime.com obtains certain
market information relating to the Nasdaq National Market and the
National Small Cap Market
6.2.2 Amendment to Attachment A - System Description of NQDS Information
Vendor Agreement, dated April 25, 1997
6.2.3 Addendum to the Vendor Agreements for Level 1 Service and Last Sale
Service of The National Stock Market, Inc., between The Nasdaq Stock
Market, Inc., and First International Financial Corporation (Alberta),
dated May 20, 1999 adjusting subscriber pricing and revenue guarantees
6.3.1 S&P Comstock Information Distribution License Agreement between S&P
Comstock, Inc. and First International Financial Corporation
(Alberta), dated June 13, 1997 pursuant to which Freerealtime.com
obtains certain securities and commodities prices and other data.
6.3.2 Addendum to Exhibit C of License Agreement by and between S&P
Comstock, Inc. and First International Financial Corporation
(Alberta), dated June 13, 1997 allowing First International Financial
Corporation to operate a second site
6.4 Options Price Reporting Authority Vendor Agreement, between First
International Financial Corporation (Alberta) and the American Stock
Exchange, Inc., Chicago Board Options Exchange, Incorporated and
Philadelphia Stock Exchange, Inc., dated August 12, 1997 pursuant to
which Freerealtime.com obtains market information relating to options
6.5 Representation Agreement between 2CAN Media, Inc. and
Freerealtime.com, dated March 10, 1999 relating to advertising sales
representation for FreeRealtime.com
6.6 Letter Agreement between Arete Advisors & Investors, Inc. ("Arete")
and FreeRealtime.com, Inc., dated January 27, 1999 relating to certain
consulting services to be supplied Arete
6.7 Letter Agreement between the Lawson Marketing Group ("Lawson") and
FreeRealtime.com, dated April 14, 1999 relating to certain consulting
services to be provided by Lawson
6.8.1 Letter Agreement between Neufeld & Co. and Freerealtime.com dated
April 5, 1999 relating to certain consulting services
6.8.2 Letter Agreement between Neufeld & Co. and Freerealtime.com dated July
15, 1999 relating to certain consulting services
____________
+ Attachments available from the Company upon request.
<PAGE>
Exhibit
No. Description
-- -----------
6.9 Lease between Daniel Pearse & Associates Ltd. and First International
Financial Corporation, dated June 17, 1997, relating to facilities
located in Calgary, Alberta Canada
6.9.1 Offer to Amend Lease between Daniel Pearse & Associates Ltd. and First
International Financial Corporation, dated June 17, 1998
6.9.2 Offer to Amend Lease between Daniel Pearse & Associates Ltd. and First
International Financial Corporation.
6.10 Sublease between South Coast Financial Services, Inc. and
Freerealtime.com, dated February 20, 1999, relating to facilities
located in Irvine, California
6.11 Equipment Lease between Balboa Capital Corporation and
Freerealtime.com, dated March 25, 1999 relating to material equipment
used by Freerealtime.com
6.12 Master Services Agreement between Exodus Communications, Inc. and
FreeRealtime.com, Inc. dated July 1, 1999
<PAGE>
Independent Auditors' Report
The Stockholders
FreeRealTime.com, Inc. and Subsidiary:
We have audited the accompanying consolidated balance sheet of FreeRealTime.com,
Inc. and subsidiary (the Company) as of March 31, 1999 and the related
consolidated statements of operations, stockholders' equity (deficit) and cash
flows for each of the years in the two-year period then ended. In connection
with our audit of the consolidated financial statements, we have also audited
the consolidated financial statement schedule as of and for the year ended March
31, 1999. These consolidated financial statements and financial statement
schedule are the responsibility of the Company's management. Our responsibility
is to express an opinion on these consolidated financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of FreeRealTime.com,
Inc. and subsidiary as of March 31, 1999 and the results of their operations and
their cash flows for each of the years in the two-year period then ended in
conformity with generally accepted accounting principles. Also, in our opinion,
the related financial statement schedule, when considered in relation to the
basic consolidated financial statements taken as a whole, present fairly, in all
material respects, the information set forth therein.
/s/ KPMG LLP
Orange County, California
July 29, 1999, except as to Note 8 to the consolidated,
financial statements which is as of September 29, 1999.
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Consolidated Balance Sheet
March 31, 1999
(Dollars in thousands)
<TABLE>
<CAPTION>
Assets 1999
-------
<S> <C>
Current assets:
Cash and cash equivalents $ 493
Accounts receivable, net of allowance for
doubtful accounts of $66 358
Prepaid expenses and other current assets 8
-------
Total current assets 859
-------
Property, plant and equipment, net 265
Other assets, net 8
-------
$ 1,132
-------
Liabilities and Stockholders' Equity (Deficit)
Current liabilities:
Current installments of note payable to bank $ 70
Current installments of loan payable to shareholders 3
Current portion of capital lease obligations 11
Trade accounts payable 2,078
Advances payable 250
Accrued expenses 44
Deferred revenue 79
-------
Total current liabilities 2,535
-------
Notes payable to bank, excluding current portion 12
Notes payable to stockholders, excluding current portion 38
Capital lease obligations, net of current portion 8
Stockholders' deficit:
Preferred stock, no par value, 5,000,000 shares
authorized; no shares issued and outstanding. --
Common stock, no par value, 50,000,000 shares
authorized; 6,537,990 issued and outstanding. 2,078
Accumulated deficit (3,335)
Unearned Compensation (204)
-------
Total stockholders' deficit (1,461)
-------
Commitments and contingencies $1,132
=======
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Operations
Years ended March 31, 1999 and 1998
(Dollars in thousands, except per share data)
<TABLE>
<CAPTION>
1998 1999
--------- ---------
<S> <C> <C>
Revenues $ 1,396 $ 55
Cost of revenues 2,567 37
--------- ---------
Gross profit (1,171) 18
--------- ---------
General, administrative, selling and development
expenses 1,016 168
Non-cash charge - stock option grants 316 --
--------- ---------
Total general, administrative, selling and
development expenses 1,332 168
Goodwill impairment 528 --
Interest expense 18 11
--------- ---------
Net loss $ (3,049) $ (161)
========= =========
Basic and diluted loss per common share $ (0.54) $ (0.04)
========= =========
Common shares used in computing basic and diluted
per share amounts 5,601,073 4,447,635
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Stockholders' Equity (Deficit)
Years ended March 31, 1999 and 1998
(Dollars in thousands, except share amounts)
<TABLE>
<CAPTION>
Common
shares Common Accumulated Unearned
outstanding stock deficit Compensation Total
----------- -------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C>
Balance at March 31, 1997 4,176,066 104 (125) -- (21)
--
FIFC-Alberta stock offerings 368,924 36 -- -- 36
Net loss -- -- (161) -- (161)
----------- -------- ---------- ------------ -------
Balance at March 31, 1998 4,544,990 140 (286) -- (146)
FIFC-Delaware stock offering 215,000 215 -- -- 215
Shares issued to acquire FreeRealTime.com,
Inc. (the former Pub Singin', Inc.) 528,000 528 528
Stock offering, net of issuance costs
of $575 1,250,000 675 -- -- 675
Issuance of options as compensation,
net of amortization -- 520 -- (204) 316
Net loss -- -- (3,049) -- (3,049)
----------- -------- ----------- ------------ -------
Balance at March 31, 1999 6,537,990 $ 2,078 (3,335) (204) (1,461)
=========== ======== =========== ============ =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Consolidated Statements of Cash Flows
Years ended March 31, 1999 and 1998
(Dollars in thousands)
<TABLE>
<CAPTION>
1999 1998
------- -----
<S> <C> <C>
Cash flows from operating activities:
Net loss $(3,049) $(161)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 47 7
Goodwill impairment 528 --
Provision for doubtful accounts 66 --
Non-cash charge - stock options 316 --
Receivables (424) 13
Inventories, prepaid expenses and other assets (15) --
Trade accounts payable and accrued liabilities 2,078 6
Unearned revenue 79 --
------- -----
Net cash used by operating activities (374) (135)
------- -----
Cash flows from investing activities:
Capital expenditures (246) (24)
------- -----
Net cash used in investing activities (246) (24)
------- -----
Cash flows from financing activities:
Advances payable 250 --
Borrowings (repayments) of long-term debt (75) 144
Increase (decrease) in note payable to shareholder (7) 27
Proceeds from issuance of common stock 965 36
Stock issuance costs (75) --
------- -----
Net cash provided by financing activities 1,058 207
------- -----
Net increase in cash 438 48
------- -----
Cash at beginning of year 55 7
------- -----
Cash at end of year $ 493 $ 55
======= =====
Supplemental disclosure of cash flow information:
Cash paid during the year for:
Interest $ 18 $ --
======= =====
Supplemental disclosure of noncash investing and financing
activities:
Borrowings related to the acquisition of assets $ 22 $ --
Unearned compensation related to stock options 520 --
Common stock issued to pay for stock issuance fees 500 --
======= =====
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
(1) Business Description and Organization
FreeRealTime.com, Inc. ("the Company" or "FreeRealTime.com") is a web based
provider of real-time financial market information services and analytic
tools. The Company has a free web site and web site which is accessible
only to paid subscribers. The Company derives its revenues from the sale of
advertising space on its free web site and from the collection of
subscription fees.
FreeRealTime.com, Inc. is the result of a merger between Pub Singin', Inc.,
a Colorado corporation ("Pub Singin") and First International Financial
Corporation, a Delaware corporation ("FIFC-Delaware"). The two companies
merged in September 1998. Immediately prior to the merger, Pub Singin
changed its name to "FreeRealTime.com, Inc." and FreeRealTime.com, Inc.
became the surviving entity. Prior to the merger, FreeRealTime.com, Inc.
had approximately 528,000 shares of common stock issued and outstanding
(after giving effect to a 5-for-1 reverse stock split) and FIFC-Delaware
had approximately 4,760,000 shares of common stock issued and outstanding.
Pursuant to the merger agreement, all shares of FIFC-Delaware were
exchanged on a 1-for-1 basis for shares of FreeRealTime.com, Inc.
Accordingly, following the merger the former shareholders of FIFC-Delaware
held approximately a 90% controlling interest in FreeRealTime.com, Inc.
Pub Singin was formed on May 3, 1989 under the laws of the State of
Colorado for the purpose of publishing and marketing song sheets for use in
piano bars and restaurants. From the period of its inception through the
time of its merger with FIFC-Delaware, Pub Singin had no business
operations and sustained minimal losses each year.
The Company's business began in Canada through First International
Financial Corporation, an Alberta corporation ("FIFC-Alberta"). FIFC-
Alberta was originally named Divitae Financial Corporation and was formed
in July 1994 under the laws of Alberta, Canada by founder Brad Gunn. Mr.
Gunn formed FIFC-Alberta as an investment vehicle for his family but the
company never conducted any business operations until January 1996, when
Divitae Financial Corporation changed its name to First International
Financial Corporation. At that time, FIFC-Alberta sold capital stock in
several private placements and began to develop its Internet business.
First International Financial Corporation (Delaware) ("FIFC-Delaware") was
formed on June 25, 1997 under the laws of the State of Delaware under the
name First International USA Corp. with the intent of moving the business
of FIFC-Alberta into the United States and into an entity governed by the
laws of the State of Delaware. FIFC-Delaware did not have any business
operations until July 31, 1998 when FIFC-Delaware acquired 566,689 shares
of common stock of FIFC-Alberta, representing all of the outstanding
capital stock, from the stockholders of FIFC-Alberta. FIFC-Delaware
issued, in the aggregate, 4,544,990 shares of common stock in a private
placement to the stockholders of FIFC-Alberta in exchange for their shares
of FIFC-Alberta. As a result of the foregoing acquisition, FIFC-Alberta
became a wholly-owned subsidiary of FIFC-Delaware.
Prior to the acquisition of FIFC-Alberta, FIFC-Delaware intended to file an
amendment to its Certificate of Incorporation to change its name to "First
International Financial Corporation" and to increase its authorized capital
stock. Due to the failure to file the amendment to the Certificate of
Incorporation of FIFC-Delaware, stockholders of FIFC-Alberta received
shares of common stock in a corporation that had
6
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
not legally changed its name and which were in excess of the amount of
shares of common stock authorized by the Certificate of Incorporation of
FIFC-Delaware. In addition, due to the failure to legally effect the name
change of FIFC-Delaware, the Company has made a corrective filing with the
State of Colorado and has filed a merger certificate in Delaware to effect
the merger of FIFC-Delaware and Pub Singin. The failure to file this
amendment to the Certificate of Incorporation was discovered during the
preparation of the Company's annual report on Form 10-SB and an amendment
to the Certificate of Incorporation was filed with the Secretary of State
of the State of Delaware on September 29, 1999. The Company is currently
seeking releases from any potential claims from all stockholders affected
by this oversight.
(2) Summary of Significant Accounting Policies
Business Combinations and Basis of Presentation
The combination between FIFC-Delaware and Pub Singin', Inc. was accounted
for as a purchase. The combination between FIFC-Delaware and FIFC-Alberta
was a combination between commonly controlled corporations and has been
accounted for using the "as if pooling" method of accounting. The
accompanying financial statements have been restated as if the pooling took
place at beginning of the earliest year presented. All share and per share
information has been retroactively restated for the effects or all stock
splits and share exchanges. All intercompany balances and transactions
have been eliminated in consolidation.
Use of Estimates
The financial statements have been prepared in conformity with generally
accepted accounting principles. In preparing the financial statements,
management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities to prepare the consolidated
financial statements in conformity with generally accepted accounting
principles. Actual results could differ from those estimates.
Foreign Currency
The financial statements of the Canadian subsidiary are measured using the
local currency as the functional currency. Assets and liabilities of the
Canadian subsidiary are translated using the rate of exchange at the
balance sheet date. Income and expense items are translated at the average
rate of exchange during each period. Translation gains and losses are nil.
Foreign currency transaction gains and losses are included in income
currently.
Revenue Recognition
Advertising revenues are recognized during the period the advertising is
displayed. Subscription fees are recognized on a straight-line basis over
the subscription period.
7
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
Cash and Cash Equivalents
For purposes of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. At March 31, 1999, $50 of the
Company's cash and cash equivalents balance was restricted in accordance
with the Company's collateralized bank loan.
Plant and Equipment
Plant and equipment are stated at cost. Depreciation has been provided on
a straight-line basis over periods ranging from 5 to 7 years.
Long Lived Assets
Long lived assets are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount of an asset may not be
recoverable. Recoverability of assets to be held and used is measured by a
comparison of the carrying amount of an asset to future net cash flows
expected to be generated by the asset. If such assets are considered to be
impaired, the impairment to be recognized is measured by the amount by
which the carrying amount of the assets exceed the fair value of the
assets. Assets to be disposed of are reported at the lower of the carrying
amount or fair value less costs to sell.
Advertising, Start-up Costs and Development Costs
The Company charges all advertising costs, start-up costs and development
costs to expense as incurred. Selling expenses of the Company include
advertising and promotion costs of approximately $12 and $13 for the years
ended March 31, 1999 and 1998, respectively.
Software Development Costs for Internal Use Software
Internal costs associated with the development of software used internally
is generally expensed as incurred.
Stock Based Compensation
The Company measures the compensation cost of employee stock option plans
using the intrinsic value based method prescribed by APB Opinion No. 25,
"Accounting for Stock Issued to Employees." The Company makes pro forma
disclosures of net loss and loss per share as if the fair value method
prescribed by Statement of Financial Accounting Standards No. 123 had been
applied.
Income Taxes
Income taxes are accounted for using the asset and liability method. Under
this method, deferred tax assets and liabilities are determined based on
the difference between the financial statement and tax bases of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
8
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
Earnings Per Share
Basic and diluted earnings per share have been retroactively restated to
give effect to stock splits and the Company's business combination
accounted for using the "as if pooling" method.
Other Comprehensive Income
Net income and other comprehensive income are substantially identical for
all periods presented because foreign currency translation adjustments are
nil.
Business Segment Reporting
The Company adopted Statement of Financial Accounting Standard No. 131,
"Disclosures About Segments of an Enterprise and Related Information"
effective in the fiscal year ended March 31, 1999. SFAS No. 131
establishes new standards for reporting information about business segments
and related disclosures about products, geographic areas and major
customers, if applicable. Management of the company has determined that it
operates in only one reportable business segment. The company does not
have any individually significant customers. Substantially all sales are
derived from customers located in the United States.
Fair Value of Financial Instruments
The Company believes that the fair value of its financial instruments
approximates their recorded historical cost due to the short term
maturities of the instruments and where applicable, the similarity of
stated interest rates with market rates.
Recent Accounting Pronouncements
In June 1998, the Financial Accounting Standards Board issued SFAS No. 133,
"Accounting for Derivative Instruments and Hedging Activities." SFAS No.
133 modifies the accounting for derivative and hedging activities and is
effective for fiscal years beginning after June 15, 2000. Since the
Company and its subsidiaries do not presently invest in derivatives or
engage in hedging activities, SFAS No. 133 should not impact the Company's
financial position or results of operations.
In March 1998, the American Institute of Certified Public Accountants
issued Statement of Position 98-1 ("SOP 98-1"), "Accounting for the Costs
of Computer Software Developed or Obtained for Internal Use." The Company
will adopt SOP 98-1 effective April 1, 1999. The adoption of SOP 98-1 will
require the Company to modify its method of accounting for software. The
Company is still evaluating the impact of SOP 98-1.
In April 1998, The American Institute of Certified Public Accountants
issued Statement of Position 98-5 ("SOP 98-5"), "Reporting on the Costs of
Start-Up Activities." SOP 98-5 provides guidance on the financial
reporting of start-up costs and organization costs. It requires costs of
start-up activities and organization costs to be expensed as incurred.
Based on information currently available, the Company does not expect the
adoption of SOP 98-5 to have a significant impact on its financial position
or results of operations. The Company will adopt SOP 98-5 effective April
1, 1999.
9
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
(3) Property, Plant and Equipment
A summary of property, plant and equipment follows:
<TABLE>
<CAPTION>
1999
--------
<S> <C>
Computer hardware and software $ 323
Office equipment 10
--------
333
Less accumulated depreciation and amortization 68
--------
$ 265
========
</TABLE>
(4) Long-Term Debt
Long-term debt consists of the following:
<TABLE>
<CAPTION>
1999
--------
<S> <C>
Collateralized bank loan, bearing interest
at the rate of bank's prime rate plus 4%.
Interest only payments until June 30, 1998.
Commencing June 1, 1998, principal payments
of $9 plus interest monthly for 36 months. 82
Unsecured shareholder loans, bearing interest
at the rate of 10%. Interest only payments
until maturity. Maturity dates range from
March 31, 2001 to April 24, 2001. 41
--------
Total long-term debt 123
Less current installments of long-term debt 73
--------
Long-term debt, excluding current installments $ 50
========
</TABLE>
Under the terms of the collateralized bank loan, the Company is required to
meet certain non-financial covenants and ratios. The Company was in
compliance with all covenants and ratios at March 31, 1999.
Annual maturities of long-term debt for the next five years for the periods
ended March 31 are as follows:
<TABLE>
<CAPTION>
1999
--------
<S> <C>
2000 $ 73
2001 37
2002 13
--------
$ 123
========
</TABLE>
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
(5) Income Taxes
The Company has no significant net, taxable temporary differences which
would require recognition of deferred tax liabilities and, due to the
uncertainty of future realizability, has recorded a valuation allowance
against all deferred tax assets for deductible temporary differences and
tax operating loss carryforwards. The Company increased its valuation
allowance by approximately $273 for the year ended March 31, 1999,
primarily as a result of the increase in tax operating loss carryforwards.
The Company has had losses since inception and therefore has not provided
for income taxes. At March 31, 1999, the Company has net operating loss
carryforwards of approximately $273 for both Federal and state income tax
reporting purposes which begin to expire in 2011 and 2004, respectively.
Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amount of assets and liabilities for financial
reporting purposes and the amounts used for income tax purposes, as well as
operating loss and tax credit carryforwards.
Significant components of the Company's deferred income tax assets are as
follows:
<TABLE>
<CAPTION>
1999
----------
<S> <C>
Deferred tax asset -- net operating losses $ 273
Valuation allowance (273)
----------
Net deferred tax asset -- net operating losses $ --
==========
</TABLE>
Due to the uncertainty surrounding the realization of the benefits of the
net operating loss carryforward, the Company has established a valuation
allowance for all of its deferred tax asset as of March 31, 1999. In
assessing the potential realization of deferred tax assets, management
considers whether it is more likely than not that some portion or all of
the deferred tax assets will not be realized. The ultimate realization of
deferred tax assets is dependent upon the generation of future taxable
income during the periods in which those temporary differences become
deductible. In addition, the utilization of the net operating loss
carryforwards may be limited due to restrictions imposed under applicable
Federal and state tax law due to a change in ownership.
(6) Shareholders' Equity
Sales of Unregistered Securities
FIFC-Delaware merged with FreeRealTime.com (formerly Pub Singin) in
September 1998. Prior to the merger, FIFC-Delaware had completed two
issuances of its common stock. The first occurred in July 1998. FIFC-
Delaware, whose shareholders were identical to those of FIFC-Alberta,
issued approximately 8 shares of FIFC-Delaware common stock to acquire each
outstanding common share of FIFC-Alberta. FIFC-Delaware issued a total of
4,544,990 shares of common stock in this exchange. All share amounts prior
to this acquisition reflect the 8-for-1 share exchange. This share exchange
has been FIFC-Delaware relied on the registration exemption in Section 4(2)
of the Securities Act of 1933 (the "1933 Act") to issue those shares
without registration. As a result of this acquisition, FIFC-Alberta became
a wholly-owned subsidiary of FIFC-Delaware. In August 1998, FIFC-Delaware
issued 215,000 shares of its common stock at $1.00 per share for a total of
$215. FIFC-Delaware relied on the registration exemption in Section 4(2) of
the 1933 Act to issue these shares without registration.
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
In September 1998, FIFC Delaware acquired the company formerly known as Pub
Singin (Pub Singin changed its name to FreeRealTime.com, Inc. just prior to
the acquisition). Pub Singin was an inactive public shell company with no
operations and no assets. To complete the acquisition, FIFC Delaware issued
528,000 shares of common stock with a market value of $528 to acquire all
of the common stock belonging to the former Pub Singin shareholders. The
excess of the purchase price over the fair value of the net assets acquired
(goodwill) was approximately $528, which was to be amortized on a straight-
line basis over five years. Subsequent to the merger, the Company evaluated
the recoverability of the goodwill recorded and determined the goodwill to
be permanently impaired. As a result, the Company recorded an impairment
charge of $528 in fiscal 1999.
The acquisition described above was accounted for by the purchase method of
accounting. Accordingly, the accompanying Consolidated Statements of
Operations do not include any revenues or expenses related to this
acquisition prior to the closing date. Following are the Company's pro
forma results for fiscal years 1999 and 1998 assuming the acquisition
occurred on April 1, 1997 (in thousands, except for per share data).
Because Pub Singin had no operations, the pro forma results of operations
for 1999 and 1998 are identical to the results reported in the Consolidated
Statements of Operations included herein, except as to the amortization of
goodwill:
<TABLE>
<CAPTION>
1999 1998
---------------------------------------------------------------------------
<S> <C> <C>
Net revenues $ 1,396 $ 55
Net loss (2,943) (267)
Net loss per common share:
Basic and diluted (0.50) (0.05)
Weighted average outstanding common shares:
Basic and diluted 5,865,073 4,975,635
</TABLE>
In October 1998, the Company offered 1 million shares of common stock in
FreeRealTime.com, Inc. The aggregate offering price for the issuance was
$1,000. The Company relied on the registration exemption in Rule 504 of the
1933 Act to issue these units without registration. Three investors
purchased a total of 750,000 shares for $750 (less issuance costs of $75
paid in cash). In addition, the Company issued 500,000 shares of common
stock with a fair market value of $500 as stock issuance costs which had no
net effect on stockholders' equity.
While the Company believes that all of the issuances discussed above
qualified for either the Rule 504 or Section 4(2) exemption from
registration, a court could determine that these issuances did not qualify
for either exemption. If that were to occur, the Company would be in
violation of the Securities Laws and the Company could be exposed to
liability for damages suffered by investors.
Stock Option Plan
As of March 31, 1999, the Company had two stock-based compensation plans,
the Non-Qualified Stock Option Plan and the 1999 Equity Incentive Plan.
Stock options are granted at the discretion of the Board of Directors.
Options vest at varying rates from the date of grant up to 16 months.
Compensation expense, related to stock options granted with exercise prices
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
below fair market value, are amortized over the option vesting period. Options
expire at varying rates of up to 47 months from the date of grant. The
total number of options exercisable as of March 31, 1999 was 300,000 with a
weighted average exercise price of $1.06.
The following tables summarize the Company's option activity:
<TABLE>
<CAPTION>
Number of Weighted-average exercise
options price per option
<S> <C> <C>
Outstanding at March 31, 1998 - $ -
Granted during the year ended
March 31, 1999 1,436,000 1.02
----------- -------------------------
Outstanding at March 31, 1999 1,436,000 $ 1.02
=========== =========================
</TABLE>
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
---------------------------------------- ----------------------------
Weighted-
Number average Weighted-
Range of outstanding remaining Average Weighted-
exercise at March 31, contractual Exercise Number of average
prices 1999 life Price Shares exercise price
-------- ------------ ----------- ---------- --------- --------------
<S> <C> <C> <C> <C> <C>
$
.10 -- 1,230,000 2.10 $ 0.58 285,500 $ 1.00
1.00
2.20 -- 206,000 2.96 3.63 14,500 2.20
8.00
------------ ---------
Total 1,436,000 2.22 $ 1.02 300,000 $ 1.06
============ =========
</TABLE>
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
The following table presents pro forma information as if the Company had
recorded compensation cost using the fair value method of SFAS No. 123 for
the issued stock options using the minimum value valuation model:
<TABLE>
<CAPTION>
Year Ended
March 31, 1999
--------------
<S> <C>
Net loss:
As reported $ (3,049)
Assumed stock compensation cost (5)
--------------
Pro forma, adjusted $ (3,054)
--------------
Pro forma loss per share:
Basic and diluted (0.54)
</TABLE>
The fair value of each option grant is estimated on the date of grant using
the Black-Scholes options pricing model, with the following weighted-
average assumptions: risk-free interest rate of 5.5%; no stock dividend
yield; expected lives of approximately 6 months. The average fair value of
options granted amounted to $0.02 per option granted in 1999.
(7) Commitments and Contingencies
Leases
The Company is obligated under various capital leases for computer hardware
that expire at various dates during the next three years. At March 31,
1999, the gross amount of computer hardware and related accumulated
amortization recorded under capital leases are as follows:
<TABLE>
<CAPTION>
1999
--------
<S> <C>
Computer hardware $ 22
Less accumulated amortization 2
--------
$ 20
========
</TABLE>
Amortization of assets held under capital leases is included with
depreciation expense.
<PAGE>
FREEREALTIME.COM, INC.
AND SUBSIDIARY
Notes to the Consolidated Financial Statements
March 31, 1999
(Dollars in thousands, except per share data)
The Company also has two noncancelable operating leases for buildings, that
expire in 2000. Future minimum lease payments under the noncancelable
operating leases (with initial or remaining terms in excess of one year)
and future minimum capital lease payments as of March 31, 1999 are:
<TABLE>
<CAPTION>
Capital Operating
Leases Leases
------- ---------
<S> <C> <C>
2000 $ 11 $ 15
2001 8 -
2002 3 -
------- ---------
Total minimum lease payments 22 $ 15
=========
Less amount representing interest
(at rates ranging from 9.05% to 15.60%) 3
-------
Present value of net minimum
capital lease payments 19
Less current installments of obligations
under capital leases 11
-------
$ 8
=======
</TABLE>
Total rental expense, including month-to-month rentals, approximated $34 in
1999.
(8) Subsequent Events
In June 1999, the Company offered units consisting of one share of common
stock and one warrant to purchase an additional share of common stock. The
price of each unit was $4.00 and 182,500 units were issued, for total
offering proceeds of $730 (less issuance costs of $73). The Company relied
on the registration exemption in Section 4(2) of the 1933 Act to issue
these units without registering the underlying securities.
In September 1999 (through September 29, 1999), the Company issued 727,800
shares of common stock at $5.00 per share for a total of $3,639. The
Company relied on the registration exemption in Section 4(2) of the 1933
Act to issue these units without registering the underlying securities.
<PAGE>
SCHEDULE II
FREEREALTIME.COM, INC. AND SUBSIDIARY
Valuation and Qualifying Account and Reserve
Year ended March 31, 1999
(Dollars in thousands)
<TABLE>
<CAPTION>
Allowance for Doubtful
Accounts
-----------------------
<S> <C>
Year end March 31, 1998: $ --
Provision for doubtful accounts 95
Bad debt write-offs 29
------
Year end March 31, 1999 $ 66
======
</TABLE>
<PAGE>
Exhibit 2.1.1
ARTICLES OF AMENDMENT AND RESTATEMENT
OF THE
ARTICLES OF INCORPORATION
OF
PUB SINGIN' INC.
Pursuant to the provisions of the Colorado Business Corporation Act, the
undersigned corporation adopts the following amended and restated Articles of
Incorporation. These Articles set forth the provisions of the Articles of
Incorporation, as amended, and supercedes the original Articles of Incorporation
and all amendments thereto.
FIRST: The name of the corporation is Pub Singin' Inc.
SECOND: The following amended and restated Articles of Incorporation were
adopted by a vote of the board of directors and the shareholders.
The number of shares voted for the amended and restated Articles of
Incorporation was sufficient for approval.
ARTICLE I
Name
----
The name of the Corporation is Pub Singin' Inc.
ARTICLE II
Period of Duration
------------------
This Corporation shall exist in perpetuity, from and after the date of
filing these Articles of Incorporation with the Secretary of State of Colorado
unless and until dissolved according to the laws of the State of Colorado.
ARTICLE III
Purpose
-------
This Corporation is organized for the purpose of transacting any and all
lawful activities or business for which corporations may be formed under
Articles 101 to 117 of Title 7 of the Colorado Revised Statues, known and cited
as the Colorado Business Corporation Act, to have and exercise all powers,
privileges and immunities now or hereafter conferred upon or permitted to
corporations by the laws of the State of Colorado, and to do any and all things
herein set forth to the same extent as natural persons could do insofar as
permitted by the laws of the State of Colorado.
-1-
<PAGE>
ARTICLE IV
Powers
------
The powers of the Corporation shall be those powers granted by the Colorado
Business Corporation Act under which this Corporation is formed. In addition,
the Corporation shall have the following specific powers:
Section 1. Officers. The Corporation shall have the power to elect or
--------
appoint officers and agents of the Corporation and to fix their compensation.
Section 2. Capacity. The Corporation shall have the power to act as an agent
--------
for any individual, association, partnership, corporation or other legal entity,
and to act as general partner for any limited partnership.
Section 3. Acquisitions. The Corporation shall have the power to receive,
------------
acquire, hold, exercise rights arising out of the ownership or possession
thereof, sell, or otherwise dispose of, shares or other interests in, or
obligations of, individuals, associations, partnerships, corporations or
governments.
Section 4. Earned Surplus. The Corporation shall have the power to receive,
--------------
acquire, hold, pledge, transfer, or otherwise dispose of shares of the
Corporation, but such shares may only be purchased, directly or indirectly, out
of earned surplus.
Section 5. Gifts. The Corporation shall have the power to make gifts or
-----
contributions for the public welfare or for charitable, scientific or
educational purposes.
ARTICLE V
Capital Structure
-----------------
Section 1. Authorized Capital. The aggregate number of shares and the
------------------
amount of the total authorized capital of said Corporation shall consist of
50,000,000 shares of common stock, no par value per share, and 5,000,000 shares
of preferred stock, no par value per share. The preferred shares shall have the
preference of upon dissolution or winding up of the company, the preferred
shareholders as a group shall receive 10% of the assets of the company to be
distributed pro rata prior to the distribution of assets to the holders of
common stock.
Section 2. Share Status. All common shares will be equal to each other, and
------------
when issued, shall be fully paid and nonassessable, and the private property of
shareholders shall be liable for corporate debts. Preferred shares shall have
such preferences and voting rights as the Directors may assign to them prior to
issuance. Each holder of a common share of record shall have one vote for each
share of stock outstanding in his name on the books of the Corporation and shall
be entitled to vote said stock. Each holder of a preferred share of record shall
have one vote for each share of stock outstanding in his name on the books of
the Corporation, if such voting right was assigned by the Board of Directors
upon issuance.
-2-
<PAGE>
Section 3. Consideration for Shares. The stock of the Corporation shall be
------------------------
issued for such consideration as shall be fixed from time to time by the Board
of Directors. In the absence of fraud, the judgment of the Directors as to the
value of any property or services received in full or partial payment for shares
shall be conclusive. When shares are issued upon payment of the consideration
fixed by the Board of Directors, such shares shall be taken to be fully paid
stock and shall be nonassessable.
Section 4. Pre-Emptive Rights. Except as may otherwise be provided by the
------------------
Board of Directors, holders of shares of stock of the Corporation shall have no
pre-emptive right to purchase, subscribe for or otherwise acquire shares of
stock of the Corporation, rights, warrants or options to purchase stocks or
securities of any kind convertible into stock of the Corporation.
Section 5. Dividends. Dividends in cash, property or shares of the
---------
Corporation may be paid, as and when declared by the Board of Directors, out of
funds of the Corporation to the extent and in the manner permitted by law.
Section 6. Distribution in Liquidation. Upon any liquidation, dissolution
---------------------------
or winding up of the Corporation, and after paying or adequately providing for
the payment of all its obligations, the remainder of the assets of the
Corporation shall be distributed, either in cash or in kind, pro rata to the
holders of the common stock, subject to preferences, if any, granted to holders
of the preferred shares. The Board of Directors may, from time to time,
distribute to the shareholders in partial liquidation from stated capital of the
Corporation, in cash or property, without the vote of the shareholders, in the
manner permitted and upon compliance with limitations imposed by law.
ARTICLE VI
Voting by Shareholders
----------------------
Section 1. Voting Rights; Cumulative Voting. Each outstanding share of
--------------------------------
common stock is entitled to one vote and each fractional share of common stock
is entitled to a corresponding fractional vote on each matter submitted to a
vote of shareholders. Cumulative voting shall not be allowed in the election of
Directors of the Corporation and every shareholder entitled to vote at such
election shall have the right to vote the number of shares owned by him for as
many persons as there are Directors to be elected, and for whose election he has
a right to vote. Preferred shares are to have the same voting rights as common
shares if so designated by the Board of Directors upon issuance.
Section 2. Majority Vote. Except as otherwise provided herein, when, with
-------------
respect to any action to be taken by the Shareholders of the Corporation, the
Colorado Business Corporation Act requires the vote or concurrence of the
holders of two-thirds of the outstanding shares entitled to vote thereon, or of
any class or series, any and every such action shall be taken, notwithstanding
such requirements of the Colorado Business Corporation Act, by the vote or
concurrence of the holders of a majority of the outstanding shares entitled to
vote thereon, or of any class or series.
<PAGE>
ARTICLE VII
Registered and Initial Principal Office and Registered Agent
------------------------------------------------------------
The registered office and initial principal office of the Corporation is
located at 3055 E. 1/4 Road, Grand Junction, CO 81504, and the name of the
registered agent of the Corporation at such address is William R. Barber.
ARTICLE VIII
Incorporator
------------
The name and address of the incorporators are William R. Barber, 3055 E. 1/4
Road, Grand Junction, CO 81504; Gayle Barber, 3055 E. 1/4 Road, Grand Junction,
CO 81504; and Katherine A. Fitzgerald, 2888 S. Locust St., Denver, CO 80222.
ARTICLE IX
Board of Directors
------------------
Section 1. The corporate powers shall be exercised by a majority of the Board
of Directors. The number of individuals to serve on the Board of Directors shall
be set forth in the Bylaws of the Corporation; provided, however, that the
initial Board of Directors shall consist of one person below-named to manage the
affairs of the Corporation until such time as he resigns or his successor
is appointed by him or elected by a majority vote of the Shareholders:
Name of Director Address
---------------- -------
William R. Barber 3055 E. 1/4 Road, Grand Junction, CO 81504;
Section 2. If in the interval between the annual meetings of shareholders of
the Corporation, the Board of Directors of the Corporation deems it desirable
that the number of Directors be increased, additional Directors may be elected
by a unanimous vote of the Board of Directors of the Corporation then in office,
or as otherwise set forth in the Bylaws of the Corporation.
Section 3. The number of Directors comprising the whole Board of Directors
may be increased or decreased from time to time within such foregoing limit as
set forth in the Bylaws of the Corporation.
ARTICLE X
Powers of the Board of Directors
--------------------------------
In furtherance and not in limitation of the powers conferred by the State of
Colorado, the Board of Directors is expressly authorized and empowered:
Section 1. Bylaws. To make, alter, amend and repeal the Bylaws, subject to
------
the power of the shareholders to alter or repeal the Bylaws made by the Board of
Directors.
<PAGE>
Section 2. Books and Records. Subject to the applicable provisions of the
-----------------
Bylaws then in effect, to determine, from time to time, whether and to what
extent, and at what times and places, and under what conditions and regulations,
the accounts and books of the Corporation or any of them, shall be open to
shareholder inspection. No shareholder shall have any right to inspect any of
the accounts, books, or documents of the Corporation, except as permitted by
law, unless and until authorized to do so by resolution of the Board of
Directors or of the shareholders of the Corporation.
Section 3. Power to Borrow. To authorize and issue, without shareholder
---------------
consent, obligations of the Corporation, secured and unsecured, under such terms
and conditions as the Board, in its sole discretion, may determine, and to
pledge, or mortgage, as security therefor, any real or personal property of the
Corporation, including after-acquired property.
Section 4. Dividends. To determine whether any and, if so, what part, of
---------
the earned surplus of the Corporation shall be paid in dividends to the
shareholders, and to direct and determine other use and disposition of any such
earned surplus.
Section 5. Profits. To fix, from time to time, the amount of the profits
-------
of the Corporation to be reserved as working capital or for any other lawful
purposes.
Section 6. Employees' Plans. From time to time to provide and carry out
----------------
and to recall, abolish, revise, amend, alter, or change a plan or plans for the
participation by all or any of the employees, including Directors and officers
of this Corporation or of any corporation in which or in the welfare of which
the Corporation has any interest, and those actively engaged in the conduct of
this Corporation's business, in the profits of this Corporation or of any branch
or division thereof, as a part of this Corporation's legitimate expenses, and
for the furnishing to such employees and persons, or any of them, at this
Corporation's expense, of medical services, insurance against accident,
sickness, or death, pensions during old age, disability, or unemployment,
education, housing, social services, recreation, or other similar aids for their
relief or general welfare, in such manner and upon such terms and conditions as
may be determined by the Board of Directors.
Section 7. Warrants and Options. The Corporation, by resolution or
--------------------
resolutions of its Board of Directors, shall have power to create and issue,
whether or not in connection with the issue and sale of any shares of any other
securities of the Corporation, warrants, rights, or options entitling the
holders thereof to purchase from the Corporation any shares of any class or
classes of any other securities of the Corporation, such warrants, rights or
options to be evidenced by or in such instrument or instruments as shall be
approved by the Board of Directors. The terms upon which, the time or times
(which may be limited or unlimited in duration), and the price or prices (not
less than the minimum amount prescribed by law, if any) at which any such
warrants, rights, or options may be issued and any such shares or other
securities may be purchased from the Corporation upon the exercise of such
warrant, right, or option shall be such as shall be fixed and stated in the
resolution or resolutions of the Board of Directors providing for the creation
and issue of such warrants, rights or options. The Board of Directors is hereby
authorized to create and issue any such warrants, rights or options from time to
time for such consideration, and to such persons, firms, or corporations, as the
Board of Directors may determine.
<PAGE>
Section 8. Compensation. To provide for the reasonable compensation of its
------------
own members, and to fix the terms and conditions upon which such compensation
will be paid.
Section 9. Not in Limitation. In addition to the powers and authority
-----------------
hereinabove, or by statute expressly conferred upon it, the Board of Directors
may exercise all such powers and do all such acts and things as may be exercised
or done by the Corporation, subject, nevertheless, to the provisions of the laws
of the State of Colorado, of these Articles of Incorporation and of the Bylaws
of the Corporation.
ARTICLE XI
Right of Directors to Contract with Corporation
-----------------------------------------------
No contract or other transaction between this Corporation and one or more
of its Directors or any other corporation, firm, association, or entity in which
one or more of its Directors are directors or officers or are financially
interested shall be either void or voidable solely because of such relationship
or interest or solely because such directors are present at the meeting of the
Board of Directors or a committee thereof which authorizes, approves, or
ratifies such contract or transaction or solely because their votes are counted
for such purpose if:
A. The fact of such relationship or interest is disclosed or known to the
Board of Directors or committee which authorizes, approves, or ratifies the
contract or transaction by a vote or consent sufficient for the purpose without
counting the votes of consents of such interested Directors; or
B. The fact of such relationship or interest is disclosed or known to the
shareholders entitled to vote and they authorize, approve, or ratify such
contract or transaction by vote or written consent; or
C. The contract or transaction is fair and reasonable to the Corporation.
ARTICLE XII
Corporate Opportunity
---------------------
The officers, Directors and other members of management of this Corporation
shall be subject to the doctrine of "corporate opportunities" only insofar as it
applies to business opportunities in which this Corporation has expressed an
interest as determined from time to time by this Corporation's Board of
Directors as evidenced by resolutions appearing in the Corporation's minutes.
Once such areas of interest are delineated, all such business opportunities
within such areas of interest which come to the attention of the officers,
Directors, and other members of management of this Corporation shall be
disclosed promptly to this Corporation and made available to it. The Board of
Directors may reject any business opportunity presented to it and thereafter any
officer, Director or other member of management may avail himself of such
opportunity. Until such time as this Corporation, through its Board of
Directors, has designated an area of interest, the officers, Directors and other
members of management of this Corporation shall be free to engage in such areas
of interest on their own and this doctrine shall not limit the right of any
officer, Director or other member of
<PAGE>
management of this Corporation to continue a business existing prior to the time
that such area of interest is designated by the Corporation. This provision
shall not be construed to release any employee of this Corporation (other than
an officer, Director or member of management) from any duties which he may have
to this Corporation.
ARTICLE XIII
Indemnification of Officers, Directors and Others
--------------------------------------------------
The Board of Directors of the Corporation shall have the power to:
A. Indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative (other than an action
by or in the right of the Corporation), by reason of the fact that he is or was
a director, officer, employee or agent of the Corporation or is or was serving
at the request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in the best interests of the Corporation and, with
respect to any criminal action or proceedings, had no reasonable cause to
believe his action was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement or conviction or upon a plea of nolo
----
contendere or its equivalent shall not of itself create a presumption that the
- ----------
person did not act in good faith and in a manner which he reasonably believed to
be in the best interests of the Corporation and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
B. Indemnify any person who was or is a party or is threatened to be made
a party to any threatened, pending or completed action or suit by or in the
right of the Corporation to procure a judgment in its favor by reason of the
fact that he is or was a director, officer, employee or agent of the Corporation
or is or was serving at the request of the Corporation as a director, officer,
employee or agent of the Corporation, partnership, joint venture, trust or other
enterprise against expenses (including attorney's fees) actually and reasonably
incurred by him in connection with the defense or settlement of such action or
suit if he acted in good faith and in a manner he reasonably believed to be in
the best interests of the Corporation; but no indemnification shall be made in
respect of any claim, issue or matter as to which such person has been adjudged
to be liable for negligence or misconduct in the performance of his duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought determines upon application that, despite the adjudication of
liability, but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnification for such expenses which such court
deems proper.
C. Indemnify a Director, officer, employee or agent of the Corporation to
the extent that such person has been successful on the merits in defense of any
action, suit or proceeding referred to in Subparagraph A or B of this Article or
in defense of any claim, issue, or matter therein, against expenses (including
attorney's fees) actually and reasonably incurred by him in connection
therewith.
<PAGE>
D. Authorize indemnification under Subparagraph A or B of this Article
(unless ordered by a court) in the specific case upon a determination that
indemnification of the Director, officer, employee or agent is proper in the
circumstances because he has met the applicable standard of conduct set forth in
said Subparagraph A or B. Such determination shall be made by the Board of
Directors by a majority vote of a quorum consisting of directors who were not
parties to such action, suit or proceeding, or, if such a quorum is not
obtainable or even if obtainable a quorum of disinterested directors so directs,
by independent legal counsel in a written opinion, or by the shareholders.
E. Authorize payment of expenses (including attorney's fees) incurred in
defending a civil or criminal action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding as authorized in Subparagraph D
of this Article upon receipt of an undertaking by or on behalf of the Director,
officer, employee or agent to repay such amount unless it is ultimately
determined that he is entitled to be indemnified by the Corporation as
authorized in this Article.
F. Purchase and maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the Corporation or who is or was serving
at the request of the Corporation as a Director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity or arising out of his status as such, whether or not the Corporation
would have the power to indemnify him against such liability under the
provision of this Article.
The indemnification provided by this Article shall not be deemed exclusive
of any other rights to which those indemnified may be entitled under these
Articles of Incorporation, and the Bylaws, agreement, vote of shareholders or
disinterested directors or otherwise, and any procedure provided for by any of
the foregoing, both as to action in his official capacity and as to action in
another capacity while holding such office, and shall continue as to a person
who has ceased to be a Director, officer, employee or agent and shall inure to
the benefit of heirs, executors and administrators of such a person.
ARTICLE XIV
Right to Amend or Restate
-------------------------
The right is expressly reserved to amend, restate, alter, change, or
repeal any provision or provisions contained in these Article of Incorporation
or any Article herein by a majority vote of the members of the Board of
Directors and a majority vote of the shareholders of the Corporation in
accordance with Article 110 of the Colorado Business Corporation Act.
ARTICLE XV
Change of Corporate Name
------------------------
Inasmuch as both the Colorado Business Corporation Act and these Articles
of Incorporation both require shareholder action to amend these Articles of
Incorporation, should the directors of this corporation amend these Articles
whereby the name of this corporation changed without actual
<PAGE>
STATE OF COLORADO
FEE $175.00 BIENNIAL REPORT OF
- ----------------- A CORPORATION OR LIMITED LIABILITY COMPANY
ON OR BEFORE
DATE DUE
-------- READ INSTRUCTIONS ON REVERSE SIDE BEFORE COMPLETING
REPORT YEAR 1997 THIS FORM MUST BE TYPED
----- SUBMIT SIGNED FORM WITH FILING FEE
MAILING DATE
-------------
INFORMATION BELOW IS ON FILE IN THIS OFFICE-DO NOT CHANGE PRE-PRINTED
INFORMATION
- --------------------------------------------------------------------------------
CORPORATE NAME REGISTERED AGENT, REGISTERED FOR OFFICE USE ONLY
OFFICE, CITY, STATE & ZIP
891045860 DP SUSPEND DATE 11/01/93 971014014 C $175.00
STATE/COUNTRY OF INC CO SECRETARY OF STATE
BARBER, WM R 01-29-97 14:47
PUB SINGIN' INC.
3055 E 1/4 RD
GRAND JUNCTION CO 81504 FIRST REPORT OF CORRECTIONS IN THIS COLUMN
- --------------------------------------------------------------------------------
Return completed reports to: TYPE NEW AGENT NAME
Department of State William R. Barber
Corporate Report Section ----------------------------------------
1560 Broadway, Suite 200 SIGNATURE OF NEW REGISTERED AGENT
Denver, CO 80202 /s/ William R. Barber
----------------------------------------
MUST HAVE A STREET ADDRESS
3055 E. 1/4 Road
----------------------------------------
CITY STATE ZIP
Grand Junction CO 81504
- --------------------------------------------------------------------------------
OFFICERS NAME AND ADDRESS TITLE
BARBER, WILLIAM R PR ----------------------------------------
3055 E 1/4 RD ----------------------------------------
----------------------------------------
GRAND JCT CO 81504
- --------------------------------------------------------------------------------
BARBER, GAYLE ST
3055 E 1/4 RD ----------------------------------------
----------------------------------------
GRAND JCT CO 81504 ----------------------------------------
- --------------------------------------------------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
- --------------------------------------------------------------------------------
DIRECTORS OR LIMITED LIABILITY COMPANY MANAGERS
(If you have less than
BARBER, WILLIAM R 3 shareholders, you may
3055 E 1/4 RD list less than 3
directors)
GRAND JCT CO 81504
- --------------------------------------------------------------------------------
BARBER, GAYLE ----------------------------------------
3055 E 1/4 RD ----------------------------------------
----------------------------------------
GRAND JCT CO 81504
- --------------------------------------------------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
- --------------------------------------------------------------------------------
Address of Principal Place of Business
Street 3055 E. 1/4 Road
------------------------------
City Grand Junction State CO Zip 81504
------------------------------ --------------- -----------
SIGNATURE
Under penalties of perjury and as an authorized officer, I declare that this
biennial report and, if applicable, the statement of change of registered office
and/or agent, has been examined by me and is, to the best of my knowledge and
belief, true, correct and complete.
BY /s/ William R. Barber
------------------------------------------------
Authorized Agent
TITLE President DATE 1/9 1997
------------------- -------------
[ ]NOTE: DO NOT USE THIS BOX IF THIS IS YOUR FIRST REPORT!!! SEE INSTRUCTIONS ON
REVERSE. IF THERE ARE NO CHANGES SINCE YOUR LAST REPORT, MARK THIS BOX, SIGN
ABOVE AND RETURN WITH THE FEE AND BY THE DATE DUE INDICATED ABOVE (UPPER LEFT
HAND CORNER). IF YOU ARE FILING AFTER THE DATE DUE ABOVE, CONTACT THIS OFFICE
FOR THE PROPER FEE. (303) 894-2251
SEE INSTRUCTIONS ON BACK
<PAGE>
<TABLE>
<S> <C> <C>
Mail to: Secretary of State For office use only 004
Corporations Section
1560 Broadway, Suite 200
Denver, CO 80202
(303) 894-2251
MUST BE TYPED Fax (303) 894-2242
FILING FEE: $5.00
MUST SUBMIT THREE COPIES
-----
Please include a typed
self-addressed envelope
</TABLE>
REGISTRATION OF REGISTERED AGENT
The undersigned, pursuant to the provisions of the Colorado Business Corporation
Act, states:
FIRST: That he is the registered agent of PUB SINGIN' INC. an entity
----------------------------
Name of Entity
organized under the laws of COLORADO
--------------------------
State of Incorporation
SECOND: That he has resigned as the registered agent of such entity and has
given notice to the entity of such resignation.
THIRD: The registered office of the entity is discontinued.
WILLIAM R. BARBER
-------------------------------
Typed name of registered agent
/s/ William R. Barber
-------------------------------
Signature
<PAGE>
EXHIBIT 2.1.2
ARTICLES OF AMENDMENT
ARTICLES OF INCORPORATION OF
PUB SINGIN', INC.,
a Colorado corporation
Pub Singin', Inc., a corporation organized and duly existing pursuant to
and by virtue of the laws of the State of Colorado ("Corporation"),
DOES HEREBY CERTIFY:
FIRST: That, pursuant to the provisions of Section 7-108-202 of the
Colorado Business Corporation Act, resolutions were adopted by the Board of
Directors of the Corporation setting forth a proposed amendment of the Articles
of Incorporation of the Corporation, declaring said amendment to be advisable
and calling for a vote of the stockholders of the Corporation in consideration
thereof. The resolution setting forth the proposed amendment is as follows:
RESOLVED, that the Articles of Incorporation of the Corporation be amended
to specify that the name of the Corporation be, and hereby is, Freerealtime.com,
----------------
Inc.
- ---
SECOND: That, pursuant to a resolution of the Board of Directors of the
Corporation, the written consent of shareholders to the amendment, given in
accordance with Section 7-107-104 of the Colorado Business Corporation Act, was
sought by the Corporation; and that, thereafter, the written consent of the
necessary number of shares was provided by shareholders in each voting group
entitled to vote separately on the amendment sufficient for approval of the
amendment by each voting group.
THIRD: That said amendment was duly adopted in accordance with the
provisions of Section 7-110-103 of the Colorado Business Corporation Act on
August 31, 1998.
IN WITNESS WHEREOF, said Corporation has caused these Articles of Amendment
to be signed by Dale Paisley, its President and Secretary, on August 31, 1998
/s/ Dale Paisley
- -------------------------
Dale Paisley
President and Secretary
<PAGE>
EXHIBIT 2.2
BYLAWS
OF
PUB SINGIN' INC.
ARTICLE I
Offices
-------
The principal office of the Corporation in Colorado shall initially be
located in Denver, Colorado. The Corporation may have such other offices,
either within or outside the State of Colorado, as the Board of Directors may
designate, or as the business of the Corporation may require from time to time.
The registered office of the Corporation required by the Colorado Business
Corporation Act to be maintained in the State of Colorado may be, but need not
be, identical with the principal office, and the address of the registered
office may be changed from time to time by the Board of Directors.
ARTICLE II
Shareholders
------------
Section 1. Annual Meeting.
--------------
The annual meeting of the shareholders shall be held pursuant to notice
given by the Board of Directors for the purpose of electing directors and for
the transaction of such other business as may come before the meeting.
Section 2. Special Meetings.
----------------
Special meetings of the shareholders, for any purpose, unless otherwise
prescribed by statute, may be called by the President or by the Board of
Directors, and shall be called by the President at the request of the holders of
not less than ten (10%) percent of all the outstanding shares of the Corporation
entitled to vote at the meeting. Such request shall state the purposes of the
proposed meeting.
Section 3. Adjournment.
-----------
a. When the annual meeting is convened, or when any special meeting
is convened, the presiding officer may adjourn it for such period of time as may
be reasonably necessary to reconvene the meeting at another place and another
time.
b. The presiding officer shall have the power to adjourn any meeting
of the shareholders for any proper purpose, including, but not limited to, lack
of a quorum, to secure a more adequate meeting place, to elect officials to
count and tabulate votes, to review any shareholder proposals or to pass upon
any challenge which may properly come before the meeting.
c. When a meeting is adjourned to another time or place, it shall not
be necessary to give any notice of the adjourned meeting if the time and place
to which the meeting is adjourned are announced at the meeting at which the
adjournment is taken, and any business may be transacted at the adjourned
meeting that might have been transacted on the original date of the meeting.
If, however, after the adjournment the Board fixes a new record date for the
adjourned meeting, a notice of the adjourned meeting shall be given in
compliance with Subsection (4)(a) of this Article II to each shareholder of
record on the new record date entitled to vote at such meeting .
<PAGE>
Section 4. Notice of Meeting; Purpose of Meeting; Waiver
---------------------------------------------
a. Each shareholder of record entitled to vote at any meeting shall
be given in person, or by first class mail, postage prepaid, written notice of
such meeting which, in the case of a special meeting, shall set forth the
purpose(s) for which the meeting is called, not less that ten (10) or more than
fifty (50) days before the date of such meeting. If mailed, such notice is to
be sent to the shareholder's address as it appears on the stock transfer books
of the Corporation unless the shareholder shall have requested of the Secretary
in writing at least fifteen (15) days prior to the distribution of any required
notice that any notice intended for him to be sent to some other address, in
which case the notice may be sent to the address so designated. Notwithstanding
any such request by a shareholder, notice sent to a shareholder's address as it
appears on the stock transfer books of this Corporation as of the record date
shall be deemed properly given. Any notice of a meeting sent by the United
States mail shall be deemed delivered when deposited with proper postage thereon
with the United States Postal Service or in any mail receptacle under its
control.
b. A shareholder waives notice of any meeting by attendance, either
in person or by proxy, at such meeting or by waiving notice in writing either
before, during or after such meeting. Attendance at a meeting for the express
purpose of objecting that the meeting was not lawfully called or convened,
however, will not constitute a waiver of notice by a shareholder stating at the
beginning of the meeting, his objection that the meeting is not lawfully called
or convened.
c. Whenever the holders of at least eighty (80%) percent of the
capital stock of the Corporation having the right to vote shall be present at
any annual or special meeting of shareholders, however called or notified, and
shall sign a written consent thereto on the minutes of such meeting, the meeting
shall be valid for all purposes.
d. A Waiver of Notice signed by all shareholders entitled to vote at
a meeting of shareholders may also be used for any other proper purpose
including, but not limited to, designating any place within or without the State
of Colorado as the place for holding such a meeting.
e. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of shareholders need be specified in any written
Waiver of Notice.
Section 5. Closing of Transfer Books; Record Date; Shareholders' List
----------------------------------------------------------
a. In order to determine the holders of record of the capital stock
of the Corporation who are entitled to notice of meetings, to vote at a meeting
or adjournment thereof, or to receive payment of any dividend, or for any other
purpose, the Board of Directors may fix a date not more than fifty (50) days
prior to the date set for any of the above-mentioned activities for such
determination of shareholders.
b. If the stock transfer books shall be closed for the purpose of
determining shareholders entitled to notice of or to vote at a meeting of
shareholders, such books shall be closed for at least ten (10) days immediately
preceding such meeting.
c. In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the date for such determination of
shareholders, such date in any case to be not more than fifty (50) days and, in
case of a meeting of shareholders, not less than ten (10) days prior to the date
on which the particular action, requiring such determination of shareholders, is
to be taken.
d. If the stock transfer books are not closed and no record date is
fixed for the determination of shareholders entitled to notice or to vote at a
meeting of shareholders, or to receive payment of a dividend, the date on which
notice of the meeting is mailed or the date on which the resolution of the Board
of Directors declaring such dividend is adopted, as the case may be, shall be
the record date for such determination of shareholders.
<PAGE>
e. When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such determination shall
apply to any adjournment thereof, unless the Board of Directors fixes a new
record date under this section for the adjourned meeting.
f. The officer or agent having charge of the stock transfer books of the
Corporation shall make, as of a date at least ten (10) days before each meeting
of shareholders, a complete list of the shareholders entitled to vote at such
meeting or any adjournment thereof, with the address of each shareholder and the
number and class and series, if any, of shares held by each shareholder. Such
list shall be kept on file at the registered office of the Corporation or at the
office of the transfer agent or registrar of the Corporation for a period of ten
(10) days prior to such meeting and shall be available for inspection by any
shareholder at any time during usual business hours. Such list shall also be
produced and kept open at the time and place of any meeting of shareholders and
shall be subject to inspection by any shareholder at any time during the
meeting.
g. The original stock transfer books shall be prima facie evidence as to the
shareholders entitled to examine such list or stock transfer books or to vote at
any meeting of shareholders.
h. If the requirements of Subsection 5(f) of this Article II have not been
substantially complied with then, on the demand of any shareholder in person or
by proxy, the meeting shall be adjourned until such requirements are complied
with.
i. If no demand pursuant to Section 5(h) is made, failure to comply with the
requirements of this Section shall not affect the validity of any action taken
at such meeting.
j. Subsection 5(g) of this Article II shall be operative only at such time(s)
as the Corporation shall have six (6) or more shareholders.
Section 6. Quorum
------
a. At any meeting of the shareholders of the Corporation, the presence, in
person or by proxy, of shareholders owning a majority of the issued and
outstanding shares of the capital stock of the Corporation entitled to vote
thereat shall be necessary to constitute a quorum for the transaction of any
business. If a quorum is present the affirmative vote of a majority of the
shares represented at such meeting and entitled to vote on the subject matter
shall be the act of the shareholders. If there shall not be a quorum at any
meeting of the shareholders of the Corporation, then the holders of a majority
of the shares of the capital stock of the Corporation who shall be present at
such meeting, in person or by proxy, may adjourn such meeting from time to time
until holders of a majority of the shares of the capital stock shall attend. At
any such adjourned meeting at which a quorum shall be present, any business may
be transacted which might have been transacted at the meeting as originally
scheduled.
b. The shareholders at a duly organized meeting having a quorum may continue
to transact business until adjournment notwithstanding the withdrawal of enough
shareholders to leave less than a quorum.
Section 7. Presiding Officer, Order of Business
------------------------------------
a. Meetings of the shareholders shall be presided over by the Chairman of the
Board, or, if he is not present, by the President or, if he is not present, by a
Vice President or, if none of the Chairman of the Board, the President, or a
Vice President is present, the meeting shall be presided over by a Chairman to
be chosen by a plurality of the shareholders entitled to vote at the meeting who
are present, in person or by proxy. The presiding officer of any meeting of the
shareholders may delegate the duties and obligations of the presiding officer of
the meeting as he sees fit.
b. The Secretary of the Corporation, or, in his absence, an Assistant
Secretary shall act as Secretary of every meeting of shareholders, but if
neither the Secretary nor an Assistant Secretary is present, the presiding
officer of the meeting shall choose any person present to act as Secretary of
the meeting.
Page 3
<PAGE>
c. The order of business shall be as follows:
1. Call of meeting to order.
2. Proof of notice of meeting.
3. Reading of minutes of last previous shareholders meeting or a Waiver
thereof.
4. Reports of officers.
5. Reports of committees.
6. Election of directors.
7. Regular and miscellaneous business.
8. Special matters.
9. Adjournment.
d. Notwithstanding the provisions of Article II, Section 7, Subsection c,
the order and topics of business to be transacted at any meeting shall be
determined by the presiding officer of the meeting in his sole discretion. In no
event shall any variation in the order of business or additions and deletions
from the order of business as specified in Article II, Section 7, Subsection c,
invalidate any actions properly taken at any meeting.
Section 8. Voting.
------
a. Unless otherwise provided for in the Certificate of Incorporation, each
shareholder shall be entitled, at each meeting and upon each proposal to be
voted upon, to one vote for each share of voting stock recorded in his name on
the books of the Corporation on the record date fixed as provided for in Article
II, Section 5.
b. The presiding officer at any meeting of the shareholders shall have the
power to determine the method and means of voting when any matter is to be voted
upon. The method and means of voting may include, but shall not be limited to,
vote by ballot, vote by hand or vote by voice. However, no method of voting may
be adopted which fails to take account at any shareholder's right to vote by
proxy as provided for in Section 10 of this Article II. In no event may any
method of voting be adopted which would prejudice the outcome of the vote.
Section 9. Action Without Meeting.
----------------------
a. Any action required to be taken at any annual or special meeting of
shareholders of the Corporation, or any action which may be taken at any annual
or special meeting of such shareholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by the holders of outstanding stock having not
less than the minimum number of votes that would be signed by the holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. If any class of shares is
entitled to vote thereon as a class, such written consent shall be required of
the holders of a majority of the shares of each class of shares entitled to vote
thereon.
b. Within ten (10) days after obtaining such authorization by written
consent, notice must be given to those shareholders who have not consented in
writing. The notice shall fairly summarize the material features of the
authorized action and, if the action be a merger, consolidation or sale or
exchange of assets for which dissenters' rights are provided under the Colorado
Business Corporation Act, the notice shall contain a clear statement of the
right of the shareholders dissenting therefrom to be paid the fair value of
their shares upon compliance with further provisions of the Colorado Business
Corporation Act regarding the rights of dissenting shareholders.
c. In the event that the action to which the Shareholders' consent is such
as would have required the filing of a certificate under the Colorado Business
Corporation Act if such action had been voted on by shareholders at a meeting
thereof, the certificate filed under such other section shall state that written
consent has been given in accordance with the provisions of this Article II,
Section 9.
<PAGE>
Section 10. Proxies
-------
a. Every shareholder entitled to vote at a meeting of shareholders or to
express consent or dissent without a meeting, or his duly authorized
attorney-in-fact may authorize another person or persons to act for him by
proxy.
b. Every proxy must be signed by the shareholder or his attorney-in-fact. No
proxy shall be valid after the expiration of eleven (11) months from the date
thereof unless otherwise provided in the proxy. Every proxy shall be revocable
at the pleasure of the shareholder executing it, except as otherwise provided in
this Article II, Section 10.
c. The authority of the holder of a proxy to act shall not be revoked by the
incompetence or death of the shareholder who executed the proxy unless, before
the authority is exercised, written notice of an adjudication of such
incompetence or of such death is received by the corporate officer responsible
for maintaining the list of shareholders.
d. Except when other provisions shall have been made by written agreement
between the parties, the record holder of shares held as pledges or otherwise as
security or which belong to another, shall issue to the pledgor or to such owner
of such shares, upon demand therefor and payment of necessary expenses thereof,
a proxy to vote or take other action thereon.
e. A proxy which states that it is irrevocable is irrevocable when it is held
by any of the following or a nominee of any of the following: (i) a pledgee;
(ii) a person who has purchased or agreed to purchase the shares; (iii) a
creditor or creditors of the Corporation who extend or continue to extend credit
to the Corporation in consideration of the proxy, if the proxy states that it
was given in consideration of such extension or continuation of credit, the
amount thereof, and the name of the person extending or continuing credit; (iv)
a person who has contracted to perform services as an officer of the
Corporation, if a proxy is required by the contract of employment, if the proxy
states that it was given in consideration of such contract of employment and
states the name of the employee and the period of employment contracted for; and
(v) a person designated by or under an agreement as provided in Article XI
hereof.
f. Notwithstanding a provision to a proxy stating that it is irrevocable, the
proxy becomes revocable after the pledge is redeemed, or the debt of the
Corporation is paid, or the period of employment provided for in the contract of
employment has terminated, or the agreement under Article XII hereof, has
terminated and, in a case provided for in Subsection 10(e)(iii) or Subsection
10(e)(iv) of this Article II becomes irrevocable three years after the date of
the proxy or at the end of the period, if any, specified therein, whichever
period is less, unless the period of irrevocability is renewed from time to time
by the execution of a new irrevocable proxy as provided in this Article II,
Section 10. This Subsection 10(f) does not affect the duration of a proxy under
Subsection 10(b) of this Article II.
g. A proxy may be revoked, notwithstanding a provision making it irrevocable,
by a purchaser of shares without knowledge of the existence of the provision
unless the existence of the proxy and its irrevocability is noted conspicuously
on the face or back of the certificate representing such shares.
h. If a proxy for the same shares confers authority upon two (2) or more
persons and does not otherwise provide a majority of such persons present at the
meeting, or if only one is present, then that one may exercise all the powers
conferred by the proxy. If the proxy holders present at the meeting are equally
divided as the right and manner of voting in any particular case, the voting of
such shares shall be prorated.
i. If a proxy expressly so provides, any proxy holder may appoint in writing a
substitute to act in his place.
Section II. Voting of Shares by Shareholders
--------------------------------
a. Shares standing in the name of another corporation, domestic or foreign,
may be voted by the officer, agent, or proxy designated by the Bylaws of the
corporate shareholder, or, in the absence of any applicable Bylaw, by such
person as the Board of Directors of the corporate shareholder may designate.
Proof of such designation may be
Page 5
<PAGE>
made by presentation of a certified copy of the Bylaws or other instrument of
the corporate shareholder. In the absence of any such designation, or in case of
conflicting designation by the corporate shareholder, the Chairman of the Board,
President, any vice president, secretary and treasurer of the corporate
shareholder, in that order shall be presumed to possess authority to vote such
shares.
b. Shares held by an administrator, executor, guardian or conservator may
be voted by him, either in person or by proxy, without a transfer of such shares
into his name. Shares standing in the name of a trustee may be voted by him,
either in person or by proxy, but no trustee shall be entitled to vote shares
held by him without a transfer of such shares into his name.
c. Shares standing in the name of a receiver may be voted by such receiver.
Shares held by or under the control of a receiver but not standing in the name
of such receiver, may be voted by such receiver without the transfer thereof
into his name if authority to do so is contained in an appropriate order of the
court by which receiver was appointed.
d. A shareholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledge.
e. Shares of the capital stock of the Corporation belonging to the
Corporation or held by it in a fiduciary capacity shall not be voted, directly
or indirectly, at any meeting, and shall not be counted in determining the total
number of outstanding shares.
ARTICLE III
Directors
---------
Section 1. Board of Directors; Exercise of Corporate Powers.
------------------------------------------------
a. All corporate powers shall be exercised by or under the authority of,
and the business and affairs of the Corporation shall be managed under the
direction of the Board of Directors except as may be otherwise provided in the
Articles of Incorporation. If any such provision is made in the Articles of
Incorporation, the powers and duties conferred or imposed upon the Board of
Directors shall be exercised or performed to such extent and by such person or
persons as shall be provided in the Articles of Incorporation.
b. Directors need not be residents of the state of incorporation unless the
Articles of Incorporation so require.
c. The Board of Directors shall have authority to fix the compensation of
Directors unless otherwise provided in the Articles of Incorporation.
d. A Director shall perform his duties as a Director, including his duties
as a member of any committee of the Board upon which he may serve, in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinary prudent person in a like position
would use under similar circumstances.
e. In performing his duties, a Director shall be entitled to rely on
information, opinions, reports or statements, including financial data, in each
case prepared or presented by: (i) one or more officers or employees of the
Corporation whom the Director reasonably believes to be reliable and competent
in the matters presented; (ii) counsel, public accountants or other persons as
to matters which the Director reasonably believes to be within such persons'
professional or expert competence; or (iii) a committee of the Board upon which
he does not serve, duly designated in accordance with a provision of the
Articles of Incorporation or the Bylaws, as to matters within its designated
authority, which committee the Director reasonably believes to merit confidence.
<PAGE>
f. A Director shall not be considered to be acting in good faith if
he has knowledge concerning the mater in question that would cause such reliance
described in Subsection 1(e) of this Article III to be unwarranted.
g. A person who performs his duties in compliance with this Article
III, Section 1 shall have no liability by reason of being or having been a
Director of the Corporation.
h. A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is taken consents
thereto unless he votes against such action or abstains from voting in respect
therein because of an asserted conflict of interest.
Section 2. Number: Election: Classification of Directors: Vacancies.
--------------------------------------------------------
a. The Board of Directors of this Corporation shall consist of not
less than two (2) nor more than seven (7) numbers, unless the number of
shareholders is less than two, in which the Corporation shall one director until
such time as the number of shareholders increase to two or more. The number of
directors shall be fixed by the initial Board of Directors. The number of
directors constituting the initial Board of Directors shall be fixed by the
Articles of Incorporation. The number of directors may be increased from time
to time by the Board of directors, but no decrease shall have the effect of
shortening the term of any incumbent director.
b. Each person named in the Articles of Incorporation as a member of
the initial Board of Directors, shall hold office until the first annual meeting
of shareholders, and until his successor shall have been elected and qualified
or until his earlier resignation, removal from office or death.
c. At the first annual meeting of shareholders and at each annual
meeting thereafter the shareholders shall elect directors to hold office until
the next succeeding annual meeting, except in case of the classification of
directors as permitted by the Colorado Business Corporation Act. Each director
shall hold office for the term for which he is elected and until his successor
shall have been elected and qualified or until his earlier resignation, removal
from office or death.
d. The shareholders, by amendment to these Bylaws, may provide that
the directors be divided into not more than four classes, as nearly equal in
number as possible, whose terms of office shall respectively expire at different
times but no such term shall continue longer than four (4) years, and at least
one-fifth (1/5) in number of the directors shall be elected annually.
e. If directors are classified and the number of directors is
thereafter changed, any increase or decrease in directorships shall be so
apportioned among the classes as to make all classes as nearly equal in number
as possible.
f. Any vacancy occurring in the Board of Directors including any
vacancy created by reason of an increase in the number of directors, may be
filled by the affirmative vote of a majority of the remaining directors though
less than a quorum of the Board of Directors. A director elected to fill a
vacancy shall hold office only until the next election of directors by the
shareholders.
Section 3. Removal of Directors.
--------------------
a. At a meeting of shareholders called expressly for that purpose,
directors may be removed in the manner provided in this Article III, Section 3.
Any director or the entire Board of Directors may be removed, with or without
cause, by vote of the holders of a majority of the shares than entitled to vote
at an election of directors.
b. If the Corporation has cumulative voting; if less than the entire
Board is to be removed, no one of the directors may be removed if the votes cast
against his removal would be sufficient to elect him if then cumulatively voted
at an election of the entire Board of Directors, or, if there be classes of
directors at an election of the class of directors of which he is a member.
BYLAWS Page 7
<PAGE>
Section 4. Director Quorum and Voting.
--------------------------
a. A majority of the number of directors fixed in the manner provided
in these Bylaws shall constitute a quorum for the transaction of business unless
a greater number if required elsewhere in these Bylaws.
b. A majority of the members of an Executive Committee or other
committee shall constitute a quorum for the transaction of business at any
meeting of such Executive Committee or other committee.
c. The act of the majority of the directors present at a Board
meeting at which a quorum is present shall be the act of the Board of Directors.
d. The act of a majority of the members of an Executive Committee
present at an Executive Committee meeting at which a quorum is present shall be
the act of the Executive Committee.
e. The act of a majority of the members of any other committee
present at a committee meeting at which a quorum is present shall be the act of
the committee.
Section 5. Director Conflicts of Interest.
------------------------------
a. No contract or other transaction between this Corporation and one
or more of its directors or any other Corporation, firm, association or entity
in which one or more of its directors are directors or officers or are
financially interested, shall be either void or voidable because of a
relationship or interest or because such director or directors are present at
the meeting of the Board of Directors or a committee thereof which authorizes,
approves or ratifies such contract or transaction or because his or their votes
are counted for such purpose, if:
(i) The fact of such relationship or interest is disclosed or
known to the Board of Directors or committee which authorizes, approves or
ratifies the contract or transaction by a vote or consent sufficient for the
purpose without counting the votes or consents of such interested directors; or
(ii) The fact of such relationship or interest is disclosed or
known to the shareholders entitled to vote and they authorize, approve or ratify
such contract or transaction by vote or written consent; or
(iii) The contract or transaction is fair and reasonable as to the
Corporation at the time it is authorized by the Board, a committee, or the
shareholders.
b. Common or interested directors may be counted in determining the
presence of a quorum at a meeting of the Board of Directors or a committee
thereof which authorizes, approves or ratifies such contract or transaction.
Section 6. Executive and Other Committees: Designation: Authority
--------------------------------------------------------
a. The Board of Directors, by resolution adopted by a majority of the
full Board of Directors, may designate from among its members an Executive
Committee and one or more other committees each of which, to the extent provided
in such resolution or in the Articles of Incorporation or these Bylaws, shall
have and may exercise all the authority of the Board of Directors, except that
no such committee shall have the authority to: (i) approve or recommend to
shareholders actions or proposals required by the Colorado Business Corporation
Act to be approved by shareholders; (ii) designate candidates for the office of
director for purposes of proxy solicitation or otherwise; (iii) fill vacancies
on the Board of Directors or any committee thereof; (iv) amend the Bylaws; or
(v) authorize or approve the issuance or sale of, or any contract to issue or
sell, shares or designate the terms of a series of class of shares, unless the
Board of Directors, having acted regarding general authorization for the
issuance or sale of shares, or any contract therefor, and in the case of a
series, the designation thereof, has specified a general formula or method by
resolution or by adoption of a stock option or other plan, authorized a
committee to fix the terms upon which such shares may be issued or sold,
including, without limitation, the price, the rate or manner of payment of
dividends, provisions for redemption, sinking fund, conversion, and voting
preferential rights, and provisions for other features of a class of shares, or
a series of class
BYLAWS Page 8
<PAGE>
of shares, with full power in such committee to adopt any final resolution
setting forth all the terms thereof and to authorize the statement of the
terms of a series for filing with the Secretary of State under the Colorado
Business Corporation Act.
b. The Board, by resolution adopted in accordance with Article III,
Subsection 6(a) may designate one or more directors as alternate members of any
such committee, who may act in the place and stead of any absent member or
members at any meeting of such committee.
c. Neither the designation of any such committee, the delegation thereto
of authority, nor action by such committee pursuant to such authority shall
alone constitute compliance by any member of the Board of Directors, not a
member of the committee in question, with his responsibility to act in good
faith, in a manner he reasonably believes to be in the best interests of the
Corporation, and with such care as an ordinarily prudent person in a like
position would use under similar circumstances.
Section 7. Place, Time, Notice, and Call of Directors' Meetings.
----------------------------------------------------
a. Meetings of the Board of Directors, regular or special, may be held
either within or without this state.
b. A regular meeting of the Board of Directors of the Corporation shall be
held for the election of officers of the Corporation and for the transaction of
such other business as may come before such meeting as promptly as practicable
after the annual meeting of the shareholders of this Corporation without the
necessity of other notice than this Bylaw. Other regular meetings of the Board
of Directors of the Corporation may be held at such times and at such places as
the Board of Directors of the Corporation may from time to time resolve without
other notice than such resolution. Special meetings of the Board of Directors
may be held at any time upon call of the Chairman of the Board or the President
or a majority of the Directors of the Corporation, at such time and at such
place as shall be specified in the call thereof. Notice of any special meeting
of the Board of Directors must be given at least two (2) days prior thereto, if
by written notice delivered personally; or at least five (5) days prior thereto,
if mailed; or at least two (2) days prior thereto, if by telegram; or at least
two (2) days prior thereto, if by telephone. If such notice is given by mail,
such notice shall be deemed to have been delivered when deposited with the
United States Postal Service addressed to the business address of such director
with postage theron prepaid. If notice be given by telegram, such notice shall
be deemed delivered when the telegram is delivered to the telegraph company. If
notice is given by telephone, such notice shall be deemed delivered when the
call is completed.
c. Notice of a meeting of the Board of Directors need not be given to any
director who signs a waiver of notice either before or after the meeting.
Attendance of a director at a meeting shall constitute a waiver of notice of
such meeting and waiver of any and all objections to the place of the meeting,
the time of the meeting, or the manner in which it has been called or convened,
except when a director states, at the beginning of the meeting, any objection to
the transaction of business because the meeting is not lawfully called or
convened.
d. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
e. A majority of the directors present, whether or not a quorum exists,
may adjourn any meeting of the Board of Directors to another time and place.
Notice of any such adjourned meeting shall be given to the directors who were
not present at the time of the adjournment and, unless the time and place of the
adjourned meeting are announced at the time of the adjournment, to the other
directors.
f. Members of the Board of Directors may participate in a meeting of such
Board by means of a conference telephone or similar communications equipment by
means of which all persons participating in the meeting can hear each other at
the same time. Participation by such means shall constitute presence in person
at a meeting.
Section 8. Action by Directors Without a Meeting.
-------------------------------------
BYLAWS Page 9
<PAGE>
Any action required by the Colorado Business Corporation Act to be taken at
a meeting of the directors of the Corporation, or a committee thereof, may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, signed by all of the directors, or all of the members of the
committee, as the case may be, is filed in the minutes of the proceedings of the
Board or of the committee. Such consent shall have the same effect as a
unanimous vote.
Section 9. Compensation.
------------
The directors and members of the Executive and any other committee of the
Board of Directors shall be entitled to such reasonable compensation for their
services and on such basis as shall be fixed from time to time by resolution of
the Board of Directors. The Board of Directors and members of any committee of
the Board of Directors shall be entitled to reimbursement for any reasonable
expenses incurred in attending any Board or committee meeting. Any director
receiving compensation under this section shall not be prevented from serving
the Corporation in any other capacity and shall not be prohibited from receiving
reasonable compensation for such other services.
Section 10. Resignation.
-----------
Any Director of the Corporation may resign at any time without acceptance
by the Corporation. Such resignation shall be in writing and may provide that
such resignation shall take effect immediately or on any future date stated in
such notice.
Section 11. Removal.
-------
Any Director of the Corporation may be removed for cause by a majority vote
of the other members of the Board of Directors as then constituted or with or
without cause by the vote of the holders of a majority of the outstanding shares
of capital stock shareholders of the Corporation called for such purpose.
Section 12. Vacancies.
---------
In the event that a vacancy shall occur on the Board of Directors of the
Corporation whether because of death, resignation, removal, an increase in the
number of directors or any other reason, such vacancy may be filled by the vote
of a majority of the remaining directors of the Corporation even though such
remaining directors represent less than a quorum. An increase in the number of
directors shall create vacancies for the purpose of this section. A director of
the Corporation elected to fill a vacancy shall hold office for the unexpired
term of his predecessor, or in the case of an increase in the number of
directors, until the election and qualification of directors at the next annual
meeting of the shareholders
ARTICLE IV
Officers
--------
Section 1. Election: Number Terms of Office.
---------------------------------
a. The officers of the Corporation shall consist of a Chairman of the
Board, a President, a Secretary and a Treasurer, each of whom shall be elected
by the Board of Directors at such time and in such manner as may be prescribed
by these Bylaws. Such other officers and assistant officers and agents as may be
deemed necessary may be elected or appointed by the Board of Directors.
b. All officers and agents, as between themselves and the
Corporation, shall have such authority and perform such duties in the management
of the Corporation as are provided in these Bylaws, or as may be determined by
resolution of the Board of Directors not inconsistent with these Bylaws.
c. Any two (2) or more offices may be held by the same person except
the offices of the President and Secretary.
BYLAWS Page 10
<PAGE>
d. A failure to elect a Chairman of the Board, President, a Secretary and
a Treasurer shall not affect the existence of the Corporation.
Section 2. Removal.
-------
An officer of the Corporation shall hold office until the election
qualification of his successor; however, any officer of the Corporation may be
removed from office by the Board of Directors whenever in its judgment the best
interests of the Corporation will be served thereby. Such removal shall be
without prejudice to the contract rights, if any, of the person so removed.
Election or appointment of any officer shall not of itself create any contract
right to employment or compensation.
Section 3. Vacancies.
---------
Any vacancy in any office from any cause may be filled for the unexpired
portion of the term of such office by the Board of Directors.
Section 4. Powers and Duties.
-----------------
a. The Chairman of the Board shall be the Chief Executive Officer of the
Corporation. The Chairman of the Board shall preside at all meetings of the
shareholders and of the Board of Directors. Except where by law the signature of
the President is required or unless the Board of Directors shall rule otherwise,
the Chairman of the Board shall possess the same power as the President to sign
all certificates, contracts and other instruments of the Corporation which may
be authorized by the Board of Directors. Unless a Chairman of the Board is
specifically elected, the President shall be deemed to be the Chairman of the
Board.
b. The President shall be the Chief Operating Officer of the Corporation.
He shall be responsible for the general day-to-day supervision of the business
and affairs of the Corporation. He shall sign or countersign all certificates,
contracts or other instruments of the Corporation as authorized by the Board of
Directors. He may, but need not, be a member of the Board of Directors. In the
absence of the Chairman of the Board, the President shall be the Chief Executive
Officer of the Corporation and shall preside at all meetings of the shareholders
and the Board of Directors. He shall make reports to the Board of Directors and
shareholders. He shall perform such other duties as are incident to his office
or are properly required of him by the Board of Directors. The Board of
Directors will at times retain the power to expressly delegate the duties of the
President to any other officer of the Corporation.
c. The Vice-President(s), if any, in the order designated by the Board of
Directors, shall exercise the functions of the President during the absence,
disability, death, or refusal to act of the President. During the time that any
Vice-President is properly exercising the functions of the President, such
Vice-President shall have all the powers of and be subject to all the
restrictions upon the President. Each Vice-President shall have such other
duties as are assigned to him from time to time by the Board of Directors or by
the President of the Corporation.
d. The Secretary of the Corporation shall keep the minutes of the
meetings of the shareholders of the Corporation and, if so requested, the
Secretary shall keep the minutes of the meetings of the Board of Directors of
the Corporation. The Secretary shall be the custodian of the minute books of the
Corporation and such other books and records of the Corporation as the Board of
Directors of the Corporation may direct. The Secretary shall make or cause to be
made all proper entries in all corporate books that the Board of Directors of
the Corporation may direct. The Secretary shall have the general responsibility
for maintaining the stock transfer books of the Corporation, or of supervising
the maintenance of the stock transfer books of the Corporation by the transfer
agent, if any, of the Corporation. The Secretary shall be the custodian of the
corporate seal of the Corporation and shall affix the corporate seal of the
Corporation on contracts and other instruments as the Board of Directors of the
Corporation may direct. The Secretary shall perform such other duties as are
assigned to him from time to time by the Board of Directors or the President of
the Corporation.
BYLAWS Page 11
<PAGE>
b. Each certificate representing shares shall state upon the face
thereof: (1) the name of the Corporation; (ii) that the Corporation is organized
under the laws of this state; (iii) the name of the person or persons to whom
issued; (iv) the number and class of shares, and the designation of the series,
if any, which such certificate represents; and (v) the par value of each share
represented by such certificate, or a statement that the shares are without par
value.
c. No certificate shall be issued for any shares until such shares
are fully paid.
Section 2. Transfer Book.
-------------
The Corporation shall keep at its registered office or principal place of
business or in the office of its transfer agent or registrar, a book (or books
where more than one kind, class, or series of stock is outstanding) to be known
as the Stock Book, containing the names, alphabetically arranged, addresses and
Social Security numbers of every shareholder, and the number of shares of each
kind, class or series of stock held of record. Where the Stock Book is kept in
the office of the transfer agent, the Corporation shall keep at its office in
the State of Colorado copies of the stock lists prepared from said Stock Book
and sent to it from time to time by said transfer agent. The Stock Book or stock
lists shall show the current status of the ownership of shares of the
Corporation provided, if the transfer agent of the Corporation be located
elsewhere, a reasonable time shall be allowed for transit or mail.
Section 3. Transfer of Shares.
------------------
a. The name(s) and address(s) of the person(s) to whom shares of
stock of this Corporation are issued, shall be entered on the Stock Transfer
Books of the Corporation, with the number of shares and date of issuance.
b. Transfer of shares of the Corporation shall be made on the Stock
Transfer Books of the Corporation by the Secretary or the transfer agent, only
when the holder of record thereof or the legal representative of such holder of
record or the attorney-in-fact of such holder of record, authorized by power of
attorney duly executed and filed with the Secretary or transfer agent of the
Corporation, shall surrender the Certificate representing such shares for
cancellation. Lost, destroyed or stolen Stock Certificates shall be replaced
pursuant to Section 5 of this Article VI.
c. The person or persons in whose names shares stand on the books of
the Corporation shall be deemed by the Corporation to be the owner of such
shares for all purposes, except as otherwise provided pursuant to Section 10 and
11 of Article II, or Section 4 of this Article VI.
Section 4. Voting Trusts.
-------------
a. Any number of shareholders of the Corporation may create a voting
trust for the purpose of conferring upon a trustee or trustees the right to vote
or otherwise represent their shares, for a period not to exceed ten (10) years,
by: (I) entering into a written voting trust; (ii) depositing a counterpart of
the agreement with the Corporation at its registered office, and (iii)
transferring their shares to such trustee or trustees for the purposes of this
Agreement. Prior to the recording of the Agreement, the shareholder concerned
shall tender the stock certificate(s) described therein to the corporate
secretary who shall note on each certificate:
"This Certificate is subject to the provisions of a voting
trust agreement dated------------------, recorded in
Minute Book ______________________, of the Corporation.
_________________________
Secretary"
b. Upon the transfer of such shares, voting trust certificates shall
be issued by the trustee or trustees to the shareholders who transfer their
share in trust. Such trustee or trustees shall keep a record of the holders of
the voting trust certificates evidencing a beneficial interest in the voting
trust, giving the names and addresses of all such holders and the number and
class of the shares in respect of which the voting trust certificates held by
each are issued, and shall deposit a copy of such record with the Corporation at
its registered office.
BYLAWS Page 13
<PAGE>
b. Upon the transfer of such shares, voting trust certificates shall be
issued by the trustee or trustees to the shareholders who transfer their shares
in trust. Such trustee or trustees shall keep a record of the holders of the
voting trust certificates evidencing a beneficial interest in the voting trust,
giving the names and addresses of all such holders and the number and class of
the shares in respect of which the voting trust certificates held by each are
issued, and shall deposit a copy of such record with the Corporation at its
registered office.
c. The counterpart of the voting trust agreement and the copy of such
record so deposited with the Corporation shall be subject to the same right of
examination by a shareholder of the Corporation, in person or by agent or
attorney, as are the books and records of the Corporation, and such counterpart
and such copy of such record shall be subject to examination by any holder of
record of voting trust certificates either in person or by agent or attorney, at
any reasonable time for any proper purpose.
d. At any time before the expiration of a voting trust agreement as
originally fixed or as extended one or more times under this Article VI,
Subsection 4(d) one or more holders of voting trust certificates may, by
agreement in writing, extend the duration of such voting trust agreement,
nominating the same or substitute trustee or trustees, for an additional period
not exceeding ten (10) years. Such extension agreement shall not affect the
rights or obligations of persons not parties to the agreement, and such persons
shall be entitled to remove their shares from the trust and promptly to have
their stock certificates reissued upon the expiration date of the original term
of the voting trust agreement. The extension agreement shall in every respect
comply with and be subject to all the provisions of this Article VI, Section 4
applicable to the original voting trust agreement except that the ten (10) year
maximum period of duration shall commence on the date of adoption of the
extension agreement.
e. The trustees under the terms of the agreements entered into under the
provisions of this Article VI, Section 4 shall not acquire the legal title to
the shares but shall be vested only with the legal right and title to the voting
power which is incident to the ownership of the shares.
Section 5. Lost, Destroyed, or Stolen Certificates.
---------------------------------------
No certificate representing shares of the stock in the Corporation shall be
issued in place of any Certificate alleged to have been lost, destroyed, or
stolen except on production of evidence, satisfactory to the Board of Directors,
of such loss, destruction or theft, and if the Board of Directors so requires,
upon the furnishing of an indemnity bond in such amount (but not to exceed twice
the fair market value of the shares represented by the Certificate) and with
such terms and with such surety as the Board of Directors may, in its
discretion, require.
ARTICLES VII
Books and Records
----------------
a. The Corporation shall keep correct and complete books and records of
account and shall keep minutes of the proceedings of its shareholders, Board of
Directors and committees of Directors.
b. Any books, records and minutes may be in written form or in any other
form capable of being converted into written form within a reasonable time.
c. Any person who shall have been a holder of record of one quarter of one
percent of all shares or of voting trust certificates therefor at least six
months immediately preceding his demand or shall be the holder of record of, or
the holder of record of voting trust certificates for, at least five (5%)
percent of the outstanding shares of any class or series of the Corporation,
upon written demand stating the purpose thereof, shall have the right to
examine, in person or by agent or attorney, at any reasonable time or times, for
any proper purpose, its relevant books and records of account, minutes and
record of shareholders and to make extracts therefrom.
d. No shareholder who within two (2) years has sold or offered for sale any
list of shareholders or of holders of voting trust certificates for shares of
this Corporation or any other Corporation; has aided or abetted any
<PAGE>
person in procuring any list of shareholders or of holders of voting trust
certificates for any such purpose; or has improperly used any information
secured through any prior examination of the books and records of account,
minutes, or record of shareholders or of holders of voting trust certificates
for shares of the Corporation or any other Corporation; shall be entitled
to examine the documents and records of the Corporation as provided in
Subsection (C) of this Article VII. No shareholder who does not act in good
faith or for a proper purpose in making his demand shall be entitled to examine
the documents and records of the Corporation as provided in Subsection (C) of
the Article VII.
e. Unless modified by resolution of the shareholders, this Corporation
shall prepare not later than four (4) months after the close of each fiscal
year:
(i) A balance sheet showing in reasonable detail the financial
conditions of the Corporation as of the date of its fiscal year.
(ii) A profit and loss statement showing the results of its operation
during its fiscal year.
f. Upon the written request of any shareholder or holder of voting trust
certificates for shares of the Corporation, the Corporation shall mail to such
shareholder or holder of voting trust certificates a copy of its most recent
balance sheet and profit and loss statement.
g. Such balance sheets and profit and loss statements shall be filed and
kept for at least five (5) years in the registered office of the Corporation in
this state and shall be subject to inspection during business hours by any
shareholder or holder of voting trust certificates.
ARTICLE VIII
Dividends
---------
The Board of Directors of the Corporation may, from time to time, declare
and the Corporation may pay dividends on its shares in cash, property or its own
shares, except when the Corporation is insolvent or when the payment thereof
would render the Corporation insolvent subject to the following provisions:
a. Dividends in cash or property may be declared and paid, except as
otherwise provided in this Article VII, only out of the unreserved and
unrestricted earned surplus of the Corporation or out of capital surplus,
however arising, but each dividend paid out of capital surplus shall be
identified as a distribution of capital surplus, and the amount per share paid
from such capital surplus shall be disclosed to the shareholders receiving the
same concurrently with the distribution.
b. Dividends may be declared and paid in the Corporation's treasury
shares.
c. Dividends may be declared and paid in the Corporation's authorized but
unissued shares out of any unreserved and unrestricted surplus of the
Corporation upon the following conditions:
(i) If a dividend is payable in the Corporation's own shares having a
par value, such shares shall be issued at not less than the par value thereof
and there shall be transferred to stated capital at the time such dividend is
paid an amount of surplus equal to the aggregate par value of the shares to be
issued as a dividend.
(ii) If a dividend is payable in the Corporation's own shares without
par value, such shares shall be issued at such stated value as shall be fixed by
the Board of Directors by resolution adopted at the time such dividend is
declared, and there shall be transferred to stated capital at the time such
dividend is paid an amount of surplus equal to the aggregate stated value so
fixed in respect of such shares; and the amount per share so transferred to
stated capital shall be disclosed to the shareholders receiving such dividend
concurrently with the payment thereof.
BYLAWS Page 15
<PAGE>
d. No dividend payable in shares of any class shall be paid to the
holders of shares of any other class unless the Articles of Incorporation so
provide or such payment is authorized by the affirmative vote or written consent
of the holders of at least a majority of the outstanding shares of the class in
which the payment is to be made.
e. A split up or division of the issued shares of any class into a
greater number of shares of the same class without increasing the stated capital
of the Corporation shall not be construed to be a stock dividend within the
meaning of this Article VIII.
ARTICLE IX
Indemnification
---------------
Section 1. Action, etc., Other Than by or in the Right of the
--------------------------------------------------
Corporation.
------------
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding or investigation, whether civil, criminal or administrative,
and whether external or internal to the Corporation, (other than a judicial
action or suit brought by or in the right of the Corporation) by reason of the
fact that he is or was a director, officer, employee or agent of the
Corporation, or that, being or having been such a director, officer, employee or
agent, he is or was serving at the request of the Corporation as a director,
officer, employee, or trustee or agent of another corporation, partnership,
joint venture, trust or other enterprise (all such persons being referred to
hereafter as an "Agent"), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him in connection with such action, suit or proceeding, or any appeal
therein, if such person acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation, and
with respect to any criminal action or proceeding, had no reasonable cause to
believe such conduct was unlawful. The termination of any action, suit or
proceeding--whether by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent--shall not, of itself, create a
---------------
presumption that the person did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, that such
person had reasonable cause to believe that his conduct was unlawful.
Section 2. Action, etc., by or in the Right of the Corporation.
----------------------------------------------------
The Corporation shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed judicial
action or suit brought by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that he is or was an Agent (as
defined above) against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection with the defense, settlement or appeal
of such action or suit if he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Corporation,
except that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for gross
negligence or willful misconduct in the performance of his or her duty to the
Corporation unless and only to the extent that the court in which such action or
suit was brought shall determine upon application that, despite the adjudication
of liability but in view of all the circumstances of the case, such person is
fairly and reasonably entitled to indemnity for such expenses which the court
shall deem proper.
Section 3. Determination of Right of Indemnification.
------------------------------------------
Any indemnification under Section 1 or 2 (unless ordered by a court) shall
be made by the Corporation unless a determination is reasonably and promptly
made (i) by the Board by a majority vote of a quorum consisting of directors who
were not parties to such action, suit or proceeding, or (ii) if such a quorum is
not obtainable, or, even if obtainable, if a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders, that such person acted in bad faith and in a manner that such
person did not believe to be in or not opposed to the best interests of the
Corporation, or, with respect to any criminal proceeding, that such person
believed or had reasonable cause to believe that his conduct was unlawful.
BYLAWS Page 16
<PAGE>
Section 4. Indemnification Against Expenses of Successful Party.
----------------------------------------------------
Notwithstanding the other provisions of this Article, to the extent that an
Agent has been successful on the merits or otherwise, without limitation, the
dismissal of an action without prejudice or the settlement of an action without
admission of liability, in defense of any proceeding or in defense of any claim,
issue or matter therein, or on appeal from any such proceeding, action, claim or
matter, such Agent shall be indemnified against all expenses incurred in
connection therewith.
Section 5. Advances of Expenses.
--------------------
Except as limited by Section 6 of this Article, costs, charges and expenses
(including attorney's fees) incurred in any action, suit, proceeding or
investigation or any appeal therefrom shall be paid by the Corporation in
advance of the final disposition of such matter, if the Agent shall undertake to
repay such amount in the event that it is ultimately determined, as provided
herein, that such person is not entitled to indemnification. Notwithstanding
the foregoing, no advance shall be made by the Corporation if a determination is
reasonably and promptly made by the Board of Directors or if a majority vote of
a quorum of disinterested directors cannot be obtained, then by the independent
legal counsel in a written opinion, that, based upon the facts known to the
Board or counsel at the time such determination is made, such person acted in
bad faith and in a manner that such person did not believe to be in or not
opposed to the best interest of the Corporation, or, with respect to any
criminal proceeding, that such person believed or had reasonable cause to
believe his conduct was unlawful. In no event shall any advance be made in
instances where the Board or independent legal counsel reasonable determines
that such person deliberately breached his duty to the Corporation or its
shareholders.
Section 6. Right of Agent to Indemnification Upon Application; Procedure
-------------------------------------------------------------
Upon Application.
- ----------------
Any indemnification under Sections 1, 2 and 4 or advance under Section 5 of
this Article, shall be made promptly, and in any event within ninety (90) days,
upon the written request of the Agent, unless with respect to applications under
Sections 1, 2 or 5, a determination is reasonably and promptly made by the Board
of Directors by a majority vote of a quorum of disinterested directors that such
Agent acted in a manner set forth in such Sections as to justify the
Corporation's not indemnifying or making an advance to the Agent. In the event
no quorum of disinterested directors is obtainable, the Board of Directors shall
promptly direct that independent legal counsel shall decide whether the Agent
acted in the manner set forth in such Sections as to justify the Corporation's
not indemnifying or making an advance to the Agent. The right to indemnification
or advances as granted by this Article shall be enforceable by the Agent in any
court of competent jurisdiction, if the Board or independent legal counsel
denies the claim, in whole or in part, or if no disposition of such claim is
made within ninety (90) days. The Agent's costs and expenses incurred in
connection with successfully establishing his right to indemnification, in whole
or in part, in any such proceeding shall also be indemnified by the Corporation.
Section 7. Contribution.
------------
In order to provide for just and equitable contribution in circumstances in
which the indemnification provided for in this Article is held by a court of
competent jurisdiction to be unavailable to an indemnitee in whole or part, the
Corporation shall, in such an event, after taking into account, among other
thins, contributions by other directors and officers of the Corporation pursuant
to indemnification agreements or otherwise, and, in the absence of personal
enrichment, acts of intentional fraud or dishonesty or criminal conduct on the
part of the Agent, contribute to the payment of Agent's losses to the extent
that, after other contributions are taken into account, such losses exceed: (I)
in the case of a director of the Corporation or any of its subsidiaries who is
not an officer of the Corporation or any of such subsidiaries, the amount of
fees paid to him for serving as a director during the 12 months preceding the
commencement of the suit, proceeding or investigation; or (ii) in the case of a
director of the Corporation or any of its subsidiaries who is also an officer of
the Corporation or any such subsidiaries, the amount set forth in clause (I)
plus 5% of the aggregate cash compensation paid to said director for service in
such office(s) during the 12 months preceding the commencement of the suit,
proceeding or investigation; or (iii) in the case of an officer of the
Corporation or any of its subsidiaries, 5%
BYLAWS Page 17
<PAGE>
of the aggregate cash compensation paid to such officer of service in such
office(s) during the 12 months preceding the commencement of such suit,
proceeding or investigation.
Section 8. Other Rights and Remedies.
-------------------------
The indemnification provided by this Article shall not be deemed exclusive
of, and shall not affect, any other rights to which an Agent seeking
indemnification may be entitled under any law, Bylaw, or charter provision,
agreement, vote of stockholders or disinterested directors or otherwise, both as
to action in his official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be an
Agent and shall inure to the benefit of the heirs, executors and administrators
of such a person. All rights to indemnification under this Article shall be
deemed to be provided by a contract between the Corporation and the Agent who
serves in such capacity at any time while these Bylaws and other relevant
provisions of the general corporation law and other applicable law, if any are
in effect. Any repeal or modification thereof shall not affect any rights or
obligations then existing.
Section 9. Insurance.
---------
Upon resolution passed by the Board, the Corporation may purchase and
maintain insurance on behalf of any person who is or was an Agent against any
liability asserted against such person and incurred by him in any such capacity,
or arising out of his status as such, whether or not the Corporation would have
the power to indemnify such person against such liability under the provisions
of this Article. The Corporation may create a trust fund, grant a security
interest or use other means (including, without limitation, a letter of credit)
to ensure the payment of such sums as may become necessary to effect
indemnification as provided herein.
Section 10. Constituent Corporation.
------------------------
For the purposes of this Article, references to the "Corporation" include
all constituent corporations absorbed in a consolidation or merger as well as
the resulting or surviving corporation, so that any person who is or was a
director, officer, employee, agent or trustee of such a constituent corporation
or who, being or having been such a director, officer, employee or trustee, is
or was serving at the request of such constituent corporation as a director,
officer, employee, agent or trustee of another corporation, partnership, joint
venture, trust or other enterprise shall stand in the same position under the
provisions of this Article with respect to the resulting or surviving
corporation as such persons would if he had served the resulting or surviving
corporation in the same capacity.
Section 11. Other Enterprises, Fines and Serving at Corporation's
--------------------------------------------------------
Request.
--------
For purposes of this Article, references to "other enterprise" in Sections
1 and 10 shall include employee benefit plans; references to "fines" shall
include any excise taxes assessed on a person with respect to any employee
benefit plan; and references to "serving at the request of the Corporation"
shall include any service by Agent as director, officer, employee, trustee or
agent of the Corporation which imposes duties on, or involves services by, such
Agent with respect to any employee benefit plan, its participants, or
beneficiaries; and a person who acted in good faith and in a manner he
reasonably believed to be in the interest of the participants and beneficiaries
of an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article.
Section 12. Savings Clause.
--------------
If this Article or any portion thereof shall be invalidated on any ground
by any court of competent jurisdiction, then the Corporation shall nevertheless
indemnify each Agent as to express (including attorneys' fees), judgments, fines
and amounts paid in settlement with respect to any action, suit, appeal,
proceeding or investigation, whether civil, criminal or administrative, and
whether internal or external, including a grand jury proceeding and an action or
suit brought by or in the right of the Corporation, to the full extent permitted
by any applicable portion of this Article that shall not have been invalidated,
or by any other applicable law.
BYLAWS Page 18
<PAGE>
ARTICLE X
Amendment of Bylaws
-------------------
a. The Board of Directors shall have the power to amend, alter, or repeal
these Bylaws, and to adopt new Bylaws, from time to time.
b. The shareholders of the Corporation, may, at any annual meeting of the
shareholders of the Corporation or at any special meeting of the shareholders of
the Corporation called for the purpose of amending these Bylaws, amend, alter,
or repeal these Bylaws, and adopt new Bylaws, from time to time.
c. The Board of Directors shall not have the authority to adopt or amend
any Bylaw if such new Bylaw of such amendment would be inconsistent with any
Bylaw previously adopted by the shareholders of the Corporation. The
shareholders may prescribe in any Bylaw made by them that such Bylaw shall not
be altered, amended or repealed by the Board of Directors.
ARTICLE XI
Shareholder Agreements
----------------------
Unless the shares of this Corporation are listed on a national securities
exchange or are regularly quoted by licensed securities dealers and brokers, all
the shareholders of this Corporation may enter into agreements relating to any
phase of business and affairs of the Corporation and which may provide for,
among other things, the election of directors of the Corporation in a manner
determined without reference to the number of shares of capital stock of the
Corporation owned by its shareholders, the determination of management policy,
and division of profits. Such agreement may restrict the discretion of the Board
of Directors and its management of the business of the Corporation or may treat
the Corporation as if it were a partnership or may arrange the relationships of
the shareholders in a manner that would be appropriate only among partners. In
the event such agreement shall be inconsistent in whole or in part with the
Articles of Incorporation and/or Bylaws of the Corporation, the terms of such
agreement shall govern. Such agreement shall be binding upon any transferee of
shares of this corporation provided such transferee has actual notice thereof or
a legend referring to such agreement is noted on the face or back of the
certificate or certificates representing the shares transferred to such
transferee.
ARTICLE XII
Fiscal Year
-----------
The Fiscal Year of this Corporation shall be determined by the Board of
Directors.
Date: 2-15-97
-----------------------
/s/
----------------------------
Secretary
[S E A L]
BYLAWS Page 19
<PAGE>
EXECUTION FORM
EXHIBIT 6.1
NEW YORK STOCK EXCHANGE, INC.
AGREEMENT FOR RECEIPT AND USE OF MARKET DATA
AGREEMENT made as of the 23rd day of December, 1997 between the executing
person ("Customer") and New York Stock Exchange, Inc. ("NYSE") acting on behalf
-------- ----
of the Authorizing SROs* as Paragraph 12 describes.
RECITAL
The Authorizing SROs act (1) cooperatively pursuant to the "CTA Plan"/1/
and the "CQ Plan"/2/ (collectively, the "Plans") and on behalf of Other Data
Disseminators*, and (2) individually on their own behalves, to facilitate the
dissemination of the following categories of information:
<TABLE>
<S> <C>
Network A* Last Sale Price Information* Network B* Last Sale Price Information
Network A Quotation Information* Network B Quotation Information
NYSE Market Information* AMEX Market Information*
Other Market Information* Delayed Last Sale Price Information*
</TABLE>
This Agreement refers to such information collectively as "Market Data" and
-----------
refers to each category of such information as a "Type of Market Data") The
-------------------
Authorizing SROs authorize NYSE to enter into this Agreement to permit Customer
to receive and redisseminate and/or otherwise use Market Data on a non-exclusive
basis, and to perform or provide the Services*, (1) to the extent, for the
purposes, and in the manner, specified in Exhibit A and (2) only in accordance
---------
with and subject to this Agreement. This Agreement incorporates Exhibit A.
---------
TERMS AND CONDITIONS
Customer and the Authorizing SROs by NYSE acting on their behalf agree as
follows:
PART I: MARKET DATA ACCESS AND USE
1. DEFINITIONS
(a) "AMEX Market Information" includes Last Sale Price and Quotation
-----------------------
Information relating to Non-Eligible Securities* that are admitted to dealings
on the American Stock Exchange ("AMEX"), index information that AMEX makes
available and such other categories of information as AMEX or an Other Data
Disseminator may make available and AMEX may from time to time identify.
(b) "Authorizing SRO(s)" mean each of the national securities exchanges,
------------------
and the national securities association, that are signatories to either or both
Plans. (This agreement refers to any such signatory as a "Participant".)
-----------
(c) "Customer Affiliate" means any person identified in Exhibit A (i) that
------------------ ---------
receives one or more Services and (ii) as to which NYSE has made the "control
relationship" determination that Paragraph 8(b) describes.
_______________________
* Whenever an asterisk follows the first use of a term, Paragraph 1 of
this Agreement refers to or defines that term.
/1/ The CTA Plan was filed with the Securities and Exchange Commission
(the "Commission") by certain of the Authorizing SROs pursuant to Rule
17A-15 (later amended and renumbered as Rule 11Aa3-2) under the
Securities Exchange Act of 1934, as amended (the "1934 Act"). The
Commission declared the CTA Plan effective as of May 17, 1974.
/2/ The CQ Plan was filed with the Commission by certain of the
Authorizing SROs for the purpose of implementing Rule 11Ac1-1 under
the 1934 Act. The Commission approved the CQ Plan on July 28, 1978.
<PAGE>
Page 2
(d) "Data Recipient" means any person that is authorized in accordance
--------------
with Paragraph 5 to receive one or more Types of Market Data from Customer
acting pursuant to this Agreement.
(e) "Delayed Last Sale Price Information" means Last Sale Price
-----------------------------------
Information that has been delayed for such period (the "Delay Period") as NYSE
specifies on 60 days' written notice.
(f) "Disseminating Party" means "CTA" and the "Operating Committee" (as
-------------------
defined in the CTA and CQ Plans, respectively), each member of CTA and the
Operating Committee, each Authorizing SRO, each facilities manager for the
dissemination of one or more Types of Market Data (e.g., the "Processor" as
defined in the Plans), each Other Data Disseminator, each of their respective
directors, governors, officers, employees and affiliates, and each director,
officer and employee of each such affiliate.
(g) "Eligible Security" has the meaning that the CTA Plan assigns to that
-----------------
term.
(h) "Indirect Access" means access to one or more of the Authorizing SROs'
---------------
Transmission Facilities through an intermediary and in a manner that (i) allows
the access recipient to control the redistribution of Market Data or (ii)
precludes the access provider (A) from exercising entitlement controls over the
access recipient's use of Market Data in a manner that is satisfactory to NYSE
or AMEX, as appropriate, or (B) from otherwise fulfilling its reporting
obligations under its agreement with the Authorizing SROs. (This Agreement
provides terms and conditions pursuant to which Customer may provide and/or
receive Indirect Access.)
(i) "Indirect Access Service" refers to Customer's provision of Market
-----------------------
Data to a Data Recipient in compliance with Exhibit A and in a manner that NYSE,
acting in its sole discretion, determines to constitute Indirect Access to the
Transmission Facilities.
(j) "Interrogation Device" means any terminal or other device, including,
--------------------
without limitation, any computer, data processing equipment, communications
equipment, cathode ray tube, monitor or audio voice response equipment,
technically enabled to display, transmit or otherwise communicate, upon inquiry,
Market Data in visual, audible or other comprehensible form.
(k) "Interrogation Service" means any service that permits retrieval of
---------------------
one or more Types of Market Data by means of an Interrogation Device.
(l) "Last Sale Price Information" means (i) the last sale prices
---------------------------
reflecting completed transactions in Eligible Securities or Non-Eligible
Securities, (ii) the volume and other information related to those transactions,
(iii) the identifier of the Authorizing SRO furnishing the prices, and (iv)
other related information.
(m) "Market Minder" means any Service provided by a Vendor* by means of an
-------------
Interrogation Device or other display which (i) permits monitoring, on a dynamic
basis, of Last Sale Price Information and/or Quotation Information in respect of
a particular security, and (ii) displays the most recent Last Sale Price
Information or Quotation Information with respect to that security until such
information has been superseded or supplemented by the display of new Last Sale
Price Information reflecting the next reported transaction in that security
and/or new Quotation Information reflecting updated bids or offers for that
security.
(n) "Network A" means (i) in respect of Eligible Securities, Eligible
---------
Securities admitted to dealings on NYSE, and (ii) in respect of a Participant, a
Participant that makes available information relating to Network A Eligible
Securities.
(o) "Network B" means (i) in respect of Eligible Securities, Eligible
---------
Securities other than Network A Eligible Securities, and (ii) in respect of a
Participant, a Participant that makes available information relating to Network
B Eligible Securities.
(p) "Non-Eligible Securities" include certain stocks, bonds, and other
-----------------------
securities, that are not Eligible Securities and that are admitted to dealings
on a Participant national securities exchange.
(q) "NYSE Market Information" includes Last Sale Price and Quotation
-----------------------
Information relating to Non-Eligible Securities that are admitted to dealings on
NYSE, index information that NYSE makes available and such other categories of
information as NYSE or an Other Data Disseminator may make available and NYSE
may from time to time identify.
(r) "Other Data Disseminators" means (i) "other reporting parties" (as the
------------------------
CTA Plan defines that term) and (ii) such other, non-Participant parties that
make market information available over the Transmission Facilities, or that have
a proprietary interest in the index information that a Participant makes
available pursuant to the CTA Plan, as NYSE or AMEX, as appropriate, may from
time to time identify.
<PAGE>
Page 3
(s) "Other Market Information" includes Last Sale Price and Quotation
------------------------
Information relating to Non-Eligible Securities that are admitted to dealings on
a Participant other than NYSE or AMEX, index information that a Participant
other than NYSE or AMEX makes available pursuant to the CTA Plan and such other
categories of information as a Participant other than NYSE or AMEX, or an Other
Data Disseminator, may make available and NYSE may from time to time identify.
(t) "Person" means a natural person or proprietorship, or a corporation,
------
partnership or other organization.
(u) "Quotation Information" means (i) all bids, offers, quotation sizes,
---------------------
aggregate quotation sizes, identities of brokers or dealers making bids or
offers and other information in respect of Eligible Securities and Non-Eligible
Securities; (ii) the identifier of the Authorizing SRO furnishing each bid or
offer; (iii) each "consolidated BBO" (as the CQ Plan defines that term) in the
foregoing information and any identifier associated therewith; (iv) each
"ITS/CAES BBO" (as the CQ Plan defines that term) and any identifier associated
therewith; and (v) related information.
(v) "Services" include both Subscriber Services* and Indirect Access
--------
Services.
(w) "Service Facilitator" means any person other than a "common carrier"
-------------------
(as defined in the Federal Communications Act) (i) that assists Customer as
described and in the manner specified in Exhibit A in any aspect of Customer's
---------
receipt, dissemination or other use of Market Data (including any facilities
manager, equipment operator, signal broadcaster or installation contractor) and
(ii) as to which NYSE has made the "Service Facilitator" determination that
Paragraph 8(a) describes.
(x) "Subscriber" means a recipient of one or more types of Market Data
----------
through a Ticker Display*, Interrogation Service, Market Minder Service, or
other Market Data Service from a Vendor, another data redisseminator or the
Authorizing SROs.
(y) "Subscriber Service" refers to any Interrogation, Ticker Display,
------------------
Market Minder or other service involving the use of Market Data (other than an
Indirect Access Service) that Customer may create and provide to its own
officers, partners and employees and/or to other Data Recipients, all as Exhibit
-------
A describes.
- -
(z) "Ticker Display" means a continuous moving display of Last Sale Price
--------------
Information (other than a Market Minder) provided on an interrogation or other
display device.
(aa) "Transmission Facilities" include the data transmission facilities by
-----------------------
which the Authorizing SROs make Market Data available pursuant to the Plans and
such other data transmission facilities by which one or more Authorizing SROs
may make Market Data available as NYSE may from time to time identify.
(bb) "Vendor" means any person engaged in the business of providing
------
Subscriber Services and/or Indirect Access Services to brokers, dealers,
investors or other persons.
2. PROPRIETARY INTERESTS - Customer understands and acknowledges, and
shall assure that each Customer Affiliate and Service Facilitator (if any)
understands and acknowledges, that each Authorizing SRO and Other Data
Disseminator has a proprietary interest in the Market Data that originates on or
derives from its markets or in its index information.
3. CUSTOMER ACCESS TO MARKET DATA
(a) DIRECT ACCESS - Customer may receive one or more Types of Market Data
through direct access to (i.e., through direct computer-to-computer interface(s)
----
with) the Transmission Facilities.
(b) INDIRECT ACCESS - Customer may receive one or more Types of Market
Data through Indirect Access to the Transmission Facilities through an
intermediary. However, Customer may do so only after NYSE notifies the
intermediary in writing of NYSE's approval.
(c) ACCESS SPECIFICATIONS AND EXPENSES - Customer may receive one or more
Types of Market Data as Paragraphs 3(a) and 3(b) provide solely as and to the
extent described, and in the manner specified, in Exhibit A. Where Customer
---------
adds, deletes or substitutes either any intermediary or any means of access
(i.e., either direct access or Indirect Access), NYSE must first approve the
addition, deletion or substitution and any related changes as Paragraph 6
describes. Except as NYSE may explicitly undertake, no Authorizing SRO is
responsible for any cost or expense, or for providing any circuit, necessary for
Customer to receive or transmit Market Data.
<PAGE>
Page 4
4. SRO MODIFICATIONS - Upon as much notice as is reasonably practicable
under the circumstances, the Authorizing SROs, without liability to Customer or
to any other person, (a) may discontinue disseminating any or all Types of
Market Data either at all or in any particular manner, (b) may change or
eliminate any circuit(s) carrying any or all Types of Market Data, (c) may
discontinue converting any or all Types of Market Data into electrical signal
form and/or (d) may change the speed or any other characteristic of the
electrical signals representing any or all Types of Market Data.
5. CUSTOMER USE OF MARKET DATA
(a) PERMITTED USE OF DATA - Customer may receive and use a Type of
Market Data pursuant to this Agreement solely as and to the extent described,
and in the manner specified, in Exhibit A. Except as this Paragraph 5 describes,
---------
any redissemination or other use of that Type of Market Data is prohibited.
Where NYSE has authorized Customer to provide one or more, but not all, Types of
Market Data to a Data Recipient, Customer shall inhibit the provision of the
unauthorized Type(s) of Market Data in the manner Exhibit A describes.
---------
(b) SUBSCRIBER SERVICES - Customer may provide one or more Type(s) of
Market Data to a Subscriber through a Subscriber Service solely as described and
in the manner specified in Exhibit A and only pursuant to such one or more of
---------
the following requirements as NYSE or AMEX, as appropriate, specifies:
(i) if NYSE, or AMEX, as appropriate, has notified Customer (by such
means as NYSE or AMEX, as appropriate, may specify) that the person
has entered into an appropriate agreement with NYSE or AMEX that
authorizes the person to receive and use the Type(s) of Market Data;
or
(ii) while the person is a party to an effective agreement with Customer
that includes terms and conditions in the form attached to this
Agreement as Exhibit B (if any); or
---------
(iii) Customer's compliance with such alternative or additional Subscriber
Service requirements as NYSE, or AMEX, as appropriate, may from time
to time approve in writing.
Where Customer provides a Subscriber Service pursuant to clause (ii) or (iii) of
this Paragraph 5(b), Customer shall assure that it has the ability to modify its
agreements with Subscribers, and any alternative subscriber requirements, as
NYSE may from time to time specify. Customer shall effect any such modification
promptly, except that Customer may continue to provide a Subscriber Service to
any existing Subscriber without effecting the modification for 90 days from that
receipt. Customer shall discontinue its provision thereafter if the Subscriber
has not agreed to the modification(s). Customer shall promptly describe to NYSE
any breach by a Subscriber of the NYSE-prescribed portions of Customer's
agreements with the Subscriber, or of NYSE-prescribed alternative subscriber
requirements, about which it may learn. Customer shall not in any way amend,
supplement, or otherwise modify NYSE-prescribed provisions or requirements or
vitiate those provisions or requirements by any collateral agreement or
understanding, except as NYSE may otherwise agree in writing.
(c) INDIRECT ACCESS SERVICES - NYSE will determine in its sole
discretion whether the manner in which Customer intends to provide one or more
Types of Market Data to other persons constitutes an Indirect Access Service.
Customer may provide an Indirect Access Service solely as described and in the
manner specified in Exhibit A. Customer shall not provide any person with an
---------
Indirect Access Service unless NYSE has notified Customer that the person has
entered into an appropriate agreement with NYSE authorizing the Indirect Access.
Customer shall promptly notify NYSE whenever any person commences or ceases to
receive an Indirect Access Service.
(d) DELAYED LAST SALE PRICE INFORMATION SERVICES - If Customer elects to
provide Delayed Last Sale Price Information Services (as described, and in the
manner specified, in Exhibit A), Customer shall:
---------
(i) comply with any contract and fee collection requirements that NYSE
may specify from time to time as to persons receiving Delayed Last
Sale Price Information;
(ii) assure that each display of Delayed Last Sale Price Information
conspicuously exhibits a statement indicating that the information
has been delayed and the duration of the delay; and
(iii) assure that any advertisement, sales literature or other material
promoting any Delayed Last Sale Price Information Service, and any
agreement for that Service, includes such a statement in a
conspicuous manner.
<PAGE>
Page 5
Customer shall assure that the statement is effected in the form and manner
Exhibit A describes and in a manner that makes it readily visible to any person
- ---------
viewing the display or promotional material. In addition, Customer shall comply,
and shall use its best efforts to cause Subscribers to comply, with any other
reasonable regulation that NYSE may adopt from time to time to assure that
viewers of Delayed Last Sale Price Information are not misled as to its nature.
(e) SECURITIES PROFESSIONAL EXCEPTION - Insofar as (i) NYSE determines
that Customer is a securities professional (such as a registered broker-dealer
or investment adviser) and (ii) Exhibit A does not otherwise permit Customer to
---------
provide Market Data to a particular person or branch office, Customer, solely in
the regular course of its securities business, may occasionally furnish limited
amounts of Market Data to its customers and clients and to its branch offices.
Customer may do so notwithstanding anything to the contrary in this Paragraph 5
and subject to such additional limitations as NYSE may specify in writing.
Customer may so furnish Market Data to its customers and clients who are not on
Customer's premises solely (i) in written advertisements, educational material,
sales literature or similar written communications or (ii) during telephone
conversations not entailing the use of computerized voice synthesization, other
electronic communication or similar technology. Customer may so furnish Market
Data to its branch offices solely (i) as the preceding sentence permits or (ii)
through manual entry over its communications network. Customer shall not permit
any customer or client to take physical possession of any component of the
equipment and software used for or in connection with any Service, except as
Exhibit A may otherwise provide.
- ---------
(f) PERMITTED CONNECTIONS OF TICKER DISPLAY DEVICES - Customer may connect
approved Ticker Display devices to the Transmission Facilities solely (i) for
persons, and at locations, that NYSE or AMEX, as appropriate, has approved for
that purpose and (ii) as described and in the manner specified in Exhibit A.
---------
Customer shall assure that any Ticker Display device complies with all NYSE
requirements for content, format and timeliness.
6. SERVICE AND SECURITY VARIATIONS AND SUPPLEMENTS - Customer shall
submit for NYSE's approval a description of any proposed, non-trivial variation
or supplement to or deletion from any receipt, redissemination, other use or
display of Market Data or to any Market Data security safeguard. Customer shall
not implement any such variation, supplement or deletion unless NYSE approves
its description in writing, whereupon Exhibit A shall incorporate the
---------
description. Customer understands that NYSE may not approve a proposed
variation, supplement or deletion and that it acts at its own risk if any
significant effort is expended in development prior to NYSE's approval. Customer
further understands that an approved variation or supplement may be subject to
one or more additional or substituted charges payable pursuant to Paragraph 10.
PART II: SECURITY
7. TRANSMISSION AND EQUIPMENT SECURITY
(a) PROTECTION OF TRANSMISSIONS AND EQUIPMENT - Customer shall assure that
Service-related data processing, transmission and communications equipment and
software are arranged and protected so that, so far as reasonably possible, no
person can have unauthorized access to Market Data.
(b) SECURITY BREACHES AND REVISION - Customer shall assure that the
security safeguards that Exhibit A describes are enforced. If, in its sole
---------
discretion, NYSE determines that one or more persons have unauthorized access to
Market Data, Customer shall, in accordance with Paragraph 6, take all steps
necessary to alter the security safeguards and the manner of its receipt or
transmission of Market Data so as to preclude the access. Customer shall provide
NYSE with such evidence as NYSE may request regarding the adequacy of those
steps. If NYSE determines those steps to be inadequate, Customer shall promptly
comply with any writing instructing Customer to discontinue transmitting Market
Data by the inadequately-safeguarded means.
(c) INSPECTION - Customer shall assure that any person authorized in
writing by NYSE (in respect of all Types of Market Data) or by AMEX (in respect
of Network B Market Data and Other Market Information) has access, at any
reasonable time, to any premises of Customer, any Customer Affiliate, any
Service Facilitator or any person to whom Customer provides Market Data. In the
presence of officials in charge of the premises, the authorized person may (i)
examine any component of equipment and software used for the purposes of this
Agreement and located at the premises and (ii) observe the use of Market Data
and all operations located or conducted at the premises, but solely to monitor
compliance with this Agreement. This Paragraph 7(c) does not require Customer to
disclose any proprietary information other than as Exhibit A discloses.
---------
<PAGE>
Page 6
8. SERVICE FACILITATORS AND CUSTOMER AFFILIATES
(a) SERVICE FACILITATORS - NYSE will determine in its sole discretion
whether any person assisting Customer for the purposes of this Agreement is a
"Service Facilitator" and, therefore, is excused from entering into a separate
agreement with NYSE. NYSE will base its determination upon such criteria as (i)
the nature and quantity of the Service-related functions that the person
performs and (ii) the extent to which Customer owns, or is under common
ownership with, the person. Customer shall not permit any person other than a
common carrier to assist Customer in providing or performing any aspect of the
Service unless (i) NYSE has determined the person to be a "Service Facilitator"
and the person is acting in accordance with, and in the manner specified, in
Exhibit A or (ii) the person has entered into an agreement with NYSE governing
- ---------
the assistance.
(b) CUSTOMER AFFILIATES - NYSE will determine in its sole discretion
whether any "control relationship" between Customer and any person qualifies the
person as a "Customer Affiliate" for the purposes of this Agreement. Subject to
the charges to which Paragraph 10(a) refers and to the other applicable
provisions of this Agreement, Customer may provide any Subscriber Service to
partners or officers and employees of Customer Affiliates. For that purpose, any
such partner, officer or employee is deemed "a partner, officer or employee of
Customer".
(c) CUSTOMER'S GUARANTEE - Customer unconditionally guarantees that each
Service Facilitator and Customer Affiliate (i) will fully comply with the
provisions of this Agreement that protect against unauthorized access to Market
Data, that relate to installation, maintenance and inspection, or that otherwise
apply in respect of the Service Facilitator or Customer Affiliate to the same
extent as if it had entered into this Agreement and (ii) will not cause Customer
to fail to comply with this Agreement. Customer shall inform each Service
Facilitator and Customer Affiliate of all relevant provisions of this Agreement
and shall promptly provide NYSE with a full description whenever it learns that
a Service Facilitator or Customer Affiliate has failed to so comply or has
caused Customer to fail to comply.
(d) CURE AND DISCONTINUANCE OF ACCESS - Whenever NYSE notifies Customer in
writing that it has determined that a Service Facilitator or Customer Affiliate
has failed to act in accordance with, or in the manner specified in, this
Agreement, Customer shall promptly cure the breach or rectify the failure. If
NYSE so instructs, Customer shall discontinue giving Market Data access to the
partners, officers and employees of the Customer Affiliate, or using the Service
Facilitator, under this Agreement.
9. COOPERATION AS TO UNAUTHORIZED RECEIPT
(a) PREVENTION AND DISCOVERY - Customer shall use best efforts to assure
that no "Unauthorized Recipient" obtains Market Data from Customer or from
----------------------
equipment and software that Customer uses for the Services. As to any Type of
Market Data, an "Unauthorized Recipient" is any person other than a Data
Recipient, Customer Affiliate or Service Facilitator in its authorized access to
that Type of Market Data. If an Unauthorized Recipient does so obtain Market
Data, Customer shall use its best efforts to ascertain the source and manner of
acquisition, shall fully and promptly brief NYSE, and shall promptly pay the
applicable amounts described in Paragraph 10. Customer shall otherwise cooperate
and assist in any investigation relating to any unauthorized receipt of Market
Data made available pursuant to this Agreement.
(b) CUSTOMER COOPERATION AND ASSIGNMENT - Any one or more Authorizing SROs
may sue or otherwise proceed against any Unauthorized Recipient, including suing
or proceeding to prevent the Unauthorized Recipient from obtaining, or from
using, any Type of Market Data that it or they make available. If any one or
more Authorizing SROs institute any suit or other proceeding against the
Unauthorized Recipient, Customer, unless made a defendant in the suit or
proceeding,
(i) shall assure that it and Customer Affiliates and Service Facilitators
(if any) cooperate with and assist the Authorizing SRO(s) in the suit
or proceeding in all reasonable respects, provided that the
Authorizing SRO(s) reimburse Customer for reasonable out-of-pocket
expenses; and
(ii) if the one or more Authorizing SROs so elect in writing, shall assure
that all of Customer's, Customer Affiliates' and Service Facilitators'
right, title and interest in the suit or proceeding and in its subject
matter will be assigned to the Authorizing SRO(s).
If the one or more Authorizing SROs elect the assignment, it or they shall
indemnify, hold harmless and defend Customer against any cost, liability or
expense (including reasonable attorneys' fees) that arises out of or results
from the suit or proceeding.
<PAGE>
Page 7
(c) THIRD PARTY SUITS AGAINST CUSTOMER - If any person brings a suit or
other proceeding to enjoin Customer, any Customer Affiliate or any Service
Facilitator from refusing to furnish any Type of Market Data to any Unauthorized
Recipient, Customer shall promptly notify NYSE. The Authorizing SRO(s) that make
that Type of Market Data available may intervene in the suit or proceeding in
the name of Customer, the Customer Affiliate or the Service Facilitator, as
appropriate, and, through counsel chosen by the intervening Authorizing SRO(s),
may assume the defense of the action on behalf of Customer, the Customer
Affiliate or the Service Facilitator. Intervening Authorizing SROs shall jointly
and severally indemnify, hold harmless and defend Customer against any loss,
liability or expense (including reasonable attorneys' fees) that arises out of
or results from the suit or proceeding.
(d) WITHDRAWAL OF RECIPIENT APPROVAL - If NYSE or AMEX, as appropriate,
notifies Customer in writing that the Authorizing SRO(s) have terminated the
right of any authorized recipient to receive any Type of Market Data, Customer
(i) shall cease furnishing that Type of Market Data to the person within five
business days of the notice and (ii) shall, within ten business days, confirm
the cessation, and inform NYSE or AMEX, as appropriate, of the cessation date,
by notice.
(e) CUSTOMER INDEMNIFIED - If Customer refuses to furnish, or to continue
to furnish, to any person any Type of Market Data solely because NYSE has
notified Customer in writing that the Authorizing SRO(s) do not authorize, or no
longer authorize, the person to receive that Type of Market Data, the
Authorizing SRO(s) shall jointly and severally indemnify, hold harmless and
defend Customer from and against (i) any suit or other proceeding that arises
from the refusal and (ii) any liability, loss, cost, damage or expense
(including reasonable attorneys' fees) that Customer incurs as a result of the
suit or proceeding. The Authorizing SRO(s) shall have sole control of the
defense of any such suit or proceeding and of all negotiations for its
settlement or compromise. Customer's prompt notice to NYSE of any such suit or
proceeding is a condition to Customer's rights under this Paragraph 9(e). Those
rights do not apply when Customer ceases to furnish Market Data to a person, or
in a manner, not authorized by NYSE.
PART III: PAYMENTS, RECORDS AND REPORTS
10. PAYMENTS
(a) GENERAL CHARGES - Customer shall pay NYSE or AMEX, as appropriate, in
United States dollars the applicable charge(s) from time to time in effect.
Customer shall pay any amounts due in accordance with such procedures, and
within such time parameters, as NYSE or AMEX, as appropriate, may specify from
time to time and shall pay any applicable tax (excluding any income tax imposed
on any Authorizing SRO in respect of any such amount). The Authorizing SROs will
provide Customer with 30 days' notice of any changes in the charge(s) payable by
Customer.
(b) CHARGES FOR UNAUTHORIZED INSTALLATIONS - If NYSE or AMEX, as
appropriate, notifies Customer that it has determined in its sole discretion
that Customer has made any unauthorized or unreported provision or use of Market
Data made available to Customer under this Agreement (including the improper
receipt described in Paragraph 10(d)), Customer shall pay (i) any applicable
charge(s) that would have been imposed on Customer, a Data Recipient or an
Unauthorized Recipient in respect of a provision or use, whether by Customer or
by a Data Recipient or Unauthorized Recipient, had it been authorized or
reported and (ii) an administrative fee equal to ten percent of those charges.
Customer's payment obligations apply regardless of whether a person responsible
for an unauthorized provision or use received the Market Data from Customer
directly or from a person in the chain of dissemination that began with an
unauthorized provision or use by Customer. The Authorizing SROs reserve the
right to recover punitive damages for any deliberate breach of good faith and
the like.
(c) INTEREST ON UNPAID AMOUNTS - If Customer has not paid any amounts
payable pursuant to Paragraph 10(a) within the applicable time parameters,
Customer shall pay interest on the unpaid amount. That interest begins to accrue
on the 31st day after the payment's due date. Customer shall also pay interest
in respect of amounts payable pursuant to Paragraph 10(b)(i). That interest
begins to accrue as of the date on which the amount would have been payable had
the provision or use of Market Data been properly authorized or reported.
The interest payable under this Paragraph 10(c) will equal the lesser of(i) one
and one-half percent per month and (ii) the maximum rate of interest that
applicable law permits.
(d) SUBROGATION AND RETURNS - If Customer has paid all amounts due in
respect of any Unauthorized Recipient (i) Customer becomes subrogated to all
rights of the Authorizing SROs to recover amounts from the Unauthorized
Recipient and (ii) NYSE or AMEX, as appropriate, will return to Customer any
amounts subsequently received from the Unauthorized Recipient, less any
associated collection and administrative expenses.
<PAGE>
Page 8
11. RECORDS AND REPORTS
(a) RECORDS MAINTENANCE AND PRESERVATION - Customer shall maintain such
billing records, reports, information, subscriber agreements and other documents
as NYSE or AMEX, as appropriate, may reasonably require from time to time to
permit the Authorizing SROs to bill for applicable charges and to monitor
compliance with this Agreement. Customer shall have the ability to retrieve each
such item as it applies to any NYSE-specified criterion, such as a particular
Service, Data Recipient, location or account number. Customer shall preserve
each such item for not less than three years.
(b) ACCESS TO RECORDS - During the term of this Agreement and for three
years thereafter, Customer shall assure that any authorized representative of
NYSE (in respect of all Types of Market Data) or of AMEX (in respect of Network
B Market Data and Other Market Information) is able (i) to examine Customer's
books and records relating to the Services (including, among other items, the
items Customer must maintain pursuant to Paragraph 11(a)), (ii) to copy those
books and records and extract information from them and (iii) to otherwise
perform any auditing functions necessary to verify Customer's compliance with
this Agreement.
(c) REPORTING - NYSE (in respect of all Types of Market Data) and AMEX (in
respect of Network B Market Data and Other Market Information) may from time to
time require Customer to furnish or report all or some of the items that
Paragraph 11(a) requires Customer to maintain. Customer understands that NYSE or
AMEX may require Customer (i) to so furnish or report some or all of those items
upon occurrences of specified events and/or on a periodic basis and (ii) to
provide detailed summaries. At the request of NYSE or AMEX, as appropriate,
Customer shall have audited, by an independent certified public accountant
satisfactory to the requesting exchange, a list of all Data Recipients and any
other reasonably requested list, report or information relating to Customer's
redissemination or other use of Market Data. Customer shall comply with this
Paragraph 11(c) by such methods, in such format and within such time parameters
as NYSE or AMEX may reasonably specify.
(d) RELIABILITY OF CUSTOMER'S RECORDS - Customer shall use its best
efforts (including the insertion of appropriate terms in Customer's agreements
with Data Recipients, Customer Affiliates and Service Facilitators) to assure
that Customer is supplied with timely, complete and accurate information so that
Customer, in complying with this Paragraph 11, maintains and supplies NYSE and
AMEX with timely, complete and accurate information. Those efforts shall include
the use of such entitlement controls as Exhibit A may describe. NYSE recognizes
---------
that certain information is beyond Customer's control (such as information
identifying Service-related equipment and software that Customer has not
supplied, installed or made available). Subject to the best efforts requirement
of this Paragraph 11(d), Customer's obligations under this Paragraph 11 apply to
information of this type only to the extent Customer has received it.
PART IV: PROVISIONS OF GENERAL APPLICABILITY
12. NYSE AND AMEX CAPACITIES - In respect of Network A Last Sale Price and
Quotation information, NYSE acts, and receives payments, information and
notices, under this Agreement in the one or more capacities for which the Plans
provide. In respect of Network B Last Sale Price and Quotation Information, NYSE
or AMEX so acts or receives in the one or more capacities for which the Plans
provide. In respect of NYSE Market Information, NYSE so acts or receives solely
on its own behalf. In respect of AMEX Market Information, NYSE or AMEX so acts
or receives solely on behalf of AMEX. In respect of Other Market Information,
NYSE or AMEX so acts or receives on behalf of the Participants or Other Data
Disseminators that make that information available.
13. PROHIBITED USE AND PATENT INDEMNIFICATION - Customer shall indemnify,
hold harmless and defend each Disseminating Party from and against any suit or
other proceeding at law or in equity, claim, liability, loss, cost, damage, or
expense (including reasonable attorneys' fees) incurred by or threatened against
the Disseminating Parties that arises out of or relates to
(a) any use of Market Data other than as this Agreement provides by
Customer, a Customer Affiliate or a Service Facilitator, or
(b) any claim that either any component of the equipment and software used
for the purposes of this Agreement (excluding any equipment and
software Customer or Service Facilitators (if any) do not supply,
install or make available to, or operate or maintain for, a Data
Recipient) or the manner of the use made of the component or of Market
Data provided pursuant to this Agreement infringes any United States
or foreign patent or copyright or violates any other property right.
NYSE's provision to Customer of prompt written notice of the suit or proceeding
is a condition to Customer's obligations under the preceding sentence. Customer
shall have sole control of the defense of the suit or proceeding and all
negotiations for its settlement or compromise.
<PAGE>
Page 9
14. DATA NOT GUARANTEED - The Disseminating Parties do not guarantee the
timeliness, sequence, accuracy or completeness of Market Data made available, or
of other market information or messages disseminated, by any Disseminating
Party. No Disseminating Party will be liable in any way to Customer or to any
other person for
(a) any inaccuracy, error or delay in, or omission of, (i) any such data,
information or message, or (ii) the transmission or delivery of any
such data, information or message, or
(b) any loss or damage arising from or occasioned by (i) any such
inaccuracy, error, delay or omission, (ii) non-performance, or (iii)
interruption in any such data, information or message,
due either to any negligent act or omission by any Disseminating Party or to any
"Force Majeure" (i.e., any flood, extraordinary weather conditions, earthquake
-------------
or other act of God, fire, war, insurrection, riot, labor dispute, accident,
action of government, communications or power failure, or equipment or software
malfunction) or any other cause beyond the reasonable control of any
Disseminating Party.
15. NO SPONSORSHIP - Customer shall assure that neither Customer nor any
Customer Affiliate or Service Facilitator represents, either directly or
indirectly, that any Disseminating Party sponsors or endorses in any manner
Customer, any other person, any particular use of Market Data or any equipment
and software.
16. ARBITRATION - The parties shall settle any controversy or claim
arising out of or relating to this Agreement, or to its breach or alleged
breach, by arbitration in New York, New York under the Commercial Arbitration
Rules of the American Arbitration Association. The arbitrator(s) may issue
injunctive and other equitable relief, but may not modify this Agreement. Either
party may enter in any court having jurisdiction judgment upon any award that
the arbitrator(s) render. For the purposes of so entering any such judgment,
each party submits to the jurisdiction of the courts of the State of New York.
Nothing in this Paragraph 16 derogates any right Customer, any Authorizing SRO,
or any other person may have to appeal to the Securities and Exchange Commission
any action taken or any failure to act under the 1934 Act, or any of its rules,
or to pursue any claim relating to the unauthorized publication or use of
communications under the Communications Act of 1934, as amended, at any time,
whether before or after the commencement of any arbitration proceeding.
17. EFFECTIVE DATE AND TERMINATION - Upon its execution by each party,
this Agreement becomes effective as of the date first above written. Upon
becoming effective, this Agreement supersedes each previous agreement between
the parties relating to any receipt or use of Market Data that Exhibit A
---------
describes. This Agreement continues in effect until terminated as this Paragraph
17 provides. Subject to Paragraph 4, either Customer or NYSE may terminate this
Agreement as to one or more Types of Market Data on 30 days' written notice to
the other. In addition, this Agreement terminates upon NYSE's withdrawal from
the Plans and terminates as to Other Market Information and either Plan's
Network B Market Data upon AMEX's withdrawal from that Plan. NYSE shall give
Customer 30 days' written notice of any such withdrawal. Insofar as Customer
receives access to Transmission Facilities by means of one or more interfaces
with one or more intermediaries, this Agreement terminates as to that access
immediately upon written notice from NYSE that it no longer approves the
interface(s). Paragraphs 8(c), 9, 10, 11, 13, 14 and 16 survive the termination
of this Agreement in general or as to any Type(s) of Market Data. They also
survive any Participant's withdrawal from either Plan as those paragraphs apply
to any matter arising prior to the withdrawal.
18. PROVISION OF SERVICE TO NYSE AND AMEX - Upon request by NYSE and/or
AMEX, Customer shall provide to the requesting exchange, free of charge, one
subscription to such one or more of Customer's Services as the request may
identify, together with the equipment necessary to receive, display or
communicate the Service(s). NYSE and AMEX shall use such subscriptions solely
for purposes of demonstrating the Service(s) and monitoring Customer's
compliance with this Agreement.
19. MISCELLANEOUS
(a) ENTIRE AGREEMENT - Exhibit C, if any, contains additional provisions
---------
applicable to any non-standard aspects of Customer's receipt and use of Market
Data. This Agreement incorporates Exhibit C. This writing, Exhibit A, Exhibit B
--------- --------- ---------
and Exhibit C contain the entire agreement between the parties in respect of
---------
their subject matter. No oral or written collateral representation, agreement or
understanding exists except as this Agreement may otherwise provide.
(b) MODIFICATIONS - In keeping with Paragraph 19(g), NYSE may, by written
notice to Customer, modify this Agreement as necessary to cause this Agreement
to comply, or to be consistent, with any modification to or replacement of the
1934 Act, the rules under the 1934 Act, or either Plan. Subject to Paragraphs
5(d) and 6, neither party may otherwise modify this Agreement except pursuant to
a writing signed by or on behalf of each of them.
(c) ASSIGNMENTS - Customer may not assign this Agreement, in whole or in
part, without the written consent of NYSE.
<PAGE>
Page 10
(d) INDIRECT ACTS PROHIBITED - In prohibiting Customer from doing any act,
this Agreement also prohibits Customer from doing the act indirectly (e.g., by
causing or permitting another person to do the act).
(e) REASONABLENESS STANDARD - This Agreement requires or authorizes NYSE
and other Authorizing SROs to provide notices and approvals, to make requests
and determinations, to impose and specify requirements, and otherwise to act, in
respect of a variety of matters. The Authorizing SROs shall perform those acts
in a reasonable manner.
(f) GOVERNING LAW - The laws of the State of New York govern this
Agreement. It shall be interpreted in accordance with those laws.
(g) ACT AND PLAN APPLICABILITY - This Agreement and the Services are
subject at all times to the 1934 Act, the rules under the 1934 Act and the
Plans.
20. NOTICES - Customer shall furnish any notice, description, report or
other communication relating to this Agreement in writing or by such other means
(e.g., by electronic mail) as NYSE may specify. The address of each party for
all written communications relating to this Agreement is:
Customer (as set forth in Exhibit A)
CQ Plan Participants and
CTA Plan Participants
c/o New York Stock Exchange, Inc. (as below)
New York Stock Exchange, Inc.
11 Wall Street
New York, New York 10005
Attention: Director of Market Data
American Stock Exchange, Inc.
86 Trinity Place
New York, New York 10006
Attention: Director of Market Communications
Customer may change its address by notice to NYSE. NYSE may change any other
party's address by notice to Customer.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as of the date first above written.
CUSTOMER NEW YORK STOCK EXCHANGE, INC.
acting in the capacities
First International Financial Corp. Paragraph 12 describes
- ------------------------------------
(Name of Customer)
By: /s/ Brad G. Gunn By: /s/ Ronald Jordan
--------------------------------- --------------------------------
Name: Brad G. Gunn Name: Ronald Jordan
Title: President Title: Managing Director, Market Data
Date: Dec 23, 1997 Date: 1/11/98
Dated: May 9, 1996
<PAGE>
TABLE OF CONTENTS
<TABLE>
<S> <C>
1.0 TYPE(S) OF MARKET DATA TO BE RECEIVED............................. 1
2.0 SOURCE(S) OF MARKET DATA.......................................... 1
3.0 SUMMARY OF USES OF MARKET DATA.................................... 2
4.0 DESCRIPTION OF SERVICE(S)......................................... 3
4.1 Services and Options......................................... 3
4.2 Equipment and Devices Used................................... 3
4.3 Display Screens.............................................. 3
4.4 Block Diagram of System and Communication Network............ 3
4.5 Delayed Price Service........................................ 3
5.0 DATA ENTITLEMENT - CONTROL AND REPORTS............................ 4
5.1 Control...................................................... 4
5.2 Reporting.................................................... 4
6.0 CUSTOMER AFFILIATES............................................... 5
7.0 SERVICE FACILITATORS.............................................. 6
</TABLE>
<PAGE>
1.0 TYPE(S) OF MARKET DATA TO BE RECEIVED
Check the applicable boxes)
Real-Time Delayed
- -------------------------------------------------------------------------------
X Network A/1/ Last Sale X Network B/2/ Last Sale --- Network A Last Sale
- --- ---
X Network A/1/ Bid-Asked X Network B/2/ Bid-Asked --- Network B Last Sale
- --- ---
X NYSE Bond Last Sale --- NYSE Bond Last Sale
- ---
X NYSE Bond Bid-Asked
- ---
/1/ NYSE-listed equity securities
/2/ AMEX-listed equity securities, AMEX-listed bonds, and other equity
securities that meet AMEX listing requirements.
2.0 SOURCE(S) OF MARKET DATA
Directly through a connection to SIAC systems
---
X Indirectly through S&P Comstock
--- -----------------------------------------------------
------------------------------------------------------------------------
------------------------------------------------------------------------
Page 1
<PAGE>
3.0 SUMMARY OF USES OF MARKET DATA
Market Data will be used: Yes No
___ __
X
(a). As part of a real-time interrogation display or ticker ___ ___
display service.
X
If yes, will service be made available to persons other ___ ___
than the officers and employees of the customer?
X
(b). For the purpose of compiling and disseminating stock ___ ___
tables to press associations or other publishers, or
for the purpose of furnishing market data via magnetic
tape.
X
(c). In operations control programs designed for monitoring ___ ___
and surveillance purposes, order/report price
validation, limit order switching, order status
verification and related activities, index
calculation/dissemination, portfolio valuation
services, software/system development, etc.
X
(d). In analysis programs leading to purchase/sales or other ___ ___
trading decisions, such as options analysis, arbitrage,
and program trading.
X
(e). In market making programs which generate quotations or ___ ___
execute transactions in an automatic or semi-automatic
manner.
X
(f). As part of a real-time automated telephone voice ___ ___
response service.
X
(g). To provide a data feed or other type of service where ___ ___
control over the use of market data and the reporting
of uses and display devices cannot be directly
maintained by the customer.
X
(h). As part of a delayed last-sale price interrogation, ___ ___
ticker display, or automated voice response service.
(Note: bid-asked quotations may not be delayed.)
X
(i). As part of a closing price, after hours or historical ___ ___
pricing service.
X
(j). As part of a real-time Network B ticker display ___ ___
service, either provided by a vendor or created
internally from data received. (Note: Separate Network
B ticker display charges apply to this usage.)
Please explain any other planned use of market data not covered in items (a)
through (j) above.
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
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4.0 DESCRIPTION OF SERVICES
4.1 Services and Options
Description of the Service
The FIFC system has been designed in order to provide real-time stock market
data to individual investors' interrogation displays using the Internet as the
data transmission medium.
The FIFC system is intended to provide a "window" between the financial markets
and individual investors. There will be no transactions involved. The system
allows registered users to login using their individual Login ID and password in
order to access real-time market information. (Users must register and provide
the information that is required by the stock exchanges as well as credit card
information in order to be eligible to use the service.)
Through the web site, investors can access information from all major North
American exchanges, i.e. NASDAQ, New York Stock Exchange, American Stock
Exchange, OPRA, Toronto Stock Exchange, Montreal Stock Exchange, Vancouver Stock
Exchange and Alberta Stock Exchange.
Two Levels of Service: Continual Updates, Static Updates.
Continual Updates
Registered users request real-time updates on equities and options; including
BBO, Last Sale, Volume, day hi-lo, 52 wk hi-lo, time of last sale, open, and
previous close. The system provides the quotes in a table format to the user
through a series of graphical user interfaces which have been created using
Java. The system automatically refreshes the information on the screen. Users of
this service will be signed up as non-professionals.
Static Updates
Registered users are able to obtain single snapshot quotes in a table form via
HTML in their browser. This is our usage-based metered system.
How the Data Will be Utilized
Market data will only be used to the extent that FIFC's registered users request
market information from the FIFC system. Only a user who has specifically
requested (and paid for) market data will be allowed to access real-time market
information. Market data will be used strictly for displaying current stock
price updates in an abbreviated quote format, an extended or long quote format,
a screen based ticker, and a market monitor format through the Java based
Portfolio Manager.
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The data will only be used to support the intended uses of the FIFC system and
web sites. Data will not be provided to users through any other vehicle.
Profile of System Users
FIFC users are all external to the firm. All FIFC users will be financial
industry non-professionals as defined in the Exchange Agreements. Primary
testing and marketing of the site suggests that the majority of our users will
be Americans; however, the global reach of the Internet also allows us to reach
users around the world.
Overview of the FIFC Portfolio Manager(Continual Update Service)
The Portfolio Manager is a platform independent 100% Java application that
continuously updates the user's display with real-time trading information. The
Portfolio Manager allows each user to monitor their own custom set of
portfolios. Each portfolio is continuously updated with real-time intra-day
trading information. The Detailed Quotes screen allows users to query more
detailed historical data such as PE ratios, 52 week high and lows, Dividend and
Earnings information. The Exchange Statistics screen allows users to query a
variety of reports on each exchange (e.g. Most Active, % Gainers, $ Gainers,
etc...). The Option Listings screen allows users to query detailed information
about the options offered on a given security.
The primary function of the FIFC service is the Portfolio Manager that tracks
multiple stocks from multiple exchanges in user defined portfolios. Users may
select what data they wish to display from each market. From here they can set
up portfolios of 10 stocks and indexes that they can monitor. Users can select
to view all or none of BBO, Last Sale, trade volume, day hi-lo, 52 wk hi-lo,
time of last sale, open, previous close, price targets, company name. Also,
users may choose to display a snapshot of the market statistics for net gainers,
losers, etc.
The Portfolio Manager performs one analytical function that uses the market
data. If users desire to calculate the profit/loss position on a given stock
they can by entering in their purchase price and quantity.
Users may display their portfolios in a screen based ticker that uses Last Sale
data only. The ticker symbol and last price will scroll by.
Market Summary
The market summary window is designed to provide the user with an overview of
market conditions as well as the user's custom portfolio. Several major market
indices are presented to provide the user with information about overall market
conditions. The user's portfolio is displayed in a ticker tape that scrolls
across the screen. Both the ticker tape and the market indices are continuously
updated with the latest market information.
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Features
Portfolio Manager
The portfolio manager allows the user to define and monitor a set of custom
portfolios. For each symbol, the portfolio manager monitors and updates the
following:
Menu-bar Actions
The menu-bar is located at the very top of the Portfolio Manager window and
contains the following pull down menus:
File
Save
The save action saves the user's portfolio selections, including the current
order of the portfolios and symbols as well as any properties the user may have
entered.
Exit
The exit action exits the portfolio manager and all related windows.
Edit
The edit pull down allows the user to customize their portfolio entries.
Adding a Portfolio
Selecting this action will pop-up a dialog box that prompts the use to enter the
name of the new portfolio they wish to add. The name must be unique among
existing portfolios.
Removing a Portfolio
The user must select a portfolio before choosing this action. The user will be
presented with a dialog box confirming the selection. Removing a portfolio will
also remove the portfolio's contents.
Portfolio Properties
The user must select a portfolio before choosing this action. The user will be
presented with a dialog box containing the current property settings for this
portfolio. Portfolio properties are, the name and whether or not values are to
be displayed.
Add Symbol(s)
The user must select a portfolio before choosing this action. Selecting this
action will pop-up a dialog box that prompts the use to enter the symbols that
are to be added to an existing portfolio. More than one symbol may be entered,
separated by commas.
Remove Symbol
The user must select a symbol before choosing this action. The user will be
presented with a dialog box confirming the selection.
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Symbol Properties
The user must select a symbol before choosing this action. The user will be
presented with a dialog box containing the current property settings for the
selected symbol. Symbol properties are, the number of shares, and the up and
down limits. Up and down limits represent price targets which if reached or
exceeded will cause the symbols change field to flash until the limit is
modified or the last trade value changes to a value above/below the given price
targets.
View
The view pull down allows the user to pop up other windows or views.
Detailed Quotes
The detailed quotes screen allows the user to view detailed information about a
symbol. The user enters a symbol and presses the "Quote" button. The detailed
symbol information will appear in the view area.
Option Listings
The option listing screen allows the user to view detailed options information
for a symbol. The user enters the symbol of the underlying security and presses
the "Options" button. The detailed symbol information including bid, ask, sizes,
last trade price and contracts traded, will appear in the view area.
Exchange Statistics
The exchange statistics screen allows the user to request statistics for each of
the Exchanges. The user selects the exchange they wish to query and the
statistic in which they are interested and select the "Query" button. The
information will appear in the view area.
Help
About
This provides information about the release of the FIFC.
Field Descriptions
Symbol
The Symbol is the exchange symbol under which the security is traded.
Time
Time is the time of the last trade.
Last
Last is the price of the last trade.
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Change (%)
Change is the difference between the last trade and the previous close prices
and is followed by the percentage of the previous close that the difference
represents.
$ Value
$ Value represents the current dollar value of the symbol. This is calculated by
multiplying the number of shares currently owned (See Symbol Properties) by the
last trade price.
Bid (Size)
Bid is the current price at which the security can be sold. The size, shown in
parenthesis, is the number of 100 share blocks currently being offered at that
price. The availability of this data varies with the exchange on which the
symbol is traded.
Ask (Size)
Ask is the current price at which the security can be bought. The size, shown in
parenthesis, is the number of 100 share blocks currently being asked for at that
price. The availability of this data varies with the exchange on which the
symbol is traded.
High
The highest price at which a symbol was traded during the current/last trading
day.
Low
The lowest price at which a symbol was traded during the current/last trading
day.
Volume
The number of shares of the given symbol that have traded during the
current/last trading day.
Name
The full name or description of the given symbol.
Other Actions
Selecting A Portfolio
To select a portfolio you must click (with mouse button 1) the top line
containing the name of the portfolio.
Open/Close A Portfolio
Clicking (with mouse button 1) the arrow button located at the top of the
portfolio to the left of the name will open and close a portfolio. To conserve
space on the screen, a user may choose to close one or more portfolios. When the
arrow is pointing down, the portfolio is open. When it is pointing to the right,
it is closed.
Changing the order of Portfolios
After closing all of your portfolios, you may drag (using button 3 on your
mouse) the portfolios into any order you want.
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Selecting A Symbol
A symbol may be selected by clicking (using button 1 on your mouse) anywhere on
the line containing the symbol information. The symbol will have an outline when
it is selected.
Changing the order of Symbols
You may drag (using button 3 on your mouse) the symbols within a portfolio into
any order you want. You may not drag a symbol outside of its original portfolio,
but it may be added to any number of portfolios using the Add Portfolio Edit
action.
4.2 Equipment and Devices Used
Data Processing Equipment
Data is received via land lease POTS line at the Company's premises and directly
to dual S & P Comstock Client Site Processors.
Data Parser & Quote Server
These two programs (S & P Comstock Client Site Processor v 3.0) reside in two
(2) S & P Comstock Client Site Processors, 32MB RAM, 512kb cache, Ethernet PCI
10/100 Mbps, UNIX.
Database & Webserver
The customer database (currently Microsoft SQL v 6.5) and web server (Microsoft
Internet Information Server) reside in a Digital Equipment Corporation Alpha
1000 Server. The AlphaServer configuration is 266 Mhz Pentium, 64-bit platform,
128 MB EDO RAM Windows NT Server v 4.0.
Applet Server
This program resides in a Digital Equipment Corporation Celebris XL 5166DP Dual
166 Mhz Pentium processors with 128MB EDO RAM, 512kb cache, Ethernet PCI 10/100
Mbps, Windows NT v 4.0
Router/Firewall
A protective firewall is between the Company's LAN and the Internet. Included is
a firewall filter and routing system, Bastion Host firewall and application-
level gateway with authentication, authorization, monitoring, and logging
capabilities, and a choke router backup to Bastion Host. The type of firewall is
a product supplied by Borderware.
User Interface
The user interface for the continual updating service is the applet itself (e.g.
Portfolio Manager). Because an applet can only connect back to the machine from
which it is loaded, the User Interface must be co-located with the Applet
Server(s) so it can be loaded and started in the Subscriber's browser. The
interface for the static quote service is the clients web browser and HTML.
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Market Data Display
Java applets are downloaded to the client's personal computer, where the market
data is then displayed. The end user display device is completely dependent on
the users equipment, and FIFC has no control over what equipment is used by its
users.
4.3 Display Screens
The following are screen display samples based upon real-time last sale and bid
and ask NYSE market data.
Detailed Quote with Fundamentals
[GRAPHIC OF DISPLAY SCREEN]
7
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[Screen Display Of BullSession.Com Report]
8
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4.4 Block Diagram of the System and Communications Network
The following is a block diagram describing the overall system that will be
utilized in the dissemination of the market data.
[BLOCK DIAGRAM APPEARS HERE]
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Subsystems
We currently have 6 distinct subsystems each providing a critical piece of
functionality.
Data Parser
Receives and parses the data feed, sending parsed data to the quote server. Part
of the S & P Client Site Processor.
Quote Server
Quote server maintains an in memory copy of the latest trading information for
all Symbols. Part of the S & P Client Site Processor.
Database
Database (currently Microsoft SQL) contains subscriber information, User Account
Files, as well as exchange and market information on Symbols. The database also
tracks usage-based interrogation amounts by quote packets (see section 5.0 for a
detailed explanation of this tracking system).
Applet Server
Ticker.bat maintains subscriber portfolios and applet options. Serves as applet
interface to quote information which resides in either the Database or the Quote
Server.
User Interface
The user interface is the applet itself (e.g. Portfolio Manager). Because an
applet can only connect back to the machine from which it is loaded, the User
Interface must be co-located with the Applet Server(s) so it can be loaded and
started in the Subscriber's browser.
Web Server
The web server is the Internet presence for FIFC. It contains the home page,
help files, ticker lookup, login forms and other html/cgi related files.
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4.5 Delayed Price Service
FIFC currently has no plans to disseminate or use delayed last sale prices.
5.0 Data Entitlement - Control and Reports
5.1 Control
a) The market data entitlement system resides on FIFC's system, therefore only
FIFC has control of the entitlement of the market data. When a user
initially registers for First International's services they are prompted to
specify which exchanges they would like to receive data for. This
information is recorded, tracked in User Account Files in the FIFC Customer
Database and made readily available to the system. All market data is stored
in a database at two levels: the first identifies which exchange the data
originates from (Network A or Network B) and a second level identifies what
symbol or security the data corresponds to. An exchange identifier is
attached to each symbol. When the user requests a piece of market data from
a specific exchange, the system will compare the request to the
authorization limits for the exchanges that the user has been granted in
their User Account File. In the event the user requests market data for an
Exchange which they are not permissioned for, the system will alert the user
and reject the request. Should the user want to obtain the restricted piece
of market data they will have to return to the registration section and make
a request to FIFC to add the desired exchange to their entitlements. FIFC
will then determine whether or not they must fill out additional exchange
agreements and what the incremental cost will be. Upon receipt of the
required Subscriber Agreements and payment, FIFC then changes the User
Account File granting the user access to the requested exchange data. The
FIFC service only allows users to obtain real-time information for last sale
and bid and asked data for both Network A and Network B.
First International Financial's system identifies a user via a unique login
ID, a unique password, and a unique FIFC Client Number. Only users with a
valid login ID and password can access the market data. The user is prompted
for their login ID and password upon entering the FIFC system. The Customer
Database is then checked for verification of login ID and password and a log
is created with their unique FIFC Client Number. If the password does not
match the password recorded in the system then he/she will be prompted to
re-enter the login identification. This process will re-iterate three times
and upon failing on the third try, log the user out of the system and
server. The forementioned processes and a firewall are very stringent
measures employed to restrict access to the market data to only authorized
users.
b) Simultaneous use of the password is restricted via First International's
System. As a user logs into the system his/her entry and FIFC Client Number
is recorded. If
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b) Simultaneous use of the password is restricted via First International's
System. As a user logs into the system his/her entry and FIFC Client Number
is recorded. If another individual tries to enter the system using the same
login identification and password the system will check the log to see if
that corresponding FIFC Client Number is already logged in. If it is in use,
the system will refuse to grant him/her access. Once the user signs off the
system or the system detects the user is no longer present after 30 minutes
of inactivity, then his/her user session is removed.
c) When a prospective user registers for access to First International's system
they are prompted to specify which exchanges they would like to view data
for and informed what the cost will be for the specified combination.
Additionally, they will be informed which exchange agreements must be
downloaded and filled out. The completed forms are then faxed directly to
the offices of First International Financial where they are reviewed and
either accepted or rejected. After approving a user for use of the system,
FIFC creates a User Account File using FIFC's Administration Program,
proprietary software that is used for database administration. Each User
Account File contains the following information; name, address, login ID,
password, occupation and description, exchange entitlements, billing
information, employer name and address, and age. Only FIFC can add, change,
or delete exchange entitlements for the user by entering the appropriate
exchange identifier in the user account file. If the application is
rejected, the user is contacted via e-mail or telephone to elaborate on why
they were rejected (e.g. insufficient data, designated a professional,
etc.).
Users are automatically billed each month once they have successfully been
accepted into the system. In order to quit the service the user must notify
the office of First International either by telephone, e-mail or fax.
Furthermore, notification must be 30 days prior to the user's last day of
service. Upon receiving notification of discontinuance, First International
records the user's anticipated last day of service. Each day a process is
executed that will remove users that no longer wish to use the service.
User Account Files contain all the information on users and are stored in
the Customer Database. Each day a report is generated from the Customer
Database for billing purposes. From the same database, a report is generated
every month for Exchange reporting purposes.
Users do not have direct access to alter their data entitlements. Only FIFC
has access to the entitlement system to change data access. Subscribers can
only alter their entitlements by submitting a change of registration. Upon
receipt of the change of registration FIFC physically enters in the new
requests. The system will determine if the Exchange agreements that the user
has completed are sufficient for the new data he/she would like to receive.
In the event these agreements are not sufficient, the user will be prompted
to download the remaining required agreements. Such agreements must be
filled out and sent to First International for
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reviewing and approval. Upon granting approval, First International will
notify and allow the user to request information from the new exchange or
restrict data coming from an exchange that was removed. As well, the user
will be notified what his/her change in pricing will be given the changes
they have requested.
d) Audit trail information is maintained in electronic and hard copy format.
Each User Account File contains customers transactions history that is
maintained for 6 years. In compliance with exchange and vendor agreements, a
hard copy is generated monthly for exchange reporting purposes. The customer
transaction history includes the time and date of registration for the FIFC
service, the date and amount of payment for service, and the exchanges they
have contracted to receive market data from. In addition to the user account
files, the web servers of First International automatically track which
users have entered into and for what duration they remained in the system.
These log files are kept on-line and then archived to tape and a hard copy
is generated once a month. In turn, these tapes and hard copies are to be
kept for a period of eighteen months. The details of the log files include:
which data instruments were requested/received and the time of the request
for each user.
Exchange Indentifier Description
Our data provider, S&P Comstock, sends the exchange identifier attached to every
data message we receive, specifying exactly to which exchange the symbol
belongs. We append this to the symbol itself for storage and retrieval purposes,
meaning we cannot look up or display a symbol without knowing from which
exchange it is part of. For example AT&T's symbol comes in from the NYSE as
T.N in which the .N is the exchange identifier. AMEX symbols have .A attached as
a suffix.
Technical Specifications for the Record-Keeping of Per-Quote Charge Usage.
Our web based per-quote usage-based service allows a registered user to look up
the realtime data for a single stock. We have a secure method to accurately and
reliably track this action.
First, we guarantee that each person requesting the stock data has registered
with our service, meaning they have agreed to the enclosed sample agreements.
Using standard HTTP authentication, the web pages and CGI scripts are protected
from unauthorized use. Only those who have a user account with our service may
view the pages.
Second, the CGI script that connects to our Data Server knows exactly who is
requesting the information and for which stock symbol and Exchange the client is
requesting. This gets logged to disk before sending a single quote-packet
allowing us to closely monitor usage. It is impossible for a user to subvert
this program to get stock information without it recording the action first. For
the purpose of counting quotes, a "quote-packet" is any data element, or all
data elements, for a single issue. (For example, open, high, low, last,
------
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volume, net change, bid, offer, size are data elements. "IBM" is a single
issue.) An index value also qualifies as a data element
In a more detailed description, here is a sample user session. The client
uses their web browser to connect to our server and request the HTML page
containing a CGI form allowing them to enter a symbol. This HTML page is
stored in an HTTP protected directory, meaning the Web Server first checks
that the user has entered a valid username and password (which they were
assigned upon registration.) If one has not been entered yet, the Web Server
sends a message to the browser to obtain that information from the user. Once
the username and password are sent back, the Web Server checks that they are
valid, and if not, it denies the user access to the HTML page (and any other
pages and programs store in the protected directory.)
Once the Web Server has received a valid username and password, it then sends
the user's browser the HTML page with the form. The user fills out the form
with their desired stock symbol, and this information is passed back (always
with their username and password which the browser caches, so the Web Server
can verify who they are.) The CGI script that receives the information then
logs the transaction to disk. Only upon successful completion of this action
will the CGI script request the actual stock information from the Data Server
and send it back to the client.
The data is compiled into daily reports in hard copy and monthly reports that
are sent to the NYSE and Authorizing SRO's. The data logs are also backed up
in several locations on different computers, so in the event of a disk
failure, the logs remain unharmed.
5.2(a) Applicable Fees and Reporting Requirements -- Per Quote Pricing
FIFC understands and acknowledges that there are separate fees for each of
Network A data Network B data.
Usage Based Fees - Network A
Each real-time (less than 20 minutes old) quote-packet disseminated will be
subject to a charge that is currently $.01 (one cent) which applies in
respect of each quote packet retrieved during the period of market open
(currently 9:30am to 4:20pm ET). Quote-packets disseminated at any time other
than this period will not be subject to a charge.
Reporting Requirements -- Network A
FISC will submit monthly reports to the NYSE consisting of the number of
quote-packets that have been accessed during the month.
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Usage Based Fees - Network B
Tiered Quote Fees apply to FIFC services which permit individuals to access
market data by dialing into the vendors computers via any network, including the
Internet. FIFC customers must be in contractual privity with FIFC which contract
contains language acceptable to the AMEX (1) clearly enumerating the property
rights of the Network B participants and the AMEX, (2) prohibiting
retransmission or redistribution of the market data and (3) indicating that the
market data is not guaranteed.
Fees
The Network B charge is a function of the number of quotes requested by each of
FIFC customers during the month being reported.
Tier Quotes Accessed by the Monthly Fee Per
Customer in the Month Customer
I 1-50 $ 0.50
II 51-250 $ 3.25
III more than 251 $35.00
A quote is any data element or all data elements for a single issue. An index
value also qualifies as a data element. If the vendor offers a portfolio pricing
feature, then each issue (index) priced is counted as a quote.
These rates will be increased 5% September 1 each year this Pilot is in effect.
The Vendor understands that, upon 60 days notice, the AMEX may also increase the
rates as well as change the quote ranges for each of the three categories.
Reporting Requirements
Vendor must report to the AMEX no later than the 15th of each month the number
of customers in each of the three tiers during the previous month.
In addition, Vendor must send to the AMEX, by the 15th of the following month, a
report of all quote usage listing the number of customers who requested or
accessed one quote in the month, two quotes, three quotes and so on. This report
must be a computer file readable into Excel.
In addition, Vendor agrees to supply other reports of a market research nature
as the AMEX may reasonably request.
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5.2(b) Sample Reports
All data is stored in our MS SQL database and any type of report can be
generated. Below is a sample of three reports.
a)
Customer Entitlement and Usage Report for January 1, 1997 - January 31, 1997
<TABLE>
<CAPTION>
---------------------------
Devices
- -----------------------------------------------------------------------------------------------------------------
Customer Service Billing User Account Entitlements Previous Change Current Active Fees to
Address Address File Number Month Total Date Exchange
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
John Smith 1 Street 2 Street 107 NYSE, 1 0 1 11/11/96 4.25
AMEX, 1 0 1 11/11/96 3.25
NASDAQ, 0 +1 1 01/09/97 4.00
TSE 0 +1 1 01/09/97 6.00
- -----------------------------------------------------------------------------------------------------------------
</TABLE>
b)
Total Number of Customers (display units) by Exchange for January 1, 1997 -
January 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
Number of Devices NYSE AMEX NASDAQ NASDAQ OPRA VSE TSE ME ASE
Level 1 Level 2
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Previous Month 10 5 9 1 2 2 4 1 1
- -----------------------------------------------------------------------------------------------------------------------
Change +2 +1 +1 0 0 -2 +1 -1 -1
- -----------------------------------------------------------------------------------------------------------------------
Total this Month 12 6 10 1 2 0 5 0 0
- -----------------------------------------------------------------------------------------------------------------------
Total Fees Remitted to Exchange $63.00 $19.50 $40.00 $50.00 $4.00 $0.00 $30.00 $0.00 $0.00
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
c)
Metered Per-Quote Usage Report for January 1, 1998 - January 31, 1998
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Number of Users Total Real Time Quote Packets Fee per Quote Packet Total Fees Due to NYSE
Displayed
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
103 10,300 $0.01 $103.00
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
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6.0 Customer Affiliates
As defined in this agreement there are no customer affiliates.
7.0 Service Facilitators
Exodus Communications located at Harbourside Financial Center, Plaza III, Suite
800, Jersey City, NJ 07302. FIFC has leased office space from Exodus to house
its own servers and receive the S&P Comstock data feed in New Jersey.
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EXHIBIT C
AGREEMENT FOR RECEIPT AND USE OF MARKET DATA;
ADDITIONAL PROVISIONS
21. NETWORK A AND NETWORK B PILOT TEST OPERATIONS
(a) AUTHORIZATION - Exhibit A describes Services that Customer provides
pursuant to a per-quote charge. Customer acknowledges and understands that
it provides those services on a pilot test basis (the "Pilot Test
Services"). The CTA Plan and the CQ Plan authorize the Authorizing SROs to
enter into arrangements for pilot test operations designed to develop new
Market Data services. Accordingly, Customer may provide the Pilot Test
Services, but may do so only as and to the extent described, and in the
manner specified, in Exhibit A. It may do so only for so long as this
Agreement is in effect.
(b) SHARING OF RESEARCH - Customer, NYSE and AMEX shall periodically discuss
the results, progress and status of the Pilot Test Services and share any
market research that Customer has generated, subject to Customer's
obligation or reasonable need to maintain confidentiality in respect of
certain information.
(c) CUSTOMER AGREEMENTS WITH SUBSCRIBERS - Customer may provide the Pilot Test
Services to a person only while the person is a party to an effective
agreement with Customer that includes the terms and conditions in the form
attached to this Exhibit C as Attachment A. (This Exhibit C refers to any
--------- ------------ ---------
such person as a "Pilot Test Subscriber".) Customer shall assure that it
has the ability to modify its agreements with each Pilot Test Subscriber as
NYSE or AMEX, as appropriate, may from time to time specify. Customer shall
effect any such modification promptly, except that Customer may continue to
provide a Pilot Test Service to a Pilot Test Subscriber without effecting
the modification for 90 days from that receipt. Customer shall discontinue
its provision thereafter if the Pilot Test Subscriber has not agreed to the
modification(s). Customer shall promptly describe to NYSE or AMEX, as
appropriate, any breach of the NYSE or AMEX-prescribed portions of
Customer's agreements about which it may learn. Customer shall not in any
way amend, supplement, or otherwise modify NYSE or AMEX-prescribed
provisions or requirements or vitiate those provisions or requirements by
any collateral agreement or understanding, except as NYSE or AMEX, as
appropriate, may otherwise agree in writing.
(d) PILOT TEST SERVICE CHARGES - In addition to the applicable charge(s)
payable by Customer pursuant to Paragraph 10, Customer shall pay:
(1) in respect of Network A Market Data, one cent ($0.01) for each
"quote packet" (as defined in Exhibit A) that Customer
distributes pursuant to the Pilot Test Services; and
<PAGE>
(2) in respect of Network B Market Data, in accordance with the
following chart:
<TABLE>
<CAPTION>
Number of quotes accessed
by Customer during a month That month's fee
-------------------------- ----------------
<S> <C>
1 - 50 $ 0.50
51 - 250 $ 3.25
more than 250 $35.00
</TABLE>
provided, however, that those fees shall not apply insofar as
Customer has delayed any such quote packet for no less than 20
minutes.
Customer shall so pay those amounts in accordance with Exhibit A and
subject to the terms and conditions that Paragraph 10 imposes in respect of
other amounts payable pursuant to this Agreement.
(e) TERMINATION OF PILOT TEST SERVICES - Customer understands that NYSE or AMEX
intends to monitor the Pilot Test Services and may determine to amend the
CTA Plan and the CQ Plan to permit the pilot test's Market Data services on
a permanent basis, whether in the form described in Exhibit A, or to
---------
discontinue its authorization of one or more Pilot Test Services. If NYSE
(in respect of Network A Pilot Test Services), or AMEX (in respect of
Network B Pilot Test Services) makes any such determination, it shall so
notify Customer. Within 30 days of receipt of that notice, Customer shall
cease to provide the Pilot Test Services to which the notice refers and the
provisions of this Exhibit C shall then terminate. If Customer wishes to
---------
continue to provide those services and NYSE or AMEX, as appropriate, is
willing to permit Customer to do so, Customer shall amend Exhibit A to
---------
reflect any necessary changes and shall comply with such additional terms
and conditions as NYSE or AMEX, as appropriate, may impose in respect of
those services.
ACCEPTED AND AGREED:
CUSTOMER NEW YORK STOCK EXCHANGE, INC.
acting in the capacities
FIRST INTERNATIONAL FINANCIAL CORP Paragraph 12 of the Agreement
- ----------------------------------- describes
(Name of Customer)
By: /s/ Brad G. Gunn By: /s/ Ronald Jordan
-------------------------------- -------------------------------------
Name: Brad G. Gunn Name: Ronald Jordan
Title: President Title: Managing Director, Market Data
Date: Dec. 23, 1997 Date: 1/11/98
<PAGE>
ATTACHMENT A
TERMS AND CONDITIONS
PROPRIETARY NATURE OF DATA - Subscriber understands and acknowledges that
each "Authorizing SRO" (i.e., the New York Stock Exchange, Inc. ("NYSE"), each
CTA Plan Participant and each CQ Plan Participant), and each other entity whose
information is made available over the facilities of the Authorizing SROs (an
"Other Data Disseminator") has a proprietary interest in the Market Data that
originates on or derives from it or its markets. For the purposes of this
Addendum, "Market Data" means (a) CTA Network A last sale information, (b) CQ
Network A quotation information, (c) such bond and other equity last sale and
quotation information, and such index and other market information, as the
Authorizing SROs or any Other Data Disseminator may make available and as NYSE
may from time to time designate as "Market Data", and (d) all information that
derives from any such information.
THIRD-PARTY BENEFICIARIES; ENFORCEMENT - Subscriber understands and
acknowledges that this Addendum confers third-party beneficiary status on the
Authorizing SROs. In authorizing Vendor to take any action, or to receive any
communication, this Addendum authorizes Vendor to act on its own behalf and on
behalf the Authorizing SRO(s). NYSE may enforce this Addendum as to all Market
Data, and any Authorizing SRO may enforce this Addendum as to Market Data that
originates on or derives from its markets, by legal proceeding or otherwise,
against Subscriber and may likewise proceed against any person that obtains such
Market Data other than as this Addendum contemplates. No act or omission on the
part of Vendor and no other defense that might defeat recovery by Vendor against
Subscriber shall affect the rights of the Authorizing SROs as third-party
beneficiaries under this Addendum. Subscriber shall pay the reasonable
attorney's fees that any Authorizing SRO incurs in enforcing this Addendum
against Subscriber.
DATA NOT GUARANTEED - Subscriber understands that neither NYSE, any other
Authorizing SRO, any Other Data Disseminator nor the Processor under the CTA
Plan or the CQ Plan (the "Disseminating Parties") guarantees the timeliness,
sequence, accuracy or completeness of Market Data or of other market information
or messages disseminated by any Disseminating Party. Neither Subscriber nor any
other person shall hold any Disseminating Party liable in any way for (a) any
inaccuracy, error or delay in, or omission of, (i) any such data, information or
message or (ii) the transmission or delivery of any such data, information or
message, or (b) any loss or damage arising from or occasioned by (i) any such
inaccuracy, error, delay or omission, (ii) non-performance or (iii) interruption
in any such data, information or message, due either to any negligent act or
omission by any Disseminating Party, to any "force majeure" (e.g., flood,
extraordinary weather conditions, earthquake or other act of God, fire, war,
insurrection, riot, labor dispute, accident, action of government,
communications or power failure, equipment or software malfunction) or to any
other cause beyond the reasonable control of any Disseminating Party.
<PAGE>
REDISSEMINATION PROHIBITED - Subscriber shall use Market Data only for its
individual use. Subscriber shall not furnish Market Data to any person or entity
other than an officer, partner or employee of Subscriber.
DISSEMINATION DISCONTINUANCE OR MODIFICATION - Subscriber understands that,
at any time, the Authorizing SROs may discontinue disseminating any category of
Market Data, may change or eliminate any transmission method and may change
transmission speeds or other signal characteristics. Subscriber shall not hold
the authorizing SROs liable for any resulting liability, loss or damages that
may arise therefrom.
DURATION; SURVIVAL - This Addendum remains in effect for so long as
Subscriber has the ability to receive Market Data as contemplated by this
Addendum. In addition, either Subscriber or Vendor may terminate this Addendum
on 30 days' written notice to the other. Subscriber understands that Vendor is
obligated to terminate this Addendum pursuant to this Paragraph upon notice to
that effect from NYSE. Paragraphs [PROPRIETARY NATURE OF DATA], [THIRD-PARTY
BENEFICIARIES; ENFORCEMENT] AND [DATA NOT GUARANTEED] survive termination of
this Addendum. This Addendum supersedes each previous agreement between the
Subscriber and NYSE insofar as the superseded agreement pertains to the Market
Data services that Vendor provides to Subscriber pursuant to the Vendor-
Subscriber Agreement.
<PAGE>
EXHIBIT C
---------
AGREEMENT FOR RECEIPT AND USE
OF MARKET DATA; ADDITIONAL PROVISIONS
-------------------------------------
22. "CLICK-ON" AGREEMENTS
(a) SCOPE - The Agreement and Exhibit A require Customer to enter
---------
into contracts with its subscribers for the benefit of the Authorizing SROs.
This Paragraph 22 applies insofar as Exhibit A allows Customer to satisfy that
obligation by means of on-line contracts to which the subscriber manifests its
assent by means of "clicking" an appropriate space on a computer screen (a
"Click-On Agreement"); provided, however, that, subsequent to the effective date
-------- -------
of this Paragraph 22, Customer may not so use a Click-On Agreement for the
benefit of the Authorizing SROs insofar as a subscriber enters into written
agreements (i.e., on paper) for Customer's benefit contemporaneously with the
subscriber's determination to receive Market Data from Customer.
(b) AUTHORIZATION - Customer may fulfill its obligation to have its
subscribers enter into agreements for the benefit of the Authorizing SROs by
means of a Click-On Agreement, subject to the indemnification provisions set
forth in Paragraph 22(c) below and the following conditions:
(i) NYSE must have approved the form and content of, and manner of entry
into, the Click-On Agreement, and any change to that form, content and
manner of entry, prior to its use.
(ii) Customer must maintain a hard copy of each NYSE-approved Click-On
Agreement and careful records as to the scope of use of each such
agreement. Those records ("Click-On Agreement Records") must indicate
with precision exactly to which agreement each subscriber manifested
its assent, the precise manner in which each subscriber manifested its
assent and the effective
<PAGE>
dates of the Click-On Agreement and of any updated or revised
versions.
(iii) Upon request from NYSE, Customer must provide to NYSE:
(A) a hard copy of each Click-On Agreement that it uses in connection
with its provision of the Services, including any revised
version;
(B) a description of the scope of use of, and manner of entry into,
each such agreement; and
(C) access to all Click-On Agreement Records.
(iv) Customer must prevent the subscriber from having the ability to
manifest its assent to the Click-On Agreement unless all of the
agreement's terms and conditions have first appeared on the computer
screen.
(v) Each time a subscriber logs on to the Service(s) that the Click-On
Agreement governs, the Subscriber must view the following message,
which shall appear in a clearly legible form:
As your agreement for the receipt and use of market data
provides, the securities markets (1) reserve all rights to the
market data that they make available; (2) do not guarantee that
data; and (3) shall not be liable for any loss due either to
their negligence or to any cause beyond their reasonable control.
(c) INDEMNIFICATION - Customer shall defend and indemnify the
Authorizing SROs, and hold the Authorizing SROs harmless, from and against any
suit or other proceeding at law or in equity, claim, liability, direct or
indirect loss, cost, damage, lost profits or expense (including attorneys' fees)
incurred by or threatened against the Authorizing SROs that arises out of or
relates to the unenforceability of a Click-On Agreement due to the manner in
which the subscriber manifests its assent to the terms and conditions of the
Click-On Agreement. NYSE's prompt written notice of the suit or proceeding is a
condition to Customer's obligations under the preceding sentence. Customer shall
have sole control of the suit or proceeding and all negotiations for its
settlement or compromise.
(d) APPLICABILITY OF AGREEMENT - Terms defined in the Agreement shall
have the same meaning in this Paragraph 22.
<PAGE>
3
Except as this Paragraph 22 may otherwise provide, all terms and conditions of
the Agreement shall govern this Paragraph 22. In particular, the parties
recognize and understand that clause (iii) of Paragraph 5(b) of the Agreement
and the provisions of Paragraph 5(b) that apply to that clause govern Customer's
use of Click-On Agreements. In the event of a conflict between the Agreement and
this Paragraph 22, this Paragraph 22 shall govern.
(e) TERMINATION OF PARAGRAPH 22 - If NYSE, in its sole discretion,
determines that statutory or common law have deemed, or are likely to deem,
Click-On Agreements to be unenforceable, it may so notify Customer. Customer
shall cease to allow subscribers to enter into Click-On Agreements within 24
hours of Customer's receipt of that notice and this Paragraph 22 shall then
terminate; provided, however, that, as to any subscriber that has manifested
-------- -------
assent to a Click-On Agreement prior to that determination, Customer may
continue to provide one or more Services to that subscriber until 90 days after
Customer's receipt of that notice. Customer may provide one or more
<PAGE>
4
Services to that subscriber thereafter only if the subscriber has entered into a
written agreement suitable to NYSE.
ACCEPTED AND AGREED:
CUSTOMER NEW YORK STOCK EXCHANGE, INC.
acting in the capacities
FIRST INTERNATIONAL FINANCIAL CORP Paragraph 12 of the Agreement
- ------------------------------------ describes
(Name of Customer)
By: /s/ Brad G. Gunn By: /s/ Ronald Jordan
--------------------------------- -------------------------------------
Name: Brad G. Gunn Name: Ronald Jordan
Title: President Title: Managing Director, Market Data
Date: 12/15/97 Date: 1/11/98
<PAGE>
EXHIBIT 6.2.1
THE NASDAQ STOCK MARKET, INC.
NQDS INFORMATION VENDOR AGREEMENT
THIS NQDS INFORMATION VENDOR AGREEMENT ("Agreement") is made by and between
---------
The Nasdaq Stock Market, Inc., a Delaware corporation, which is a wholly owned
subsidiary of the National Association of Securities Dealers, Inc. ("NASD"),
----
and whose executive offices are located at 1735 K Street, N.W., Washington, D.C.
20006, and FIRST INTERNATIONAL FINANCIAL CORPORATION, ("Vendor"), a ALBERTA
----------------------------------------- ------ -------
CORPORATION, whose principal executive offices are located at 1413 22ND AVE
- ----------- -------------
CALGARY ALBERTA T2TOR6.
- ----------------------
WHEREAS, Nasdaq has developed the National Quotation Data Service ("NQDS
----
Service") which makes available to authorized vendors certain market information
- -------
for Nasdaq National Market(R) and Nasdaq SmallCap Market(SM) securities that has
been collected, validated, processed, and recorded by the Nasdaq(R) System
("System"); and
------
WHEREAS, in accordance with the provisions hereof, Nasdaq desires to
utilize the System to make the Information available to Vendor and Vendor
desires to distribute the Information to interrogation devices owned and/or
controlled by Vendor or its subscribers; and
WHEREAS, Vendor has developed a subscriber interrogation service
("Service") whereby it intends to disseminate the Information to interrogation
-------
devices owned and/or controlled by Vendor or its subscribers; and
WHEREAS, Vendor desires to receive and utilize the Information from the
System through a communications interface between Vendor's computers and the
System to provide the Service in accordance with the detailed description of
Vendor's system and services set forth in Attachment A hereto, which is attached
------------
to and made a part of this Agreement; and
WHEREAS, Nasdaq is willing to furnish and Vendor is willing to receive the
NQDS Service subject to the terms and conditions hereof.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and conditions herein contained, Vendor and Nasdaq agree as follows:
Section 1. Definitions.
-----------
1
<PAGE>
The following initially capitalized words or phrases shall have
the meanings set forth below when used in this Agreement.
(a) "Claims or Losses" means any and all liabilities,
----------------
obligations, losses, damages, penalties, claims, actions, suits, costs,
judgments, settlements, and expenses of whatever nature, including, without
limitation (i) direct, indirect, punitive, consequential and incidental damages,
and (ii) administrative costs, litigation costs, and attorneys' and auditors'
fees and disbursements.
(b) "Corporations" means the National Association of Securities
------------
Dealers, Inc. ("NASD"), The Nasdaq Stock Market, Inc. ("Nasdaq"), and any other
---- ------
subsidiaries or affiliates of the NASD now or hereafter in existence.
(c) "Exchange Act" means the Securities Exchange Act of 1934, as
------------
amended.
(d) "Indemnified Parties", means the Corporations and each of
-------------------
their officers, directors, employees and agents.
(e) "Information" means the updated individual market maker bid
-----------
and ask quotation information for each authorized Nasdaq National Market and
Nasdaq SmallCap Market securities for which the requisite minimum number of
registered market makers are entering quotations and/or certain other or
alternate information as determined by Nasdaq. A person shall be deemed to
receive or make use of the Information if he receives or makes use of all or any
part of the Information.
(f) "Interrogation Device" means any device or equipment,
--------------------
including, without limitation, any computer, terminal, CRT or other display
device, which receives and displays or communicates the Information to any
person in visual or audible form. Interrogation Devices do not include printers,
disk drives, communication circuits, computers and other peripheral, front end,
and similar ancillary devices and equipment unless used to display the
Information in visual or audible form to Subscribers.
(g) "NQDS Service" means the National Quotation Data Service,
------------
whereby Nasdaq makes the Information available to Vendor on a real-time basis,
directly or through a Nasdaq-authorized supplier.
(h) "SEC" means the Securities and Exchange Commission, and any
---
other or successor federal agency exercising the functions or responsibilities
2
<PAGE>
assigned to the SEC.
(i) "Service" means Vendor's service, including the equipment
-------
and software related thereto, for disseminating the Information to Interrogation
Devices owned and/or controlled by Vendor or its Subscribers, as further
described in Attachment A hereto.
------------
(j) "Subscriber" means any person who subscribes to Vendor's
----------
Service and is entitled to receive the Information pursuant to Section 4(d)
------------
hereof.
(k) "System" means the computerized securities information
------
system for Nasdaq National Market and Nasdaq SmallCap Market securities operated
by the Corporations.
Section 2. Furnishing the Information.
--------------------------
(a) This Agreement governs the furnishing to Vendor by Nasdaq of
the information on a non-exclusive basis and the receipt and utilization of the
Information by Vendor in the manner described herein and in Attachments A, B, C
-------------------
and D hereto, which are attached to and made a part hereof. Attachment A hereto
- ----- ------------
describes vendor's system and services, including the Interrogation Devices upon
which the information is to be disseminated by Vendor to its Subscribers and the
precise nature and format of the presentation of, and access to, the
Information. Attachment B hereto sets further the technical and operational
------------
requirements that must be met by Vendor to enable it to receive the Information
and the technical method by which such information will be provided to Vendor by
Nasdaq. Attachment C here to contains a list, by Subscriber, of each
------------
Interrogation Device through which the Information provided to Vendor under this
Agreement may be received by Subscribers. This list also shows the Vendor and
Subscriber addresses where Interrogation Devices are located, the quantity, type
and serial number of each interrogation device located at such addresses, and
the date each interrogation device first became capable of receiving the
Information without further action by Vendor. Attachment D hereto sets forth
------------
terms and conditions applicable to payment of fees and related provisions.
(b) Nasdaq will make available the Information to Vendor from
the System. Vendor shall be responsible for obtaining the requisite quantity and
quality of common carrier communication lines and for interfacing with the
system at Trumbull, Connecticut, or at such other places as the central
computers or any back up computers for the System may be located, as described
in Attachment B hereto. Vendor will meet any reasonable requirement of Nasdaq
------------
concerning the location of the interface(s) with the System.
3
<PAGE>
(c) Vendor acknowledges and agrees that nothing herein shall be
deemed to constitute an agreement by Nasdaq to continue to disseminate the
Information in the present form or configuration or to continue to utilize any
present or future circuit or circuits carrying the Information in either the
present form or in any other form. Nasdaq, in its sole discretion, may from time
to time make modifications to the Information and the System, including the
interface and operational requirements referred to in Attachment B hereto,
------------
irrespective of whether such changes would require changes to be made by Vendor
to its Service or in the Interrogation Devices or other equipment or would
render them inoperative with respect to the Information. Nasdaq agrees to give
Vendor at least ninety (90) days prior written notice of any change in the
speed, code, format, operating hours, or any other changes in the operational
requirements contained in Attachment B hereto, unless a malfunction in the
------------
System necessitates modifications on an accelerated basis or an emergency
situation precludes such advance notice. Vendor shall bear all risks of failing
to make concurrent modifications to its Service. Any changes pursuant to this
subsection (c) will be applicable generally to all persons in the same class of
- --------------
service as Vendor, or such part thereof as may be affected by such
modifications.
(d) Nothing contained herein shall be construed to authorize,
appoint or license Vendor to act on an exclusive basis. Nasdaq reserves the
right, without any notice or liability to vendor or to any other person, to
furnish or to contract with any other person to furnish, the Information or any
other market information by any means whatever (including devices or equipment
designed or manufactured by the Corporations or any other person).
Section 3. Use of the Information.
----------------------
(a) Vendor is authorized by this Agreement to process and use
the Information only for the purposes of providing to its Subscribers listed on
Attachment C hereto a display of the Information supplied by Nasdaq to Vendor on
- ------------
Interrogation Devices (i) approved by Nasdaq and described in Attachment A
------------
hereto, (ii) listed on Attachment C hereto and (iii) owned or controlled by
------------
Vendor or its Subscribers. Any use of the Information, whether by Vendor or by
its Subscribers, including, but not limited to, retransmission or reprocessing,
not expressly described in Attachment A hereto is prohibited. Should Vendor
------------
desire to make any use of the Information (including, but not limited to,
developing or communicating derivative information based upon the Information,
retransmission, calculation of inside quotations or indices) in any manner not
then described in Attachment A hereto, Vendor may do so only with prior written
------------
approval by Nasdaq of such use, which approval shall be reflected in a written
amendment to Attachment A hereto, or a separate agreement with Vendor pertinent
------------
to the particular information or service that
4
<PAGE>
its seeks to offer, and upon payment of the fees applicable to the use approved.
The decision approving or disapproving the proposed modifications to Attachment
----------
A shall be made promptly and in good faith by Nasdaq. Vendor agrees that no
- -
change in or supplement to Vendor's use of the Information as described in
Attachment A hereto shall be implemented by or for Vendor unless Nasdaq shall
- ------------
have been notified thereof in writing and shall have approved such change or
supplement by amendment to Attachment A hereto. Vendor agrees not to alter the
------------
information in any manner that adversely affects its accuracy or integrity or
that renders it misleading and agrees to continuously monitor and review the
activities of its Subscribers to insure that no prohibited use of the
Information occurs. Vendor agrees that it will not use or cause or permit to be
used, directly or indirectly, all or any part of the Information except to
operate the Service described in Attachment A hereto. If Nasdaq transmits to
------------
Vendor data other than the Information, Vendor shall not furnish or permit to be
furnished such other data to any other party or place without the prior written
approval of Nasdaq.
(b) Notwithstanding subsection (a) above, and for advertisement
--------------
or demonstration purposes only, Vendor may use up to two (2) Interrogation
Devices, without charge, which permit persons other than Subscribers to operate
or view the Interrogation Devices on an intermittent basis and for limited
periods of time. In addition, upon obtaining the prior written consent of
Nasdaq, which shall be in the form of an amendment to this Agreement, Vendor may
be permitted to use additional Interrogation Devices for advertisement or
demonstration of its Service, or for product development and customer service.
(c) Vendor represents that the detailed description of its
Service, and the equipment and software used in connection therewith, including
the Interrogation Devices, set forth in Attachment A hereto is true, complete,
------------
and not misleading.
(d) Vendor acknowledges and agrees that it acts at its own risk
in developing any modification to its Service prior to receiving approval of
Nasdaq, since Nasdaq is not obligated hereby to grant such approval.
(e) Vendor shall ensure that its master computers are capable of
communicating with the System in accordance with the requirements contained in
Attachment B hereto at all times. Any variation by Vendor from the
- ------------
specifications contained in Attachment B hereto for the interface with the
------------
System is prohibited absent the prior written approval of Nasdaq. Vendor shall
provide written notice to Nasdaq of any change in location of Vendor's master
computers at least sixty (60) business days prior to such change.
(f) Vendor shall be responsible for and shall bear all costs
5
<PAGE>
associated with the transmission, storage and distribution of the Information
after receipt from Nasdaq at the interface with the System described in
Attachment B hereto.
- ------------
(g) Vendor acknowledges that the NASD is registered with the SEC
as a registered national securities association pursuant to Section 15A of the
Exchange Act, and that as such the NASD has a statutory obligation to protect
investors and the public interest and to insure the integrity of quotation
information, including, without limitation, the Information, supplied to
investors and the public; and further, that Section 19 (g)(1) of the Exchange
Act mandates that the NASD, as a self-regulatory organization, comply with the
provisions of the Exchange Act, the rules and regulations thereunder, and its
own rules. Accordingly, Vendor agrees that Nasdaq, as a subsidiary of the NASD,
when required to do so by the NASD, may by written notice to Vendor
unilaterally: (i) limit or terminate the right of any or all persons to receive
or use the Information; or (ii) control the manner in which Information is
formatted and displayed by Vendor to assure the completeness, fairness and
integrity of the Information received by Subscribers. Vendor shall promptly
comply with any such notice, and with respect to clause (i) above, shall
----------
terminate or limit the furnishing of the Information within three (3) days after
receipt of such notice and shall confirm such compliance by written notice to
Nasdaq not later than five (5) days after receipt of notice from Nasdaq. Any
person or persons the subject of notice issued pursuant to this subsection (g)
--------------
shall have available to them those procedural protections provided under the
Exchange Act and applicable rules thereunder.
(h) Vendor shall assume sole responsibility for the design,
development, acquisition, installation, testing, implementation, operation and
maintenance of any and all software and equipment used to provide the Service
that is not directly supplied by Nasdaq. Vendor warrants that the design,
development, acquisition, installation, testing, implementation, operation and
maintenance of its Service will not adversely affect the equipment, software or
operation of the System, any of its component parts or processes, or any use
thereof by other persons.
Section 4. Service Charges and Subscriber Agreements.
-----------------------------------------
(a) A schedule of fees will be established by Nasdaq to be
imposed upon Vendor and/or its Subscribers. These fees, and any changes thereto,
will be subject to review and approval by the SEC. A fee schedule applicable to
Subscriber Interrogation Devices and Vendors has been proposed and will be filed
with the SEC. The proposed fee schedule will be effective upon approval by the
SEC, provided, however, that nothing shall preclude the fee initially
-------- -------
established by Nasdaq that becomes effective from having retroactive application
to Vendor and its Subscribers, if permitted by the SEC from the date of
commencement of Service
6
<PAGE>
under this Agreement. Prior to approval of the initial fee, and interim charge
of $9.25 per month shall be applied to each Subscriber Interrogation Device.
Subsequent modifications to the fee schedule approved by the SEC shall become
effective upon thirty (30) days prior written notice to Vendor. The fee payable
for the month of commencement or termination of receipt of the Information will
be a pro rata share of the full monthly fee computed by dividing the number of
days during such month that the Information was received (or available for
receipt) by a standard twenty (20) business day month.
(b) Vendor shall have the obligation to pay directly to Nasdaq, on
behalf of itself and all of its Subscribers, one hundred percent (100%) of the
appropriate fees specified in the then effective fee schedule, without any
deductions whatever. Vendor shall assume full and complete responsibility for
the payment of any taxes, charges or assessments imposed on Vendor or Nasdaq by
any foreign or domestic, national, state, provincial or local governmental
bodies, or subdivisions thereof, and any penalties or interest, relating to the
provision of the Information. In addition, if Vendor is required by applicable
law to deduct or withhold any such tax, charge or assessment from the amounts
due Nasdaq under this Section 4, then the amounts due under this Section 4 shall
--------- ---------
be increased so that the net amount actually received by Nasdaq after the
deduction or withholding of any such tax, charge or assessment will equal one
hundred percent (100%) of the appropriate fees specified on the then effective
fee schedule. Vendor shall remit such fees to Nasdaq no later than fifteen (15)
calendar days after the end of the service month; such fees shall be payable in
immediately available United States funds by check or electronic funds transfer
drawn against a United States bank or financial institution acceptable to
Nasdaq. Any amounts due Nasdaq which are past due for thirty (30) days or more
shall be subject to a late fee equal to five percent (5%) of the amount past
due. Further, Vendor shall be obligated to pay interest on any such past due
amounts at a rate equal to the lesser or (i) one and one-half percent (1.5%) per
month or (ii) the maximum amount permitted by applicable law.
(c) Vendor agrees that it will not furnish, or cause or permit to be
furnished, all or any part of the Information except to a Subscriber who, at the
time of receipt thereof, is a party to a binding agreement ("Subscriber
----------
Agreement") with Vendor, in form and substance acceptable to and approved by
- ---------
Nasdaq, which provides for the Subscriber's assumption of the substantive
obligations required hereby pertinent to such Subscriber, including, without
limitation, Subscriber's agreement to the provisions of Section 5 and 6 hereof.
---------------
Vendor shall supply each potential Subscriber with a Subscriber Agreement
approved by Nasdaq. Such Subscriber Agreement shall be executed in duplicate by
the potential Subscriber and Vendor, and Vendor shall (i) provide the Subscriber
with an original counterpart of such Subscriber Agreement and (ii) maintain an
original counterpart of such Subscriber Agreement in its files for the duration
of its Service to such Subscriber,
7
<PAGE>
and for (2) years after discontinuation of Service to such Subscriber. Vendor
agrees that it will not install, operate, or maintain, on the premises of any
person, any equipment for the display or receipt of Information other than the
Interrogation Devices described in Attachment A hereto and that it will not
------------
furnish or cause or permit to be furnished, any part of the Information to any
person unless such person shall be a party to a Subscriber Agreement, then in
force with Vendor, as referenced above, authorizing such person to receive the
Information under the applicable terms and conditions set forth in this
Agreement. Subsequent to the execution of a Subscriber Agreement with a
Subscriber, the location and number of Interrogation Devices receiving or
capable of receiving the Information without further action by Vendor will be
furnished to Nasdaq by Vendor, by way of amendment to Attachment C hereto. Any
------------
amendments to Attachment C hereto resulting from the receipt or termination of
------------
receipt of the Information covered by Subscriber Agreements during the course of
any month shall be communicated to Nasdaq within thirty (30) days of the close
of each month. Nothing in this Agreement shall prevent Vendor from separately
charging its Subscribers for its Service. The specific procedures and
responsibilities of Vendor and Nasdaq concerning the authorization of a
Subscriber to receive the Information are set forth in Attachment D hereto.
------------
(d) Vendor shall maintain complete and accurate records at its
principal executive offices identifying all persons able to receive the
Information through the Service. All such persons shall be identified in
Attachment C hereto in accordance with the terms and conditions of this
- ------------
Agreement. The records shall set forth in reasonable detail the names,
addresses, telephone numbers, and contact persons of each Subscriber, by site at
which Interrogation Devices are located, and the number of Interrogation Devices
located at each site, and the date on which Information first became available
to each Interrogation Device.
(e) Vendor shall comply with Nasdaq's reasonable procedures and
requirements for the verification of all Interrogation Devices for which a fee
is payable to Nasdaq, and any other information relating to the Service as
Nasdaq may reasonably request. Vendor shall deliver to Nasdaq each year an
audited report from an independent certified public accountant retained by
Vendor, satisfactory to Nasdaq, which shall verify the number of Subscribers and
Interrogation Devices receiving the Information and the subscriber and vendor
fees payable to Nasdaq under this Section 4 as of the last day of any selected
month during the Vendor's fiscal year, provided, however, that the month
selected is within fifteen (15) months after the month selected for the
preceding year's report. Vendor shall ensure that delivery of the audited report
is made to Nasdaq within ninety (90) days after the month end selected for the
audit. If this audit report indicates that Vendor has underreported the amount
of Subscriber fees due to Nasdaq, Vendor shall promptly remit any unpaid fees
and applicable interest and late fees to Nasdaq and submit a revised Attachment
----------
C hereto within thirty (30) days of the date of the audit report.
- -
8
<PAGE>
(f) Vendor acknowledges that payment of all fees as described in this
Section 4 is a condition precedent for continued receipt of the Information.
- ---------
Vendor shall bear all risk of non-payment by its Subscribers. Upon Vendor's
payment to Nasdaq on behalf of a Subscriber of any amounts due under this
Section 4, Vendor shall be subrogated to any and all rights of Nasdaq to recover
- ---------
such amounts.
(g) From time to time, Nasdaq may cause Vendor's records of
customers, and reports and payments to Nasdaq to be reviewed by Nasdaq personnel
and/or auditors of Nasdaq's choice. The review shall be scheduled upon
reasonable notice to Vendor and conducted in Vendor's offices where its records
are kept. Vendor shall make available for review all records and supporting
documentation necessary in the judgment of the Nasdaq audit personnel to reach a
conclusion as to the accuracy and completeness of Vendor's reports to Nasdaq and
the payments connected therewith. If the examination conducted by Nasdaq
personnel or their auditors reveals exceptions or errors or possible exceptions
or errors in the audit reports provided to Nasdaq pursuant to subsection (f)
--------------
above, Vendor shall notify its auditors and direct them to perform such
procedures as are necessary to determine the magnitude of any adjustments of
amounts previously remitted to Nasdaq relating to the audit period in question.
If the audit review conducted by Nasdaq relates to a previously unaudited
period, the results of this review shall be deemed conclusive and the parties
shall promptly adjust payments and records accordingly. The conduct of any such
review by Nasdaq shall not constitute a waiver of the requirement for the annual
audit certification as described in subsection (f) above. If such audit shall
--------------
disclose additional underreported amounts, these amounts shall be remitted in
accordance with subsection (f) above. Moreover, should Vendor have underreported
--------------
the amount of Subscriber fees due Nasdaq by three percent (3%) or more, for any
audited or unaudited period, Vendor shall, in addition to remitting the fees and
applicable interest and late fees due relative to such underreporting, within
fifteen (15) days of invoice from Nasdaq, reimburse Nasdaq for any audit, legal
or administrative fees and expenses incurred to detect and rectify such
underreporting.
(h) Any information obtained by Nasdaq pursuant to subsection (h)
--------------
above shall be used solely for the purpose of this Agreement and shall be kept
confidential in accordance with the provisions of Section 15 hereof.
----------
(i) Vendor agrees to pay facilities charges that may in the future be
established by Nasdaq. It is anticipated that such charges, and any changes
thereto, will be subject to review and approval by the SEC. Vendor will be
notified in writing not less than thirty (30) days prior to the imposition of,
or changes in, any facilities charges.
9
<PAGE>
Section 5. Representations and Obligations of Vendor.
-----------------------------------------
(a) Vendor agrees to make a diligent effort to configure and
operate its communications network (or to make a diligent effort to cause such
communications network to be configured and operated) so that said
communications network remains at all times secure from unauthorized entry or
interference and to prevent the Information from being taken from said
communications network, or in any way communicated otherwise than as described
in Attachment A hereto.
------------
(b) Vendor shall not oppose any suit or proceeding instituted by
Nasdaq to enjoin any person receiving the Information from Vendor, who is not
entitled to receive the Information, from obtaining or using the same, and
Vendor agrees to cooperate with and assist Nasdaq in any such suit or
proceeding. If a Nasdaq request for cooperation and assistance imposes
substantial, extraordinary burdens upon Vendor, then Nasdaq agrees to reimburse
Vendor for Vendor's reasonable direct expenses incurred in connection with such
request. If Vendor furnishes, or permits to be furnished, any Information to any
party other than in accordance with this Agreement, without the prior written
approval of Nasdaq, then Nasdaq, in addition to exercising any other rights it
may have under this Agreement, may take any action against such other party to
prevent the receipt or use of the Information by such other party, either with
or without making Vendor a party to such action.
(c) Vendor represents that it is not engaged in, and agrees not to
engage in, any illegal transaction or business, and agrees not to use or
knowingly permit anyone to use the Information for any illegal purpose or for
any purpose not authorized hereby. The Information furnished to Vendor by Nasdaq
shall be solely for use in accordance with this Agreement and Vendor will
neither furnish nor permit others to furnish Information (i) other than in
accordance with this Agreement or (ii) to any person not presently authorized to
receive the Information under the procedures referenced in Section 4(d) hereof.
------------
(d) Vendor will meet any reasonable requirement of Nasdaq
concerning the security arrangements in Vendor's place or places of business
where equipment used to store and transmit the Information is located. Vendor
will adopt and enforce, as respects persons entering Vendor's place or places of
business, any reasonable regulation or requirement which Nasdaq may deem
advisable in order to prevent the Information from being improperly taken from
any of Vendor's offices or places of business. For the purpose of determining
compliance with this Agreement, and at all reasonable times, any person or
persons designated by Nasdaq shall have access to the locations where the
Information is processed and the Service is received, and the right to observe
the use made of the Information and the Service
10
<PAGE>
and to examine and inspect all instruments and apparatus used in connection
therewith in and such location.
(e) Neither Vendor nor any officer or employee of the Vendor
shall represent, or shall cause or permit any other person to represent, either
directly or indirectly, that Vendor or all or any part of the Service which
Vendor offers or any equipment utilized by Vendor is sponsored or endorsed by
the Corporations. Vendor acknowledges that "NASD", "Nasdaq", "Nasdaq-100",
"Nasdaq National Market", and "NASDAQ/NMS", "OTC Bulletin Board" are registered
trademarks and/or service marks and Vendor agrees not to use such marks in any
way which would infringe such marks under applicable law. Vendor acknowledges
and agrees that the Corporations have proprietary rights to use the names
"National Association of Securities Dealers, Inc.", "NASD", "The Nasdaq Stock
Market, Inc.", as trade and/or corporate names and Vendor further agrees not to
use said names or any combination or subset thereof in any manner inconsistent
with the Corporations' rights therein. For purposes of monitoring this
requirement, upon reasonable request, Vendor shall provide Nasdaq with any
materials made available to potential users of Vendor's Service. This Agreement
does not constitute a license of the marks listed in this subsection (e).
--------------
(f) If any Subscriber fails to comply with any of the
conditions, terms or provisions of this Agreement applicable to Subscribers or
of its Subscriber Agreement, or has made any representation in such Subscriber
Agreement which was or has become untrue, then Vendor shall, within three (3)
days after receipt of notice from Nasdaq of such failure or untruth, notify
Subscriber of such default and provide the opportunity for it to cure the
default within a period of five (5) days. If the default has not been cured
within this period, the Vendor shall cease providing the Information to such
Subscriber and shall, within thirteen (13) days following the receipt of the
original notice received, confirm such termination by written notice to Nasdaq.
(g) Vendor shall deliver to Nasdaq written notice within five
(5) days after Vendor knows or has reason to know that (i) a breach of or
default under this Agreement by Vendor or any Subscriber has occurred or (ii) a
breach of or default under any Subscriber Agreement has occurred, describing the
same in reasonable detail.
Section 6. Limitation of Liability.
-----------------------
Vendor fully understands and agrees to the following limitations
upon the liability of the Corporations: Nasdaq will furnish the Information from
its
11
<PAGE>
computers to all vendors as promptly and accurately as practicable, but the
Corporations neither warrant nor guarantee the sequence, accuracy or
completeness of the Information, and further, that with respect to the
Information, THERE ARE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION, THE IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A
PARTICULAR PURPOSE. The Corporations shall not be liable to Vendor, its
subscribers, or any other person, regardless of the cause (unless resulting from
the gross negligence or willful misconduct of the Corporations) or duration, for
any inaccuracy or lack of authenticity of the Information furnished, or for any
errors or omissions therein, or for any delays in the transmission of the
Information to Vendor or presentation thereof, or for any interruptions; nor
shall the Corporations be liable to Vendor, its Subscribers, or to any other
person, for any damages of any kind whatever arising therefrom or occasioned
thereby. Further, in no event shall the Corporations be liable for incidental or
consequential damages. In addition, Vendor shall be solely responsible for any
errors, omissions, or other defects in the Information that are caused by the
Vendor.
Section 7. Indemnification.
---------------
(a) Vendor shall indemnify the Indemnified Parties against, and
hold the Indemnified Parties harmless from, any and all Claims or Losses imposed
on, incurred by or asserted against the Indemnified Parties as a result of or
relating to:
(i) any non-compliance by Vendor or its Subscribers with the
terms and conditions hereof, including, without limitation,
non-payment of fees, illegal use of the Information or any
use, diversion, reprocessing or redissemination of the
Information not authorized by Nasdaq;
(ii) any assertion of Claims or Losses against the
Indemnified Parties made by Subscribers which would
otherwise be barred under Section 6 hereof if asserted by
---------
Vendor against the Corporations;
(iii) any assertion of Claims or Losses against the Indemnified
Parties made by Subscribers relating to Nasdaq's exercise
of its remedies under Section 8 hereof;
---------
(iv) any breach by Vendor of its warranty set forth in Section
-------
3(h) hereof;
----
12
<PAGE>
(v) any defense of or participation by the Indemnified parties
in any action, suit, arbitration, or judicial or
administrative proceeding involving any Claims or Losses
described in this subsection (a).
--------------
Such indemnification shall also include any loss in revenue to Nasdaq for non-
payment for any Interrogation Device or the furnishing of Information covered
hereunder by a Subscriber to any other person, or to any other Interrogation
Device, wherever located, from the date such Information was originally
furnished, together with the actual legal, investigative and administrative
costs of detection, rectification and/or prevention of the violation by a
Subscriber of the terms and conditions required to be incorporated in Subscriber
Agreements hereunder.
(b) Vendor shall indemnify the Indemnified Parties against,
and hold the Indemnified Parties harmless from, any and all Claims or Losses
imposed on, incurred by or asserted against the Indemnified Parties as a result
of or relating to any assertion by any person that Vendor's Service infringes
any patent, trademark, service mark, copyright, or violates any other property
right, or any defense of or participation by the Indemnified Parties in any
action, suit, arbitration, or judicial or administrative proceeding involving
any Claims or Losses described in this subsection (b). Nasdaq agrees to promptly
--------------
notify Vendor in writing of any such suit or proceeding brought against any of
the Indemnified Parties. If permitted by applicable law, Nasdaq further agrees
that, upon request, Vendor shall have the right to defend, settle, or compromise
any such suit or proceeding, at Vendor's expense, provided that: (i) Vendor
--------
demonstrates to Nasdaq's satisfaction that it is financially able to defend such
action and to pay any settlement or judgment; and (ii) counsel retained by
Vendor are satisfactory to Nasdaq. Nasdaq agrees to cooperate with Vendor in the
defense of any such suit or proceeding and Vendor agrees to reimburse Nasdaq for
its expenses with respect thereto.
Section 8. Default.
-------
(a) Vendor has specifically induced Nasdaq to enter into
this Agreement based on the representations and undertakings of Vendor contained
herein. Strict compliance with the provisions of this Agreement are and shall be
a condition precedent to Vendor's right to continue to receive the Information.
Vendor expressly acknowledges and agrees that Nasdaq shall have the rights set
forth in subsection (b) below if Nasdaq shall determine that one or more of the
--------------
following events or conditions occurs or is continuing:
(i) Vendor defaults in the payment when due of any of the
amount described in Section 4 hereof;
---------
13
<PAGE>
(ii) any representation, warranty or certification made by
Vendor in this Agreement or in any other document
furnished by Vendor in connection herewith was false or
misleading, as of the time made or furnished;
(iii) Vendor defaults in the performance of any of its
obligations or covenants under this Agreement, or any
representation, warranty or certification described in
clause (ii) above shall become untrue or inaccurate, and
-----------
such default, untruth or inaccuracy (if curable) shall
continue unremedied for a period of fifteen (15) days
after Nasdaq notifies Vendor thereof;
(iv) Vendor proceeds with a proposed action in default of its
obligations or covenants under this Agreement, or in
breach of any representation, warranty or certification
described in clause (ii) above, after Nasdaq has notified
-----------
Vendor that such proposed action would constitute a
default hereunder;
(v) Vendor (A) applies for or consents to the appointment of,
or the taking of possession by, a receiver, custodian,
trustee or liquidator of itself or of all or a
substantial part of its property, (B) makes a general
assignment for the benefit of it's creditors, (C)
institutes proceedings under the United States Bankruptcy
Code, (D) files a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment
of debts, (E) fails to controvert in a timely and
appropriate manner, or acquiesces in writing to, any
petition filed against it in an involuntary case under the
Bankruptcy Code, or the board of directors of Vendor takes
any action for the purpose of effecting any of the
foregoing;
(vi) a proceeding or case of the type described in clause (v)
----------
above is commenced, without the application or consent of
Vendor, in any court of competent jurisdiction, and such
proceeding or case is entered
14
<PAGE>
and continues unstayed and in effect for a period of sixty
(60) days, or an order for relief against Vendor is
entered in an involuntary case under the Bankruptcy Code;
or
(vii) Vendor admits in writing its inability to pay its debts as
they become due.
(b) Upon the occurrence of any of the events or conditions
described in subsection (a) above, Nasdaq shall have the immediate right, in its
--------------
sole discretion, to take one or more of the following actions: (i) to terminate
this Agreement and Vendor's right to receive the Information hereunder; (ii) to
discontinue providing the Information to Vendor; (iii) to demand arbitration
under Section 14 hereof; or (iv) to pursue such other remedies, consistent with
----------
Section 14 hereof, as it may be entitled hereunder or at law or in equity.
- ----------
(c) Vendor acknowledges and agrees that the exercise by Nasdaq of
the remedies to which it is entitled under this Section 8 shall not be deemed or
---------
considered to be, and to the extent permitted by applicable law Vendor waives
any right to represent or assert that any such exercise constitutes, an act or
omission or an improper denial or limitation of access to any service or
facility operated by the Corporations as contemplated in Section 11A of the
Exchange Act, or any other provision of the Exchange Act, or any rule adopted
thereunder.
Section 9. Term and Termination.
--------------------
(a) The original term of this Agreement shall commence on the
date specified in Section 25 hereof and shall continue until the date one (1)
----------
year thereafter. The term of this Agreement shall automatically be extended for
successive additional periods of one (1) year unless terminated by written
notice by a party hereto given to the other at least ninety (90) days prior to
the expiration of the original term or any such additional one (1) year period
as the case may be. Notwithstanding the foregoing, and in addition to Nasdaq's
rights under Section 8 hereof, this Agreement may be terminated by:
---------
(i) either party upon breach of this Agreement by the other
party which continues unremedied for fifteen (15) days
after notice to the breaching party; or
(ii) either party upon termination of the right of Vendor to
receive Information pursuant to Section 3 (g) hereof; or
-------------
15
<PAGE>
(iii) either party if performance hereof by Nasdaq is impaired
or rendered unnecessary by reason of changes in the
statutes, rules and regulations referenced in Section 16
----------
(b) hereof, other than rules and regulations of the NASD;
---
or
(iv) Vendor should Vendor be unable to receive the Information
as a result of any modification to the operational
requirements notified by Nasdaq in accordance with Section
-------
2(c) hereof; or
----
(v) Nasdaq should Nasdaq cease providing NQDS Service to all
persons in the same class of service as Vendor, provided,
--------
however, that Nasdaq has given Vendor not less than ninety
-------
(90) days notice of its intention to cease providing NQDS
Service.
(b) Upon termination of this Agreement Vendor shall immediately
cease any and all use of the Information.
Section 10. Assignment; Third-Party Rights.
------------------------------
This Agreement shall be binding upon and inure to the
benefit of the parties and their permitted successors and assigns. This
Agreement may not be assigned by any party without the written consent of the
other party, except to a successor corporation by operation of law, merger or
consolidation of either party, or to a corporation or partnership or other
entity acquiring substantially all the property, assets and business of any
party by sale, lease or other disposition or to any corporation controlling,
controlled by, or under common control with any party, except that Nasdaq may
assign its rights to any person as security for or in connection with the
borrowing of monies. Except as otherwise provided in Sections 6, 7, and 21
---------------------
hereof, nothing in this Agreement shall entitle any person to any rights as a
third-party beneficiary under this Agreement. Nothing in this Agreement shall
constitute the parties as partners or participants in a joint venture and
neither party is appointed the agent of the other.
Section 11. Amendment.
---------
Except as otherwise provided herein, no provision of this
Agreement, or the attachments which are a part hereof, may be amended, modified
or waived unless by an instrument in writing executed on behalf of each of the
parties by their respective duly authorized officers.
16
<PAGE>
Section 12. Waiver.
------
No failure on the part of either party hereto to exercise,
no delay in exercising, and no course of dealing with respect to any right,
power or privilege under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege under this Agreement.
Section 13. Entire Agreement.
----------------
This Agreement constitutes the entire Agreement between the
parties with respect to the subject matter hereof, and supersedes all prior
negotiations, communications, writings, and understandings.
Section 14. Arbitration.
-----------
All claims, disputes, controversies and other matters in
question between the parties to this Agreement, arising out of, or relating to
this Agreement, or to the breach hereof, and which cannot be resolved by the
parties shall be settled by binding arbitration in accordance with this
Agreement and the following procedure or such other procedures as may be
mutually agreed upon by the parties:
(a) Either party may serve upon the other party, by hand or
certified mail, return receipt requested, a written demand, specifying in
reasonable detail the nature of the matter, that the claim, dispute, controversy
or other matter in question be submitted to arbitration. The demand, which shall
be effective upon receipt, shall be made within a reasonable time after the
claim, dispute, controversy or other matter in question has arisen. In no event
shall the demand for arbitration be made after the date when institution of
legal or equitable proceedings based upon such claim, dispute, controversy or
other matter in question would be barred by the applicable statute of
limitations or laches.
(b) After service and receipt of a demand for arbitration,
the parties shall attempt to agree upon a single arbitrator within ten(10) days
or such longer period as the parties may agree to.
(c) In the event the parties fail to agree upon a single
arbitrator within the period established under subsection (b) above, then each
--------------
party shall appoint one arbitrator within an additional ten (10) days and notify
the other party of such appointment. If either party fails to timely appoint an
arbitrator, then the arbitrator appointed by the other party shall be the sole
arbitrator. If, however, both parties appoint an arbitrator, then a third
arbitrator shall be selected within ten (10) days thereafter by the first two
arbitrators unless otherwise agreed by the parties. If
17
<PAGE>
the arbitrators and the parties fail to appoint a third arbitrator, either party
may request the American Arbitration Association or any federal or local court
of the District of Columbia to appoint the third arbitrator.
(d) Any arbitration proceeding shall be conducted in
accordance with the rules of the American Arbitration Association (except that
the procedures set forth in this section shall supersede the rules of the
American Association) or such other procedures as are agreed to by the
arbitrators or the parties. Nothing contained herein shall be construed as
requiring submission of any claim, dispute, controversy or other matter in
question to the American Arbitration Association.
(e) The arbitration proceeding shall be held in the
District of Columbia, unless otherwise agreed by the parties.
(f) The decision rendered through arbitration shall be
final and binding upon the parties hereto and judgment may be entered in
accordance with applicable law in any court having jurisdiction thereof. In
rendering a decision the arbitrators shall be governed by the terms of this
Agreement.
(g) Although the parties agree that compulsory and binding
arbitration shall be the exclusive means of dispute resolution, judicial review
of any arbitration decision or proceeding (other than entry or enforcement of an
arbitration award/judgment) or of any matter arising under the terms of this
Agreement, whether or not submitted to the binding arbitration process required
by this Agreement, shall be brought solely in the federal or local courts of the
District of Columbia.
The foregoing procedures shall not preclude either party
from (i) petitioning the SEC regarding a matter in question or (ii) pursuing all
available administrative, judicial or other remedies for infringement of a
registered patent, trademark, service mark, or copyright.
Section 15. Confidentiality.
---------------
Each party acknowledges that in the course of performance of
this Agreement it may obtain confidential data, information or techniques from
the other party. With respect to any such data, information or techniques which
a party has designated in writing as "confidential" on or before disclosure to
the other party, and which are not otherwise publicly available, the other party
agrees to hold such data, information or techniques confidential, to use it only
in performance of this Agreement, and agrees not to disclose it unless directed
to do so by any court or administrative agency. Nothing in this Agreement shall
constrain the Corporations from using confidential information in furtherance of
their regulatory duties under the Exchange Act.
18
<PAGE>
Section 16. Governing Law.
-------------
(a) This Agreement shall be deemed to have been made in the
District of Columbia and shall be construed and enforced in accordance with, and
the validity and performance hereof shall be governed by, the law of the
District of Columbia, without reference to principles of conflicts of laws
thereof. Each party hereby consents to submit to the jurisdiction of the courts
of the District of Columbia in connection with any action or proceeding
instituted by the other party pursuant to the provisions of this Agreement.
(b) This Agreement and the Information to be provided
hereunder are subject to all applicable federal, state and local laws and
governmental rules and regulations, including, without limitation, the Exchange
Act and the Securities Act of 1933, as amended, the rules thereunder, and to the
rules, regulations and requirements of the NASD.
Section 17. Liaison and Notices.
-------------------
All questions regarding the implementation of this Agreement
shall be directed to the persons identified in subsections (a) and (b) below.
-----------------------
All notices and other communications required or permitted to be given under
this Agreement shall be in writing and shall be deemed to have been duly given
upon actual receipt by the notified party, or upon constructive receipt (as of
the date marked on the return receipt) if sent by certified mail, return receipt
requested, and addressed to the following addresses:
(a) If to Nasdaq: The Nasdaq Stock Market, Inc.
------------
1735 K Street N.W.
Washington, DC 20006
Attn: Manager, Trading & Market
Svc's
(202) 728-8480
with a required copy to:
Robert E. Aber
Vice President
The Nasdaq Stock Market, Inc.
1735 K Street N.W.
Washington, DC 20006
19
<PAGE>
(b) If to Vendor:
FIRST INTERNATIONAL FINANCIAL CORP.
-----------------------------------
1413 22ND AVE SW
-----------------------------------
CALGARY ALBERTA T2T OR6
-----------------------------------
ATTN: BRAD GUNN
-----------------------------------
Either party, by ten (10) days prior written notice, may specify a different
contact person or address for purposes of this Section 17.
----------
Section 18. Receipt of Services by Nasdaq
-----------------------------
Vendor agrees that during the term of this Agreement it will
provide to Nasdaq at no cost two (2) subscriptions to the Service covered by
this Agreement together with the equipment used for the display of the Service.
Nasdaq represents and agrees that such subscriptions will be used solely for
purposes of monitoring the Information and demonstration of Vendor's Service.
Section 19. Severability.
------------
If any of the provisions of this Agreement, or application
thereof to any person or circumstance, shall to any extent be invalid or
unenforceable, the remainder of this Agreement, or the application of such terms
or provisions to persons or circumstances other than those as to which they are
invalid or unenforceable, shall not be affected thereby, and each term and
provision of this Agreement shall be valid and enforceable to the fullest extent
permitted by law.
Section 20. Captions; Interpretation.
------------------------
The section headings used in this Agreement are intended
solely for convenience of reference and shall not in any way or manner amplify,
limit, modify or otherwise be used in the interpretation of this Agreement.
Unless otherwise expressly provided, all references herein are to the sections
of or attachments to this Agreement and " hereto," "hereof," "hereby" and
"herein" refer to this Agreement. The masculine, feminine or neuter gender and
the singular or plural number shall be deemed to include the other number or
genders where the context so indicates or requires. The word "person" shall
refer to any natural person, proprietorship, corporation, partnership, or other
entity whatever. Unless otherwise expressly provided, references to days, months
or years are to calendar days, months
20
<PAGE>
or years.
Section 21. Force Majeure.
-------------
In addition to the provisions of Section 6 hereof, the
---------
Corporations shall not be liable for delay or failure in performance of any of
the acts required by this Agreement when such delay or failure arises from
circumstances beyond the control and without the gross negligence or willful
misconduct of the Corporations. Such causes may include, without limitation,
acts of God, acts of government, in its sovereign or contractual capacity, acts
of public enemy, acts of civil or military authority, war, riots, civil strife,
terrorism, blockades, sabotage, rationing, embargoes, epidemics, earthquakes,
fire, flood, quarantine restrictions, power shortages, utility or communication
failure or delays, labor disputes, strikes, or shortages, or supply shortages.
The time for performance of any act delayed by such events may be postponed for
a period equal to the delay.
Section 22. Bankruptcy.
----------
If Nasdaq is not permitted to terminate this Agreement
pursuant to Section 8 hereof because of the provisions of the United States
---------
Bankruptcy Code, as amended, then Vendor or any trustee for Vendor agrees to
assume or reject this Agreement within no more than fifteen (15) days after
request by Nasdaq to the presiding Bankruptcy Court or judicial officer. Vendor
or any trustee for Vendor agrees not to seek or request any extension or
adjournment of any such application by Nasdaq to such Court or judicial officer.
Section 23. Survival.
--------
The provisions of Sections 4(e), 4(f), 4(h), 4(i), 5(e), 6,
-----------------------------------------
7, 8(c), 9(b), 14, 15, and 16 hereof shall survive the completion of performance
- -----------------------------
or any termination of this Agreement.
Section 24. Authorization.
-------------
This Agreement shall not be binding upon Nasdaq unless
executed by an authorized officer of Nasdaq. Vendor, Nasdaq, and the persons
executing this Agreement, represent that such persons have been and are duly
authorized by all necessary and appropriate corporate or other action to execute
this Agreement on behalf of Vendor and Nasdaq, respectively.
21
<PAGE>
Section 25. Effective Date
--------------
The execution date of this Agreement shall be the date it is
executed by an authorized officer of Nasdaq. This Agreement shall be effective
upon the earlier of (a) the execution date or (b) the date the Information is
first made available to Vendor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective authorized officers.
FIRST INTERNATIONAL FINANCIAL CORP.
----------------------------------------
("VENDOR")
By: /s/ BRAD G. GUNN
-------------------------------------
Name: BRAD G. GUNN
-----------------------------------
Title: PRESIDENT
----------------------------------
Date: 03/25/97
-----------------------------------
Executed this day of June 12, 1997, in the District of Columbia, for and on
behalf of:
The Nasdaq Stock Market. Inc.
-----------------------------
By: /s/ illegible
--------------------------
Name:
--------------------------------
Title: Senior Vice President
--------------------------------
The NASDAQ STOCK MARKET, INC.
22
<PAGE>
Exhibit 6.2.2
Dec. 15, 1997
Amendment to
Attachment A - System Description
of
NQDS Information Vendor Agreement
Dated April 25, 1997
between
First International Financial Corporation
and
The Nasdaq Stock Market, Inc.
The purpose of this amendment is to implement a per-quote usage-based system
to operate in addition to our fixed-monthly charge quotation system, to update
Nasdaq on any system changes, and to implement an electronic subscriber
agreement. As such, included in the Amendment are updated sections. The Updated
sections do not replace the previous Attachment A only amends it. Updated
sections are 1.0, 1.1, 1.2, 2.1, 2.2, 2.3, 3.2, 3.3 and a sample of the
electronic subscriber agreement.
1
<PAGE>
1.0 System Overview
Description of the System
Additional User Interface
An additional user interface is one in HTML through the user's web browser that
will allow registered users to obtain a single quote packet at a time.
Profile of System Users
World Wide Quote users are all external to the firm. All users will be financial
industry non-professionals as defined in the Exchange Agreements. Primary
testing and marketing of the site suggests that the majority of our users will
be Americans; however, the global reach of the Internet also allows us to reach
users around the world.
1.1 Services and Options
Per-quote Usage Charge Option
In addition to FIFC's fixed-monthly charge service, we are offering an option
that allows users to obtain a single quote packet at a time. This is a simple
HTML based service. A user logs in with their user id and password and enters a
symbol they are interested in. Upon the submission of the symbol a single quote
is returned.
1.2 Processing Equipment and Display Devices
Data Processing Equipment
Data is received via land leased line through two S & P Comstock Client Site
Processors at space leased by the Company.
Data Parser & Quote Server
These two programs (S & P Comstock Client Site Processor v 3.0) reside in a
Digital Equipment Corporation Celebris XL 5166DP with 166 Mhz Pentium
processors, 64MB EDO RAM, 512kb cache, Ethernet PCI 10/100 Mbps, UNIX.
Additional User Interface
The additional user interface is a table in HTML through the subscriber's
browser (a sample of the HTML display is in section 2.2.
2
<PAGE>
2.1 Entitlement Controls and Record Keeping
Continuously Updating Service Section 2.1 remains unchanged from Original
Attachment A.
Technical Specifications for the Record-Keeping of Per-Quote Charge Usage.
Our web based per-quote usage-based service allows a registered user to look up
the real-time data for a single stock. We have a secure method to accurately and
reliably track this action.
First, we guarantee that each person requesting the stock data has registered
with our service, meaning they have agreed to the enclosed sample agreements.
Using standard HTTP authentication, the web pages and CGI scripts are protected
from unauthorized use. Only those who have a user account with our service may
view the pages.
Second, the CGI script that connects to our Data Server knows exactly who is
requesting the information and for which stock symbol and stock exchange the
client is requesting. This gets logged to disk before sending the single quote
packet, allowing us to closely monitor usage. It is impossible for a user to
subvert this program to get stock information without it recording the action
first.
In a more detailed description, here is a sample user session. The client uses
their web browser to connect to our server and request the HTML page containing
a CGI form allowing them to enter a symbol. This HTML page is stored in an HTTP
protected directory, meaning the Web Server first checks that the user has
entered a valid username and password (which they were assigned upon
registration.) If one has not been entered yet, the Web Server sends a message
to the browser to obtain that information from the user. Once the username and
password are sent back, the Web Server checks that they are valid, and if not,
it denies the user access to the HTML page (and any other pages and programs
store in the protected directory.)
Once the Web Server has received a valid username and password, it then sends
the user's browser the HTML page with the form. The user fills out the form with
their desired stock symbol, and this information is passed back (always with
their username and password which the browser caches, so the Web Server can
verify who they are.) The CGI script that receives the information then logs the
transaction to disk. Only upon successful completion of this action will the CGI
script request the actual stock information from the Data Server and send it
back to the client.
The data is compiled into daily reports in hard copy and monthly reports that
are sent to the Nasdaq Stock Market, Inc. The data logs are also backed up in
several locations on different computers, so in the event of a disk failure, the
logs remain unharmed.
3
<PAGE>
2.2 Display Sample
Continuously Updating Service Section 2.2 remains unchanged from Original
Attachment A.
The following screen shot is a display sample from our per-quote usage-based
HTML system:
[SCREEN DISPLAY]
2.3 Sample Reporting - Per-Quote Usage-Based
Continuously Updating Service Section 2.3 remains unchanged from Original
Attachment A.
<TABLE>
- --------------------------------------------------------------------------------
Month Number of Quote Packets Fees
- --------------------------------------------------------------------------------
<S> <C> <C>
January 165,000 $1,650.00
- --------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
3.2 Communications Network Block Diagram
[BLOCK DIAGRAM APPEARS HERE]
Service Facilitators
S & P Comstock located at 600 Mamaroneck Avenue, 5th Floor, Harrison, NY is a
service facilitator. The role of S & P Comstock is to gather and process market
data from the various exchanges and disseminate this data to our system. The
dissemination is achieved by transmitting the data to FIFC via high speed
digital dedicated lines. The S & P Comstock Client Site Processor receives the
data from the land line and parses the data for the FIFC System.
Exodus Communications located at Harbourside Financial Center, Plaza III,
Suite 800, Jersey City, NJ 07302. FIFC has leased office space from Exodus to
house its own servers and receive the S&P Comstock data feed in New Jersey.
5
<PAGE>
Please Note: The following agreements are submitted electronically, you may
print these pages for your records. You are required to check every box to
confirm your understanding. We cannot process your registration without this
confirmation.
The Nasdaq Stock Market, Inc. (Nasdaq) Consolidated Subscriber Agreement
THE VENDOR AND ITS AGENTS MAY NOT MODIFY OR WAIVE ANY TERM OF THIS AGREEMENT.
ANY ATTEMPT TO MODIFY THIS AGREEMENT, EXCEPT BY NASDAQ, IS VOID.
1. The word "Corporations" means The Nasdaq Stock Market, Inc. and its
affiliates. The word "Information" means certain data and other information:
relating to securities or other financial instruments, products, vehicles or
devices; or relating to Persons regulated by the Corporations or to activities
of the Corporations; or gathered by the Corporations from other sources. The
word "or" includes the word "and". The phrase "Claims or Losses" means any and
all liabilities, obligations, losses, damages, penalties, claims, actions,
suits, costs, judgments, settlements, and expenses of whatever nature, whether
incurred by or issued against an indemnified party or a third party, including,
without limitation, (1) indirect, special, punitive, consequential or incidental
loss or damage, (including, but not limited to, trading losses, loss of
anticipated profits, loss by reason of shutdown in operation or increased
expenses of operation, or other indirect loss or damage) and (2) administrative
costs, investigatory costs, litigation costs, and auditors' and attorneys' and
fees and disbursements (including in-house personnel). The word "Person" means
any natural person, proprietorship, corporation, partnership, or other entity
whatsoever. The phrase "Non-Professional Subscriber" means any natural person
who is neither: (a) registered or qualified in any capacity with the SEC, the
Commodities Futures Trading Commission, any state securities agency, any
securities exchange or association, or any commodities or futures contract
market or association; (b) engaged as an "investment advisor" as that term is
defined in Section 201 (11) of the Investment Advisors Act of 1940 (whether or
not registered or qualified under that Act); nor, (c) employed by a bank or
other organization exempt from registration under federal or state securities
laws to perform functions that would require registration or qualification if
such functions were performed for an organization not so exempt. The phrase
"Professional Subscriber" means all other persons who do not meet the definition
of Non-Professional Subscriber. When it appears alone, the word "Subscriber"
encompasses all Non-Professional and Professional Subscribers. The phrase
"Vendor's Service" means the service from a vendor, including the data
processing equipment, software, and communications facilities related thereto,
for receiving, processing, transmitting, using and disseminating the Information
to or by Subscriber
2. Subscriber is granted the right to receive from Nasdaq the Information under
the terms stated herein or in the NASD Rules.
"NASD Rules" shall mean all applicable laws (including intellectual property,
communications, and securities laws), statutes, and regulations, the rules and
regulations of the SEC, the rules and regulations of the Corporations including,
but not limited to, those requirements established by the Corporations' rule
filings (with such SEC approval as may be required), the Corporations' decisions
and interpretations and any User Guides, or successors of the components of the
NASD Rules, as they may exist at the time. If any payment is due directly to
Nasdaq under this Agreement, payment in full is due Nasdaq in immediately
available U.S. funds, within 30 days of date of invoice, whether or not use is
made of the Information. Interest shall be due from the date of the invoice to
the time that the amount(s) that are due have been paid.
<PAGE>
Exhibit 6.2.3
ADDENDUM TO THE VENDOR AGREEMENTS FOR LEVEL 1 SERVICE AND LAST SALE
SERVICE OF THE NASDAQ STOCK MARKET, INC.
This addendum ("Addendum"), dated as of the date executed by The Nasdaq
Stock Market, Inc. ("Nasdaq"), amends any Vendor Agreement for Level 1 Service
and Last Sale Service offered by The Nasdaq Stock Market, Inc., (collectively,
the "Vendor Agreement") made by and between The Nasdaq Stock Market, Inc., a
Delaware corporation that is an affiliate of the National Association of
Securities Dealers, Inc. ("NASD") (a registered national securities association
subject to regulation by the Securities and Exchange Commission ("SEC") under
the Securities Exchange Act of 1934 ("Act")) (NASD with its affiliates is
collectively referred to herein as the "Corporations") whose principal place of
business is located at 1735 K Street, N.W., Washington, D.C. 20006 and FIRST
-----
INTERNATIONAL FINANCIAL CORP ("Vendor") with a principal place of business at
- ----------------------------
217 10TH AVE S.W., CALGARY, ALBERTA, CANADA.
- -------------------------------------------
Section 1. Non-Professional Subscriber Pricing. Under this Addendum, Vendor
shall be charged $2.00 per month for each Non-Professional Subscriber and $.005
per query, subject to the Revenue Guarantee set forth in Section 3 herein.
Section 2. Subscriber Agreements. Vendor shall ensure that all Subscribers
are subject to a legally effective Subscriber Agreement as set forth in the
Vendor Agreement.
Section 3. Revenue Guarantee. Each month, Vendor guarantees Nasdaq revenue
equal to the lower of: (1) the number of Vendor's Non-Professional Subscribers
in that month times $4.00, plus Vendor's per query usage in that month times
$.01; or (2) $21,344.86 which equals 75% of Vendor's Non-Professional and query
revenue from December, 1998.
Section 4. Classification of Non-Professionals. Nasdaq shall ensure that all
of Vendor's non-professional Subscribers meet Nasdaq's definition of "non-
professional" Subscriber.
Section 5. Term. Unless otherwise notified by Nasdaq, Vendor acknowledges
that this is a pilot program that shall terminate, without notice, on March 31,
2000. Nasdaq reserves the right to terminate this Addendum and/or the pilot
program with or without cause, at an earlier date, upon notice to Vendor.
Section 6. Ratification of Vendor Agreement. Except as modified herein, the
Vendor Agreement is hereby affirmed and ratified. Section headings are included
for convenience only and are not to be used to construe or interpret the Vendor
Agreement or this Addendum. Unless otherwise set forth in this Addendum, defined
terms shall have the meanings set forth in the Vendor Agreement.
The Nasdaq Stock Market, Inc. FIRST INTERNATIONAL FINANCIAL CORP. ("Vendor")
By:__________________________ By: /s/ Brad Gunn
-------------------------------------
Name: _______________________ Name: BRAD GUNN
------------------------------------
Title: ______________________ Title: PRESIDENT
-----------------------------------
Date:________________________ Date: MAY 20, 1999
-----------------------------------
<PAGE>
EXHIBIT 6.3.1
S&P COMSTOCK INFORMATION DISTRIBUTION
LICENSE AGREEMENT
AGREEMENT, made as of JUNE 13, 1997 by and between S&P ComStock, Inc. a
corporation having offices at 600 Mamaroneck Avenue, Harrison, New York 1052S,
and First International Financial ("Distributor"), having an office at 1413 22nd
Avenue, S.W., Calgary, Alberta, Canada 12T 0R6.
WHEREAS, S&P ComStock, Inc. gathers, formats and distributes an
information service comprised of certain securities and commodities prices and
other data which is known as the S&P ComStock Service ("ComStock") and
WHEREAS, S&P ComStock, Inc. is licensed to distribute information from
various Stock Exchanges, Commodity Exchanges, and other sources (collectively,
"Sources") as part of S&P ComStock: and
WHEREAS, the parties desire that certain delayed information from S&P
ComStock ("the ComStock Information") as specified in Exhibit A (Part I),
attached hereto, be made available to Distributor for display by Distributor on
its Internet World Wide Web site (collectively, the "Distributor Service"), as
described fully in Exhibit B, attached hereto.
NOW, THEREFORE, the parties mutually agree as follows:
1. Distribution License.
(a) Distributor is hereby granted for the term of this Agreement a
nonexclusive, nontransferable right and license to distribute electronically the
ComStock Information via the Distributor Service solely for access by Internet
users of the Distributor Service (such users referred to herein as
"Subscribers"), provided that the ComStock Information is supplied to the
Subscribers by means (such as data encryption, or packet transmission-
digitizing) which prevent unauthorized reception, use or retransmission and
further provided that Distributor has executed in advance any and all necessary
documents with the various Sources, which documents have been accepted and
approved by the Sources. Notice of such Sources' acceptance and approval must
be supplied to S&P ComStock, Inc. prior to Distributor's use or distribution of
the ComStock Information.
(b) Distributor agrees and understands that it is not permitted to
sublicense, transfer, or assign its rights hereunder and that it shall not
permit the redistribution of the ComStock Information by any Subscriber or by
any other third party without the express prior authorization of S&P ComStock,
Inc. pursuant to a separate agreement or by mutually agreeable amendment
executed and attached hereto.
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<PAGE>
2. ComStock Equipment.
(a) During the term of this Agreement, S&P ComStock, Inc. shall provide
Distributor the equipment listed in Exhibit C, attached hereto ("the ComStock
Equipment"), for installation only at the site(s) specified therein.
Distributor shall not relocate the ComStock equipment without the written
permission of S&P ComStock, Inc.
(b) S&P ComStock, Inc. shall, at Distributor's expense and request,
install, furnish, and maintain necessary modems and/or communications interface
equipment.
(c) Distributor shall not attach, or permit or cause to be attached, any
non-ComStock equipment to the ComStock communications line or the ComStock
Equipment without the prior written permission of S&P ComStock, Inc.
(d) Distributor shall have no right in or to any of the ComStock Equipment
except for the rights of use herein granted. Distributor shall pay all
extraordinary costs for repair or replacement of the ComStock Equipment, over
and above ordinary maintenance which shall be performed by S&P ComStock, Inc.
Such extraordinary maintenance includes electrical work external to the ComStock
Equipment, maintenance of accessories or attachments, and repair of damage to
the ComStock Equipment resulting from accident, neglect, misuse, failure of
electrical power or causes other than ordinary use. Distributor shall promptly
return the ComStock Equipment in good condition, ordinary wear and tear
excepted, upon termination of this Agreement for any reason.
3. ComStock Information.
(a) The furnishing to Distributor of the ComStock Information is
conditioned upon strict compliance with the provisions of this Agreement, the
applicable policies of the Sources, and with all local, state and federal
regulations which might pertain to the use of the ComStock Information. It shall
be the sole responsibility of Distributor to confirm with the applicable Sources
whether or not all of the ComStock Information may be distributed by
Distributor to its Subscribers. S&P ComStock, Inc. may discontinue provision of
the ComStock Information hereunder, without notice, whenever the terms of its
agreements with the Sources require such discontinuance, or if in its reasonable
judgment S&P ComStock, Inc. finds a breach by Distributor of any of the
provisions of this Agreement.
(b) Neither S&P ComStock, Inc., nor any of its affiliates, nor any Sources
make any express or implied warranties (including, without limitation, any
warranty of merchantability or fitness for a particular purpose or use). Neither
S&P ComStock, Inc., any of its affiliates, or any Sources warrant that the
ComStock information will be uninterrupted or error-free. Distributor expressly
agrees that its use and distribution of the ComStock Information and its use of
the ComStock Equipment is at the sole risk of Distributor and its Subscribers.
S&P ComStock, Inc., its affiliates, and all Sources involved in creating or
providing the ComStock Information will in no way be liable to Distributor or
any of its Subscribers for any inaccuracies, errors or omissions, regardless of
2
<PAGE>
cause, in the ComStock Information or for any defects or failures in the
ComStock Equipment, or for any damages (whether direct or indirect, or
consequential, punitive or exemplary) resulting therefrom. The liability of S&P
ComStock, Inc. and its affiliates in any and all categories, whether arising
from contract, warranty, negligence, or otherwise shall, in the aggregate, in no
event exceed one month's ComStock Information Delivery Fee.
(c) Distributor agrees that it shall not display the ComStock Information
in the Distributor Service without a prominent notice indicating that the
ComStock Information is being displayed on a minimum fifteen (15) minute delayed
basis, except for where real-time information is displayed.
(d) Distributor also agrees to include S&P Comstock's Terms and Condition
of Use, a copy of which is attached hereto as Exhibit E, within the Distributor
Service in a manner which alerts Subscribers of the applicability thereof.
(e) Distributor shall clearly and prominently identify S&P ComStock as the
source of the ComStock Information by display of the S&P ComStock logo (the
"Logo") in a manner to be agreed to by the parties. Distributor shall also
create a hypertext or other computer link from the Logo to the S&P ComStock Site
on the World Wide Web.
(f) Distributor represents and warrants that it has and will employ
adequate security procedures to prevent the unauthorized access to the ComStock
Information or corruption of the ComStock Information.
(g) Distributor agrees to indemnify and hold S&P ComStock, Inc. and its
affiliates harmless from and against any and all losses, damages, liabilities,
costs, charges and expenses, including reasonable attorneys' fees, arising out
of: (i) any liability of S&P ComStock, Inc. to any Subscriber where Distributor
has failed to include the Terms and Conditions of Use in the Distributor Service
pursuant to Section 3(d) above; or (ii) any breach or alleged breach on the part
of Distributor or any Subscribers with respect to its/their obligations to
obtain prior approvals from appropriate Sources and to comply with any
applicable conditions, restrictions or limitations imposed by any Source.
(h) S&P ComStock, Inc. represents that it has the rights and licenses
necessary to transmit the ComStock Information to Distributor, and that to the
best of S&P ComStock, Inc.'s knowledge, the license granted to Distributor
hereunder does not infringe any proprietary right or any third party right at
common law or any statutory copyright.
(i) S&P ComStock, Inc. shall deliver the ComStock Information to
Distributor at the site(s) set forth in Exhibit C or at such other locations as
Distributor may designate within the continental United States or Canada.
3
<PAGE>
4. Payments.
In consideration for the license granted to Distributor by S&P ComStock,
Inc. under this Agreement. Distributor shall make the following payments to S&P
ComStock. Inc.:
(a) Distributor shall pay to S&P ComStock, Inc. a basic ComStock
Information Delivery Fee of $520 per month, including all recurring charges for
ComStock network connection, modem/line interface equipment, and standard
equipment maintenance services as determined by S&P ComStock. Inc.'s standard
price list. These charges, plus any applicable Source fees and state/local
taxes, will be billed monthly in advance. Nonrecurring charges such as
installation, relocation and removals of ComStock Equipment will be separately
billed in accordance with S&P ComStock, Inc.'s then-current standard rates.
(b) Distributor shall pay to S&P ComStock, Inc. a monthly Subscriber Fee
the amount as calculated using the Schedule of Fees attached hereto as Exhibit
D. The Subscriber Fees will be due and payable on the fifteenth (15th) day of
each month and shall be based upon the number of Subscriber terminals receiving
the ComStock Information via the Distributor Service (unless the Guaranteed
Minimum is greater and therefore payable). Together with the Subscriber Fee
payment, Distributor shall provide to S&P ComStock, Inc. on a monthly basis a
list identifying the number of each Subscriber's terminals accessing the
ComStock Information. S&P ComStock, Inc. shall keep such list confidential.
(c) Distributor shall be responsible for the payment of any and all
applicable fees billed to S&P ComStock, Inc. or directly to Distributor by
Sources, which fees result from Distributor's use and distribution of the
ComStock Information. Distributor shall also be responsible for payment of any
Subscriber's Source fees which must be paid directly by Distributor to the
Sources. Distributor shall provide to S&P ComStock, Inc. a copy of its monthly
Source fee reports when and as filed with the Sources.
(d) Any amounts payable to S&P ComStock, Inc. by Distributor hereunder
which are more than thirty (30) days past due shall bear interest at the rate of
1-1/2% per month.
(e) S&P ComStock, Inc. may, in its sole discretion and at any time
following the initial term of this Agreement, change the per-Subscriber fee
payment schedule and/or the ComStock Information Delivery Fee as specified
herein after having provided written notice to Distributor at least ninety (90)
days in advance of such changes.
(f) S&P ComStock, Inc. may audit Distributor's records for the sole
purpose of verifying the accuracy of Distributor's reported monthly Subscriber
Fee payments as set forth in Paragraph 4(b), above. Distributor will make such
records readily available to S&P ComStock, Inc. for inspection during normal
working hours on one week's notice. S&P ComStock, Inc. agrees that Distributor's
records will be treated as confidential and will not be used for any purpose
other than verifying Distributor's compliance with this Agreement. Any such
audit shall be at S&P
4
<PAGE>
ComStock, Inc.'s expense unless it is determined that S&P ComStock, Inc. has
been underpaid by an amount exceeding five percent (5%) of the revenues actually
received by S&P ComStock, Inc. in the period covered by the audit; in such case,
the expense of the audit shall be borne by Distributor.
5. Information Enhancements; Changes to Data Specification.
(a) Any additions of new Sources or other enhancements to the
ComStock Information which may be made by S&P ComStock, Inc. during the term of
this Agreement, while unidentified at this time, will be offered to Distributor
under terms and conditions to be negotiated, provided that (i) S&P ComStock,
Inc. has the necessary rights to convey such new information to Distributor for
redistribution; and (ii) Distributor and S&P ComStock, Inc. execute a separate
agreement or an amendment to this Agreement.
(b) S&P ComStock, Inc. shall have the right, on at least six (6)
months prior written notice, to change the ComStock Data Format Specification,
provided that any such change shall be made effective generally by S&P ComStock,
Inc. to its customers. Distributor shall be responsible at its own expense for
making any modifications to its software necessitated by such change.
6. Term.
(a) This Agreement shall take effect upon its execution by an
authorized representative of S&P ComStock, Inc. and of Distributor.
(b) The term of this Agreement shall be for an initial term of three
(3) years commencing on the first day of service operation and shall continue
thereafter for additional consecutive twelve (12) month terms, unless written
notice of termination shall have been received by either party from the other at
least ninety (90) days prior to the end of the initial term or of any additional
twelve-month term. If S&P ComStock, Inc. increases charges to Distributor
pursuant to Paragraph 4(f), above, Distributor shall have the option to
terminate this Agreement by written notice to S&P ComStock, Inc. within sixty
(60) days of Distributor's receipt of notice of such increases; such termination
will become effective no sooner than thirty (30) days from the last day of the
month in which notice of termination by Distributor is received by S&P ComStock,
Inc. Distributor shall have the right to cancel this agreement by providing at
least ninety (90) days written notice after the first twelve (12) months, only
if Distributor does not continue providing market information as part of its
Distributor's service.
(c) During the term or this Agreement, Distributor shall not
distribute, market, sell and support any other market data feed other than the
S&P ComStock data feed.
7. Marketing.
Distributor may not use the names "ComStock", "SPC.", or "S&P
ComStock, Inc.", which are proprietary to S&P ComStock, Inc., or refer to the
ComStock Information in
5
<PAGE>
marketing or advertising materials without the prior written consent of S&P
ComStock, Inc., such consent not to be unreasonably withheld. Upon S&P ComStock,
Inc.'s written request, Distributor shall notify Subscribers by a display in the
service itself that S&P ComStock is the source of the quote information and any
sales literature discussing ComStock provided quotes shall list S&P ComStock as
the provider of the service.
8. Rights to Data Specification; Other Confidential Information.
(a) Distributor agrees and acknowledges that the Data Specification
is a confidential and proprietary trade secret belonging to ComStock, and
nothing in this Agreement conveys any proprietary rights whatsoever with regard
to the Data Specification to Distributor. The Data Specification is provided to
the Distributor strictly and solely for the purpose of developing internal
computer software to receive the ComStock Information. Distributor may not use
the Data Specification for any other purpose whatsoever, including, but not
limited to, the development of systems for the receipt or transmission of
computer data. Distributor may not give, transmit, or provide access to the
ComStock Data Specification to any Subscriber or other third party. On any
termination of this Agreement, regardless of cause, Distributor shall promptly
return the Data Specification to S&P ComStock, Inc. and shall provide a written
certification by an officer that no copies have been retained by Distributor.
(b) In addition to the duties imposed on Distributor pursuant to Paragraph
8(a), above, S&P ComStock, Inc. and Distributor agree to hold confidential any
and all of each other's trade secrets, procedures, formulae, financial data.
Subscriber lists, and future plans, which may be learned before and during the
term of this Agreement. Notwithstanding the foregoing, however, such duty of
confidentiality shall not extend to information which is or comes into the
public domain, is rightfully obtained from third parties not under a duty of
confidentiality, or which is independently developed without reference to the
other party's confidential information.
(c) The duties of confidentiality imposed herein shall survive any
termination of this Agreement.
9. Prevention of Performance.
Neither party shall be liable for any failure in performance of this
Agreement if such failure is caused by acts of God, war, governmental decree,
power failure, judgment or order, strike, or other circumstances, whether or not
similar to the foregoing, beyond the reasonable control of the party so
affected. Neither party shall have any liability for any default resulting from
force majeure, which shall be deemed to include any circumstances beyond its
control. Such circumstances shall include, but are not limited to acts of the
government, fires, flood, strikes, power failures or communications line or
network failures.
6
<PAGE>
10. Right of Termination in the Event of Breach or Bankruptcy; Right to
Injunctive Relief.
(a) Either party shall have the right to terminate this Agreement for
material breach by the other party by giving thirty (30) days prior written
notice, such termination to take effect unless the breach is cured or corrected
within such notice period.
(b) If a receiver is appointed for either party's business or if either
party petitions under the Bankruptcy Act and is adjudicated a bankrupt, declared
an insolvent, or makes an assignment for the benefit of creditors, then the
other party shall, upon thirty (30) days prior written notice, have the right to
terminate this Agreement.
(c) Upon termination of this Agreement for any reason. Distributor shall
cease all use and distribution of any of the ComStock Information.
(d) In addition to and notwithstanding the above, if Distributor, or any
of its employees, agents or representatives. shall attempt to use or dispose of
the ComStock Information or the Data Specification in a manner contrary to the
terms of this Agreement S&P ComStock, Inc. shall have the right, in addition to
such other remedies as may be available to it, to injunctive relief enjoining
such acts or attempt, it being acknowledged that legal remedies are inadequate.
11. Assignment.
This Agreement may not be assigned, sublicensed or otherwise transferred by
either party without the written consent, except to a wholly owned subsidiary,
of the other party, such consent not to be unreasonably withheld, provided,
however, that no such consent shall be required with respect to any assignment
by S&P ComStock, Inc. to its parent company, or to any S&P ComStock, Inc.
affiliate. Any attempted transfer or assignment of this Agreement in violation
of this provision shall be null and void.
12. Entire Agreement.
This Agreement and its Exhibits embodies the entire agreement between the
parties hereto. There are no promises, representations, conditions or terms
other than those herein contained. No modification, change or alteration of this
Agreement shall be effective unless in writing and signed by the parties hereto.
13. Non-Waiver.
The failure of either party to exercise any of its rights under this
Agreement for a breach thereof shall not be deemed to be a waiver of such rights
nor shall the same be deemed to be a waiver of any subsequent breach.
7
<PAGE>
14. Notices.
All notices under this Agreement shall be given in writing to the parties
as follows:
To: S&P ComStock, Inc.
600 Mamaroneck Avenue
Harrison. New York 10528
Attn.: Mr. Paul Zinone
To: First International Financial
1413 22nd Avenue S.W.
Calgary. Alberta
Canada I2T 0R6
Attn.: Mr. Brad Gunn
15. Governing Law.
This Agreement shall be governed by the laws of the State of New York and
the parties agree to select New York jurisdiction for any claims or disputes
which may arise hereunder.
IN WITNESS WHEREOF, Distributor and S&P ComStock, Inc. have caused this
Agreement to be executed by their duly authorized respective officers, as of the
day and year above written.
S&P COMSTOCK. INC.
By: /s/ Paul S. Zinone
Title: V.P of Sales
Date: June 19, 1997
DISTRIBUTOR
By: /s/ Brad Gunn
Title: PRESIDENT
Date: JUNE 13, 1997
8
<PAGE>
EXHIBITS
A. COMSTOCK INFORMATION DEFINITION: AUTHORIZED COUNTRIES
B. DESCRIPTION OF DISTRIBUTOR SERVICE
C. LISTING OF COMSTOCK EQUIPMENT: DISTRIBUTOR DELIVERY SITES
D. SCHEDULES OF SUBSCRIBER FEES
E. TERMS AND CONDITIONS OF USE
9
<PAGE>
EXHIBIT A
PART 1: INFORMATION DEFINITION
STOCKS:
NYSE
NYSE Corporate Bonds
AMEX. Boston, Philadelphia, Cincinnati, Midwest, Pacific
Stock Exchanges and Instinet, NASD
NASDAQ Over-the-Counter
NASDAQ National Market System
NASDAQ Level II
U.S. Mutual Funds
Alberta Stock Exchange
Canadian OTC Automated Trading System
Montreal Stock Exchange
Toronto Stock Exchange
Vancouver Stock Exchange
STOCK/CURRENCY OPTIONS:
AMEX. OPRA: Chicago Board of Options Exchange
NYSE, Pacific, Philadelphia Stock Exchange
FUTURE EXCHANGES:
Chicago Board of Trade
Chicago Mercantile Exchange
Commodities Exchange Center
Kansas City Board of Trade
Mid-America Commodity Exchange
Minneapolis Grain Exchange
New York Mercantile Exchange
New York Commodity Exchange
Winnipeg Commodity Exchange
BASIC FUNDAMENTAL INFORMATION
U.S. Company names
P/E Ratio
52 week high/low
Dividend Rate
Dividend Amount
Dividend Yield
PART II: AUTHORIZED GEOGRAPHICAL AREA
Distribution of the ComStock Information may only be made by Distributor to
Subscribers located in the United States and Canada. Subscribers may access the
ComStock Information outside of the U.S. and Canada but Distributor shall not
purposely market outside of these regions.
10
<PAGE>
EXHIBIT B
Description of Distributor Service
Description of the System
The FIFC quote system has been designed in order to provide delayed and
real-time stock market and related data to individual investors using
the Internet as the data transmission medium. A description of the
hardware and software components of the system are as follows:
Hardware
- --------
Figure 1.0a below is a schematic of the basic FIFC quote system;
[DIAGRAM APPEARS HERE]
11
<PAGE>
Subsystems
We currently have 8 distinct subsystems each providing a critical piece
of functionality.
Data Parser
Receives and parses the data feed, sending parsed data to the quote
server.
Quote Server
Quote server maintains an in memory copy of the latest trading
information for all Symbols.
Database
Database (currently Microsoft SQL) contains subscriber information,
including entitlements, as well as exchange and market information on
Symbols.
Applet Server
Ticker.bat maintains subscriber portfolios and applet options. Serves as
applet interface to quote information which resides in either the
Database or the Quote Server
User interface
The user interface is the applet itself (e.g. Portfolio Manager).
Because an applet can only connect back to the machine from which it is
loaded, the User Interface must be co-located with the Applet Server(s)
so it can be loaded and started in the Subscriber's browser.
Web Server
The web server is the internet presence for FIFC. It contains the home
page, help files, ticker lookup, login forms and other html/cgi related
files.
Software
- --------
Typical of most websites, the FIFC quote site features an HTML interface with
the user, but also makes use of innovative Java applets to provide financial
market information to subscribers.
Functions that the System Is Intended to Perform
The FIFC quote system is intended only to provide a "window" between the
financial markets and individual investors, there will no transactions involved.
The system allows registered users to login using their individual Login ID and
password in order to access real-time market information. (Users must register
and provide the information that is required by the stock exchanges as well as
credit card information in order to be eligible to use the service.)
Through the web site, investors can access information from all major North
American exchanges. i.e. NASDAQ, New York Stock Exchange, American Stock
Exchange, Toronto Stock Exchange, Montreal Stock Exchange, Vancouver Stock
Exchange, Alberta Stock Exchange, etc.
Registered users request real-time updates on equities and options in a preset
portfolio defined by the user, including BBO, Last Sale, Volume, day hi-lo, 52
wk hi-lo, time of last sale, open, and previous close. The system provides the
quotes in a table format and a ticker format to the user through a series of
graphical user interfaces which have been created using Java. The system
automatically refreshes the information on the screen. The system is intended to
provide a mechanism for investors to track baskets of securities in real-time.
12
<PAGE>
First International intends to offer three levels of service at three prices:
delayed data "snapshots" - free
real-time data "snapshots" - $34.95 per month per user
real-time data "continuous tick-by-tick" - $49.95 per month per user
Real-time data is defined by the sources themselves
A "snapshot" is defined as a moment of market data captured and displayed to the
user. The user does not receive every tick change.
"Continuous tick-by-tick" is defined as a service in which the user receives
every tick change.
Information Sources to be Displayed
As defined in Exhibit A of this agreement.
How S & P Data Will be Utilized
The data itself is the heart of the FIFC quote system. S & P data will only be
used to the extent that FIFC's registered users request market information from
the system. Only a user who has specifically requested (and paid for) S & P data
will be allowed to access real-time market Information.
The S & P data feed will only be used to support the intended uses of the FIFC
quote system. Data will not be provided to users through any other vehicle.
Profile of System Users
FIFC quote users are a diverse group of individuals. Perhaps most important (and
most relevant) is the fact that, in accordance with the exchange agreements, all
FIFC quote users will be financial industry non-professionals. Primary testing
and marketing of the site suggests that the majority of our users are likely to
be North American; however, the global reach of the Internet also allows us to
reach users around the world.
Data Processing Equipment
Data is received via satellite receiver at the Company's premises and
distributed to the S & P Comstock Client Site Processor.
Data Parser & Quote Server
These two programs (S & P Comstock Client Site Processor v 3.0) reside in a
Digital Equipment Corporation Celebris XL 5166DP with Dual 166 Mhz Pentium
processors, 128MB EDO RAM, 512kb cache, Ethernet PCI 10/100 Mbps, Windows NT 4.0
Database & Webserver
The customer database (currently Microsoft SQL) and webserver (Microsoft
Internet Information Server) reside in a Digital Equipment Corporation Alpha
1000 Server. The AlphaServer configuration is 266 Mhz Pentium, 64-bit platform,
128 MB EDO RAM Windows NT Server 4.0.
13
<PAGE>
Applet Server
This program resides in a Digital Equipment Corporation Celebris XL 5166DP Dual
166 Mhz Pentium processors with 128MB EDO RAM, 512kb cache, Ethernet PCI 10/100
Mbps, Windows NT 4.0
User Interface
The user interface is the applet itself (e.g. Portfolio Manager). Because an
applet can only connect back to the machine from which it is loaded, the User
Interface must be co-located with the Applet Server(s) so it can be loaded and
started in the Subscriber's browser.
Entitlement Controls
Entitlements are controlled by First International's administrative staff. Only
users subscribed to the service will receive data. Users have no control over
entitlements. Subscribers access is limited to a single session per login id,
i.e. if a single login id is active another session cannot be created until the
original session is terminated. This eliminates the action of login id sharing
among multiple individuals.
14
<PAGE>
EXHIBIT C
DESCRIPTION OF COMSTOCK EQUIPMENT
Licensee will use the ComStock Digital Data feed from equipment to be
provided at the Licensee's site. The feed will be distributed through a port
of the ComStock Client Site Processor (CSP) into the head end service of the
Licensee. The ComStock CSP is fed with 56KB band data run via satellite
equipment.
Licensee location is registered at:
1413 22nd Avenue S.W.
Calgary, Alberta
Canada 12T 0R6
<PAGE>
EXHIBIT D
SCHEDULE OF FEES
Monthly Fees:
Monthly Base Rate $520
Satellite Equipment if needed $200
Subscriber Fees:
<TABLE>
<CAPTION>
# of Subscribers Real-time Continuously Updated # of Subscribers Real-Time Snapshot Basis
<S> <C> <C> <C>
1 - 100 $20.00 1 - 100 $5.00
101 - 500 $15.00 101 - 250 $4.00
501 - 1000 $13.00 251 - 500 $3.00
1001 - $10.00 501 - 1000 $2.00
1001 - $1.00
NASDAQ Level II $15/user
Full Fundamental Data $ 2/user - if needed
S&P News $10/user - if needed
</TABLE>
If Full Fundamental Data and/or S&P News are launched, then a $1500/month
minimum shall apply for the services.
Distributor has the right to distribute the delayed ComStock Information to
an unlimited number of Subscribers without any additional monthly fees.
If the above level is not reached, Distributor shall pay S&P ComStock a
minimum Subscriber Fee of $2500 per month after the first six months.
One-Time Fees:
Installation
Refundable Security Deposit $500
13
<PAGE>
EXHIBIT E
TERMS AND CONDITIONS OF USE OF COMSTOCK INFORMATION
All information provided by S&P ComStock, Inc. ("ComStock") and its
affiliates (the "ComStock Information") on __ __ World Wide Web site is owned by
or licensed to ComStock and its affiliates and any user is permitted to store,
manipulate, analyze, reformat, print and display the ComStock Information only
for such user's personal use. In no event shall any user publish, retransmit,
redistribute or otherwise reproduce any ComStock Information in any format to
anyone, and no user shall use any ComStock Information in or in connection with
any business or commercial enterprise, including, without limitation, any
securities, investment, accounting, banking, legal or media business or
enterprise.
Prior to the execution of a security trade based upon the ComStock
Information, you are advised to consult with your broker or other financial
representative to verify pricing information.
Neither ComStock nor its affiliates make any express or implied warranties
(including, without limitation, any warranty or merchantability or fitness for a
particular purpose or use) regarding the ComStock Information. The ComStock
Information is provided to the users "as is." Neither ComStock nor its
affiliates will be liable to any user or anyone else for any interruption,
inaccuracy, error or omission, regardless of cause, in the ComStock Information
or for any damages (whether direct or indirect, consequential, punitive or
exemplary) resulting therefrom.
14
<PAGE>
Exhibit 6.3.2
ADDENDUM TO EXHIBIT C OF LICENSE AGREEMENT BY AND
BETWEEN S&P COMSTOCK, INC, AND FIRST INTERNATIONAL
FINANCIAL DATED 7/18/1997.
Account # 088082
S&P Comstock shall allow FIRST INTERNATIONAL FINANCIAL, to operate a
secondary site, listed below, where Exodus Communications, Inc. will maintain
and service all of S&P Comstocks equipment and data. All S&P Comstocks data
rights will be enforced and administered to by First Financial
FIRST INTERNATIONAL FINANCIAL
C/O Exodus Communications, Inc.
34 Exchange Place, Harborside Plaza, 8th Floor
Jersey City, New Jersey, 07311
The additional fees for this application are as follows:
Monthly fees
- ------------
Site Fee $ 520
56k Communications Fee $ 345
Installation Fees
- -----------------
56k Installation Fee $1,500
This addendum shall run concurrently with the original Subscriber Agreement. All
other terms and conditions shall apply.
FIRST INTERNATIONAL FINANCIAL S&P COMSTOCK, INC.
By: /s/ Stuart Robson By: /s/ Paul S. Zinone
--------------------------- -----------------------
Title: Dir. Of Operations Title: V.P. of Sales
----------------------- ---------------------
Date: Dec 17/97 Date: 12/29/97
------------------------- ----------------------
<PAGE>
Exhibit 6.4
OPTIONS PRICE REPORTING AUTHORITY
VENDOR AGREEMENT
(Last Sale and Quotation Information)
-----------------------------------
THIS AGREEMENT is made this 12th day of AUGUST, 1997, between FIRST
---- ------ --
INTERNATIONAL FINANCIAL CORPORATION an ALBERTA corporation ("Vendor"), and the
- ----------------------------------- --------
American Stock Exchange, Inc., Chicago Board Options Exchange, Incorporated, New
York Stock Exchange, Inc., Pacific Stock Exchange Incorporated and Philadelphia
Stock Exchange, Inc. (said exchanges are hereinafter sometimes collectively
referred to as the Options Price Reporting Authority ("OPRA"), a registered
securities information processor registered pursuant to Section 11A(b) of the
Securities Exchange Act of 1934, as amended).
RECITALS
--------
A. The aforesaid exchanges have been authorized by the Securities and
Exchange Commission pursuant to Section 11A(a)(3)(B) of the Securities
Exchange Act of 1934, as amended, to act jointly as parties to the Plan for
Reporting of Consolidated Options Last Sale Reports and Quotation Information
(said plan as amended from time to time in accordance with the provisions
thereof is hereinafter referred to as the "Plan"), and the Plan provides that
any other national securities exchange or association approved by the Securities
and Exchange Commission for the trading of options may become a party to the
Plan (all such parties are hereinafter sometimes collectively referred to
as the "Participants" and individually as a "Participant");
<PAGE>
B. The Plan provides that the consolidated options information
reporting system described therein is administered by the Participants through a
committee designated as OPRA, and all references in this Agreement to OPRA shall
mean the Participants acting pursuant to the Plan;
C. The Plan further provides that all options last sale reports,
quotation information and related information collected by the Participants
shall be furnished to a central processor selected by OPRA ("Processor") for
consolidation and dissemination to vendors and other authorized persons;
D. Vendor is engaged in the business of publishing, disseminating or
otherwise distributing securities market information, and is desirous of
including in such information consolidated options last sale reports, quotation
information and related information.
A G R E E M E N T S
-------------------
1. Definitions.
-----------
As used in this Agreement, the following terms shall have the meanings
set forth after each:
(a) "Last Sale Reports" means any price, volume or related information
reflecting completed transactions in Eligible Securities (as defined below).
(b) "Quotation Information" means bids and offers or related
information pertaining to quotations in Eligible Securities (as defined below).
-2-
<PAGE>
(c) "Options Information" means Last Sale Reports and Quotation
Information and any other information transmitted over the information reporting
system administered by OPRA.
(d) "Current" means, in the case of Last Sale Reports, such
information that has been transmitted by the Processor, by a Participant or by
OPRA to Vendor within the immediately preceding 15 minutes, and in the case of
Quotation Information, the bid or offer in respect of a given security that was
most recently transmitted by the Processor, by a Participant or by OPRA to
Vendor.
(e) "Eligible Securities" means each series of option contracts listed
and traded on one or more of the Participant exchanges, and any other securities
determined by OPRA to be eligible for inclusion in the information reporting
system administered by OPRA.
(f) "Last Sale Subscriber" means a person that has executed a
Nonprofessional Subscriber agreement or a Professional Subscriber agreement with
OPRA setting forth the terms and conditions under which such person is permitted
to receive Last Sale Reports for its own use and not for the purpose of
retransmitting or redistributing Last Sale Reports to any other person, and that
has been approved by OPRA for such purpose.
(g) "Quotation Subscriber" means a person that has executed a
Nonprofessional Subscriber agreement or a Professional Subscriber agreement with
OPRA setting forth the terms and conditions under which such person is permitted
to receive
-3-
<PAGE>
Quotation Information for its own use and not for the purpose of retransmitting
or redistributing Quotation Information to any other person, and that has been
approved by OPRA for such purpose.
(h) "Nonprofessional Subscriber" means an individual natural person
(not a firm, corporation, partnership, trust or association) who has completed a
Nonprofessional Subscriber Application and Agreement in the form of Attachment C
hereto, or as said Application and Agreement may be amended from time to time by
OPRA, evidencing that such person intends to receive Options Information for his
or her private use only in connection with personal investment activities and
not in connection with any trade or business activities, and making the other
representations and agreements required by said Application and Agreement.
(i) "Professional Subscriber" means a Last Sale Subscriber or a
Quotation Subscriber who is not a Nonprofessional Subscriber.
(j) "Person" means a firm, corporation, or an association, as well as
an individual.
(k) "Affiliate" means when used in reference to a Participant, each
governor, director, officer, employee or subsidiary of such Participant and each
director, officer or employee of each such subsidiary.
(1) "Print News Publisher" means the publisher of a bona fide
newspaper, newsmagazine or other news publication of
-4-
<PAGE>
general circulation published on a regular schedule solely in print form and not
distributed electronically, by fax or by radio or television broadcast.
2. Furnishing Options Information to Vendor.
----------------------------------------
Options Information (in the format conforming to the specifications set
forth in Attachment A hereto, as the same may be amended from time to time,
subject to the provisions of Section 13 hereof) may be furnished to Vendor
directly from the Processor or from another vendor for the purpose of enabling
Vendor to distribute or publish Options Information in accordance with the terms
hereof. If Vendor desires to access Options information directly from the
Processor, Vendor must provide telecommunications facilities to the Processor.
Vendor shall pay to OPRA, if applicable, any one or more of the following fees
in accordance with the Fee Schedule set forth in Attachment B hereto: (i) the
Redistribution Fee, (ii) the Direct Access Charge, (iii) the Nonprofessional
Subscriber fee referred to in Section 6 hereof, and (iv) such other fees and
charges as OPRA may from time to time impose, all as the same may be amended
from time to time, subject in each case to not less than 30 days prior written
notice to Vendor. Payment of the Redistribution Fee shall permit Vendor to
redistribute Options Information in accordance with the terms of Section 3,
below. Payment of the Direct Access Charge shall entitle Vendor to two circuit
connections at the premises of the Processor in New York City. Additional
circuit connections will be made available upon
-5-
<PAGE>
payment of a nominal fee, as reflected in the Fee Schedule, which will
approximate OPRA's cost in respect of such additional connections. The Direct
Access Charge established by OPRA for direct access to Options Information is a
uniform charge levied against each person who receives Options Information
directly from the Processor. The revenues derived from the Direct Access charge
are not intended by OPRA to exceed OPRA's operating expenses associated with
providing Options Information in the form of one or more consolidated high
speed transmissions. This charge may be increased or decreased, depending upon
the number of vendors or other persons who are required to pay it, or changes in
OPRA's costs associated with the furnishing of Options Information. OPRA intends
to review the Direct Access Charge at least annually, and may increase or
decrease this charge from time to time on not less than 30 days prior written
notice to Vendor. In the event Vendor intends to utilize Options Information
other than in its capacity as a vendor as authorized under this Agreement,
Vendor must complete the appropriate agreements governing such other use, and
pay any additional applicable fees.
3. Authority of Vendor to Utilize Options Information.
--------------------------------------------------
Subject to the terms of this Agreement and applicable rules and regulations
of the Securities and Exchange Commission, Vendor may retransmit or redistribute
Options Information on a selective or continuous basis, and may furnish a market
data or retrieval service or services with respect to Options Information
-6-
<PAGE>
whereby Professional and Nonprofessional Subscribers, authorized vendors, and
other authorized persons may receive access to Options Information through
interrogation or display devices and over circuits provided by Vendor, provided
that in retransmitting or redistributing such information or in making such
information available through a market data or retrieval service, Vendor shall
not exclude information or otherwise discriminate on the basis of the market in
which a transaction took place or in which a quotation was entered, and provided
further that Vendor shall furnish Last Sale Reports on a current basis only to
persons that are at the time of receipt thereof duly approved Last Sale
Subscribers, and Vendor shall furnish Quotation Information on a current basis
only to persons that are at the time of receipt thereof duly approved Quotation
Subscribers, or in either case to approved vendors, back-up facility providers,
control service providers, or other authorized persons for their use in
accordance with agreements such persons have entered into with OPRA.
Vendor may furnish Options Information on a current basis via a (data
feed) transmission only to (i) Subscribers who have entered into a Professional
Subscriber Agreement and an Indirect (Vendor Pass-Through) Circuit Connection
Rider, (ii) other vendors, (iii) Print News Publishers, subject to the
conditions stated below, or (iv) other categories of persons authorized by OPRA
to receive a data feed transmission.
-7-
<PAGE>
Vendor may furnish Options Information to a person who intends to
retransmit all or a portion of the information to other persons only if such
person has entered into a Vendor Agreement with OPRA, except that Vendor may
furnish Options Information to a Print News Publisher to the extent and subject
to the conditions set forth in the following paragraph of this Section 3, and
except that Vendor may furnish historical Last Sale Reports and Quotation
Information to any person. For purposes of the previous sentence, Last Sale
Reports that reflect transactions completed during a given trading session of an
options market, and bids and offers entered in a given trading session of an
options market, become "historical" upon the opening of trading in the next
succeeding trading session of that same market. (E.g., reports of transactions
completed in a trading session on Wednesday become historical reports from and
after the opening of trading on the following Thursday.)
Vendor may also furnish Options Information to a Print News Publisher
in the form of formatted options tables or by means of a data feed transmission
or in any other format, provided that the redistribution of such information by
the Print News Publisher is limited to options tables appearing in a bona fide
newspaper, newsmagazine or other news publication of general circulation
published on a regular schedule in print form, and provided further that Vendor
shall have entered into a written agreement with the Print News Publisher,
expressly for the benefit of OPRA, in which the Print News Publisher agrees that
-8-
<PAGE>
its redistribution of Options Information will be so limited and acknowledges
that neither OPRA, the Processor nor any Participant guarantees the timeliness,
sequence, accuracy or completeness of any Options Information, and that neither
OPRA, the Processor nor any Participant shall be liable in any way to Print News
Publisher for any claims or damages, consequential or otherwise, for any delays,
inaccuracies, errors in, or omissions of, any Options Information, or in the
transmission or delivery thereof or for any damage arising therefrom or
occasioned thereby. Vendor shall provide to OPRA, in advance, a copy of every
form of agreement it intends to use for this purpose.
4. Approval of Professional Subscribers.
------------------------------------
OPRA shall, from time to time, furnish to Vendor the names of those
persons that have been approved by OPRA as Last Sale Professional Subscribers or
Quotation Professional Subscribers or both (separately identifying those
Subscribers who have entered into Indirect (Vendor Pass-Through) Circuit
Connection Riders), and the names of those persons that have entered into Vendor
Agreements with OPRA, or are otherwise approved to receive Options Information.
Upon receipt by Vendor of written notice from OPRA that the approval of any
person to receive Options Information has been withdrawn, Vendor will promptly
discontinue furnishing Last Sale Reports or Quotation Information, or both, to
such person, except to the extent such person is approved to receive such
information as a Nonprofessional Subscriber, and except to the extent that such
-9-
<PAGE>
information is historical information as defined in Section 3 above.
5. Approval of Nonprofessional Subscribers.
---------------------------------------
(a) Vendor shall furnish to each of its customers who desires to be
approved as a Nonprofessional Subscriber a Nonprofessional Subscriber
Application and Agreement in the form of Attachment C hereto or as such form may
be amended by OPRA from time to time, and shall require the customer and to
return the completed Application and Agreement to Vendor. Vendor, on behalf of
and as agent for OPRA, shall review each Application and Agreement, and upon
Vendor's determination that the Application and Agreement is complete in all
material respects and that the applicant in fact meets the qualifications of a
Nonprofessional Subscriber, Vendor shall approve the applicant by endorsing the
completed Application and Agreement.
(b) A Nonprofessional Subscriber whose Application and Agreement has
been approved in accordance with the foregoing shall remain a duly approved
Nonprofessional Subscriber only so long as he remains in compliance with the
provisions of the Application and Agreement, subject to the right of Vendor or
OPRA to withdraw such approval or to terminate the Application and Agreement, as
stated therein.
(c) In the event Vendor or OPRA determines that a previously approved
Nonprofessional Subscriber does not meet the requirements for such approval (in
the case of such determination by OPRA, OPRA shall furnish Vendor notification
thereof), Vendor
-10-
<PAGE>
will promptly discontinue furnishing current Last Sale Reports or current
Quotation Information, or both, to such person, except to the extent such person
is approved to receive such information as a Professional Subscriber.
6. Nonprofessional Subscriber Fees, Accounts, Records and Reports.
--------------------------------------------------------------
(a) For each Nonprofessional Subscriber whom it has approved and to
whom it furnishes current Last Sale Reports or Quotation Information, Vendor
shall pay to OPRA a monthly Nonprofessional Subscriber fee in accordance with
the Fee Schedule set forth in Attachment B hereto, as the same may be amended
from time to time. Such fee shall be due and payable to OPRA on the day on which
Vendor initially furnishes Options Information to a new Nonprofessional
Subscriber, and thereafter the fee shall be due and payable for each month, in
advance, on the first day of the month. If Vendor initiates service to a new
Nonprofessional Subscriber following the 15th day of any month, or if Vendor
discontinues service to a Nonprofessional Subscriber on or before the 15th day
of any month, that month's fee for the service so initiated or discontinued
shall be 50% of the regular applicable monthly fee. If any amount due from
Vendor to OPRA under this subsection 6(a) has not been paid by the 30th day
after such amount is due, OPRA may impose a late payment charge for each day
from and after the due date that the amount remains unpaid. The late payment
charge shall be at an annual rate that does not exceed the lesser of (i) the
commercial prime rate of interest as last published in The Wall Street Journal
prior to
-11-
<PAGE>
the date such charge is computed plus three percent, or (ii) the maximum rate of
interest permitted by applicable law.
(b) For each approved Nonprofessional Subscriber to whom it furnishes
Options Information, Vendor shall retain a signed original of the completed
Application and Agreement and any supplements or amendments thereto. Vendor
shall promptly send such notices to its Nonprofessional Subscribers and shall
obtain such additional information from its Nonprofessional Subscribers as OPRA
may from time to time request. All of Vendor's records pertaining to
Nonprofessional Subscribers and to the computation of the Nonprofessional
Subscriber fee due from Vendor to OPRA, including the required copies of
completed Applications and Agreements, shall be maintained in a reasonably
accessible place during the time that Vendor furnishes Options Information to
such persons, and shall be preserved for at least six years after the date
Vendor discontinues furnishing Options Information to such persons. Such records
shall be available for inspection by duly authorized representatives of OPRA
upon reasonable notice during ordinary business hours.
(c) Vendor shall deliver to OPRA not less than 30 days after the end
of each fiscal year, and at such other time or times as OPRA may request (but
not more frequently than quarterly) a report, as of the last day in the most
recently completed calendar quarter, setting forth the name, residence address
and the billing address of each Nonprofessional Subscriber, any different
address to which Options Information is
-12-
<PAGE>
furnished, the number and types of devices through which the Nonprofessional
Subscriber receives Options Information, and the calculation of the
Nonprofessional Subscriber fees due from Vendor to OPRA since the period covered
by the most recent prior report furnished to OPRA hereunder. Vendor shall also
furnish OPRA with such additional information concerning its furnishing of
Options Information to Nonprofessional Subscribers as OPRA may reasonably
request. At the request of Vendor, such information shall be kept confidential
by OPRA.
(d) The report furnished pursuant to subsection (c) above with
respect to the end of Vendor's fiscal year shall be audited, at Vendor's
expense, by Vendor's regular independent public accountant. The auditor's report
shall be furnished to OPRA within 90 days after the end of Vendor's fiscal year.
(e) In the event OPRA, in its sole discretion, determines that a
person has been improperly approved by Vendor as a Nonprofessional Subscriber,
upon written notice of such determination to Vendor, within 20 days of receipt
of such notice, Vendor shall pay to OPRA the difference between (i) the amount
that would have been billed to that person at the rates applicable to
Professional Subscribers since the date of his approval as a Nonprofessional
Subscriber and (ii) the Nonprofessional Subscriber fees actually paid by Vendor
with respect to that person; provided, however, that if Vendor demonstrates to
OPRA's reasonable satisfaction that the improper approval of the Subscriber in
question was the result of a good
-13-
<PAGE>
faith error of Vendor, the maximum amount that Vendor shall be required to pay
to OPRA under this subsection with respect to any single Subscriber shall be the
applicable Professional Subscriber fees for a period of twelve months.
7. Transactions Effected on Other Exchanges.
----------------------------------------
To the extent that rules and regulations of the SEC require the
reporting of transactions or quotations involving option contracts having the
same terms as Eligible Securities effected in markets other than the
Participants', and to the extent that information pertaining to such
transactions is furnished to Vendor by OPRA, Vendor agrees that it will include
such information as a part of its service provided to Last Sale Subscribers or
Quotation Subscribers, unless the SEC shall have granted Vendor an exemption
from this requirement.
8. Defense of Suits - Indemnification.
----------------------------------
(a) If Vendor shall refuse to furnish Last Sale Reports or Quotation
Information to any person who is not a Last Sale Subscriber or Quotation
Subscriber or shall refuse to continue furnishing Last Sale Reports or Quotation
Information to any person who has been terminated as a Last Sale Subscriber or
Quotation Subscriber, solely by reason of having received written notice from
OPRA that the approval of such person as a Subscriber has been denied or
revoked, the Participants shall indemnify, hold harmless and defend Vendor from
and against any and all suits or proceedings at law or in equity based on such
refusal and any and all liability, loss or damages, including reasonable
-14-
<PAGE>
attorneys' fees, which Vendor shall incur as a result of such suit or
proceeding, provided, however, that Vendor shall promptly notify OPRA in writing
of any such suit or proceeding and the Participants shall have the sole control
of the defense of any such suit or proceeding and all negotiations for the
settlement or compromise thereof, but only insofar as such settlement or
compromise does not impose any liability on Vendor. The obligation of a
Participant to indemnify Vendor pursuant to this or the following paragraph
shall survive the termination of this Agreement as to such Participant, but only
to the extent of any liability arising out of action by OPRA terminating,
revoking or denying the approval of any person as a Last Sale Subscriber or
Quotation Subscriber occurring prior to the effective date of termination of
this Agreement as to such Participant.
(b) In the event any suit or legal proceeding is brought to enjoin
Vendor from refusing to furnish Last Sale Reports or Quotation Information to
any person because the approval of such person as a Last Sale Subscriber or
Quotation Subscriber has been denied or revoked by OPRA, Vendor shall at once
inform OPRA of such suit or proceeding. Upon the receipt of any such notice by
OPRA, the Participants shall have the right to intervene in such suit in the
name of Vendor, and/or through counsel of their choice to assume the defense of
the action on behalf of Vendor, and the Participants shall indemnify and hold
Vendor harmless from and against any and all loss, liability and expense out of
or resulting from such suit.
-15-
<PAGE>
(c) In case any one or more of the Participants institutes any suit
or proceeding to enjoin any person not entitled to receive Options Information
from obtaining or using the same, Vendor will, in all reasonable respects,
cooperate with and assist such Participants in such suit or proceeding, provided
Vendor is reimbursed for its actual expenses in connection therewith.
9. Protection of Options Information.
---------------------------------
Vendor agrees to use its best efforts to prevent unauthorized persons
from obtaining Options Information through its equipment or facilities. In the
event OPRA or Vendor has reason to believe any Options Information is so being
obtained by unauthorized persons, Vendor agrees to use its best efforts to
ascertain the source from which, and the manner in which, the same is being
obtained and to promptly inform OPRA fully with respect thereto. Upon reasonable
notice to Vendor, an authorized representative of OPRA shall be permitted to
inspect Vendor's equipment and facilities used in connection with the
dissemination or retransmission of Options Information; provided, however, that
this right of inspection shall extend only so far as may be necessary to insure
compliance by Vendor with the provisions of this Agreement and shall not require
Vendor to divulge any confidential or proprietary information concerning its
equipment or facilities.
-16-
<PAGE>
10. No Warranty as to Options Information.
-------------------------------------
OPRA, the Processor or any Participant does not guarantee the
timeliness, sequence, accuracy or completeness of any Options Information, and
OPRA, the Processor or any Participant shall not be liable in any way to Vendor
or to any Subscriber or to any other person whatsoever for any claims or
damages, consequential or otherwise, which may arise out of any obligation of
OPRA, the Processor or such Participant under this Agreement, or for any delays,
inaccuracies, errors in, or omissions of, any Options Information, or in the
transmission or delivery thereof or for any damage arising therefrom or
occasioned thereby.
11. Proprietary Rights of Participants.
----------------------------------
Last Sale Reports and Quotation Information are the property of the
Participant on whose floor the respective transactions took place or the
quotations were entered, and no Participant shall be deemed to have waived any
of its proprietary interests therein as a result of furnishing the same to
Vendor.
12. Disclosure by Vendor.
--------------------
Vendor agrees to maintain at all times on a current basis, a list of
all persons to whom Vendor is furnishing Last Sale Reports and/or Quotation
Information, and to provide a full, complete and current copy of such list (or
changes from the previous version of the list) to OPRA not less frequently than
monthly. For each person included in the list who receives Options Information
on terminals or other devices furnished by or
-17-
<PAGE>
under the control of Vendor, Vendor shall report the number of devices on which
such person currently receives Options Information.
At such reasonable times as OPRA shall request, Vendor agrees to
provide OPRA with a description in reasonable detail of the services furnished
by Vendor pertaining to Options Information, including a description of the
various components of such services, the form and nature of the information
made available through such services, identification of the persons to whom
Vendor provides such services, a description of the equipment used in providing
such services and the manner in which Vendor's equipment serves to furnish such
services (but without disclosing any of Vendor's trade secrets or adversely
affecting its proprietary interests in its equipment) and the nature of any
sales literature used by Vendor in marketing its equipment or services. At the
request of Vendor, such information shall be kept confidential by OPRA.
13. Alteration or Cessation of Transmission of Last Sale Reports or Quotation
-------------------------------------------------------------------------
Information.
-----------
Nothing herein shall be deemed to prevent, or restrict in any manner
whatsoever, the exercise by the Participants of their rights, without any notice
and without any liability to Vendor or to any other person, to furnish, or to
contract with any other person to furnish, Last Sale Reports or Quotation
Information by any means whatever, or to attach devices or equipment of any
design or manufacture to circuits carrying Last Sale Reports or Quotation
Information, including devices or
-18-
<PAGE>
equipment designed or manufactured by any Participant or any other person,
whether or not competitive with the service or equipment furnished by Vendor, on
such terms and conditions as OPRA may determine. OPRA may, upon compliance with
any applicable requirements of the Securities Exchange Act of 1934 (including
any affirmative action by the SEC, if required), (a) make such changes in the
speed of transmission or other characteristics of the electrical signals
representing the Last Sale Reports or Quotation Information as OPRA may from
time to time determine (whether or not such changes would require changes to be
made by Vendor in its service or equipment), (b) discontinue furnishing Last
Sale Reports or Quotation Information to Vendor, or (C) discontinue circuits
carrying Last Sale Reports or Quotation Information provided, however, that OPRA
agrees to give Vendor as much prior notice as is practicable under the
circumstances (but in any event not less than sixty days unless Vendor agrees to
a shorter period of notice) of any such action. The schedule of fees and charges
pertaining to Options Information may be changed by OPRA on not less than 30
days notice.
14. No Endorsement by OPRA.
----------------------
Vendor shall not represent, and shall not cause or permit any other
person to represent, either directly or indirectly, that all or any part of its
service is sponsored, endorsed or approved by any Participant or by OPRA.
-19-
<PAGE>
15. Patent Indemnity.
----------------
Vendor hereby agrees to indemnify, hold harmless and defend each
Participant and each Affiliate of a Participant from and against any and all
suits, proceedings at law or in equity, and any and all liability, loss or
damages, including reasonable attorneys' fees, arising out of, or in connection
with any claim by any person that the use of Vendor's equipment infringes any
United States patent or violates any property right; provided, however, that
Vendor shall be notified promptly in writing of any such suit; and Vendor shall
have the sole control of the defense of any such suit or proceeding and all
negotiations for the settlement or compromise thereof, but only insofar as such
settlement or compromise does not impose any liability on any Participant or any
affiliate thereof.
16. Effectiveness of Agreement - Termination.
----------------------------------------
This Agreement shall become effective as of the date set forth on the
first page hereof, and shall thereupon supersede and cancel any and all previous
agreements between the Vendor and any of the Participants providing for the
furnishing by such Participant of Last Sale Reports or Quotation Information to
the Vendor, or for the attachment of display devices to the circuits carrying
such information. Following its effectiveness, this Agreement shall continue in
effect until terminated as herein provided.
Upon compliance with any applicable requirements of the Securities
Exchange Act of 1934 (including any affirmative action
-20-
<PAGE>
by the SEC, if required), either the Vendor or OPRA may terminate this Agreement
on not less than thirty days prior written notice to the other; the provisions
of Section 15 hereof shall survive the termination of this Agreement.
In the event a Participant, upon compliance with any applicable
requirements of the Securities Exchange Act of 1934 (including any affirmative
action by the SEC, if required), shall withdraw from the Plan, this Agreement
shall be deemed to have terminated with respect to such Participant effective as
of the date of such withdrawal.
Notwithstanding the withdrawal by any one or more of the Participants
from the Plan, this Agreement shall remain in effect as between the remaining
Participants in the Plan and the Vendor, unless and until terminated as herein
provided, and on or following any such withdrawal the term "Participant" and
"Participants" as used herein shall refer only to the remaining Participants in
the Plan.
17. Arbitration.
-----------
Any dispute or controversy between the parties hereto relating to the
breach or alleged breach of this Agreement shall be promptly submitted to
Arbitration in New York, New York in accordance with the rules of the American
Arbitration Association then obtaining and judgment upon any award rendered may
be entered in any court having jurisdiction. Solely for the purposes hereof,
each of the parties hereto hereby submits to the jurisdiction of the courts of
the State of New York.
-21-
<PAGE>
18. Assignment of Agreement.
-----------------------
The Vendor shall not assign this Agreement in whole or in part
without the prior written consent of the OPRA, except to a successor corporation
upon merger or consolidation of the Vendor, or to a corporation acquiring all or
substantially all of the property, assets and business of the Vendor. Subject to
the foregoing restriction, this Agreement shall bind and inure to the benefit of
the assignees and successors of the parties hereto.
19. Most Favored Provision.
----------------------
If Participants shall enter into any agreement with any other person
providing for such other person acting as a vendor to have access to Last Sale
Reports or Quotation Information and such agreement contains terms and/or
conditions more favorable to such other person than the terms and conditions of
this Agreement applicable to Vendor, OPRA shall promptly notify Vendor thereof
and, at Vendor's request, shall amend this Agreement to include substantially
the same terms and conditions as are included in such other agreement.
20. New Participants.
----------------
Each new Participant, as a condition to its becoming a party to the
Plan, shall be required to subscribe in writing to the terms and conditions of
this Agreement and to authorize OPRA to take action on its behalf in respect to
this Agreement.
-22-
<PAGE>
21. Notices
-------
All notices, bills, consents or requests required or authorized to be
given hereunder shall be deemed sufficiently given if in writing and sent by
registered mail to OPRA at
Options Price Reporting Authority
400 South LaSalle Street, 6th Floor
Chicago, Illinois 60605
and in the case of Vendor -
Attention:
22. Integration; Modification.
-------------------------
(a) This Agreement constitutes the entire agreement between the parties
relating to the furnishing of Last Sale Reports or Quotation Information to
Vendor and the use thereof as permitted hereunder.
(b) No modification of this Agreement shall be valid unless set forth
in writing and executed by the parties hereto.
23. Governing Law.
-------------
This Agreement shall be construed in accordance with and governed by
the laws of the State of Illinois. The respective rights and obligations of the
parties to this Agreement shall be subject to any applicable provisions of the
Securities Exchange Act of 1934 (as amended) and any rules and regulations
promulgated thereunder.
24. Headings.
--------
Section headings used in this Agreement are for convenience in
reference only and shall not affect the meaning or construction hereof.
-23-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or duly authorized agents on the day and
year first above written.
FIRST INTERNATIONAL FINANCIAL CORP. OPTIONS PRICE REPORTING AUTHORITY --
- -----------------------------------
[Name of Vendor] AMERICAN STOCK EXCHANGE, INC.
By /s/ Brad Gunn CHICAGO BOARD OPTIONS EXCHANGE,
--------------------------- INCORPORATED
(Title)
PRESIDENT
NEW YORK STOCK EXCHANGE, INC.
PACIFIC STOCK EXCHANGE
INCORPORATED
PHILADELPHIA STOCK EXCHANGE, INC.
By /s/
----------------------------------
Executive Director
-24-
<PAGE>
ATTACHMENT B
OPTIONS PRICE REPORTING AUTHORITY
FEE SCHEDULE
(Effective September 1, 1996)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Basic FCO
Description Service/1/ Service/1/
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Professional Subscriber Information Fee See separate Professional
- --------------------------------------- Subscriber Fee Schedule attached
as Exhibit A to Professional
Subscriber Agreement
- -----------------------------------------------------------------------------------------------------------------------------------
NonProfessional Subscriber Information Fee: A monthly fee payable by every $2.00 per N/A
- ------------------------------------------ nonpro-
vendor that furnishes Options Information to any nonprofessional subscriber. fessional
subscrib-
er
- ----------------------------------------------------------------------------------------------------------------------------------
Direct Access Charge: A monthly fee payable by every person that has been $750 $150
- --------------------
authorized by OPRA to receive Options Information via the consolidated high-speed
service from OPRA's processor. This charge includes one primary and one backup
circuit connection at the processor. Additional circuit connections are available
at a monthly charge of $100 per connection.
- ------------------------------------------------------------------------------------------------------------------------------------
Redistribution Fee: A monthly fee payable by every vendor that redistributes $1,500 $300
- ------------------
Options Information to any person, whether on a current or delayed basis, except
that this fee shall not apply to a vendor whose redistribution of Options Information
is limited solely to "historical" Options Information, as that term is defined in the
Vendor Agreement.
- -----------------------------------------------------------------------------------------------------------------------------------
Subscriber Indirect Access Fee: A monthly fee payable by every subscriber that receives $600 $100
- ------------------------------
indirect access to Options Information via a high speed line or other bulk (data feed)
transmission from an OPRA vendor. This fee shall not apply to a subscriber that receives
a data feed transmission on a single, stand-alone computer for the sole purpose of
providing a single-screen display of Options Information for the subscriber's internal
use, or to a subscriber whose access and entitlement to Options Information received
via a data feed transmission is controlled by an authorized Control Service Provider or
by the vendor furnishing the data feed transmission.
- -----------------------------------------------------------------------------------------------------------------------------------
Control Service Fee: A monthly fee payable by every authorized control service provider $2,800 N/A
- -------------------
that offers a market information electronic data control service to OPRA subscribers and
in connection therewith has entered into a Data Control Service Agreement with OPRA.
- ----------------------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
________________
/1/ OPRA's basic service does not include data pertaining to
foreign currency options; this data is provided by the FCO Service.
-25-
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Basic FCO
Description Service/1/ Service/1/
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Voice-Synthesized Market Data Service Fee: A monthly fee payable by every vendor $5 per $1 per
- ----------------------------------------- port, or port, or
or subscriber that offers a voice-synthesized market data service for each active $0.02 per $.005
simultaneously accessible port of the voice-synthesized computer facility of the vendor "quote per
or subscriber through which such service is furnished. Alternatively, vendor may elect packet" "quote
in writing to pay a usage-based fee for each "quote packet" consisting of any one or packet"
more of the following values: last sale, bid/ask, and related market data for a single
series of options or a related index accessed over vendor's Voice-Synthesized Market
Data Service, as an alternative to the port charge described above. All inquiries
shall be counted for purposes of calculating the usage-based fee, except that requests
for "historical" information shall not be subject to charge. For this purpose, market
information derived from a given trading day of an options market becomes "historical"
upon the opening of trading on the next succeeding trading day of that market.
- -----------------------------------------------------------------------------------------------------------------------------------
Dial-up Market Data Service Utilization Fee: A monthly fee, payable in arrears, based $50 per $10 per
- ------------------------------------------- port, or port, or
the peak number of ports of vendor's computer simultaneously used to provide service $0.02 per $.005
during the month for which the charge is assessed. Alternatively, vendor may elect in "quote per
writing to pay a usage-based fee for each "quote packet" consisting of any one or more of packet" "quote
the following values: last sale, bid/ask, and related market data for a single series of packet"
options or a related index accessed over vendor's Dial-up Market Data Service, as an
alternative to the port charge described above. All inquiries shall be counted for
purposes of calculating the usage-based fee, except that requests for "historical"
information shall not be subject to charge. For this purpose, market information
derived from a given trading day of an options market becomes "historical" upon the
opening of trading on the next succeeding trading day of the market.
- -----------------------------------------------------------------------------------------------------------------------------------
Radio Paging Service Fee: A monthly fee, payable in arrears by every vendor that offers $1 per No
- ------------------------ device. Charge
a radio paging market data service, for each text display paging device enabled to or $0.02
receive the service provided by the vendor or by a radio paging company that receives per
options market data from the vendor. Alternatively, vendor may elect in writing to pay a "quote
usage-based fee for each "quote packet" consisting of any one or more of the following packet"
values: last sale, bid/ask, and related market data for a single series of options or a
related indexed accessed over vendor's Radio Paging Service, as an alternative to the
device charge described above. All inquiries shall be counted for purposes of calculating
the usage-based fee, except that requests for "historical" information shall not be
subject to charge. For this purpose, market information derived from a given trading day of
an options market becomes "historical" upon the opening of trading on the next succeeding
trading day of that market.
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
__________________
/1/OPRA's basic service does not include data pertaining to foreign
currency options; this data is provided by the FCO Service.
-26-
<PAGE>
OPTIONS PRICE REPORTING AUTHORITY
SUBSCRIBER FEE SCHEDULE
(Effective March 1, 1997)
BASIC SERVICE/1/
DEVICE-BASED PROFESSIONAL SUBSCRIBER FEE
Subscriber shall pay a monthly fee based upon the number of electronic display
or interrogation devices maintained by Subscriber that are capable of
displaying or reporting OPRA's Basic Service. The monthly charge per device
shall be as follows:
------------------------------------------------
NUMBER
OF NON-
DEVICES MEMBER/2/ MEMBER
------------------------------------------------
1 - 9 $23.00 $24.00
------------------------------------------------
10 - 29 14.00 19.00
------------------------------------------------
30 - 99 11.00 19.00
------------------------------------------------
100 - 749 11.00 12.75
------------------------------------------------
750+ 9.00 12.75
------------------------------------------------
ENTERPRISE RATE PROFESSIONAL SUBSCRIBER FEE
As an alternative to the Device-based Professional Subscriber Fee, OPRA's
Enterprise Rate Professional Subscriber Fee is available to those Subscribers
that are members or associate members in good standing of one or more of the
exchanges that are parties to the OPRA Plan, and that elect to pay Subscriber
Fees at the Enterprise Rate by signing the Enterprise Rate Amendment to the
Subscriber Agreement. The Enterprise Rate Subscriber Fee is a monthly fee based
on the number of a Subscriber's registered representatives based in the United
States, its territories and possessions as reported by the NASD, subject to
adjustment in accordance with the Enterprise Rate Amendment to the Subscriber
Agreement. The monthly fee shall be determined as follows:
--------------------------------------
NUMBER OF MONTHLY FEE PER
REGISTERED REGISTERED
REPRESENTATIVES REPRESENTATIVE
--------------------------------------
1 - 20,000 $10.00/3/
--------------------------------------
over 20,000 $ 7.50
--------------------------------------
________________
1. OPRA's Basic Service does not include last sale and quotation information
pertaining to foreign currency options. Subscribers who have access to FCO
information are subject to a separate FCO Service subscriber fee.
2. To be entitled to the Member Rate, a subscriber must certify that it is a
member or associate member in good standing of one or more of the exchanges
that are parties to the OPRA Plan. Member Rate Fees are discounted by 2%
for members who preauthorize payment by electronic funds transfer through
an automated clearinghouse system.
3. Subject to minimum monthly fee of $2,000 per firm.
-27-
<PAGE>
FCO SERVICE
SUBSCRIBER FEE
Subscriber shall pay a monthly fee based upon the number of electronic display
or interrogation devices maintained by Subscriber that are capable of displaying
or reporting OPRA's FCO Service. The monthly charge per device shall be as
follows:
---------------------------------
NUMBER OF FEE
DEVICES
---------------------------------
1 $3.00
---------------------------------
2 - 9 2.50
---------------------------------
10 - 749 2.00
---------------------------------
750+ 1.50
---------------------------------
---------------------------------
-28-
<PAGE>
Attachment C
OPTIONS PRICE REPORTING AUTHORITY
NONPROFESSIONAL SUBSCRIBER APPLICATION AND AGREEMENT
(Last Sale and Quotation Information for Personal Nonbusiness Use Only)
TO:________________________________
________________________________
________________________________
(Name and Address of Vendor)
The undersigned ("Applicant") hereby applies to the Vendor named above
("Vendor") for approval as a Nonprofessional Subscriber to receive for
personal nonbusiness use current options last sale information and current
options quotation information (the "Information") published by the Options Price
Reporting Authority ("OPRA") pursuant to a Plan declared effective by the
Securities and Exchange Commission. In reviewing and approving this Application
and Agreement, Vendor is authorized to act on behalf of the OPRA participants,
which are those national securities exchanges and associations who, from time to
time, are parties to said Plan. Applicant acknowledges that all representations
and agreements made herein and all payments made hereunder are for the benefit
of the OPRA participants.
For the purpose of this Application and Agreement, Applicant hereby
represents and agrees as follows (type or print all answers; attach separate
sheets if necessary):
1. Applicant's full name and residence address:
_____________________________________________________________________
_____________________________________________________________________
_____________________________________________________________________
2. Name and address of Applicant's employer(s) and/or Applicant's other
business address(es):
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
-29-
<PAGE>
3. Location where the Information is to be received by Applicant (state
"Portable" if Information is to be received on portable equipment):
___________________________________________________________________
___________________________________________________________________
___________________________________________________________________
4. A description of the equipment to be used by Applicant in receiving
the Information (identify number and types of devices; include mfr.
and model no. if available): _______________________________________
___________________________________________________________________
5. As a condition of being approved as a Nonprofessional Subscriber,
Applicant represents and agrees that the following statements are and
will continue to be true for so long as Applicant receives Information
as a Nonprofessional Subscriber:
(a) Applicant is making this Application and Agreement in his or her
own individual capacity and not on behalf of a firm, corporation,
partnership, trust or association.
(b) Applicant shall use the Information solely in connection with his
or her individual personal investment activities and not in
connection with any trade or business activities.
(c) Applicant shall receive the Information only at the location and
via the equipment identified in items 3 and 4 above, and shall
not furnish the Information to any other person.
(d) Applicant is not a securities broker--dealer, investment advisor,
futures commission merchant, commodities introducing broker or
commodity trading advisor, member of a securities exchange or
association or futures contract market, or an owner, partner, or
associated person of any of the foregoing.
(e) Applicant is not employed by a bank or an insurance company or an
affiliate of either to perform functions related to securities or
commodity futures investment or trading activity.
6. For the privilege of receiving the Information, Applicant agrees to
pay to Vendor for the benefit of the OPRA participants the OPRA
Nonprofessional Subscriber Fee in such amount and at such times as
shall be established by OPRA from time to time, plus any applicable
federal, state or local taxes. This Fee shall be in addition to any
charges imposed by Vendor. OPRA shall provide notice to Vendor of any
change in this Fee not less than 30 days prior to the effectiveness of
such change. Vendor shall be responsible for notifying its
Nonprofessional Subscribers of all Fee changes.
-30-
<PAGE>
7. Applicant acknowledges that the Information is and shall remain the
property of the respective exchange or other market on which a
reported transaction took place or a reported quotation was entered,
and Applicant shall make no use of the Information except in
compliance with the terms of this Application and Agreement.
8. DISCLAIMER OF LIABILITY -- NEITHER OPRA NOR ANY OPRA PARTICIPANT
GUARANTEES THE TIMELINESS, SEQUENCE, ACCURACY OR COMPLETENESS OF ANY
OF THE OPTIONS LAST SALE PRICES, QUOTATION INFORMATION, OR OTHER
MARKET INFORMATION SUPPLIED TO APPLICANT HEREUNDER AND NEITHER OPRA
NOR ANY OPRA PARTICIPANT SHALL BE LIABLE IN ANY WAY TO APPLICANT OR TO
ANY OTHER PERSON, FOR ANY DELAYS, INACCURACIES, ERRORS IN OR OMISSIONS
OF, ANY OF THE INFORMATION OR THE TRANSMISSION THEREOF, OR FOR ANY
DAMAGES ARISING THEREFROM OR OCCASIONED THEREBY OR BY REASON OF
NONPERFORMANCE OR INTERRUPTION OF ANY OF THE OPTIONS LAST SALE PRICES,
QUOTATION INFORMATION OR OTHER MARKET INFORMATION SUPPLIED TO
APPLICANT FOR ANY CAUSE WHATEVER.
9. Applicant's privilege of receiving the Information hereunder may be
terminated by Applicant or by Vendor upon 30 days written notice from
the terminating party to the other party, and shall be terminated
immediately at any time that Vendor or OPRA determines that Applicant
is not in compliance with this Application and Agreement or that any
of Applicant's representations herein are not true. Upon a
determination by Vendor or OPRA that Applicant received access to
Information as a Nonprofessional Subscriber during any period when
Applicant did not meet the qualifications for such access, within 30
days of receipt of written notice of such determination Applicant
shall pay to OPRA the full amount of OPRA's Professional Subscriber
fee for the period during which Applicant had access to the
Information, less Applicant's Nonprofessional Subscriber fees for such
period actually received by OPRA.
10. Nothing herein shall be deemed to prevent or restrict any OPRA
Participant from discontinuing to furnish options last sale
information or quotation information for dissemination nor to restrict
OPRA from making such changes in the speed of transmission, the
characteristics of the electrical signals representing the Information
or the manner of disseminatIng the same, as OPRA shall from time to
time determine to be appropriate; but in the event of any such
discontinuance or change, OPRA shall give such notice thereof to
Vendor as is reasonable under the circumstances.
11. Applicant agrees to inform Vendor promptly in writing at its address
set forth above of any changes in the information provided herein and
to furnish
-31-
<PAGE>
Vendor any additional information requested by it in connection with
Applicant's receipt of the information.
_____________________________________
(Applicant's Signature)
_____________________________________
(Type or Print Applicant's Name)
APPROVED: __________________________
Vendor
By: __________________________
Dated: _____________________________
-32-
<PAGE>
Exhibit 6.5
2CAN Media, Inc.
Representation Agreement
------------------------
Page 1 of 13
THIS REPRESENTATION AGREEMENT (the "Agreement") between 2CAN Media, Inc. (2CAN)
with their principal place of business located at 20700 Ventura Blvd., Suite 205
Woodland Hills, CA 91364 and FreeRealTime.com (FRT) with their principal place
of business located at 4695 MacArthur Court, Suite 500, Newport Beach, CA 92660
will constitute a valid and binding agreement, set forth below in the terms
and conditions, and on any Attachments hereto. 2SCAN and FreeRealTime.com agree
to the following:
1. Services
- --------------
a. 2CAN will provide advertising sales representation and consultation
for the FreeRealTime.com, web site(s) (the Service) (see attachment A
for list).
b. 2CAN will update FRT on the progress and demand of the Internet
advertising marketplace, while FRT will update 2CAN on new
opportunities with its Service.
c. FRT and 2CAN acknowledge and agree that 2CAN is an independent
contractor to FRT and not an employee, partner, agent, joint venture or
partner of FRT. 2CAN is an independent contractor and is solely
responsible for all taxes, withholdings, and other similar statutory
obligations, including, but not limited to, worker's compensation
insurance.
d. The performance of 2CAN and FRT under this Agreement shall be
conducted with due diligence and in full compliance with the highest
professional standards of practice in the industry.
e. FRT will indemnify and hold 2CAN harmless, and will defend 2CAN
against any and all loss, liability, damage, claims, demands or suits
and related costs and expenses to persons or property ("Loss") that
arises, directly or indirectly, from acts or omissions of FRT, in
connection with this Agreement or from breach of any term or condition
of this Agreement.
f. 2CAN will indemnify and hold FRT harmless from, and will defend FRT
against any and all loss, liability, damage, claims, demands or suits
and related costs and expenses to persons or property ("Loss") that
arise, directly or indirectly, from acts or omissions of 2CAN, in
conjunction with this Agreement of from breach of any term or condition
of this Agreement.
2. Ad Serving & Tracking
- ---------------------------
a. By the tenth of each preceding month, FRT will provide 2CAN with a
projection for the subject month of visitors, page views, and banner
advertisement inventory, and an allocation of banner advertisements.
b. FRT will utilize banner serving through 2CAN. Fees will be waived and
covered by 2CAN for the Service, if 2CAN has, for allocated banner
inventory, 100% control of the allocated banner inventory and 2CAN can
run whatever revenue forms of banners that can be sold to cover banner
serving and bandwidth cost. 2CAN will not run any advertising campaign
on the Service, which is offensive or competitive to FRT businesses. If
FRT requests specific paid or non-paid campaigns to be placed on the
Service, FRT agrees to pay 2CAN $.55 net per thousand (should 2CAN's
ad-serving cost decrease, so will the FRT ad-serving cost), for paid or
non-paid open inventory banner serving, auditing and reporting. 2CAN
will deduct fees for such banner serving from checks being sent to FRT
for advertising revenue. If FRT request banners to
<PAGE>
2 CAN Media, Inc.
Representation Agreement
------------------------
Page 2 of 13
be served for their own internal purposes, using the cost listed above,
the amount of banner impressions will not exceed ten percent (10%) of
the monthly banner impressions allocated to 2CAN by FRT to sell.
c. FRT agrees to use 2CAN to deliver 100% of its allocated banner
advertisements within 60 days from the execution of this agreement.
d. 2CAN agrees to use its best efforts to manage the sales mix of
allocated banner inventory, including type of advertisement and CPM,
with an objective of maximizing monthly advertising revenue, and agrees
to sell 100% of allocated banner inventory at a minimum $2 CPM.
3. Confidential Information
- ---------------------------
2CAN and FRT understand and agree that in the performance of this
Agreement each party may have access to private or confidential
information of the other party, its parent company, subsidiaries and
affiliates, and its and their customers and suppliers, including but
not limited to, trade secrets, marketing and business plans and
technical specifications and information, which is designated as
confidential by the disclosing party in writing, whether by letter or
by the use of a confidential or proprietary stamp or legend, prior to
or at the time it is disclosed to the other party ("Confidential
Information"). Included in the definition of Confidential Information,
but not by way of limitation, it is agreed that the identity and other
information regarding users of the Service, the financial information
regarding use and development of the Service, calculation of and the
amounts paid 2CAN hereunder shall be considered Confidential
Information of FRT. In addition, information or data that relates to
the business and activities of 2CAN and FRT, their parent companies,
subsidiaries and affiliates and the entities with whom they do business
that is obtained by the other party as a result of this Agreement shall
be considered Confidential Information of such party. Each party agrees
that: (1) all Confidential Information shall remain the exclusive
property of the owner; (2) it shall maintain, and shall cause its
employees and agents and subcontractors to maintain, the
confidentiality and secrecy of the other party's Confidential
Information; (3) it shall not, and shall ensure that its employees and
agents do not, copy, publish, manipulate, disclose to others or
otherwise use the Confidential Information of the other party; and (4)
it shall return or destroy all copies of Confidential Information upon
request of the other party, and indemnify and hold harmless the owner
from and against all damages and expenses (including attorneys' fees
and costs) arising from a breach of this provision. Notwithstanding the
foregoing, Confidential Information shall not include any information
to the extent it (i) is or becomes a part of the public domain through
no act or omission on the part of the receiving party, (ii) is
disclosed to third parties by the disclosing party without restriction
on such third parties, (iii) is in the receiving party's possession,
without actual or constructive knowledge of an obligation of
confidentiality with respect thereto, at or prior to the time of
disclosure under this Agreement, (iv) is disclosed to the receiving
party by a third party having no obligation of confidentiality with
respect thereto, (v) is independently developed without access or
reference to the disclosing party's Confidential Information, or (vi)
is released from confidential treatment by written consent of the
disclosing party .
4. Clients
- ----------
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 3 of 13
a. To avoid possible sales conflicts, 2CAN will not call on any of the
advertising agencies or clients specified by FRT. (See Attachment B for
list).
b. To avoid duplication of sales efforts with CyberReps (FRT contract
expires May 1, 1999), 2CAN shall not pursue any advertiser listed on
Attachment C ("Attachment C") and made a part of this Agreement,
however, after May 1, 1999 2CAN has the right to pursue all advertisers
listed in Attachment C.
c. FRT reserves the right to develop an in-house ad sales staff to
coordinate with and supplement 2CAN's ad sales efforts.
5. Marketing Material
- -----------------------
a. 2CAN will highlight the Service in its World Wide Web site on the
Internet located at www.2canmedia.com and within its media kit. FRT will
-----------------
have rights of advance review and final approval of media kit marketing
material before 2CAN presents it to any potential clients.
b. FRT agrees to provide 2CAN with reasonable amounts of FRT promotional
material so the 2CAN may sell advertising on the Service.
c. Both parties must approve all press releases, announcements or
collateral materials referring to 2CAN-FRT partnership before they are
released to the press or any third party.
d. FRT will authorize 2CAN Media, Inc. to register as FRT's Agent in all
relevant periodicals, directories, and other marketing sources during
the term of this Agreement.
6. Term and Termination
- -------------------------
a. The term of this exclusive Agreement is one (1) year from the date of
this execution with an evaluation privilege sixty (60), one hundred-
twenty (120), one hundred-eighty (180), two hundred-forty (240), and
three hundred (300) days from such date. At such evaluation periods,
2CAN and FRT will evaluate advertising revenue performance for the prior
two month period, including a consideration of allocated banner
inventory and advertising revenues generated for FRT, and if revenues
are below fifty (50) percent of projections (see Attachment D) FRT has
the option to terminate this Agreement with thirty (30) days-advanced
written notice. Either party may terminate this Agreement at the end of
one (1) year with ninety-(90) days-advanced written notice. With the
written consent of both parties this Agreement can be amended at any
time during the term of this Agreement. This agreement will
automatically renew for one (1) year in full force at the end of the
term, unless sooner terminated in accordance with the provisions hereof.
b. If either party shall materially breach any provision contained in the
Agreement and such breach shall not have been cured within thirty (30)
days after written notice thereof shall have been given to the breaching
party, the party giving such notice may then give further written notice
to the breaching party immediately terminating this Agreement in which
event this Agreement and rights granted hereunder shall terminate on
the date specified in such further notice. All revenue due FRT minus
all ad-serving fees (as defined in section 2b) and compensation (as
defined in section 8) due 2CAN prior to termination will be paid in
accordance with Section 10c. of this Agreement.
c. 2CAN may, at our sole discretion, decide to terminate this Agreement
immediately if we feel that continuing to represent FRT's Website
conflicts
<PAGE>
2CAN Media, Inc.
Representation Agreement
-----------------------
Page 4 of 13
with our standards and the standards being set by other website in our
network. Examples of this include: pornography, excessive violence,
abusive and/or foul language, or a pattern of neglect on the Website
such that it appears FRT is not updating it regularly, or has abandoned
it altogether.
7. Account Booking
- --------------------
Once a month, 2CAN will e-mail advertising schedule details to FRT, to
include cost, banner advertising placement, flight dates, and impression
targets.
8. Compensation
- -----------------
For all advertising revenue booked on the Service during the term of this
Agreement, 2CAN will receive Thirty percent (30%) commission on all net
advertising revenues sold by this Service.
9. Expenses
- -------------
2CAN will be solely responsible for all expenses related to client
entertainment and travel expenses.
10. Invoicing
- --------------
a. Collection. 2CAN will invoice and collect all allocated advertising
----------
revenue that it books for FRT.
b. Billing. Billing by 2CAN is calculated using gross invoice amount, equal
-------
to CPM in effect at the time of signature of the Insertion Order,
multiplied by the number of Impressions delivered divided by one
thousand. The net invoice amount is the gross invoice amount less a 15%
agency commission (where applicable). The invoice sent by 2CAN to the
Advertiser will include both a gross invoice amount and the net invoice
amount in applicable situations. 2CAN shall pay FRT the amount for each
campaign calculated from the net invoice amount billed to the Advertiser
(i.e., the amount that we are actually due to receive from the
Advertiser), less 2CAN's Commission, as set forth in Section8.
c. Payment. 2CAN shall remit amounts due to FRT within fifteen (15)
-------
business days from when we are in receipt of payment or within 120 days
of the end of the campaign, whichever occurs first.
d. Any advertiser who becomes a bad debt client (non-payment greater than
sixty (60) days shall be restricted from the Service until the account
is current.
f. Reports. 2CAN will provide written details of 2CAN generated activity
-------
on the Website. These reports will be bi-weekly, at a minimum,
summarize the 2CAN ad campaigns, including (i) the number of Impressions
delivered, (ii) the type of advertisement (e.g. site specific, network/
bundled)and the corresponding CPM and (iii) the total revenue generated.
11. General
- ------------
a. If any action at law or in equity is necessary to enforce or interpret
the terms of this Agreement, the prevailing party shall be entitled to
reasonable attorneys' fees, costs and necessary disbursements, in
addition to any other relief to which the party may be entitled.
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 5 of 13
b. This Agreement constitutes the entire understanding between the parties,
and supersedes all prior negotiations or understandings between the
parties concerning the subject matter contained in this Agreement.
c. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of California applicable to contracts made and
performed in California without regard to conflicts of law principle.
The parties hereto submit to the exclusive jurisdiction of the Federal
courts located in the County of Los Angeles, California for the purpose
of resolving any dispute relating to the subject matter of this
Agreement.
d. The provisions of this agreement are severable and the invalidity or
unenforceability of any provisions hereof shall not affect the validity
or enforceability of the other provisions hereof.
12. FRT's Representations and Warranties. FRT represents and warrants that (i)
- -----------------------------------------
it has full power and authority to enter into this Agreement, (ii) this
Agreement does not conflict with any other agreement or commitment made by FRT,
(iii) it shall not do anything to harm or bring into disrepute or disparage 2CAN
or any Advertiser, (iv) the Website is year 2000 compliant, and (v) it will use
its best efforts to provide its services in accordance with the terms of this
Agreement and in accordance with industry standards.
13. 2CAN's Representations and Warranties. 2CAN represents and warrants that
- ------------------------------------------
(i) it has full power and authority to enter into this Agreement, (ii) this
Agreement does not conflict with any other agreement or commitment made by FRT,
(iii) it shall not do anything to harm or bring into disrepute or disparage 2CAN
or any Advertiser, (iv) it will use its best efforts to provide its services in
accordance with the terms of this Agreement and in accordance with industry
standards.
14. Exclusion of Damages.
--------------------
IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL, OR
CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOSS OF DATA, LOSS OF USE,
OR LOSS OF PROFIT ARISING HEREUNDER OR FORM THE PROVISION OF SERVICES, INCLUDING
ADVERTISING ON FRT'S WEB SITE, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH
DAMAGES.
IN WITNESS WHEREOF, the parties have executed this Agreement as of March 10,
1999:
2CAN Media, Inc.: FreeRealTime.com:
By: /s/ Shawn O'Neill By: /s/ Brad Gunn
______________________ _______________________
Name: Shawn O'Neill Name: Brad Gunn
------------- ---------
Date: March 10, 1999 Date: March 10, 1999
-------------- --------------
Title: Manager, Business Development Title: President
----------------------------- ---------
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 6 of 13
Attachment A
This Attachment dated March 10, 1999 supersedes any previous drafted Attachment.
Representation by 2CAN for FreeRealTime.com includes the following Website(s):
Site Name - http://www.freerealtime.com
---------------------------
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 7 of 13
Attachment B
This Attachment dated March 10, 1999 supersedes any previous drafted Attachment.
The following is a list of Accounts and / or Categories that FRT will directly
sell advertising to or FRT finds competitive to their Service. 2CAN is not to
contact any of the following accounts on behalf of FRT, unless FRT formally
notifies 2CAN in writing. If FRT runs any of the following Accounts and / or
Categories using 2CAN's banner serving service, FRT agrees to pay the set
Tracking Fee as determined in Section 2.
A. Co-Brands
---------
Big Charts -- www.bigcharts.com
-----------------
Briefing.com -- www.briefing.com
----------------
Business Wire -- www.businesswire.com
--------------------
Individual Investor Online -- www.iionline.com
----------------
InfoSpace -- www.infospace.com
-----------------
Internet Stock News -- www.internetstocknews.com
-------------------------
IPO.com -- www.ipo.com
-----------
Market Guide -- www.marketguide.com
-------------------
Wall Street Traders -- www.wstraders.com
-----------------
Zack's Investment Research -- www.zacks.com
-------------
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 8 of 13
------------
Attachment C
This Attachment dated March 10, 1999 supersedes any previous drafted Attachment.
Current Advertisers
AF Trader
Ameritrade -- www.ameritrade.com
------------------
Datek - www.datek.com
-------------
DLJ Direct
Multex Investor Network
Quick & Reilly
S&P Personal Wealth
Scottrade -- www.scottrade.com
-----------------
Smith Barney
Stock Buyer
Stock Find
Stock Genie
The Stock Page
StockPoint
StockVantage
Strong Funds
Suretrade -- www.suretrade.com
-----------------
TheStreet.com
USANet
Company
- -------
ABN Amro
Accutrade/Sacco Group
AFTrader
AIM Funds/Interactive Deutsch
All-American Brokers (ebroker.com)
AllState Corporation
AllState/Leo Burnett
American Century/Chase/Organic Online
American Century/ibank/Rubin Postaer & A...
Ameristock Mutual Funds
Ameritrade Holdinging Corp.
Ameritrade/OgilvyOne Worldwide
AmEx Financial Advisor's/Wunderman, Cato,...
Andersen Consulting
AT&T/Modem Media
Atlanta Internet Bank
Atlanta Internet Bank, S&P/K2 Design
Bank Boston/Hill Holiday
Bank of America/LeftField
Baseline Financial Services
Big Charts
British Airways
Broadview Associates
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 9 of 13
Brooks Brothers
Brookstone
Brown & Co./Doremus
Brown. & Co./Gearon & Hoffman
Bull & Bear
Cadillac/Pontiac/DMB&B
Calvert Group
Charles Schwab/KP Media
Chicago Board Options Exchange
Citicorp
CS First Boston
Datek Securities Corporation (Datek Online)
Datek/Upside/Strong Funds/Mediaplex
Datek/Web Connect
DBC Online (Data Broadcasting Corp.)
Delta Airlines/Modem Media
Discover Brokerage Firm/J. Walter Thompson
Discover Brokerage/Lot2l
DLJ Direct
Dreyfus Corporation
Dreyfus/Citron, Haligman, Bedecarre
Dreyfus/edreyfus
Dreyfus/edreyfus/Grace Roth-Schild
E-Forex
E-Trade
E-Trade (Gotham)
E*Trade (Modem Media)
Edward Jones
Ernst & Young
FarSight Financial
Fidelity Investments
Financial Intranet
First Union Bank/Hal Riney
Forbesnet
Founders Asset Management
Franklin Templeton
Freedom Investments
Goldman Sachs
H & R Block
H & R Block/Wunderman, Cato, Johnson
Hambrecht & Quist
IMF Corporation
Individual lnvestor Online/Digital Pulp
Innotech Multimedia Corporation
InterAdNet
Intuit (Quicken)
INVESCO Funds Group, Inc.
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 10 of 13
InvesTools
J. and W. Seligman
Jaguar Cars Inc.
Jaguar/OgilvyOne Worldwide
Janus Funds
Janus Funds/Think New Ideas
JB Oxford & Company
John Hancock Mutual Life Insurance
John Hancock/Modem media
K Aufhauser & Company, Inc.
Kaufmann Fund. Inc.
KOSTECH Small Cap research
KPMG Peat Marwick LLP
Liberty Financial Companies
Lincoln Financial/Beyond Interactive
Lind-Waldock & Company
Mastercard International
Mastercard International/Multimedia Resources
MCI/Messner, Vetere
MCSI Consulting Group
Merrill Lynch
Merrill Lynch & Co., Inc.
Merrill Lynch/J. Walter Thompson
Messner, Vetere, Berger. McNamee, Schme...
MetLife
Microsoft Investor/Anderson Lembke
Microsoft Investor/Home Advisor
Microsoft Money/Andersen Lembke
Microsoft/Andersen Lembke
Money Magazine/ALC Interactive
MoneyNet (Reality Online)
Montgomery Securities
Montgomery Securities/Goodby Silverstein
Morgan Stanley & Co. Inc.
Morningstar.net
Morrison & Foerster
Mr. Stock
Muhlenkamp & Company
Multex Investor Network/i33
Multex Systems
Mutual Funds Encyclopedia.
National Discount Brokers
National Discount Brokers/Hampel Stefanides
Neuberger & Berman Management Services
Northwestern Mutual Life Insurance Co.
Olde Discount Corporation
Pacific Continental Securities Corp./US Invest
PaineWebber Inc.
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 11 of 13
Paradigm Interactive/lstTennessee Bank/La...
Paradigm Interactive/Crestar Financial
Penny Stock Picks
Pioneer Capital Corp.
Price Waterhouse LLP
Putnam Investments
Quick & Reilly
Quick & Reilly/in2
Quick & Reilly/Publicis Bloom
Robertson Stephens & Co.
S&P Personal Wealth/K2 Design
Saab Cars USA, Inc.
Saab/The Martin Agency
Saab/The Martin Agency
Salomon Smith Barney/Agency.com
Schwab/Partners & Simons
Scottrade Securities (Scottsdale Securities)
SEI Investments
Select Information Exchange
Smith Barney
Sovereign Securities, Inc (mydiscountbroker...
Sprint Corporation
Sprint/Eagle River Interactive
Standard & Poor's
Stein Roe & Farnham
Stock Genie
Stock Genie/Ad Shop
Stock Group
StockBuyer/Impact Marketing
StockPage
StockPoint
StockScape
Stocksite (go2.net)
StockSmart
StocksToWatch.com
Strong Capital Management (Strong Funds)
Strong Funds
SURETRADER/i33
T. Rowe Price
The Future Superstock
The Image Team
The Principal Financial Group
The Roman Group/PCFN
The Sharper Image
Thestreet.com/CKS
Thestreet.com/CKS NY
Thomsen Investors Network
Thomsen Investors Network/ReaXions
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 11 of 13
Paradigm Interactive/1stTennessee Bank/La...
Paradigm Interactive/Crestar Financial
Penny Stock Picks
Pioneer Capital Corp.
Price Waterhouse LLP
Putnam Investments
Quick & Reilly
Quick & Reilly/in2
Quick & Reilly/Publicis Bloom
Robertson Stephens & Co.
S&P Personal Wealth/K2 Design
Saab Cars USA, Inc.
Saab/The Martin Agency
Saab/The Martin Agency
Salomon Smith Barney/Agency.com
Schwab/Partners & Simons
Scottrade Securities (Scottsdale Securities)
SEI Investments
Select Information Exchange
Smith Barney
Sovereign Securities, Inc (mydiscountbroker...
Sprint Corporation
Sprint/Eagle River Interactive
Standard & Poor's
Stein Roe & Famham
Stock Genie
Stock Genie/Ad Shop
Stock Group
StockBuyer/Impact Marketing
StockPage
StockPoint
StockScape
Stocksite (go2.net)
StockSmart
StocksToWatch.com
Strong Capital Management (Strong Funds)
Strong Funds
SURETRADE/133
T. Rowe Price
The Future Superstock
The Image Team
The Principal Financial Group
The Roman Group/PCFN
The Sharper Image
Thestreet.com/CKS NY
Thomsen Investors Network
Thomsen Investors Network/ReaXions
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 12 of 13
Thunder House (Chase Bank, SGI)
Thunder House/Scudder
Thunder House/Smith Barney
Trading Direct
Union Bank of Switzerland
US Trust
Vanguard Group
VestCom Holdings Inc./StockVantage
Vital Information
Wall Street Access Discount Brokerage
Wall Street City
Wall Street Journal Interactive/Freeman & A...
Waterhouse Securities (Web Broker)
Web Street Securities
Web Street Securities/DDB Needham
Wellington Capital
Wells Fargo
Worden Brothers
Yoyodyne/Beyond Interactive
Zurich Kemper Investments
<PAGE>
2CAN Media, Inc.
Representation Agreement
------------------------
Page 13 of 13
Attachment D
This Attachment dated March 10, 1999 supersedes any previous drafted
Attachment.
The following is a projection of revenue based on inventory (banner
impressions) allocation of seventy-five (75) million per month. If FRT
inventory does not equal projections, 2CAN and FRT will determine a ratio
for comparative evaluation. All impression amounts are to be determined by
AdForce Reporting.
<TABLE>
<CAPTION>
MONTH PROJECTED SITE-SPECIFIC vs. PROJECTED REV. PROJECTED REV. TOTAL REVENUE (MINUS CONFIDENCE
TRAFFIC CHANNEL/NETWORK SITE-SPECIFiC CHANNEL& NET 2CAN COMMISSION) LEVEL
<S> <C> <C> <C> <C> <C> <C>
March 75,000,000 10 vs. 90 $ 90,000 $ 405,000 $ 346,500 80%
April 75,000,000 20 vs. 80 $ 180,000 $ 360,000 $ 378,000 85%
May 75,000,000 30 vs. 70 $ 270,000 $ 315,000 $ 409,500 90%
June 75,000,000 40 vs. 60 $ 360,000 $ 270,000 $ 441,000 90%
July 75,000,000 50 vs. 50 $ 450,000 $ 225,000 $ 472,500 90%
August 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 90%
September 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 90%
October 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 90%
November 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 90%
December 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 90%
January 75,000,000 40 vs. 60 $ 360,000 $ 270,000 $ 441,000 70%
February 75,000,000 60 vs. 40 $ 540,000 $ 180,000 $ 504,000 80%
- ------------------------------------------------------------------------------------------------------------------
Totals for March - $4,410,000 $2,745,000 $5,512,500 86%
February
==================================================================================================================
</TABLE>
Average Site CPM of $12
Average Channel/Network CPM of $6
* Impressions reported via AdForce Reporting
<PAGE>
Exhibit 6.6
FreeRealTime.com Inc
11500 Olympic Blvd.
Los Angeles, CA 90064
January 27, 1999
Arete Advisors & Investors, Inc.
1825 Port Manleigh
Newport Beach CA 92660
Attention: Geoffrey T. Moore
Dear Mr Moore:
This letter (the "Letter Agreement") will confirm our engagement of
Arete Advisors & Investors, a California company ("ARETE") to provide management
and consulting services to FreeRealTime.com, Inc., a Colorado corporation (the
"Company"), and its subsidiaries for a period of one year commencing on February
1, 1999.
1. ARETE will consult with, and provide advice to, the officers and
management employees of the Company concerning (i) corporate strategy and
development and implementation of the Company's business plans and (ii) matters
generally arising out of the business affairs of the Company. It is understood
that the Company shall have no obligation to follow any of ARETE's advice. ARETE
shall devote such time as it deems is necessary to perform the services to be
rendered by it hereunder, provided that ARETE shall be required to devote a
minimum of 40% of normal working hours to the performance of such services.
ARETE may also be retained to provide additional special services to the Company
as approved from time to time by the directors of the Company, upon such terms
and conditions and for such compensation as shall be negotiated in good faith by
ARETE and the Company.
2. ARETE's compensation for management and consulting services
hereunder will be $10,000 per month, payable monthly in advance. The Company
shall also reimburse ARETE (or cause ARETE to be reimbursed) for all of its
reasonable out-of-pocket costs and expenses in connection with the performance
of its services hereunder, which shall include the reasonable fees and
disbursements of its counsel. The Company will also, upon it's relocation to
Orange County, California provide ARETE with an office and the services of a
shared administrative assistant.
3. The Company has been advised that ARETE (and its officers and
directors) provides consulting, management and other services to other entities
and invests in other entities. Accordingly, the Company acknowledges and agrees
that ARETE shall not be prevented or restricted, in any manner whatsoever, by
this letter agreement from providing services (pursuant
<PAGE>
to a written agreement or otherwise) to any other person or entity and will be
supplying services to the Company on a non-exclusive basis.
4. Upon execution of this Letter Agreement, the Company will grant
210,000 shares of Common Stock to ARETE as follows: (i) 75,000 shares issued
upon signing (the "Initial Grant") in consideration of entering the Letter
Agreement, and (ii) Monthly Performance Grants of 13,500 shares each deemed
vested on the last day of each month beginning March 31, 1999 through December
31, 1999; provided that each Performance Grant is subject to forfeiture and
return to the Company pursuant to the termination of this Letter Agreement under
paragraph 8.
5. Upon execution of this Letter Agreement, the Company will issue
390,000 options (the "Options") to purchase Common Stock to ARETE. Each option
entitles the holder for a period of three years to purchase one share of Common
Stock at certain exercise prices as outlined below. The Options will be subject
to vesting and forfeiture as follows: (i) 200,000 Options at a $2.00 exercise
price issued upon signing (the "Initial Options") in consideration of entering
the Letter Agreement, and (ii) Monthly Performance Options of 19,000 shares each
deemed vested on the last day of each month beginning March 31, 1999 through
December 31, 1999 at the following exercise prices:
March $2.25,
April $2.50,
May $2.75,
June $3.00,
July $3.25,
August $3.50,
September $3.75,
October $4.00,
November $4.25, and
December $4.50,
provided that each Monthly Performance Option is subject to forfeiture and
return to the Company pursuant to the termination of this Letter Agreement under
paragraph 8.
6. ARETE will be entitled to retain and/or receive any monthly
Performance Grant and Monthly Performance Option that was subject to forfeit
pursuant to the termination of this agreement if (i) the Company is subject to a
change-of-control transaction within 180 days of the date of termination of this
agreement, or (ii) the Company issues new shares of Common Stock with a total
value of at least $15 million during the term of this agreement or within 30
days of the date of termination.
7. The Company agrees to indemnify ARETE and its affiliates in
accordance with Schedule A, as attached hereto.
<PAGE>
8. This letter agreement may be terminated at any time, with or without
cause, by ARETE or the Company upon 30 days notice in writing. Termination of
this letter agreement by the Company shall not relieve the Company from its
obligations to indemnify ARETE in accordance with the provisions of Schedule A
hereto, which obligations shall survive any termination of this letter agreement
by the Company or ARETE.
9. ARETE hereby agrees that it will, and will use its best efforts to,
cause its directors, officers, employees, agents and advisors
("Representatives") to, maintain the confidentiality of all information obtained
by it or its Representatives in connection with its services hereunder; will not
disclose such information to any third party (including any other company to
which ARETE provides management services), except for information which (i) is
or becomes generally available to the public other than as a result of a
disclosure by ARETE or its Representatives, (ii) was within ARETE's possession
prior to its being furnished to you by or on behalf of the Company pursuant
hereto, provided that the source of such information was not known by ARETE to
be bound by a confidentiality agreement with or other contractual, legal or
fiduciary obligation of confidentiality of the Company or any other party with
respect to such information or (iii) becomes available to ARETE on a non-
confidential basis from a source other than the Company or any of its
Representatives, provided that such source is not bound by a confidentiality
agreement with or other contractual, legal or fiduciary obligation of
confidentiality to the Company or any other party with respect to such
information.
If this letter accurately sets forth our understanding with respect to
the subject matter hereof, please indicate that ARETE will be bound hereby by
executing the enclosed copy of this letter in the space provided below and
return it to us.
Very truly yours,
FreeRealTime.com, Inc.
By: /s/ Brad Gunn
---------------------------
Name: Brad Gunn
Title: President
Agreed to and accepted
this 27th day of January 1999
Arete Advisors & Investors Inc.
By: /s/ Geoffrey Moore
---------------------------
<PAGE>
SCHEDULE A
As part of the consideration for the agreement of ARETE to furnish its
services the Company agrees to indemnify and hold harmless ARETE and its
affiliates and the respective partners, officers, directors, employees and
agents of, and persons controlling, ARETE or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended, and each of their
respective successors and assigns (collectively, the "indemnified persons") from
and against all claims, liabilities, expenses, losses or damages (or actions in
respect thereof) related to or arising out of actions taken (or omitted to be
taken) by ARETE pursuant to the terms of the letter agreement, dated January 31,
1999, between ARETE on the one hand and the Company on the other (the "Letter
Agreement"), or ARETE's role in connection therewith, provided, however, that
the Company shall not be responsible for any claims, liabilities, expenses,
losses and, damages to the extent that it is finally judicially determined that
they result primarily from actions taken or omitted to be taken by ARETE in bad
faith or due to ARETE's gross negligence or willful misconduct. If for any
reason (other than the bad faith, gross negligence or willful misconduct of
ARETE as provided above) the foregoing indemnity is unavailable to ARETE or
insufficient to hold ARETE harmless, then the Company shall contribute to the
amount paid or payable by ARETE as a result of such claim, liability, expense,
loss or damage in such proportion as is appropriate to reflect not only the
relative benefits received by the Company on the one hand and ARETE on the other
but also the relative fault of the Company and ARETE, as well as any relevant
equitable considerations, subject to the limitations that in any event ARETE's
aggregate contribution to all losses, claims, expenses, liabilities and damages
shall not exceed the amount of fees actually received by ARETE pursuant to the
Letter Agreement. Promptly after receipt by ARETE of notice of any complaint or
the commencement of any action or proceeding with respect to which
indemnification may be sought against the Company, ARETE will notify the Company
in writing of the receipt or commencement thereof, but failure to notify the
Company will relieve the Company from any liability which it may have hereunder
only if, and to the extent that, such failure results in the forfeiture of
substantial rights and defenses, and will not in any event relieve the Company
from any other obligation to any indemnified person other than under this
indemnification agreement. The Company shall assume the defense of such action
(including payment of fees and disbursements of counsel) insofar as such action
shall relate to any alleged liability in respect of which indemnity may be
sought against the Company. ARETE shall have the right to employ separate
counsel in any such action and to participate in the defense thereof, but the
fees and disbursements of such counsel shall be at the expense of ARETE, unless
employment of such counsel has been specifically authorized by the Company in
writing. The Company shall pay the fees and expenses of one separate counsel for
ARETE and any other indemnified persons if the name parties to any such action
(including any impleaded parties) include the Company (or any of the directors
of the Company) and ARETE and (i) in the good faith judgment of ARETE the use of
joint counsel would present such counsel with an actual or potential conflict of
interest, or (ii) ARETE shall have been advised by counsel that there may be one
or more legal defenses available to it which are different form or additional to
those available to the Company (or the director(s)). The Company shall not be
liable to indemnify any person for any settlement of any claim or action
effected without the Company's written consent, which
<PAGE>
consent shall not be unreasonable withheld. In addition, the Company agrees to
reimburse ARETE and each other indemnified person for all expenses (including
reasonable fees and disbursements of counsel if the Company does not assume the
defense of such action) as they are incurred by ARETE or any indemnified person
in connection with investigating, preparing or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which ARETE or any such indemnified person is a party. ARETE shall have no
liability to the Company or any other person in connection with the services
which they reder pursuant to the Letter Agreement, except for ARETE's bad faith,
gross negligence or willful misconduct judicially determined as aforesaid. The
indemnification, contribution and expense reimbursement obligation the Company
has under this paragraph shall be in addition to any liability the Company may
otherwise have.
<PAGE>
Exhibit 6.7
FreeRealTime.com Inc
11500 Olympic Blvd.
Los Angeles, CA 90064
April 14, 1999
The Lawson Marketing Group
4695 MacArthur Court
Suite 500
Newport Beach CA 92660
Attention: Jim Lawson
Dear Mr Lawson:
This letter (the "Letter Agreement") will confirm our engagement of The
Lawson Marketing Group, a California company ("TLMG") to provide marketing and
sales management and consulting services to FreeRealTime.com, Inc., a Colorado
corporation (the "Company"), and its subsidiaries for a period of one year
commencing on April 1, 1999. This letter supplants and replaces any previous
agreements between the Company and TLMG.
1. TLMG will consult with, and provide advice to, the officers and
management employees of the Company concerning marketing and sales strategy and
development, implementation and management of the Company's sales and marketing
plans, including management of advertising sales and the development and
management of independent and in-house advertising salesforce. It is understood
that the Company shall have no obligation to follow any of TLMG's advice. TLMG
and Jim Lawson shall devote a sufficient amount of their business time,
attention and skill to perform the services hereunder, and will use their best
efforts to fulfill their responsibilities hereunder and to promote the interests
of the Company .
2. TLMG's compensation for management and consulting services hereunder
will be $10,000 per month, payable monthly in advance. The Company shall also
reimburse TLMG (or cause TLMG to be reimbursed) for all of its reasonable
out-of-pocket costs and expenses in connection with the performance of its
services hereunder, which shall include the reasonable fees and disbursements
of its counsel.
3. The Company has been advised that TLMG (and its officers and
directors) provides consulting, management and other services to other entities.
Accordingly, the Company acknowledges and agrees that TLMG shall not be
prevented or restricted, in any manner whatsoever, by this letter agreement from
providing services (pursuant to a written agreement or otherwise) to any other
person or entity and will be supplying services to the Company on a
non-exclusive basis.
<PAGE>
4. Upon execution of this Letter Agreement, the Company will issue 100,000
options (the "Options") to purchase Common Stock to TLMG. Each option entitles
the holder for a period of five years to purchase one share of Common Stock at
exercise prices provided below. The Options will be exercisable as follows:
(i)12,500 shares issued upon signing (the "Initial Tranche") at an exercise
price of $1.00 in consideration of entering the Letter Agreement, and (ii)
Monthly Tranches of 8,750 shares each deemed vested on the last day of each
month beginning May 31, 1999 through February 28, 2000 at exercise prices for
Monthly Tranches beginning at $2.00 for the May Tranche, increasing by $.25 per
month, and ending with the February Tranche at $4.25; provided that each Monthly
Tranches is subject to forfeiture and/or cancellation pursuant to the
termination of this Letter Agreement under paragraphs 6 and 8.
Upon execution of this Letter Agreement, the Company agrees, as soon
as practicable, to document and execute an Option agreement with TLMG providing
for the issue of the Options under the terms specified herein and with certain
rights, including (i) a "best efforts" commitment by the Company to file and
maintain effectiveness of an S-8 registration statement with the SEC covering
the shares of TLMG and other senior managers and consultants (ii) other
registration rights, including "piggyback" rights.
5. Upon execution of this Letter Agreement, the Company will issue 350,000
options (the "Performance Options") to purchase Common Stock to TLMG. Each
option entitles the holder for a period of five years to purchase five 1/5/th/
shares of Common Stock with exercise prices for the 1/5/th/ shares at $2.00,
$2.50, $3.00, $3.50, and $4.00 per share, respectively. The Performance Options
will be exercisable based on the level of monthly net advertising sales
recognized by the Company as follows: if for any monthly period within the
twelve monthly periods ending March 31, 2000, the monthly net advertising sales
exceed the level in the table below, then the total amount of options which are
then exercisable is equal to 350,000 times the applicable percentage:
<TABLE>
<CAPTION>
---------------------------------------
Monthly Net Ad Sales Total Percent
---------------------------------------
<S> <C>
$50,000 10%
---------------------------------------
$100,000 25%
---------------------------------------
$150,000 40%
---------------------------------------
$200,000 55%
---------------------------------------
$250,000 70%
---------------------------------------
$300,000 85%
---------------------------------------
$350,000 100%
---------------------------------------
</TABLE>
provided that the exercisability of the Options are limited pursuant to the
termination of this Letter Agreement under paragraphs 6 and 8.
<PAGE>
6. TLMG will be entitled to immediately exercise any Option or any
Performance Option that was subject to forfeit and/or cancellation pursuant to
the termination of this agreement if the Company is subject to a change-of-
control transaction within 180 days of the date of termination of this
agreement. For any Performance Option that was deemed not exercisable pursuant
to the termination of this agreement by the Company, TLMG will be entitled to
exercise such Performance Option to the extent permitted in paragraph 5 above
if, in the monthly period following the month of the date of termination, the
Company recognizes a higher level of monthly net advertising sales than achieved
in any previous monthly period.
7. The Company agrees to indemnify TLMG and its affiliates in accordance
with Schedule A, as attached hereto.
8. This letter agreement may be terminated at any time, with or without
cause, by TLMG or the Company upon 30 days notice in writing. Upon the
effective date of termination pursuant to termination without cause by the
Company, the Company will pay TLMG a severance payment equal to two months of
the monthly payment under paragraph 2. Termination of this letter agreement by
the Company shall not relieve the Company from its obligations to indemnify TLMG
in accordance with the provisions of Schedule A hereto, which obligations shall
survive any termination of this letter agreement by the Company or TLMG.
9. TLMG hereby agrees that it will, and will use its best efforts to,
cause its directors, officers, employees, agents and advisors
("Representatives") to, maintain the confidentiality of all information obtained
by it or its Representatives in connection with its services hereunder, will
not disclose such information to any third party (including any other company to
which TLMG provides management services), except for information which (i) is or
becomes generally available to the public other than as a result of a disclosure
by TLMG or its Representatives, (ii) was within TLMG's procession prior to its
being furnished to you by or on behalf of the Company pursuant hereto, provided
that the source of such information was not known by TLMG to be bound by a
confidentiality agreement with other contractual, legal or fiduciary obligation
of confidentiality to the Company or any other party with respect to such
information or (iii) becomes available to TLMG on a non-confidential basis from
a source other than the Company or any of its Representatives, provided that
such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.
<PAGE>
If this letter accurately sets forth our understanding with respect to the
subject matter hereof, please indicate that TLMG will be bound hereby by
executing the enclosed copy of this letter in the space provided below and
return it to us.
Very truly yours,
FreeRealTime.com, Inc.
By:______________________
Name:
Title:
Agreed to and accepted
this 5th day of April 1999:
TLMG
By:______________________
<PAGE>
SCHEDULE A
As part of the consideration for the agreement of TLMG to furnish its
services the Company agrees to indemnify and hold harmless TLMG and its
affiliates and the respective partners, officers, directors, employees and
agents of, and persons controlling, TLMG or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended, and each of their
respective successors and assigns (collectively, the "indemnified persons") from
and against all claims, liabilities, expenses, losses or damages (or actions in
respect thereof) related to or arising out of actions taken (or omitted to be
taken) by TLMG pursuant to the terms of the letter agreement, dated January 31,
1999, between TLMG on the one hand and the Company on the other (the "Letter
Agreement"), or TLMG's role in connection therewith; provided, however, that the
-------
Company shall not be responsible for any claims, liabilities, expenses, losses
and damages to the extent that it is finally judicially determined that they
result primarily from actions taken or omitted to be taken by TLMG in bad faith
or due to TLMG's gross negligence or willful misconduct. If for any reason
(other than the bad faith, gross negligence or willful misconduct of TLMG as
provided above) the foregoing indemnity is unavailable to TLMG or insufficient
to hold TLMG harmless, then the Company shall contribute to the amount paid or
payable by TLMG as a result of such claim, liability, expense, loss or damage in
such proportion as is appropriate to reflect not only the relative benefits
received by the Company on the one hand and TLMG on the other but also the
relative fault of the Company and TLMG, as well as any relevant equitable
considerations, subject to the limitations that in any event TLMG's aggregate
contribution to all losses, claims, expenses, liabilities and damages shall not
exceed the amount of fees actually received by TLMG pursuant to the Letter
Agreement. Promptly after receipt by TLMG of notice of any complaint or the
commencement of any action or proceeding with respect to which indemnification
may be sought against the Company, TLMG will notify the Company in writing of
the receipt or commencement thereof, but failure to notify the Company will
relieve the Company from any liability which it may have hereunder only if, and
to the extent that, such failure results in the forfeiture of substantial rights
and defenses, and will not in any event relieve the Company from any other
obligation to any indemnified person other than under this indemnification
agreement. The Company shall assume the defense of such action (including
payment of fees and disbursements of counsel) insofar as such action shall
relate to any alleged liability in respect of which indemnity may be sought
against the Company. TLMG shall have the right to employ separate counsel in any
such action and to participate in the defense thereof, but the fees and
disbursements of such counsel shall be at the expense of TLMG unless employment
of such counsel has been specifically authorized by the Company in writing. The
Company shall pay the fees and expenses of one separate counsel for TLMG and any
other indemnified persons if the named parties to any such action (including any
impleaded parties) include the Company (or any of the directors of the Company)
and TLMG and (i) in the good faith judgment of TLMG the use of joint counsel
would present such counsel with an actual or potential conflict of interest, or
(ii) TLMG shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (or the director(s)). The Company shall not be liable
to indemnify any person for any settlement of any claim or action effected
without the Company's written consent, which
<PAGE>
consent shall not be unreasonably withheld. In addition, the Company agrees to
reimburse TLMG and each other indemnified person for all expenses (including
reasonable fees and disbursements of counsel if the Company does not assume the
defense of such action) as they are incurred by TLMG or any indemnified person
in connection with investigating, preparing or defending any such action or
claim, whether or not in connection with pending or threatened litigation in
which TLMG or any such Indemnified person is a party. TLMG shall have no
liability to the Company or any other person in connection with the services
which they render pursuant to the Letter Agreement, except for TLMG's bad faith,
gross negligence or willful misconduct judicially determined as aforesaid. The
indemnification, contribution and expense reimbursement obligation the Company
has under this paragraph shall be in addition to any liability the Company may
otherwise have.
<PAGE>
EXHIBIT 6.8.1
FreeRealTime.com Inc.
3333 Michelson Drive, Suite 430
Irvine, CA 92612
April 5, 1999
Neufeld and Co., Inc.
32011 Pacific Coast Highway
Laguna Beach, CA 92677
Attention: Michael Neufeld
Dear Michael:
This letter (the "Letter Agreement") will confirm our engagement of
Neufeld & Co., Inc., a California corporation ("NCO") to provide financial
management consulting services to FreeRealTime.com, Inc., a Colorado corporation
(the "Company"), and its subsidiaries for a period of 90 days commencing on
April 19, 1999 (the "Initial Term"), unless terminated or extended.
1. NCO will consult with, and provide advice to, the officers and
management employees of the Company concerning the primary financial functions
of the Company, including (i) the set-up and management of the general ledger
accounting and financial reporting system, (ii) the set-up and management of the
management information system, including the preparation and ongoing management
of the strategic plan, operating budgets, flash reports and projections, (iii)
the establishment and maintenance of financial control policies and procedures,
and (iv) the completion and filing of the Company's initial Form 10K with the
SEC and management of the ongoing SEC reporting requirements of the Company. It
is understood that the Company shall have no obligation to follow any of NCO's
advice. NCO shall devote such time as he deems is necessary to perform the
services to be rendered by him hereunder; provided that he shall devote the
substantial majority of his available man-hours to the performance of the
services hereunder.
2. NCO's fees for management and consulting services hereunder will be
$9,000 per month, payable bi-weekly. The Company shall also reimburse NCO (or
cause NCO to be reimbursed) for all of its reasonable out-of-pocket costs and
expenses in connection with the performance of its services hereunder, which
shall include the reasonable fees and disbursements of its counsel.
3. The Company has been advised that NCO provides consulting, management
and other services to other entities. Accordingly, the Company acknowledges and
agrees that NCO shall not be prevented or restricted, in any manner whatsoever,
by this Letter
<PAGE>
Agreement from providing services (pursuant to a written agreement or otherwise)
to any other person or entity and will be supplying services to the Company on a
non-exclusive basis.
4. Upon execution of this Letter Agreement, the Company will issue
100,000 options (the "Options") to purchase Common Stock to NCO. Each option
entitles the holder for a period of three years to purchase one share of Common
Stock at exercise prices as provided below. The Options will be exercisable and
deemed vested in 25,000 Option tranches based on the length of employment with
the Company as follows: (i) 25,000 Options at a $2.00 exercise price upon the
completion of the Initial Term (the "Initial Tranche"), and (ii) three tranches
of 25,000 Options each, with the tranches having exercise prices of $2.75,
$3.25, and $4.00, respectively, upon the completion of each of the three
successive 90 day service periods following the Initial Term pursuant to this
Letter Agreement, as extended, or other written terms of consulting services
with the Company; provided, that the exercisability of the Options are qualified
pursuant to the termination of this Letter Agreement under paragraphs 5 and 7.
Upon execution of this Letter Agreement, the Company agrees, as soon
as practicable, to document and execute an Option agreement with NCO providing
for the issue of the Options under the terms specified herein and with certain
rights, including (i) a "best efforts" commitment by the Company to file and
maintain effectiveness of an S-8 registration statement with the SEC covering
the shares of NCO and other senior managers and consultants (ii) other
registration rights, including "piggyback" rights.
5. NCO will be entitled to immediately exercise any Options in full
that were subject to forfeit and/or cancellation pursuant to the termination of
this Letter Agreement for any reason other than termination by NCO without cause
or by the Company for cause if the Company is subject to a change-of-control
transaction within 180 days of the date of termination.
6. The Company agrees to indemnify NCO, NCO's officers, directors,
shareholders, employees, and affiliates in accordance with Schedule A, as
attached hereto.
7. This Letter Agreement may be terminated at any time, with or
without cause, by NCO or the Company upon 30 days notice in writing.
Termination of this Letter Agreement by the Company shall not relieve the
Company from its obligations to indemnify NCO in accordance with the provisions
of Schedule A hereto, which obligations shall survive any termination of this
Letter Agreement by the Company or NCO. If this Letter Agreement terminates for
any reason other than termination by NCO without cause or by the Company for
- ----------------
cause, then the portion of the Options that are then exercisable, including the
Option tranche exercisable upon completion of the applicable 90 day employment
period during which the termination becomes effective, may be exercised at any
time through the expiration of the Options (i.e. 3 years from the date the
options were granted). If this Letter Agreement shall terminate because of
termination by NCO without cause or by the Company for cause ("for
<PAGE>
cause" defined as bad faith, gross negligence, or willful misconduct), all the
Options shall terminate and become null and void as of the effective date of
termination.
8. NCO hereby agrees that it will, and will use its best efforts to,
cause its directors, officers, employees, agents and advisors
("Representatives") to, maintain the confidentiality of all information obtained
by it or its Representatives in connection with its services hereunder; will not
disclose such information to any third party (including any other company to
which NCO provides management services), except for information which (i) is or
becomes generally available to the public other than as a result of a disclosure
by NCO or its Representatives, (ii) was within NCO's possession prior to its
being furnished to NCO by or on behalf of the Company pursuant hereto, provided
that the source of such information was not known by NCO to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to NCO on a non-confidential basis
from a source other than the Company or any of its Representatives, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.
If this letter accurately sets forth our understanding with respect to the
subject matter hereof, please indicate that NCO will be bound hereby by
executing the enclosed copy of this letter in the space provided below and
return it to us.
Very truly yours,
FreeRealTime.com, Inc.
By: /s/ Brad G. Gunn
------------------------
Name: BRAD G. GUNN
Title: PRESIDENT
Agreed to and accepted
this 5th day of April 1999:
Neufeld & Co., Inc.
By: /s/ Michael B. Neufeld
---------------------------------------
Michael B. Neufeld, President and CEO
<PAGE>
SCHEDULE A
As part of the consideration for the agreement of NCO to furnish its
services the Company agrees to indemnify and hold harmless NCO and its
affiliates and the respective partners, officers, directors, employees and
agents of, and persons controlling, NCO or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended, and each of their
respective successors and assigns (collectively, the "indemnified persons") from
and against all claims, liabilities, expenses, losses or damages (or actions in
respect thereof) related to or arising out of actions taken (or omitted to be
taken) by the Company or its representatives, or by NCO pursuant to the terms of
the Letter Agreement, dated April 5, 1999, between NCO on the one hand and the
Company on the other (the "Letter Agreement"), or NCO's role in connection
therewith; provided, however, that the Company shall not be responsible for any
-------
claims, liabilities, expenses, losses and damages to the extent that it is
finally judicially determined that they result primarily from actions taken or
omitted to be taken by NCO in bad faith or due to NCO's gross negligence or
willful misconduct. If for any reason (other than the bad faith, gross
negligence or willful misconduct of NCO as provided above) the foregoing
indemnity is unavailable to NCO or insufficient to hold NCO harmless, then the
Company shall contribute to the amount paid or payable by NCO as a result of
such claim, liability, expense, loss or damage in such proportion as is
appropriate to reflect not only the relative benefits received by the Company on
the one hand and NCO on the other but also the relative fault of the Company and
NCO, as well as any relevant equitable considerations, subject to the
limitations that in any event NCO's aggregate contribution to all losses,
claims, expenses, liabilities and damages shall not exceed the amount of fees
actually received by NCO pursuant to the Letter Agreement. Promptly after
receipt by NCO of notice of any complaint or the commencement of any action or
proceeding with respect to which indemnification may be sought against the
Company, NCO will notify the Company in writing of the receipt or commencement
thereof, but failure to notify the Company will relieve the Company from any
liability which it may have hereunder only if, and to the extent that, such
failure results in the forfeiture of substantial rights and defenses, and will
not in any event relieve the Company from any other obligation to any
indemnified person other than under this indemnification agreement. The Company
shall assume the defense of such action (including payment of fees and
disbursements of counsel) insofar as such action shall relate to any alleged
liability in respect of which indemnity may be sought against the Company. NCO
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and disbursements of such
counsel shall be at the expense of NCO unless employment of such counsel has
been specifically authorized by the Company in writing. The Company shall pay
the fees and expenses of one separate counsel for NCO and any other indemnified
persons if the named parties to any such action (including any impleaded
parties) include the Company (or any of the directors of the Company) and NCO
and (i) in the good faith judgment of NCO the use of joint counsel would
present such counsel with an actual or potential conflict of interest, or (ii)
NCO shall have been advised by counsel that there may be one or more legal
defenses available to it which are different from or additional to those
available to the Company (or the director(s)). The Company shall not be liable
to indemnify any person for any settlement of any claim or action effected
without the Company's written consent, which consent shall not be unreasonably
<PAGE>
withheld. In addition, the Company agrees to reimburse NCO and each other
indemnified person for all expenses (including reasonable fees and disbursements
of counsel if the Company does not assume the defense of such action) as they
are incurred by NCO or any indemnified person in connection with investigating,
preparing or defending any such action or claim, whether or not in connection
with pending or threatened litigation in which NCO or any such indemnified
person is a party. NCO shall have no liability to the Company or any other
person in connection with the services which they render pursuant to the Letter
Agreement, except for NCO's bad faith, gross negligence or willful misconduct
judicially determined as aforesaid. The indemnification, contribution and
expense reimbursement obligation the Company has under this paragraph shall be
in addition to any liability the Company may otherwise have.
<PAGE>
FreeReal Time.com Inc. Exhibit 6.8.2
3333 Michelson Drive, Suite 430
Irvine, CA 92612
Michael B. Neufeld, President & CEO July 15, 1999
Neufeld & Co., Inc.
32011 Pacific Coast Highway
Laguna Beach, CA 92677
Dear Michael:
This letter (the "Letter Agreement") will confirm our engagement of
Neufeld & Co., Inc. ("NCO"), a consulting services company whose principal is
Michael B. Neufeld ("MBN"), to provide financial management consulting services
to FreeRealTime.com, Inc., a Colorado corporation (the "Company"), and its
subsidiaries for a period of one year commencing on July 15, 1999 (the "Initial
Term"), unless terminated or extended. This Agreement supersedes the letter
agreement with NCO and MBN dated April 15, 1999 (the "Original Agreement"),
notwithstanding the fact NCO and MBN have completely fulfilled their obligations
to the Company under the Original Agreement and MBN is fully vested on July 15,
1999 in the first tranche of 25,000 options at a strike price of $2.00 as
provided for in the Original Agreement. The remaining 75,000 options at their
respective exercise prices under the Original Agreement will continue to vest to
MBN as provided for in the Original Agreement.
1. NCO will consult with, and provide advice to, the officers and
management employees of the Company concerning the primary financial functions
of the Company, including (i) the set-up and management of the general ledger
accounting and financial reporting system, (ii) the set-up and management of the
management information system, including the preparation and ongoing management
of the strategic plan, operating budgets, flash reports and projections, (iii)
the establishment and maintenance of financial control policies and procedures,
and (iv) the completion and filing of the Company's initial Form 10K with the
SEC and management of the ongoing SEC reporting requirements of the Company. It
is understood that the Company shall have no obligation to follow any of NCO's
advice. NCO shall devote such time as he deems is necessary to perform the
services to be rendered by him hereunder; provided that he shall devote the
substantial majority of his available man-hours to the performance of the
services hereunder.
2. NCO's compensation for management and consulting services
hereunder will be $10,000 per month, payable bi-weekly. The Company shall also
reimburse NCO (or cause NCO to be reimbursed) for all of its reasonable out-of-
pocket costs and expenses in connection with the performance of his services
hereunder, which shall include the reasonable fees and disbursements of his
counsel.
<PAGE>
3. The Company has been advised that NCO provides consulting,
management and other services to other entities. Accordingly, the Company
acknowledges and agrees that NCO shall not be prevented or restricted, in any
manner whatsoever, by this Letter Agreement from providing services (pursuant to
a written agreement or otherwise) to any other person or entity and will be
supplying services to the Company on a non-exclusive basis.
4. Upon execution of this Letter Agreement, the Company will grant an
additional 250,000 options (the "Options") to purchase Common Stock to MBN. Such
grant is in addition to the 100,000 Options granted previously to MBN pursuant
to the letter agreement dated April 15, 1999, which grant remains effective and
subject to terms and conditions specified in the stock option agreement between
the Company and MBN with a grant date of April 15, 1999. Each option entitles
the holder for a period of three years to purchase one share of Common Stock at
exercise prices as provided below. The Options will be exercisable and deemed
vested in quarterly periods as provided below. The Options will be granted in
two tranches: (I) Tranche A of 150,000 Options with vesting based on the length
of service with the Company (either as a consultant or as an employee), and (II)
Tranche B of 100,000 Options with the initial vesting triggered by MBN's
election to become an Officer of the Company.
Tranche A shall have the following terms: (i) 50,000 Options at a
$1.25 exercise price vested as of July 15, 1999; (ii) 25,000 Options at a $2.00
exercise price vested as of October 15, 1999; (iii) 25,000 Options at a $2.50
exercise price vested as of January 15, 2000; (iv) 25,000 Options at a $3.00
exercise price vested as of April 15, 2000; and (v) 25,000 Options at a $3.50
exercise price vested as of July 15, 2000.
Tranche B of 100,000 Options shall have an initial vesting
commencement date effective as of the date that, while providing service to the
Company pursuant to this, or a successor Agreement, MBN gives written notice of
his availability and willingness to be appointed an Officer of the Company (the
"Officer Date"). On the Officer Date, 25,000 Options at an exercise price of
$2.00 shall vest immediately; and the remaining 75,000 Options shall vest in
increments of 25,000 options each upon each of the three successive 90-day
service periods following the Officer Date, with exercise prices at each vesting
date of $2.50, $3.00, and $3.50, respectively.
The vesting and exercisability of the Options are qualified
pursuant to the termination of this Letter Agreement under paragraphs 5 and 7.
Upon execution of this Letter Agreement, the Company agrees, as soon as
practicable, to document and execute an Option agreement with MBN pursuant to
the Company's 1999 Equity Incentive Plan (the "Plan") providing for the issue
of the Options under the terms specified herein (as well as the 100,000 options
granted to MBN and/or NCO in the Original Agreement) and with certain rights as
described herein and with certain rights, including (i) a commitment by the
Company to file and maintain an effective S-8 Registration Statement with the
SEC covering the 350,000 options and underlying shares of MBN and/or NCO (ii)
other registration rights if necessary to facilitate the ability of MBN and/or
NCO to trade the shares underlying the Options and the options in the
<PAGE>
Original Agreement, including "piggyback" rights in the event of a public
offering of stock by the Company.
5. NCO will be entitled to immediately exercise any Options in
full that were subject to cancellation pursuant to the termination of this
Letter Agreement for any reason if the Company is subject to a change-of-control
transaction within 180 days of the date of termination.
6. The Company agrees to indemnify NCO and his affiliates in
accordance with Schedule A, as attached hereto.
7. This Letter Agreement may be terminated at any time, with or
without cause, by NCO or the Company upon 30 days notice in writing. Termination
of this Letter Agreement by the Company shall not relieve the Company from its
obligations to indemnify NCO in accordance with the provisions of Schedule A
hereto, which obligations shall survive any termination of this Letter Agreement
by the Company or NCO. If this Letter Agreement terminates for any reason, then
the portion of the Options (including the options granted in the Original
Agreement) that are then exercisable, including the Options that vest and become
exercisable upon completion of the applicable 90 day employment period during
which the termination becomes effective, may be exercised at any time through
the expiration date of the Options (i.e. 3 years from the date the options were
granted). If this Letter Agreement is terminated by NCO for cause ("for cause"
defined as bad faith, gross negligence, or willful misconduct) or by the Company
without cause, then the Company will pay NCO a lump sum payment equal to $10,000
within 30 days subsequent to the termination date. This $10,000 payment is above
and beyond NCO's normal cash compensation under the terms of this Agreement.
8. NCO hereby agrees that he will, and will use his best efforts to,
cause his directors, officers, employees, agents and advisors
("Representatives") to, maintain the confidentiality of all information obtained
by him or his Representatives in connection with his services hereunder; will
not disclose such information to any third party (including any other company to
which NCO provides management services), except for information which (i) is or
becomes generally available to the public other than as a result of a disclosure
by NCO or his Representatives, (ii) was within NCO's possession prior to its
being furnished to NCO by or on behalf of the Company pursuant hereto, provided
that the source of such information was not known by NCO to be bound by a
confidentiality agreement with or other contractual, legal or fiduciary
obligation of confidentiality to the Company or any other party with respect to
such information or (iii) becomes available to NCO on a non-confidential basis
from a source other than the Company or any of its Representatives, provided
that such source is not bound by a confidentiality agreement with or other
contractual, legal or fiduciary obligation of confidentiality to the Company or
any other party with respect to such information.
<PAGE>
If this letter accurately sets forth our understanding with respect to
the subject matter hereof, please indicate that NCO will be bound hereby by
executing the enclosed copy of this letter in the space provided below and
return it to us.
Very truly yours,
FreeRealTime.com, Inc.
By: /s/ Brad Gunn
--------------------------
Brad Gunn, President & CEO
Agreed to and accepted
this 15th day of July 1999:
NCO
By: /s/ Michael Neufeld, President and CEO
--------------------
<PAGE>
SCHEDULE A
As part of the consideration for the agreement of NCO to furnish its
services the Company agrees to indemnify and hold harmless NCO and its
affiliates and the respective partners, officers, directors, employees and
agents of, and persons controlling, NCO or any of its affiliates within the
meaning of either Section 15 of the Securities Act of 1933, as amended, or
Section 20 of the Securities Exchange Act of 1934, as amended, and each of their
respective successors and assigns (collectively, the "indemnified persons") from
and against all claims, liabilities, expenses, losses or damages (or actions in
respect thereof) related to or arising out of actions taken (or omitted to be
taken) by the Company or its representatives, or by NCO pursuant to the terms of
the Letter Agreement, dated July 5, 1999, between NCO on the one hand and the
Company on the other (the "Letter Agreement"), or NCO's role in connection
therewith; provided, however, that the Company shall not be responsible for any
-------- -------
claims, liabilities, expenses, losses and damages to the extent that it is
finally judicially determined that they result primarily from actions taken or
omitted to be taken by NCO in bad faith or due to NCO's gross negligence or
willful misconduct. If for any reason (other than the bad faith, gross
negligence or willful misconduct of NCO as provided above) the foregoing
indemnity is unavailable to NCO or insufficient to hold NCO harmless, then the
Company shall contribute to the amount paid or payable by NCO as a result of
such claim, liability, expense, loss or damage in such proportion as is
appropriate to reflect not only the relative benefits received by the Company on
the one hand and NCO on the other but also the relative fault of the Company and
NCO, as well as any relevant equitable considerations, subject to the
limitations that in any event NCO's aggregate contribution to all losses,
claims, expenses, liabilities and damages shall not exceed the amount of fees
actually received by NCO pursuant to the Letter Agreement. Promptly after
receipt by NCO of notice of any complaint or the commencement of any action or
proceeding with respect to which indemnification may be sought against the
Company, NCO will notify the Company in writing of the receipt or commencement
thereof, but failure to notify the Company will relieve the Company from any
liability which it may have hereunder only if, and to the extent that, such
failure results in the forfeiture of substantial rights and defenses, and will
not in any event relieve the Company from any other obligation to any
indemnified person other than under this indemnification agreement. The Company
shall assume the defense of such action (including payment of fees and
disbursements of counsel) insofar as such action shall relate to any alleged
liability in respect of which indemnity may be sought against the Company. NCO
shall have the right to employ separate counsel in any such action and to
participate in the defense thereof, but the fees and disbursements of such
counsel shall be at the expense of NCO unless employment of such counsel has
been specifically authorized by the Company in writing. The Company shall pay
the fees and expenses of one separate counsel for NCO and any other indemnified
persons if the named parties to any such action (including any impleaded
parties) include the Company (or any of the directors of the Company) and NCO
and (i) in the good faith judgment of NCO the use of joint counsel would present
such counsel with an actual or potential conflict of interest, of (ii) NCO shall
have been advised by counsel that there may be one or more legal defenses
available to it which are different from or additional to those available to the
Company (or the director(s)). The Company shall not be liable to indemnify any
person for any settlement of any claim or action effected without the Company's
written consent, which consent shall not be unreasonably
<PAGE>
withheld. In addition, the Company agrees to reimburse NCO and each other
indemnified person for all expenses (including reasonable fees and disbursements
of counsel if the Company does not assume the defense of such action) as they
are incurred by NCO or any indemnified person in connection with investigating,
preparing or defending any such action or claim, whether or not in connection
with pending or threatened litigation in which NCO or any such indemnified
person is a party. NCO shall have no liability to the Company or any other
person in connection with the services which they render pursuant to the Letter
Agreement, except for NCO's bad faith, gross negligence or willful misconduct
judicially determined as aforesaid. The indemnification, contribution and
expense reimbursement obligation the Company has under this paragraph shall be
in addition to any liability the Company may otherwise have.
<PAGE>
EXHIBIT 6.9
OFFER TO EXTEND LEASE
BETWEEN: DANIEL PEARSE & ASSOCIATES LTD.
(hereinafter referred to as the Landlord)
AND: First International Financial Corporation
(hereinfafter referred to as the "Tenant")
The Tenant hereby offers to amend a lease through Kinross Properties Ltd., as
agent for the Landlord, certain premises more particularly described in the
following terms:
1. PREMISES
The tenant hereby offers to extend a lease with the Landlord for an area
of approximately 1906 square feet of Rentable Area at the municipal
address of #1-217 10th Avenue S.W. Calgary Alberta as shown on the
portion of the attached floor plan outlined in black, attached as
Schedule "A" and forming a part of this offer. This includes the 1489
square feet described in the current lease of June 25, 1998 and
additional square footage of 419 square feet as shown on Schedule "A" and
described in the amending agreement of June 16, 1998. Total square
footage is 1908 square feet.
2. TERM
The Term of the Lease shall be extended for SEVEN MONTHS on August 1,
1999 (hereinafter referred to as the "Commencement Date") and expiring
FEBRUARY 28, 2000 ("hereinafter referred to as the Termination Date").
3. NET RENT
Throughout the Term of the Lease the Tenant shall pay to the Landlord Net
Rent for the Premises calculated as follows:
$5.40 per square foot plus G.S.T.
ADDITIONAL RENT
The Tenant shall pay its proportionate share of Additional Rent as
contained in the current lease between the Landlord and the Tenant
Additional Rent is currently estimated at $6.00 per square foot per
annum. The Landlord will prepare an annual accounting of these charges
and any adjustment required shall be made at that time.
Payment of Net Rent and Additional rent shall be made in advance in equal
consecutive monthly payments on the first day of each calendar month
during the term of this Lease.
Tenant herewith acknowledges that $2,163.32 plus in additional rent is
due and payable and that the lord and tenant shall consult as to the
method of repayment.
4. USE
The Premises are to be used and occupied as business offices for the
business of the Tenant.
5. DEPOSIT
Deposit of $1,177.00 is herewith acknowledged and shall be continued to
be held by the Landlord as security against the tenant's obligations
under the terms of the lease agreement.
<PAGE>
2.
6. LEASE
The current lease shall remain in force and effect with necessary
amendments as contained in this offer noted therein.
7. NOTICES
Notices may be provided to the Landlord and Tenant at the addresses
provided hereunder:
To the Tenant: First International Financial Corp.
#1 - 217 10th Avenue S.W.
Calgary, Alberta T2R 0A4
To the Landlord: Daniel Pearse & Associates Ltd.
Box 22102, Bankers Hall
Calgary, Alberta T2P 4J5
Either party may change its address of notification by providing written notice
to the other.
8. ASSIGNMENT AND SUBLETTING
The tenant shall not sublet or assign all or part of this accepted
Agreement to Lease or the Lease without the written permission of the
Landlord as described in the current Lease.
9. TIME OF THE ESSENCE
Time shall be of the essence hereof in all respects.
10. SOLE AGREEMENT
There are no covenants, agreements, schedules or material representations
relating to this Offer to Lease except for those set forth or
incorporated herein.
11. ACCEPTANCE
This Offer to Lease shall be open for acceptance by the Landlord until
1:00 p.m., MDST, May 17, 1999 and if not accepted by then is null and
void.
12. OPTION TO RENEW
Provided the Tenant is not in default of this Agreement or the Lease the
Tenant shall have an option to renew the Lease for a further one year
period at prevailing market rates.
Dated this _______________ of _______ 1998.
TENANT: First International Financial Corporation
________________________
per:
<PAGE>
3.
The Landlord hereby accepts this offer to Renew the Lease
this ____________ day of ________________ 19____.
LANDLORD: Daniel Pearse & Associates Ltd.
_______________________________
<PAGE>
EXHIBIT A
PART I: INFORMATION DEFINITION
STOCKS:
NYSE
NYSE Corporate Bonds
AMEX, Boston, Philadelphia, Cincinnati, Midwest, Pacific Stock Exchanges and
Instinet, NASD
NASDAQ Over-the-Counter
NASDAQ National Market System
NASDAQ Level II
U.S. Mutual Funds
Alberta Stock Exchange
Canadian OTC Automated Trading System
Montreal Stock Exchange
Toronto Stock Exchange
Vancouver Stock Exchange
STOCK/CURRENCY OPTIONS:
AMEX, OPRA: Chicago Board of Options Exchange
NYSE, Pacific, Philadelphia Stock Exchange
FUTURE EXCHANGES: BASIC FUNDAMENTAL INFORMATION
Chicago Board of Trade U.S. Company names
Chicago Mercantile Exchange P/E Ratio
Commodities Exchange Center 52 week high/low
Kansas City Board of Trade Dividend Rate
Mid-America Commodity Exchange Dividend Amount
Minneapolis Grain Exchange Dividend Yield
New York Mercantile Exchange
New York Commodity Exchange
Winnipeg Commodity Exchange
PART II: AUTHORIZED GEOGRAPHICAL AREA
Distribution of the ComStock Information may only be made by Distributor to
Subscribers located in the United States and Canada. Subscribers may access the
ComStock Information outside of the U.S. and Canada but Distributor shall not
purposely market outside of these regions.
<PAGE>
EXHIBIT A
DESCRIPTION OF DISTRIBUTOR SERVICE
The FreeRealtime.com, Inc. information services provide delayed and real-time
market and related data to users accessing such data over the Internet. The
Distributor currently operates through two primary Web sites: (1)
FreeRealtime.com -- a free, advertising-supported market data, news and analytic
tools service and (2) BullSession.com -- a subscription-based market data, news
and analytic tools service. A description of the Distributor's Internet-based
services, including current and contemplated services, includes the following:
A. Advertising-Supported Information Services
. Delayed and real-time snapshot (collectively "Delayed/RT") market
information offered free to users who have properly registered with the
Distributor (the "Registrants").
. The Business Model for the Distributor is dependent on the sale of
advertising, sponsorships, and other advertising and marketing-related fees
and revenues. All quote requests connect with FRTI servers. FRTI may sell,
serve, and/or collect banner advertising to support the display of the
page.
. Distributor's FreeRealtime.com Web site and linked sites that are
accessible via reciprocal hyperlinks between the two sites are the current
operations for this type of service.
B. Web-Host Information Services
. Snapshot Delayed/RT market information offered to Registrants of
FreeRealtime.com where such users come from other host Web sites ("Web
Hosts") whereby the FreeRealtime.com Web site is private labeled for
"other" host sites with the "other" host site's "look" and "feel".
. The Business Model for the Distributor consists exclusively of "per quote"
or "per user" sub-license fees paid to the Distributor by the Web Host.
. Distributor's arrangements with Zack's and Infospace are the current
examples of this type of service.
. Distributor shall not provide continual updated real-time market
information as part of this service.
. Other than those web host sites listed in Exhibit D. Distributor shall not
allow any other web hosts to host sites on behalf of other third parties.
. Distributor agrees that at the next renewal date for those web hosts listed
in Exhibit D (the "Web Hosts"), Distributor shall terminate the Web Hosts'
right of hosting sites on behalf of any new third parties solely with
respect to the dissemination of the ComStock information by the
Distributor. The Web Hosts can continue to host sites on behalf of third
parties that they've already entered into an agreement with or will enter
into an agreement with prior to the Distributor's next renewal date with
the Web Hosts.
<PAGE>
C. Continual Update RT Subscription-based Information Services (current
BullSession product)
. Continual Update RT market information offered to users who have properly
registered with the Distributor and who pay periodic subscription fees to
the Distributor for such services ("Subscribers"). Information is
refreshed automatically in specified time increments (typically 7 - 10
seconds) depending on the subscribers connection.
. The Business Model for the Distributor is dependent on subscription fees
paid by the Subscriber.
. Distributor's BullSession.com Web site is the current operation for this
type of service.
D. Continuous Tick-by-tick RT Subscription-based Information Services
. Continuous, real-time, tick-by-tick, (collectively "Continuous RT")
market information, including continuous real-time quotes, NASDAQ Level
II quotes, S&P News, offered to users who have properly registered with
the Distributor and who pay periodic subscription fees to the Distributor
for such services ("Subscribers").
. The Business Model for the Distributor is dependent on subscription fees
paid by the Subscriber.
. The Distributor does not have a current operation for this type of
service but may develop and offer such services in the future.
<PAGE>
Exhibit 6.9.1
OFFER TO AMEND LEASE
BETWEEN: DANIEL PEARSE & ASSOCIATES LTD.
(hereinafter referred to as the Landlord)
AND: First International Financial Corporation
(hereinafter referred to as the "Tenant")
The Tenant hereby offers to amend a lease through Kinross Properties Ltd., as
agent for the Landlord, certain premises more particularly described in the
following terms:
1. PREMISES
The tenant hereby offers to lease from with Landlord an area of
approximately 1908 square feet of Rentable Area at the municipal address of
#1-217 10th Avenue S.W. Calgary Alberta as shown on the portion of the
attached floor plan outlined in black, attached as Schedule "A" and forming
a part of this offer. This includes the 1489 square feet described in the
current lease of June 25, 1998 and additional square footage of 419 square
feet as shown on Schedule "A". Total square footage is 1908 square feet.
2. TERM
The Term of the Lease shall be for one year commencing on August 1, 1998
(hereinafter referred to as the "Commencement Date") and expiring July 31,
1999 ("hereinafter referred to as the Termination Date").
3. NET RENT
Throughout the Term of the Lease the Tenant shall pay to the Landlord Net
Rent for the Premises calculated as follows:
$5.40 per square foot plus G.S.T.
ADDITIONAL RENT
The Tenant shall pay its proportionate share of Additional Rent as
contained in the current lease between the Landlord and the Tenant.
Additional Rent is currently estimated at $5.00 per square foot per annum.
The Landlord will prepare an annual accounting of these charges and any
adjustment required shall be made at that time.
Payment of Net Rent and Additional rent shall be made in advance in equal
consecutive monthly payments on the first day of each calendar month during
the term of this Lease.
4 USE
The Premises are to be used and occupied as business offices for the
business of the Tenant.
5 DEPOSIT
Deposit of $1,177.00 is herewith acknowledged and shall be continued to be
held by the Landlord as security against the tenant's obligations under the
terms of the lease agreement.
6. LEASE
The current lease shall remain in force and effect with necessary
amendments as contained in this offer noted therein.
<PAGE>
2.
7. NOTICES
Notices may be provided to the Landlord and Tenant at the addresses
provided hereunder:
To the Tenant: First International Financial Corp.
#1-217 10th Avenue S.W.
Calgary, Alberta T2R 0A4
To the Landlord: Daniel Pearse & Associates Ltd.
Box 22102, Bankers Hall
Calgary, Alberta T2P 4J5
Either party may change its address of notification by providing written notice
to the other.
8. ASSIGNMENT AND SUBLETTING
The tenant shall not sublet or assign all or part of this accepted
Agreement to Lease or the Lease without the written permission of the
Landlord as described in the current Lease.
9. TIME OF THE ESSENCE
Time shall be of the essence hereof in all respects.
10. SOLE AGREEMENT
There are no covenants, agreements, schedules or material representations
relating to this Offer to Lease except for those set forth or incorporated
herein.
11. ACCEPTANCE
This Offer to Lease shall be open for acceptance by the Landlord until 1:00
p.m. MST, June 17, 1998 and if not accepted by then is null and void.
12. OPTION TO RENEW
Provided the Tenant is not in default of this Agreement or the Lease the
Tenant shall have an option to renew the Lease for a further one year
period at prevailing market rates.
Dated this 17th of June 1998.
TENANT: First International Financial Corporation
/s/ Brad Gunn
---------------------------
per:
The Landlord hereby accepts this offer to Renew the Lease this 17th day of June
1998.
LANDLORD: Daniel Pearse & Associates Ltd.
/s/ Tim White
---------------------------
per
<PAGE>
[FLOOR PLAN OF MacCOSHAM PLACE 215 - 10th AVENUE S.W. APPEARS HERE]
<PAGE>
EXHIBIT 6.9.2
OFFER TO EXTEND LEASE
BETWEEN: DANIEL PEARSE & ASSOCIATES LTD.
(hereinafter referred to as the Landlord)
AND: First International Financial Corporation
(hereinfafter referred to as the "Tenant")
The Tenant hereby offers to amend a lease through Kinross Properties Ltd., as
agent for the Landlord, certain premises more particularly described in the
following terms:
1. PREMISES
The tenant hereby offers to extend a lease with the Landlord for an area
of approximately 1906 square feet of Rentable Area at the municipal
address of #1-217 10th Avenue S.W. Calgary Alberta as shown on the
portion of the attached floor plan outlined in black, attached as
Schedule "A" and forming a part of this offer. This includes the 1489
square feet described in the current lease of June 25, 1998 and
additional square footage of 419 square feet as shown on Schedule "A" and
described in the amending agreement of June 16, 1998. Total square
footage is 1908 square feet.
2. TERM
The Term of the Lease shall be extended for SEVEN MONTHS on August 1,
1999 (hereinafter referred to as the "Commencement Date") and expiring
FEBRUARY 28, 2000 ("hereinafter referred to as the Termination Date").
3. NET RENT
Throughout the Term of the Lease the Tenant shall pay to the Landlord Net
Rent for the Premises calculated as follows:
$5.40 per square foot plus G.S.T.
ADDITIONAL RENT
The Tenant shall pay its proportionate share of Additional Rent as
contained in the current lease between the Landlord and the Tenant
Additional Rent is currently estimated at $6.00 per square foot per
annum. The Landlord will prepare an annual accounting of these charges
and any adjustment required shall be made at that time.
Payment of Net Rent and Additional rent shall be made in advance in equal
consecutive monthly payments on the first day of each calendar month
during the term of this Lease.
Tenant herewith acknowledges that $2,163.32 plus in additional rent is
due and payable and that the land lord and tenant shall consult as to the
method of repayment.
4. USE
The Premises are to be used and occupied as business offices for the
business of the Tenant.
5. DEPOSIT
Deposit of $1,177.00 is herewith acknowledged and shall be continued to
be held by the Landlord as security against the tenant's obligations
under the terms of the lease agreement.
<PAGE>
2.
6. LEASE
The current lease shall remain in force and effect with necessary
amendments as contained in this offer noted therein.
7. NOTICES
Notices may be provided to the Landlord and Tenant at the addresses
provided hereunder:
To the Tenant: First International Financial Corp.
#1 - 217 10th Avenue S.W.
Calgary, Alberta T2R 0A4
To the Landlord: Daniel Pearse & Associates Ltd.
Box 22102, Bankers Hall
Calgary, Alberta T2P 4J5
Either party may change its address of notification by providing written notice
to the other.
8. ASSIGNMENT AND SUBLETTING
The tenant shall not sublet or assign all or part of this accepted
Agreement to Lease or the Lease without the written permission of the
Landlord as described in the current Lease.
9. TIME OF THE ESSENCE
Time shall be of the essence hereof in all respects.
10. SOLE AGREEMENT
There are no covenants, agreements, schedules or material representations
relating to this Offer to Lease except for those set forth or
incorporated herein.
11. ACCEPTANCE
This Offer to Lease shall be open for acceptance by the Landlord until
1:00 p.m., MDST, May 17, 1999 and if not accepted by then is null and
void.
12. OPTION TO RENEW
Provided the Tenant is not in default of this Agreement or the Lease the
Tenant shall have an option to renew the Lease for a further one year
period at prevailing market rates.
Dated this _______________ of _______ 1998.
TENANT: First International Financial Corporation
________________________
per:
<PAGE>
3.
The Landlord hereby accepts this offer to Renew the Lease
this ____________ day of ________________ 19____.
LANDLORD: Daniel Pearse & Associates Ltd.
_______________________________
<PAGE>
EXHIBIT 6.10
SUBLEASE OF PREMISES KNOWN AS
SUITE 430, 3333 MICHELSON DRIVE
IRVINE, CALIFORNIA
This Sublease is executed on the 20/th/ day of February, 1999, by and
between SOUTH COAST FINANCIAL SECURITIES, INC., a California corporation,
hereinafter referred to as the "Sublessor", with its principal place of business
at 3333 Michelson Drive, Suite 430, Irvine, California, and FREEREALTIME.COM,
INC., a Colorado corporation, hereinafter referred to as the "Sublessee" with
its principal place of business at 11500 Olympic Boulevard, Suite 400, Los
Angeles, California 90064.
WHEREAS, JAMBOREE, LLC, a Delaware limited liability company, successor in
interest to CROW WINTHROP OPERATING PARTNERSHIP, hereinafter referred to as
"Lessor", and "Sublessor" executed a written lease agreement on December 16,
1993, which lease agreement was amended on May 31, 1997, hereinafter referred to
as the "Master Lease" which agreements are attached hereto as Exhibits 1 and 2,
respectively, and by this reference incorporated herein;
WHEREAS, by the terms of the "Master Lease" the real property described in
Paragraph 1 of this Sublease was leased to SOUTH COAST FINANCIAL SECURITIES,
INC., for a term commencing December 1993, and expiring on May 31, 1997. The
term of said "Master Lease" was extended until May 31, 2000, pursuant to that
Amendment first referenced above and attached hereto as Exhibit 2;
WHEREAS, "Sublessor" desires to sublease to "Sublessee" the property
currently occupied by "Sublessor" under the terms of the "Master Lease", and
"Sublessee" desires to lease that property from "Sublessor"; and,
WHEREAS, "Lessor" under the "Master Lease" shall consent to this Sublease
by executing the "Consent of Landlord to Sublease" which consent is attached
hereto as Exhibit 3, and by this reference incorporated herein.
THEREFORE, "Sublessor" and "Sublessee" agree as follows:
1. Subject to the terms, conditions, and covenants set forth in this
Sublease, "Sublessor" hereby leases to "Sublessee", and "Sublessee" hereby
leases from "Sublessor", the property located in Orange County, California known
as Suite 430, 3333 Michelson Drive, Irvine, California.
1
<PAGE>
2. This Sublease shall commence on February 22, 1999, and shall end on
May 30, 2000, or such earlier date on which the "Master Lease" terminates.
3. "Sublessee" shall pay to "Sublessor" a rental amount of
$6,200.00/month plus such other charges and payments calculated by "Landlord"
from time to time and which are designated and defined as "Rent" under "Master
Lease" which charges and payments include but are not limited to Tenant's Share
of Operating Expenses as determined by Article XXV of the "Master Lease", all of
which sums are to be paid in advance to the "Sublessor" on the first day of each
calendar month during the term of this Sublease. Currently these charges and
other payments which include the estimated amount of operating expenses is
$82.00/month. Rent shall be paid to "Sublessor" or "Sublessor's" designated
representative, ROBERT E. WITT, as directed by "Sublessor" orally or in writing
at any place designated by "Sublessor" or its designated representative.
4. "Sublessee" upon the execution of this Sublease shall deposit the sum
of $5,000.00, with "Sublessor" as and for a Security Deposit which "Sublessor"
shall then maintain in a segregated account. Any and all interest earned on said
Security Deposit during the term of this Sublease shall inure to the benefit of
"Sublessor". At the end of the term of this Sublease and after the "Lessor" has
determined the condition of the premises and settled its Security Deposit
account with "Sublessor" or "Sublessor's" designated agent, the Security Deposit
which is the subject of this Sublease or any remaining portion thereof shall be
returned to "Sublessee".
5. "Sublessee" agrees to refrain from utilizing the premises in any
manner inconsistent with the "Master Lease" or the "Lessor". "Sublessee" has
acknowledged that it intends to utilize the premises as general office space.
6. "Sublessee" agrees that "Sublessee's" act of taking possession will be
an acknowledgment that the subleased premises are in a tenantable and good
condition. "Sublessee" will, at "Sublessee's" own expenses, maintain the
subleased premises in a thorough state of repair and in good and safe condition.
7. This Sublease is subject to and subordinate to the terms and
conditions of the "Master Lease" as set forth on Exhibit 1, and the May 1997
amendment thereto set forth as Exhibit 2. Sublessee expressly assumes and agrees
to perform and comply with all the obligations required to be kept or performed
by the "Sublessee" as a tenant of Landlord under the provisions of the "Master
Lease" to the extent that they are applicable to the subleased premises.
Notwithstanding anything to the contrary contained herein, "Sublessee"
understands and agrees that the provisions of the Amendment to the "Master
Lease" of May 1997, as it refers to
2
<PAGE>
parking spaces is no longer applicable. However, "Sublessor" has been assured by
"Landlord" that the premises shall be provided with two (2) free spaces. This
change is a result of the installation of gates to the parking areas whereby a
parking fee shall become applicable. The timing and cost for such fee parking is
unknown to "Sublessor" at the time of the execution of this Sublease.
8. "Sublessee" agrees to obtain and maintain premises liability insurance
on the premises in accordance with that currently being provided by "Sublessor",
and all other insurance required to be maintained by "Sublessor" pursuant to
Article X of the "Master Lease", and to name "Sublessor" as a "loss payee" on
any such policy or policies maintained by "Sublessee".
9. If the "Master Lease" is terminated, this Sublease shall terminate
simultaneously and the "Sublessor" and "Sublessee" shall thereafter be released
from all obligations under this Sublease, and "Sublessor" shall refund to
"Sublessee" any unearned rent paid in advance and any remaining portion of
"Sublessee's" Security Deposit in accordance with Paragraph 4 above.
10. "Sublessee" agrees to purchase from "Sublessor" all furniture and
equipment remaining in the premises immediately prior to the commencement of
this Sublease as more fully described on Exhibit 4 which is attached hereto and
by this reference incorporated herein, for the sum of $5,000.00.
11. If any action or other proceeding arising out of this Sublease is
commenced by either party to this Sublease concerning the subleased premises,
then as between "Sublessor" and "Sublessee", the prevailing party shall be
entitled to receive from the other party, in addition to any other relief that
may be granted, the reasonable attorney's fees, costs, and expenses incurred in
the action or other proceeding by the prevailing party.
12. Any notices to be given hereunder by either party to the other party
must be effected either by fax delivery in writing or by mail, registered or
certified, postage prepaid with return receipt requested. Mailed notices shall
be addressed to each party at their respective address appearing in the
introductory paragraph of this Agreement, but each party may change their
respective address by written notice in accordance with this paragraph. Notices
delivered by fax will be deemed communicated as of actual receipt; mailed
notices will be deemed communicated as of two (2) days after mailing.
13. If any provision in this Sublease is held by a Court of competent
jurisdiction to be invalid, void, or unenforceable, the remaining provisions
will nevertheless continue in full force without being impaired or invalidated
in any way and effect shall be given to the intent manifested by any portion of
this Sublease held invalid or inoperative.
3
<PAGE>
14. This Sublease represents the complete and entire agreement of the
parties hereto and may only be amended upon thirty (30) days written approval of
all parties hereto.
15. Neither this Sublease nor any duties or obligations under this
Sublease may be assigned by either party without the prior written consent of
the other.
16. This Sublease will be governed by and construed in accordance with the
laws of the State of California.
EXECUTED AT Irvine, California on the date specified in the preamble of
this Sublease.
"SUBLESSOR"
SOUTH COAST FINANCIAL SECURITIES, INC.
a California corporation
BY: /s/ Robert E. Witt
-------------------------------------------
Robert E. Witt, President
"SUBLESSEE"
FREEREALTIME.COM, INC.
a Colorado corporation
BY: /s/ Brad Gunn
-------------------------------------------
Brad Gunn, President
4
<PAGE>
EXHIBIT 6.11
LEASE AGREEMENT
[LOGO OF BALBOA CAPITAL CORPORATION APPEARS HERE]
TO OUR VALUED CUSTOMER: This Lease has been written in "Plain English". When we
use the words you and your in the Lease, we mean you, our customer, which is the
Lessee indicated below. When we use the words we, us, and our in this Lease, we
mean the Lessor, Balboa Capital Corporation. Our address is 2010 Main Street,
Suite 1150, Irvine, CA 92614.
<TABLE>
_________________________________________________________________________________________________________________________________
<S> <C>
CUSTOMER INFORMATION: Lessee Name Lesse #
FreeRealTime.com, Inc. 001-07458-01
---------------------------------------------------------------------------------------------------------
Billing Street Address Tax ID #
3333 Michelson Drive, Suite 430, Irvine, CA 92612 98-017187
---------------------------------------------------------------------------------------------------------
Equipment Location(if different from above) Lessee Phone #
949-833-2959
- ---------------------------------------------------------------------------------------------------------------------------------
SUPPLIER INFORMATION: Company Name Contact
EIS Computers Inc. David VanBeveron
---------------------------------------------------------------------------------------------------------
Address Phone #
3222 Corte Malpaso, Suite 208, Camarillo, CA 93012 805-383-1466
- ---------------------------------------------------------------------------------------------------------------------------------
EQUIPMENT DESCRIPTION: Quantity Make/Model Serial Number
---------------------------------------------------------------------------------------------------------
See exhibit "A" attached hereto and make a part hereof
- ---------------------------------------------------------------------------------------------------------------------------------
END OF LEASE: [X] Fair Market Value Purchase Option (See Section 14)
- ---------------------------------------------------------------------------------------------------------------------------------
TERM AND PAYMENT: Monthly Rent Base Term in Deposit Deposit Applied To
(Plus applicable taxes) Months
$2,084.50 36 $4,169.00 First & last monthly rentals;
Documentation Fees: $199.00
- ---------------------------------------------------------------------------------------------------------------------------------
INSURANCE & TAXES: You are required to provide and maintain insurance related to the Equipment, and to pay any property,
use and other taxes related to this Lease or the Equipment. (See sections 6 and 8 on the back of this
Lease.) If you are tax-exempt, you agree to furnish us with satisfactory evidence of your exemption.
You further agree to pay reasonable service fees assessed for processing of insurance premiums and taxes.
- ---------------------------------------------------------------------------------------------------------------------------------
TERMS & CONDITIONS: BY SIGNING THIS LEASE: (i) YOU ACKNOWLEDGE THAT YOU HAVE READ AND UNDERSTAND THE TERMS AND CONDITIONS
ON EACH PAGE OF THIS LEASE, (ii) YOU AGREE THAT THIS LEASE IS A NET LEASE THAT YOU CANNOT TERMINATE OR
CANCEL, YOU HAVE AN UNCONDITIONAL OBLIGATION TO MAKE ALL PAYMENTS DUE UNDER THIS LEASE, AND YOU CANNOT
WITHHOLD, SET OFF OR REDUCE SUCH PAYMENTS FOR ANY REASON, (iii) YOU WILL USE THE EQUIPMENT ONLY FOR
BUSINESS PURPOSES, (iv) YOU WARRANT THAT THE PERSON SIGNING THIS LEASE FOR YOU HAS THE AUTHORITY TO
DO SO AND TO GRANT THE POWER OF ATTORNEY SET FORTH IN SECTION 9 OF THIS LEASE, (v) YOU CONFIRM THAT
YOU DECIDED TO ENTER INTO THIS LEASE RATHER THAN PURCHASE THE EQUIPMENT FOR THE TOTAL CASH PRICE, AND
(vi) YOU AGREE THAT THIS LEASE WILL BE GOVERNED BY THE LAWS OF THE STATE OF CALIFORNIA AND YOU CONSENT
TO JURISDICTION IN THE COUNTY OF ORANGE, YOU EXPRESSLY WAIVE ANY RIGHTS TO A TRIAL BY JURY.
</TABLE>
______________________________________________________________________________
LESSOR: Balboa Capital Corporation Lessee: FreeRealTime.com, Inc.
By: By: /s/ Brad Gunn
__________________________ ---------------------------
Vice President Brad Gunn, President
Date: Date: March 25, 1999
______________________________________________________________________________
THIS LEASE IS SUBJECT TO APPROVAL AND ACCEPTANCE BY US AND SHALL NOT BECOME
BINDING UNTIL SIGNED BY US.
1. LEASE; DELIVERY AND ACCEPTANCE. You agree to lease the equipment described on
the front of this lease agreement (collectively "Equipment") on the terms and
conditions shown on the front and back of this lease ("Lease"). You agree to
inspect the Equipment and execute a Delivery and Acceptance Certificate after
the Equipment has been delivered and after you are satisfied the Equipment is
satisfactory in every respect. If you fail to sign a Delivery and Acceptance
Certificate within 10 days of delivery of the Equipment, we have the option of
either beginning the Lease or terminating the Lease. If we begin the Lease you
shall be bound by all terms and conditions of the Lease and you will perform all
obligations as required. If we terminate the Lease, you shall pay us on demand
all sums paid or owing by us to the supplier(s) of the Equipment and you shall
indemnify and hold us harmless from any claims made by the supplier(s) arising
out of or relating to the Equipment or the Lease.
<PAGE>
2. NO WARRANTIES. We are leasing the Equipment to you "AS-IS". YOU ACKNOWLEDGE
THAT WE DO NOT MANUFACTURE THE EQUIPMENT, WE DO NOT REPRESENT THE MANUFACTURER
OR THE SUPPLIER AND YOU HAVE SELECTED THE EQUIPMENT AND SUPPLIER BASED UPON YOUR
OWN JUDGMENT. WE MAKE NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE. YOU AGREE THAT
REGARDLESS OF CAUSE, WE ARE NOT RESPONSIBLE FOR AND YOU WILL NOT MAKE ANY CLAIM
AGAINST US FOR ANY DAMAGES, WHETHER CONSEQUENTIAL, DIRECT, SPECIAL OR INDIRECT.
YOU AGREE THAT NEITHER SUPPLIER NOR ANY SALESPERSON, EMPLOYEE OR AGENT OF
SUPPLIER IS OUR AGENT OR HAS ANY AUTHORITY TO SPEAK FOR US OR TO BIND US IN ANY
WAY. We transfer to you for the term of this Lease any warranties made by the
manufacturer of Supplier under any purchase or supply contract.
3. TERM. This Lease shall become effective upon acceptance by us by signing
and dating this Lease and the term for this Lease shall begin on the day the
Equipment has been delivered to and is usable by you ("Commencement Date"). The
base term of this Lease shall begin on the first day of the month following the
Commencement Date and terminate upon the expiration of the number of months
stated under Lease Term.
4. LEASE PAYMENT. You shall pay to us the monthly Lease Payment, in advance,
for each month or any part thereof the Lease is in effect. The first such
payment shall be made on the first day of the month following the Commencement
Date. A prorata portion of the Lease Payment based on a daily charge of one-
thirtieth (1/30) of the Lease Payment calculated from the Commencement Date to
the end of the month shall be due and payable at the Commencement Date. Lease
Payments and other sums due which are not paid within ten (10) days of their due
date shall be subject to a late charge equal to ten percent (10%) of each
delayed payment (or such lesser rate as is the maximum rate allowable under
applicable law). You agree that if this Lease is not commenced for any reason
beyond our control, then we shall retain your deposit to cover our expenses
associated with approving this lease. We have the right, but not the obligation,
to electronically withdraw funds from your bank account to pay for any unpaid
lease payments, taxes, fees, charges and assessments. You shall provide us with
any bank account information we request in order to process electronic payments.
You may revoke our authorization to electronically to withdraw funds by giving
us 10 days written notice. You agree to pay us a fee of $25.00 for each
occurrence of a dishonored check or electronic payment.
5. EQUIPMENT LOCATION; USE AND REPAIR; RETURN. You will keep and use the
Equipment only at the Equipment Location shown on the front of this Lease. You
may not move the Equipment without our prior written consent. At your own cost
and expense, you will keep the Equipment eligible for any manufacturer's
certification, in compliance with all applicable laws and in good condition,
except for ordinary wear and tear. You will not make any alterations, additions
or replacements to the Equipment without our prior written consent. All
alterations, additions and replacements will become part of the Equipment and
our property at no cost or expense to us. We may inspect the Equipment at any
reasonable time. Unless you purchase the Equipment in accordance with this
Lease, at the end of this Lease you will immediately deliver the Equipment to us
in as good condition as when you received it, except for ordinary wear and tear,
to any place in the United States that we tell you. In the event the Equipment
is not in good working condition when you return it, you agree to pay for any
repairs, changes, alternations or upgrades necessary to return the Equipment to
good working condition. You will pay all expenses of deinstalling, crating and
shipping, and you will insure the Equipment for its full replacement value
during shipping.
6. TAXES AND FEES. You will pay when due, either directly to us upon our
demand to any taxing authority, all taxes, fines and penalties relating to this
Lease or the Equipment that are now or in the future assessed or levied by any
state, local or other government authority. We will file all personal property,
use or other tax returns (unless we notify you otherwise in writing) and you
agree to pay us a fee for making such filings. We do not have to contest any
taxes, fines or penalties. You will pay estimated property taxes with each Lease
Payment, or annually, as invoiced. You will also pay any reasonable fees
associated with the inspection of the leased equipment.
7. LOSS OR DAMAGE. As between you and us, you are responsible for any loss,
theft or destruction of, or damage to, the Equipment (collectively "Loss") from
any cause at all, whether or not insured, until the equipment is delivered to us
at the end of this Lease. You are required to make all Lease Payments even if
there is a Loss. At time of Loss or Damage, at our option, you will either (a)
repair the Equipment so that the equipment is in good condition and working
order, eligible for any manufacturer's certification, or (b) pay us the amounts
specified in Section 11b.
8. INSURANCE. You will provide and maintain at your expense (a) property
insurance against the loss, theft or destruction of, or damage to, the Equipment
for its full replacement value, naming us as loss payee, and (b) public
liability and third party property insurance, naming us as an additional
insured. You will give us certificates or other evidence of such insurance when
requested. Such insurance will be in a form, amount and with companies
acceptable to us, and will provide that we will be given 30 days advance notice
of any cancellation or material change of such insurance. If you do not give us
evidence of insurance acceptable to us, we have the right, but not the
obligation, to obtain insurance covering our interest in the Equipment for the
term of this Lease, including any renewal or extensions, from an insurer of our
choice. We may add the costs of acquiring and maintaining such insurance and our
fees for our service in placing and maintaining such insurance (collectively,
"Insurance Charge") to the amounts due from you under this Lease. You will pay
the Insurance Charge in equal installments allocated to the remaining Lease
Payments. If we purchase insurance, you will cooperate with our insurance agent
with respect to the placement of insurance and processing of claims. Nothing in
this Lease will create an insurance relationship of any type between us and any
other person. You acknowledge that we are not required to secure or maintain any
insurance, and we will not be liable to you if we terminate any insurance
coverage that we arrange. If we replace or renew any insurance coverage, we are
not obligated to provide replacement or renewal coverage under the same terms,
costs, limits, or conditions as the previous coverage. If we replace or renew
any insurance coverage you agree to pay any reasonable fee assessed for the
processing, maintainance, billing and handling of the policy.
9. TITLE; RECORDING. We are the owner of and will hold title to the Equipment.
You will keep the Equipment free of all liens and encumbrances. Unless the
Purchase Option price shown on the front of this Lease is $101 or less, you
agree that this transaction is a true lease. However, if this transaction is
deemed to be a lease intended for security, you grant us a purchase money
security interest in the Equipment (including any replacements, substitutions,
additions, attachments and proceeds). You will deliver us signed financing
statements or other documents we request to protect our interest in the
Equipment. YOU AUTHORIZE US TO FILE A COPY OF THIS LEASE AS A FINANCING
STATEMENT AND APPOINT US OR OUR DESIGNEE AS YOUR ATTORNEY-IN-FACT TO EXECUTE AND
FILE, ON YOUR BEHALF, FINANCING STATEMENTS COVERING THE EQUIPMENT.
INITIAL ________
<PAGE>
10. DEFAULT. Each of the following is a "Default" under this Lease: (a) you fail
to pay any Lease Payment or any other payment, fee, charge, cost or assessment
within 10 days of its due date, (b) you do not perform any of your other
obligations under this Lease or under any other agreement with us and this
failure continues for 10 days after we have notified you of it, (c) you become
insolvent, you dissolve or are dissolve or are dissolved, or you assign your
assets for the benefit or are disolved, or you assign your assets for the
benefit of your creditors, or enter (voluntarily or involuntarily) any
bankruptcy or reorganization proceeding; (d) any guarantor of this Lease dies,
does not perform their obligations under the guaranty, or becomes subject to one
of the events listed in clause (c) above.
11. REMEDIES. If a Default occurs, we may do one or more of the following: (a)
we may cancel or terminate this Lease or all other agreements that we have
entered into with you; (b) we may require you to immediately pay us, as
compensation for loss of our bargain and not as a penalty, a sum equal to (i)
the present value of all unpaid Lease Payments for the remainder of the term
plus the present value of our anticipated residual interest in the Equipment,
each discounted at 5% per year, compounded monthly, plus (ii) all other amounts
due or that become due under this Lease; (c) we may require you to deliver the
Equipment to us as set forth in Section 5; (d) we or our agent may peacefully
repossess the Equipment without court order and you will not make any claims
against us for damages or trespass or any other reason; and (e) we may exercise
any other right or remedy available at law or in equity. You agree to pay all of
our costs of enforcing our rights against you, including reasonable attorneys'
fees. If we take possession of the Equipment, we may sell or otherwise dispose
of it with or without notice, at a public or private sale, and apply the net
proceeds (after we have deducted all costs related to the sale or disposition of
the Equipment) to the amounts that you owe us. You agree that if notice of sale
is required by law to be given, 10 days' notice shall constitute reasonable
notice. You will remain responsible for any amounts that are due after we have
applied such net proceeds.
12. FINANCE LEASE STATUS. You agree that if Article 2A of the Uniform Commercial
Code applies to this Lease, this Lease will be considered a "finance lease" as
that term is defined in Article 2A. By signing this Lease, you agree that either
(a) you have reviewed, approved, and received, a copy of the Supply Contract or
(b) that we have informed you of the identity of the Supplier, that you have
rights under the Supply Contract, and that you may contact the Supplier for a
description of those right. TO THE EXTENT PERMITTED BY APPLICABLE LAW, YOU WAIVE
ANY AND ALL RIGHTS AND REMEDIES CONFERRED UPON A LESSEE BY ARTICLE 2A.
13. ASSIGNMENT, YOU MAY NOT ASSIGN, SELL, TRANSFER OR SUBLEASE THE EQUIPMENT OR
YOUR INTEREST IN THIS LEASE. We may, with or without notifying you, sell,
assign, or transfer this Lease or our rights in the Equipment. You agree that
the new owner will have the same rights and benefits that we have now under this
Lease but not our obligations. The rights of the new owner will not be subject
to any claim, defense or set-off that you may have against us.
14. PURCHASE OPTION; AUTOMATIC RENEWAL. If no Default exists under this Lease,
you will have the option at the end of the original or any renewal term to
purchase all (but not less than all) of the Equipment at the Purchase Option
price shown on the front of this Lease, plus any applicable taxes. Unless the
Purchase Option price is $101 or less, you must give at least 180 days prior
written notice via certified mail before the end of the original term that you
will purchase the Equipment or that you will deliver it to us. If you do not
give us such written notice or if you do not purchase or deliver the Equipment
in accordance with the terms and conditions of the Lease, this Lease will
automatically renew for a 12 month term and thereafter renew for successive one
month terms until you deliver the Equipment to us. During such renewal (s) the
Lease Payment will remain the same. We may concel the automatic renewal by
sending you written notice 10 days prior to such renewal term. If the Fair
Market Value Purchase Option has been selected, we will use our reasonable
judgment to determine the Equipment's fair market value. Upon payment of the
Purchase Option price, and if no Default exists, we shall transfer our interest
in the Equipment to you "AS IS, WHERE IS" without any representation or warranty
whatsoever and this Lease will terminate. In the event the Purchase Option price
is $101 or less and you do not remit the full Purchase Option price and any and
all due taxes, fees, charges or assessments, this Lease will automatically renew
for a 3 month term and thereafter renew for successive one month terms until you
remit all amounts due.
15. INDEMINIFICATION. You are responsible for any losses, damages, penalties,
claims, suits and actions (collectively "Claims"), whether based on a theory of
strict liability or otherwise caused by or related to (a) the manufacture,
installation, ownership, use, lease, possession, or delivery of the Equipment or
(b) any defects in the Equipment. You agree to reimburse us for and if we
request, to defend us against, any Claims.
16. CREDIT INFORMATION, YOU AUTHORIZE US OR ANY OF OUR AFFILIATES TO OBTAIN
CREDIT BUREAU REPORTS, AND MAKE OTHER CREDIT INQUIRES THAT WE DETERMINE ARE
NECESSARY, ON YOUR WRITTEN REQUEST, WE WILL INFORM YOU WHETHER WE HAVE REQUESTED
A CONSUMER CREDIT REPORT AND THE NAME AND ADDRESS OF ANY CONSUMER CREDIT
REPORTING AGENCY THAT FURNISHED A REPORT. YOU ACKNOWLEDGE THAT WITHOUT FURTHER
NOTICE WE MAY USE OR REQUEST ADDITIONAL CREDIT BUREAU REPORTS TO UPDATE OUR
INFORMATION SO LONG AS YOUR OBLIGATIONS TO US ARE OUTSTANDING.
17. MISCELLANEOUS. You agree that the terms and conditions contained in this
Lease make up the entire agreement between you and us regarding the lease of the
Equipment. This Lease in not binding on us until we sign it. Any change in the
terms and conditions of this Lease must be in writing and signed by us. You
agree, however, that we are authorized without notice to you, to supply missing
information or correct obvious errors in this Lease. If we delay or fail to
enforce any of our rights under this Lease, we will still be entitled to enforce
those rights at a later time. All notices shall be given in writing by the party
sending the notice and shall be effective when deposited in the U.S Mail and
shall be made via certified mail where noted in this Lease, addressed to the
other party receiving the notice at its address shown on the front of this Lease
(or to any other address specified by that party in writing) with postage
prepaid. All of our rights and indemnities will survive the termination of this
Lease. It is the express intent of the parties not to violate any applicable
usury laws or to exceed the maximum amount of time price differential or
interest, as applicable, permitted to be charged or collected by applicable law,
and any such excess payment will be applied to Lease Payments in inverse order
of maturitiy, and any remaining excess will be refunded to you. If you do not
perform any of your obligations under this Lease, we have the right, but not the
obligation, to take any action or pay any amount we believe are necessary to
protect our interest. You agree to reimburse us immediately upon our demand for
any such amounts that we pay. If more than one Lessee has signed this Lease,
each of you agree that your liability is joint and several.
18. This document was sent electronically. I hereby warrant that this document
has not been altered in any way. Any alteration or revision to any part or this
or any attached documents will make all documents non-binding and void.
INITIAL __________
<PAGE>
EXHIBIT `A'
EQUIPMENT DESCRIPTION
The following invoice(s) are referenced, and hereby incorporated, for the
purpose of describing the equipment subject to lease agreement # 001-07458-01.
By signing below, I, the lessee, acknowledge that I chose to lease the equipment
listed on the invoice(s) per the payment schedule and the terms and conditions
set out in lease agreement # 001-07458-01, which is the governing document to
this lease regardless of the price and terms (if any) indicated on the
invoice(s).
________________________________________________________________________________
EQUIPMENT INVOICE# DATE VENDOR
LA#: 001-07458-01
LESSEE: FreeRealTime.com, Inc.
By: _________________________
Brad Gunn, President
DATE: March 25, 1999
--------------
<PAGE>
Exhibit 6.12
EXODUS COMMUNICATIONS, INC.
MASTER SERVICES AGREEMENT
THIS MASTER SERVICES AGREEMENT (the "Agreement") between Exodus Communications,
Inc. ("Exodus") and _____________________________________("Customer") is made
effective as of date indicated below the Customer signature of the Initial Order
Form submitted by Customer and accepted by Exodus.
1. Overview.
1.1 General. This Agreement states the terms and conditions by which
Exodus will deliver and Customer will receive any or all of the services
provided by Exodus, including facilities, bandwidth, managed services and
professional services. If Customer purchases any equipment from Exodus (as
indicated in the Order Form(s) described below), the terms and conditions by
which Customer purchases and Exodus sells such equipment are stated in Addendum
A attached hereto. Only this Section 1.1 and Addendum A shall apply to the
purchase and sale of equipment. The specific services and/or products to be
provided hereunder are identified in the Order Form(s) submitted by Customer and
accepted by Exodus and described in detail in the Specification Sheets and
Statements of Work attached to each Order Form. Each Order Form (with the
attached Specification Sheet(s) and Statement(s) of Work) submitted, accepted
and executed by both parties is hereby incorporated by reference into this
Agreement. This Agreement is intended to cover any and all Services ordered by
Customer and provided by Exodus. In the event that any terms set forth herein
apply specifically to a service not ordered by Customer, such terms shall not
apply to Customer.
1.2 Definitions.
(a) "Customer Area" means that portion(s) of the Internet Data
Center(s) made available to Customer for the placement of Customer Equipment
and/or Exodus Supplied Equipment and use of the Service(s).
(b) "Customer Equipment" means the Customer's computer hardware, not
including stored data, and other tangible equipment placed by Customer in the
Customer Area. The Customer Equipment shall be identified on Exodus' standard
customer equipment list completed and delivered by Customer to Exodus, as
amended in writing from time to time by Customer.
(c) "Customer Registration Form" means the list that contains the
names and contact information (e.g. pager, email and telephone numbers) of
Customer and the individuals authorized by Customer to enter the Internet Data
Center(s) and Customer Area, as delivered by Customer to Exodus and amended in
writing from time to time by Customer.
(d) "Customer Technology" means Customer's proprietary technology,
including Customer's Internet operations design, content, software tools,
hardware designs, algorithms, software (in source and object forms), user
interface designs, architecture, class libraries, objects and documentation
(both printed and electronic), know-how, trade secrets and any related
intellectual property rights throughout the world (whether owned by Customer or
licensed to Customer from a third party) and also including any derivatives,
improvements, enhancements or extensions of Customer Technology conceived,
reduced to practice, or developed during the term of this Agreement by Customer.
(e) "Exodus Supplied Equipment" means the computer hardware,
software and other tangible equipment and intangible computer code contained
therein to be provided by Exodus for use by Customer as set forth on the Order
Form(s).
(f) "Exodus Technology" means Exodus' proprietary technology,
including Exodus Services, software tools, hardware designs, algorithms,
software (in source and object forms), user interface designs, architecture,
class libraries, objects and documentation (both printed and electronic),
network designs, know-how, trade secrets and any related intellectual property
rights throughout the world (whether owned by Exodus or licensed to Exodus from
a third party) and also including any derivatives, improvements, enhancements or
extensions of Exodus Technology conceived, reduced to practice, or developed
during the term of this Agreement by either party that are not uniquely
applicable to Customer or that have general applicability in the art.
(g) "Initial Term" means the minimum term for which Exodus will
provide the Service(s) to Customer, as indicated on the Order Form(s). Except as
otherwise expressly provided in this Agreement, Exodus is obligated to provide
and Customer is obligated to pay for each Service through its Initial Term and
any Renewal Term.
(h) "Internet Data Center(s)" means any of the facilities used by
Exodus to provide the Service(s).
(i) "Professional Services" means any non-standard professional or
consulting service provided by Exodus to Customer as more fully described in a
Statement of Work.
(j) "Renewal Term" means any service term following the Initial Term,
as specified in Section 2.2.
(k) "Representatives" mean that the individuals identified in writing
on the Customer Registration Form and authorized by Customer to enter the
Internet Data Center(s) and the Customer Area.
(l) "Rules and Regulations" means the Exodus general rules and
regulations governing Customer's use of Services, including, but not limited to,
online conduct, and the obligations of Customer and its Representatives in the
Internet Data Centers.
(m) "Service(s)" means the specific service(s) provided by Exodus as
described on the Order Form(s).
(n) "Service Commencement Date" means the date Exodus will begin
providing the Service(s) to Customer, as indicated in a Notice of Service
Commencement delivered by Exodus to Customer.
(o) "Service Level Warranty" is described and defined in Section 5.2
below.
(p) "Specification Sheet" means the detailed description for each
Service, other than Professional Services, ordered by Customer that is attached
to an Order Form(s).
(q) "Statement of Work" means the detailed description(s) of the
Professional Services attached to (an) Order Form(s).
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(r) "Work" means any tangible deliverable provided by Exodus to Customer
as described in the Statement of Work for any Professional Service.
2. DELIVERY OF SERVICES; TERMS; FEES.
2.1 Delivery of Services.
(a) General. By submitting an Order Form, Customer agrees to take and
pay for, and, by accepting the Order Form, Exodus agrees to provide, the
Service(s) during the Initial Term and for any Renewal Term, as specified in
paragraph 2.2(b) below.
(b) Delivery of Supplemental Services. The purpose of this provision
is to enable Exodus to provide Customer with certain limited services and
equipment needed by Customer on a "one-off" or emergency basis ("Supplemental
Services") where such services are not included within the scope of the services
as described in the Specification Sheets and/or Statement of Work. Supplemental
Service may include, as an example, a request from Customer to Exodus via
telephone that Exodus immediately replace a problem Customer server with an
Exodus server for a temporary period of time. Exodus shall notify
Customer of the fees for any Supplemental Services requested by Customer and
obtain Customer's approval prior to providing such services. In the event Exodus
reasonably determines that Supplemental Services are required on an emergency
basis, Exodus may provide such services without the consent of Customer,
thereafter provide notice of the services to Customer and bill Customer a
reasonable fee for such services. Customer agrees to pay Exodus the fees charged
by Exodus for Supplemental Services. Customer will be charged for Supplemental
Services in the invoice issued the month following delivery of the services.
Exodus will use commercially reasonable efforts to provide Supplemental
Services, provided that Exodus has no obligation to determine the need for or
provide Supplemental Services. All Supplemental Services provided pursuant to
this paragraph 2.1(b) are provided on an "as-is" basis and exclude warranties of
any kind, whether express or implied.
2.2 Term.
(a) Term Commencement. The term for each Service will commence on the
Service Commencement Date indicated in the Notice of Service Commencement
delivered by Exodus to Customer when Exodus begins providing each Service to
Customer.
(b) Renewal Term(s). Each Service will continue automatically for
additional terms equal to the Initial Term ("Renewal Term") unless Customer
notifies Exodus in writing at least thirty (30) days prior to the end of the
Initial Term or a Renewal Term, as applicable, that it has elected to terminate
such Service, in which case such Service shall terminate at the end of such
term. The termination of any Service will not affect Customer's obligations to
pay for other Service(s). Notwithstanding the foregoing, Exodus may change or
increase the prices it charges Customer for any Service at any time after the
Initial Term effective thirty (30) days after providing notice to Customer. This
paragraph 2.2(b) does not apply to Exodus Supplied Equipment which is only
provided for the Initial Term.
3. FEES AND PAYMENT TERMS.
3.1 Fees and Expenses. Customer will pay all fees due according to the
prices and terms listed in the Order Form(s). The prices listed in the Order
Form(s) will remain in effect during the Initial Term indicated in the Order
From(s) and will continue thereafter, unless modified in accordance with
Section 2.2 Customer also agrees to reimburse Exodus for actual out-of-pocket
reasonable expenses incurred in providing Professional Services to Customer.
3.2 Payment Terms. On the Service Commencement Date for each Service,
Customer will be billed an amount equal to all non-recurring charges indicated
in the Order Form and the monthly recurring charges for the first month of the
term. Monthly recurring charges for all other months will be billed in advance
of the provision of Services. All other charges for Services received and
expenses incurred for Professional Services during a month (e.g. bandwidth usage
fees, travel expenses) will be billed at the end of the month in which the
Services were provided. Payment for all fees is due upon receipt of each Exodus
invoice. All payments will be made in the United States in U.S. dollars.
3.3 Late Payments. Any payment not received within thirty (30) days of the
invoice date will accrue interest at a rate of one and one half percent (1 1/2%)
per month, or the highest rate allowed by applicable law, whichever is lower. If
Customer is delinquent in its payments, Exodus may, upon written notice to
Customer, modify the payment terms to require full payment before the provision
of all Services and Exodus Supplied Equipment or require other assurances to
secure Customer's payment obligations hereunder.
3.4 Taxes. All fees charged by Exodus for Services are exclusive of all
taxes and similar fees now in force or enacted in the future imposed on the
transaction and/or the delivery of Services, all of which Customer will be
responsible for and will pay in full, except for taxes based on Exodus' net
income.
4. CONFIDENTIAL INFORMATION; INTELLECTUAL PROPERTY OWNERSHIP; LICENSE GRANTS.
4.1 Confidential Information.
(a) Nondisclosure of Confidential Information. Each party
acknowledges that it will have access to certain confidential information of the
other party concerning the other party's business plans, customers, technology,
and products, and other information held in confidence by the other party
("Confidential Information"). Confidential Information will include all
information in tangible or intangible form that is marked or designated as
confidential or that, under the circumstances of its disclosure, should be
considered confidential. Confidential Information will also include, but not be
limited to, Exodus Technology, Customer Technology, and the terms and conditions
of this Agreement. Each party agrees that it will not use in any way, for its
own account or the account of any third party, except as expressly permitted by
or required to achieve the purposes of, this Agreement, nor disclose to any
third party (except as required by law or to that party's attorneys, accountants
and other advisors as reasonably necessary), any of the other party's
Confidential Information and will take reasonable precautions to protect the
confidentiality of such information, at least as stringent as it takes to
protect its own Confidential Information.
(b) Exceptions. Information will not be deemed Confidential
Information hereunder if such information: (i) is known to the receiving party
prior to receipt from the disclosing party directly or indirectly from a source
other than one having an obligation of confidentiality to the disclosing party;
(ii) becomes known (independently of disclosure by the disclosing party) to the
receiving party directly or indirectly from a source other than one having an
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obligation of confidentiality to the disclosing party; (iii) becomes publicly
known or otherwise ceases to be secret or confidential, except through a breach
of this Agreement by the receiving party; or (iv) is independently developed by
the receiving party. The receiving party may disclose Confidential Information
pursuant to the requirements of a governmental agency or by operation of law,
provided that it gives the disclosing party reasonable prior written notice
sufficient to permit the disclosing party to contest such disclosure.
4.2 Intellectual Property.
(a) Ownership. Except for the rights expressly granted herein and the
assignment expressly made in paragraph 4.4(a), this Agreement does not transfer
from Exodus to Customer any Exodus Technology, and all right, title and interest
in and to Exodus Technology will remain solely with Exodus. Except for the
rights expressly granted herein, this Agreement does not transfer from Customer
to Exodus any Customer Technology, and all right, title and interest in and to
Customer Technology will remain solely with Customer. Exodus and Customer each
agrees that it will not, directly or indirectly, reverse engineer, decompile,
disassemble or otherwise attempt to derive source code or other trade secrets
from the other party.
(b) General Skills and Knowledge. Notwithstanding anything to the
contrary in this Agreement, Exodus will not be prohibited or enjoined at any
time by Customer from utilizing any skills or knowledge of a general nature
acquired during the course of providing the Services, including, without
limitation, information publicly known or available or that could reasonably be
acquired in similar work performed for another customer of Exodus.
4.3 License Grants.
(a) By Exodus. Exodus hereby grants to Client a nonexclusive,
royalty-free license, during the term of this Agreement, to use the Exodus
Technology solely for purposes of using the Service(s). Customer shall have no
right to use the Exodus Technology for any purpose other than using the
Service(s).
(b) By Customer. Customer agrees that if, in the course of performing
the Service(s). It is necessary for Exodus to access Customer Equipment and use
Customer Technology. Exodus is hereby granted and shall have a nonexclusive,
royalty-free license, during the term of this Agreement, to use the Customer
Technology solely for the purposes of delivering the Service(s) to Customer.
Exodus shall have no right to use the Customer Technology for any purpose other
than providing the Service(s).
4.4 Professional Services; Assignments and License.
(a) Assignment of Work. Effective at the time Exodus receives full
and final payment for the Professional Service, Exodus assigns to Customer all
right, title and interest, including all intellectual property rights, in the
Work, provided, however, that such assignment does not include the Exodus
Technology.
(b) License Grant. Commencing at the time Exodus receives full and
final payment for the Work, Exodus grants to Customer a non-exclusive,
non-transferable, royalty free, perpetual license to use the Exodus Technology
incorporated into the Work solely in connection with the use of the Work as a
whole. To the extent that Customer or its employees or contractors participate
in the creation or development of Exodus Technology, Customer, on behalf of
itself and its employees and contractors, hereby assigns to Exodus all rights,
title and interest, including all intellectual property rights in, the Exodus
Technology.
5. EXODUS REPRESENTATIONS AND WARRANTIES.
5.1 General
(a) Authority and Performance of Exodus. Exodus represents and
warrants that (i) it has the legal right to enter into this Agreement and
perform its obligations hereunder, and (ii) the performance of its obligations
and delivery of the Services to Customer will not violate any applicable U.S.
laws or regulations, including OSIIA requirements, or cause a breach of any
agreements with any third parties. In the event of a breach of the warranties
set forth in this paragraph 5.1(a), Customer's sole remedy is termination
pursuant to Section 10 of the Agreement.
(b) Year 2000 Performance Compliance. Exodus warrants that none of the
computer hardware and software systems and equipment incorporated into or
utilized in the delivery of the Services contains any date dependent routines or
logic which will fail to operate correctly after December 31, 1999, by reason of
such date dependence; provided, however, that no representation or warranty is
made as to the adequacy of any Customer or third party service provider hardware
or software used in connection with the Services. In the event of any breach of
the warranties under this paragraph 5.1(b), Customer's sole remedy is
termination pursuant to Section 10 of the Agreement.
5.2 Service Level Warranty. In the event that Customer experiences any of
the service performance issues defined in this Section 5.2 as a result of
Exodus' failure to provide bandwidth or facility services, Exodus will, upon
Customer's request in accordance with paragraph 5.2(d) below, credit Customer's
account as described below (the "Service Level Warranty"). The Service Level
Warranty shall not apply to any services other than bandwidth and facility
services, and, shall not apply to performance issues (i) caused by factors
outside of Exodus' reasonable control; (ii) that resulted from any actions or
inactions of Customer or any third parties; or (iii) that resulted from
Customer's equipment and/or third party equipment (not within the sole control
of Exodus).
(a) Service Warranty Definitions. For purposes of this Agreement, the
following definitions shall apply only to the Services (not including
Professional Services).
(i) "Downtime" shall mean sustained packet loss in
excess of fifty percent (50%) within Exodus' U.S. network for fifteen (15)
consecutive minutes due to the failure of Exodus to provide Service(s) for such
period. Downtime shall not include any packet loss or network unavailability
during Exodus' scheduled maintenance of the Internet Data Centers, network and
Service(s), as described in the Rules and Regulations.
(ii) "Excess Latency" shall mean transmission latency in excess
of one hundred twenty (120) millisecconds round trip time between any two points
within Exodus' U.S. network.
(iii) "Excess Packet Loss" shall mean packet loss in excess of
one percent (1%) between any two points within Exodus' U.S. network.
(iv) "Performance Problem" shall mean Excess Packet Loss
and/or Excess Latency.
(v) "Service Credit" shall mean an amount equal to the pro-
rata monthly recurring connectivity charges (i.e., all monthly recurring
bandwidth-related charges) for one (1) day of Service.
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(b) Downtime Periods. In the event Customer experiences Downtime,
Customer shall be eligible to receive from Exodus a Service Credit for each
Downtime period. Examples: If Customer experiences one Downtime period, it shall
be eligible to receive one Service Credit. If Customer experiences two Downtime
periods, either from a single event or multiple events, it shall be eligible to
receive two Service Credits.
(c) Performance Problem; Packet Loss and Latency. In the event that
Exodus discovers or is notified by Customer that Customer is experiencing a
Performance Problem, Exodus will take all actions necessary to determine the
source of the Performance Problem.
(i) Time to Discover Source of Performance Problem; Notification
of Customer. Within two (2) hours of discovering or receiving notice of the
Performance Problem, Exodus will determine whether the source of the Performance
Problem is limited to the Customer Equipment and the Exodus equipment connecting
the Customer Equipment to the Exodus LAN. If Exodus determines that the Customer
Equipment and Exodus connection are not the source of the Performance Problem,
Exodus will determine the source of the Performance Problem within an additional
two (2) hour period. In any event, Exodus will notify Customer of the source of
the Performance Problem within sixty (60) minutes of identifying the source.
(ii) Remedy of Packet Loss and Latency. If the source of the
Performance Problem is within the sole control of Exodus, Exodus will remedy the
Performance Problem within two (2) hours of determining the source of the
Performance Problem. If the source of and remedy to the Performance Problem
reside outside of the Exodus LAN or WAN, Exodus will use commercially reasonable
efforts to notify the party(ies) responsible for the source of the Performance
Problem and cooperate with it(them) to resolve such problem as soon as possible.
(iii) Failure to Determine Source and/or Remedy. In the event
that Exodus (A) is unable to determine the source of the Performance Problem
within the time periods described in subsection (i) above and/or; (B) Exodus is
the sole source of the Performance Problem and is unable to remedy such
Performance Problem within the time period described in subsection (ii) above,
Exodus will deliver a Service Credit to Customer for each two (2) hour period in
excess of the time periods for identification and resolution described above.
(d) Customer Must Request Service Credit. In order to receive any of
the Service Credits described in this Section 5.2, Customer must notify Exodus
within seven (7) days from the time Customer becomes eligible to receive a
Service Credit. Failure to comply with this requirement will forfeit
Customer's rights to receive a Service Credit.
(e) Remedies Shall Not Be Cumulative: Maximum Service Credit. The
aggregate maximum number of Service Credits to be issued by Exodus to Customer
for any and all Downtime periods and Performance Problems that occur in a single
calendar month shall not exceed seven (7) Service Credits. A Service Credit
shall be issued in the Exodus invoice in the month following the Downtime or
Performance Problem, unless the Service Credit is due in Customer's final month
of Service. In such case, a refund for the dollar value of the Service Credit
will be mailed to Customer. Customer shall also be eligible to receive
a pro-rata refund for (i) Downtime periods and Performance Problems for which
Customer does not receive a Service Credit and (ii) any Services Exodus does not
deliver to Customer for which Customer has paid.
(f) Termination Option for Chronic Problems. Customer may terminate
this Agreement for cause and without penalty by notifying Exodus within five (5)
days following the end of a calendar month in the event either of the following
occurs: (1) Customer experiences more than fifteen (15) Downtime periods
resulting from three (3) or more nonconsecutive Downtime events during the
calendar month; or (ii) Customer experiences more than eight (8) consecutive
hours of Downtime due to any single event. Such termination will be effective
thirty (30) days after receipt of such notice by Exodus.
(g) THE SERVICE LEVEL WARRANTY SET FORTH IN THIS SECTION 5.2 SHALL
ONLY APPLY TO THE BANDWIDTH AND FACILITIES SERVICE(S) PROVIDED BY EXODUS AND,
DOES NOT APPLY TO (1) ANY PROFESSIONAL SERVICES: (II) ANY SUPPLEMENTAL SERVICES;
AND (III) ANY SERVICES(S) THAT EXPRESSLY EXCLUDE THIS SERVICE LEVEL WARRANTY (AS
STATED IN THE SPECIFICATION SHEETS FOR SUCH SERVICES). THIS SECTION 5.2 STATES
CUSTOMER'S SOLE AND EXCLUSIVE REMEDY FOR ANY FAILURE BY EXODUS TO PROVIDE
SERVICE(S).
5.3 Service Performance Warranty. Exodus warrants that it will perform the
Services in a manner consistent with industry standards reasonably applicable to
the performance thereof.
5.4 Selection of Exodus Supplied Equipment; Manufacturer Warranty.
Customer acknowledges that is has selected the Exodus Supplied Equipment and
disclaims any statements made by Exodus. Except with respect to any express
warranties for Service(s) related to Exodus Supplied Equipment, Customer
acknowledges and agrees that its use and possession of the Exodus Supplied
Equipment by Customer shall be subject to and controlled by the terms of any
manufacturer's or, if appropriate, supplier's warranty, and Customer agrees to
look solely to the manufacturer or, if appropriate, supplier with respect to all
mechanical, service and other claims, and the right to enforce all warranties
made by said manufacturer are hereby, to the extent Exodus has the right,
assigned to Customer solely for the Initial Term.
5.5 No Other Warranty. EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH IN THIS
SECTION 5, THE SERVICES ARE PROVIDED ON AN "AS IS" BASIS, AND CUSTOMER'S USE OF
THE SERVICES IS AT ITS OWN RISK. EXODUS DOES NOT MAKE, AND HEREBY DISCLAIMS, ANY
AND ALL OTHER EXPRESS AND/OR IMPLIED WARRANTIES, INCLUDING, BUT NOT LIMITED TO,
WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT
AND TITLE, AND ANY WARRANTIES ARISING FROM A COURSE OF DEALING, USAGE, OR TRADE
PRACTICE. EXODUS DOES NOT WARRANT THAT THE SERVICES WILL BE UNINTERRUPTED,
ERROR-FREE, OR COMPLETELY SECURE.
5.6 Disclaimer of Actions Caused by and/or Under the Control of Third
Parties. EXODUS DOES NOT AND CANNOT CONTROL THE FLOW OF DATA TO OR FROM
EXODUS' NETWORK AND OTHER PORTIONS OF THE INTERNET. SUCH FLOW DEPENDS IN LARGE
PART ON THE PERFORMANCE OF INTERNET SERVICES PROVIDED OR CONTROLLED BY THIRD
PARTIES. AT TIMES, ACTIONS OR INACTIONS OF SUCH THIRD PARTIES CAN IMPAIR OR
DISRUPT CUSTOMER'S CONNECTIONS TO THE INTERNET (OR PORTIONS THEREOF). ALTHOUGH
EXODUS WILL USE COMMERCIALLY REASONABLE EFFORTS TO TAKE ALL ACTIONS IT DEEMS
APPROPRIATE TO REMEDY AND AVOID SUCH EVENTS, EXODUS CANNOT GUARANTEE THAT SUCH
EVENTS WILL NOT OCCUR. ACCORDINGLY, EXODUS DISCLAIMS ANY AND ALL LIABILITY
RESULTING FROM OR RELATED TO SUCH EVENTS.
6. CUSTOMER OBLIGATIONS
6.1 Warranties of Customer.
(a) General. Customer represents and warrants that (i) it has the legal
right and authority, and will continue to own or maintain the legal
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right and authority, during the term of this Agreement, to place and use any
Customer Equipment as contemplated under this Agreement; (ii) the performance of
its obligations and use of the Services (by Customer, its customers and users)
will not violate any applicable laws, regulations or the Rules and Regulations
or cause a breach of any agreements with any third parties or unreasonably
interfere with other Exodus customers' use of Exodus services, and (iii) all
equipment, materials and other tangible items placed by Customer at Internet
Data Centers will be used in compliance with all applicable manufacturer
specifications.
(b) Breach of Warranties. In the event of any breach of any of the
foregoing warranties, in addition to any other remedies available at law or in
equity, Exodus will have the right, in its sole reasonable discretion, to
suspend immediately any related Services if deemed reasonably necessary by
Exodus to prevent any harm to Exodus and its business. Exodus will provide
notice and opportunity to cure if practicable depending on the nature of the
breach. Once cured, Exodus will promptly restore the Service(s).
6.2 Compliance with Law and Rules and Regulations. Customer agrees that it
will use the Service(s) only for lawful purposes and in accordance with this
Agreement. Customer will comply at all times with all applicable laws and
regulations and the Rules and Regulations, as updated by Exodus from time to
time. The Rules and Regulations are incorporated herein and made a part hereof
by this reference. Exodus may change the Rules and Regulations upon fifteen (15)
days' notice to Customer, which notice may be provided by posting such new Rules
and Regulations at the Exodus Web site www.exodus.net. Customer agrees that it
has received, read and understands the current version of the Rules and
Regulations. The Rules and Regulations contain restrictions on Customer's and
Customer's users' online conduct (including prohibitions against unsolicited
commercial email) and contain financial penalties for violations of such
restrictions. Customer agrees to comply with such restrictions and, in the event
of a failure to comply, Customer agrees to pay the financial penalties in
accordance with the Rules and Regulations. Customer acknowledges that Exodus
exercises no control whatsoever over the content of the information passing
through Customer's site(s) and that it is the sole responsibility of the
Customer to ensure that the information it and its users transmit and receive
complies with all applicable laws and regulations and the Rules and Regulations.
6.3 Access and Security. Except with the advanced written consent of
Exodus, Customer's access to the Internet Data Centers will be limited solely to
the Representatives. Representatives may only access the Customer Area and are
prohibited from accessing other areas of the Internet Data Center(s) unless
accompanied by an authorized Exodus representative.
6.4 Restrictions on Use of Services. Customer shall not, without the prior
written consent of Exodus (which may be withheld in its sole discretion), resell
the Services to any third parties or connect Customer Equipment directly to
anything other than the Exodus network, equipment and facilities.
6.5 Relocation of Customer Equipment. In the event that it becomes
necessary to relocate the Customer Equipment to another Customer Area or
Internet Data Center operated by Exodus, Customer will cooperate in good faith
with Exodus to facilitate such relocation, provided that such relocation is
based on reasonable business needs of Exodus (including the needs of other
Exodus customers), the expansion of the space requirements of Customer or
otherwise. Exodus shall be solely responsible for any costs and expenses
incurred by Exodus in connection with any such relocation and will use
commercially reasonable efforts, in cooperation with Customer, to minimize and
avoid any interruption to the Services.
6.6 Exodus Supplied Equipment.
(a) Delivery and Term. On or prior to the Service Commencement Date, Exodus
shall deliver to Customer, at the designated Customer Area, the Exodus Supplied
Equipment. Customer shall have the right to use the Exodus Supplied Equipment
for the Initial Term set forth in the Order Form and any additional period
agreed to in writing by Exodus. Customer shall not remove any Exodus Supplied
Equipment from the Customer Area(s) without the prior written consent of Exodus.
(b) Title. The Exodus Supplied Equipment shall always remain the personal
property of Exodus. Customer shall have no right or interest in or to the Exodus
Supplied Equipment except as provided in this Agreement and the applicable Order
Form and shall hold the Exodus Supplied Equipment subject and subordinate to the
rights of Exodus. Customer agrees to execute UCC financing statements as and
when requested by Exodus and hereby appoints Exodus as its attorney-in-fact to
execute such financing statements on behalf of Customer. Customer will, at its
own expense, keep the Exodus Supplied Equipment free and clear from any liens or
encumbrances of any kind (except any caused by Exodus) and will indemnify and
hold Exodus harmless from and against any loss or expense caused by Customer's
failure to do so. Customer shall give Exodus immediate written notice of any
attachment or judicial process affecting the Exodus Supplied equipment or
Exodus' ownership. Customer will not remove, alter or destroy any labels on the
Exodus Supplied Equipment stating that it is the property of Exodus and shall
allow the inspection of the Exodus Supplied Equipment at any time.
(c) Use, Maintenance and Repair. Customer will, at its own expense, keep
the Exodus Supplied Equipment in good repair, appearance and condition, other
than normal wear and tear, and, if not included in the Services, shall obtain,
pay for and keep in effect through the Initial Term a hardware and software
maintenance agreement with the manufacturer or other party acceptable to Exodus.
All parts furnished in connection with such repair and maintenance shall be
manufacturer authorized parts and shall immediately become components of the
Exodus Supplied Equipment and the property of Exodus. Customer shall use the
Exodus Supplied Equipment in compliance with the manufacturer's or supplier's
suggested guidelines.
(d) Upgrades and Additions. Customer may affix or install any accessory,
addition, upgrade, equipment or device on to the Exodus Supplied Equipment
(other than electronic data) ("Additions") provided that such Additions (i) can
be removed without causing material damage to the Exodus Supplied Equipment;
(ii) do not reduce the value of the Exodus Supplied Equipment and (iii) are
obtained from or approved in writing by Exodus and are not subject to the
interest of any third party other than Exodus. Any other Additions may not be
installed without Exodus' prior written consent. At the end of the Initial Term,
Customer shall remove any Additions which (i) were not provided by Exodus and
(ii) are readily removable without causing material damage or impairment of the
intended function, use, or value of the Exodus Supplied Equipment, and restore
the Exodus Supplied Equipment to its original configuration. Any Additions,
which are not so removable, will become the property of Exodus (lien free).
7. INSURANCE.
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7.1 Exodus Minimum Levels. Exodus agrees to keep in full force and effect
during the term of this Agreement; (i) comprehensive general liability insurance
in an amount not less than $2 million per occurrence for bodily injury and
property damage and (ii) workers' compensation insurance in an amount not less
than that required by applicable law. Exodus agrees that it will ensure and be
solely responsible for ensuring that its contractors and subcontractors maintain
insurance coverage at levels no less than those required by applicable law and
customary in Exodus' and its agents' industries.
7.2 Customer Minimum Levels. In order to provide customers with physical
access to facilities operated by Exodus and equipment owned by third parties,
Exodus is required by its insurers to ensure that each Exodus customer maintains
adequate insurance coverage. Customer agrees to keep in full force and effect
during the term of this Agreement: (i) comprehensive general liability insurance
in an amount not less than $2 million per occurrence for bodily injury and
property damage and (ii) workers' compensation insurance in an amount not less
than that required by applicable law. Customer agrees that it will ensure and be
solely responsible for ensuring that its agents (including contractors and
subcontractors) maintain insurance coverage at levels no less than those
required by applicable law and customary in Customer's and its agents'
industries.
7.3 Certificates of Insurance: Naming Exodus as an Additional Insured. Prior
to installation of any Customer Equipment in the Customer Area, Customer will
(i) deliver to Exodus certificates of insurance which evidence the minimum
levels of insurance set forth above; and (ii) cause its insurance provider(s) to
name Exodus as an additional insured and notify Exodus in writing of the
effective date thereof.
8. LIMITATIONS OF LIABILITY.
8.1 Personal Injury. EACH REPRESENTATIVE AND ANY OTHER PERSON VISITING AN
INTERNET DATA CENTER DOES SO AT ITS OWN RISK. EXODUS ASSUMES NO LIABILITY
WHATSOEVER FOR ANY HARM TO SUCH PERSONS RESULTING FROM ANY CAUSE OTHER THAN THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF EXODUS.
8.2 Damage to Customer Equipment. EXODUS ASSUMES NO LIABILITY FOR ANY DAMAGE
TO, OR LOSS OF, ANY CUSTOMER EQUIPMENT RESULTING FROM ANY CAUSE OTHER THAN THE
NEGLIGENCE OR WILLFUL MISCONDUCT OF EXODUS. TO THE EXTENT EXODUS IS LIABLE FOR
ANY DAMAGE TO, OR LOSS OF, CUSTOMER EQUIPMENT FOR ANY REASON, SUCH LIABILITY
WILL BE LIMITED SOLELY TO THE THEN-CURRENT REPLACEMENT VALUE OF THE CUSTOMER
EQUIPMENT, EXCLUDING LOST DATA, SOFTWARE AND FIRMWARE.
8.3 CONSEQUENTIAL DAMAGES WAIVER. EXCEPT FOR A BREACH OF SECTION 4.1
("CONFIDENTIAL INFORMATION") OF THIS AGREEMENT, IN NO EVENT WILL EITHER PARTY BE
LIABLE OR RESPONSIBLE TO THE OTHER FOR ANY TYPE OF INCIDENTAL, PUNITIVE,
INDIRECT OR CONSEQUENTIAL DAMAGES, INCLUDING, BUT NOT LIMITED TO, LOST REVENUE,
LOST PROFITS, REPLACEMENT GOODS, LOSS OF TECHNOLOGY, RIGHTS OR SERVICES, LOSS OF
DATA, OR INTERRUPTION OR LOSS OF USE OF SERVICE OR EQUIPMENT, EVEN IF ADVISED OF
THE POSSIBILITY OF SUCH DAMAGES, WHETHER ARISING UNDER THEORY OF CONTRACT, TORT
(INCLUDING NEGLIGENCE), STRICT LIABILITY OR OTHERWISE.
8.4 Basis of the Bargain: Failure of Essential Purpose. The parties
acknowledge that Exodus has set its prices and entered into this Agreement in
reliance upon the limitations of liability and the disclaimers of warranties and
damages set forth herein, and that the same form an essential basis of the
bargain between the parties. The parties agree that the limitations and
exclusions of liability and disclaimers specified in this Agreement will survive
and apply even if found to have failed of their essential purpose.
9. INDEMNIFICATION.
9.1 Indemnification. Each party will indemnify, defend and hold the other
harmless from and against any and all costs, liabilities, losses, and expenses
(including, but not limited to, reasonable attorneys' fees) (collectively,
"Losses") resulting from any claim, suit, action, or proceeding (each, an
"Action") brought by any third party against the other or its affiliates
alleging (i) the infringement or misappropriation of any intellectual property
right relating to the delivery or use of the Service(s) (but excluding any
infringement contributorily caused by the other party); (ii) personal injury
caused by the negligence or willful misconduct of the other party, and (iii) any
violation of or failure to comply with the Rules and Regulations. Customer will
indemnify, defend and hold Exodus, its affiliates and customers harmless from
and against any and all Losses resulting from or arising out of any Action
brought against Exodus, its affiliates or customers alleging any damage or
destruction to the Customer Area, the Internet Data Centers, Exodus equipment or
other customer equipment caused by Customer, its Representative(s) or designees.
9.2 Notice. Each party's indemnification obligations hereunder shall be
subject to (i) receiving prompt written notice of the existence of any Action;
(ii) being able to, at its option, control the defense of such Action; (iii)
permitting the indemnified party to participate in the defense of any Action;
and (iv) receiving full cooperation of the indemnified party in the defense
thereof.
10. TERMINATION.
10.1 Termination for Cause. Either party may terminate this Agreement if: (i)
the other party breaches any material term or condition of this Agreement and
fails to cure such breach within thirty (30) days after receipt of written
notice of the same, except in the case of failure to pay fees, which must be
cured within five (5) days after receipt of written notice from Exodus; (ii) the
other party becomes the subject of a voluntary petition in bankruptcy or any
voluntary proceeding relating to insolvency, receivership, liquidation, or
composition for the benefit of creditors; or (iii) the other party becomes the
subject of an involuntary petition in bankruptcy or any involuntary proceeding
relating to insolvency, receivership, liquidation, or composition for the
benefit of creditors, if such petition or proceeding is not dismissed with sixty
(60) days of filing. Customer may also terminate this Agreement in accordance
with the terms set forth in paragraph 5.2(f) ("Termination Option For Chronic
problems") of this Agreement.
10.2 No Liability for Termination. Neither party will be liable to the other
for any termination or expiration of any Service or this Agreement in accordance
with its terms.
10.3 Effect of Termination. Upon the effective date of termination of
this Agreement:
(a) Exodus will immediately cease providing the Service(s);
(b) any and all payment obligations of Customer under this Agreement for
Service(s) provided through the date of termination will immediately become due;
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(c) within thirty (30) days of such termination, each party will return
all Confidential Information of the other party in its possession and will not
make or retain any copies of such Confidential Information except as required to
comply with any applicable legal or accounting record keeping requirement; and
(d) within five (5) days of such termination Customer shall (i) remove
from the Internet Data Centers all Customer Equipment (excluding any Exodus
Supplied Equipment) and any other Customer property; (ii) deliver or make
available all Exodus Supplied Equipment to an authorized representative of
Exodus, and (iii) return the Customer Area to Exodus in the same condition as it
was on the Service Commencement Date for the Customer Area, normal wear and tear
excepted. If Customer does not remove the Customer Equipment and its other
property within such five-day period, Exodus will have the option to (i) move
any and all such property to secure storage and charge Customer for the cost of
such removal and storage, and/or (ii) liquidate the property in any reasonable
manner.
10.4. Customer Equipment as Security. In the event that Customer fails
to pay Exodus all undisputed amounts owed Exodus under this Agreement when due,
Customer agrees that, upon delivery of written notice to Customer, Exodus may
(i) restrict Customer's physical access to the Customer Area and Equipment;
and/or (ii) take possession of any Customer Equipment and store it, at
Customer's expense, until taken in full or partial satisfaction of any lien or
judgment, all without being liable to prosecution or for damages.
10.5. Survival. The following provisions will survive any expiration or
termination of the Agreement: Sections 3, 4.1, 4.2, 4.4, 5.5, 6.6(d), 8, 9, 10
and 11 (excluding 11.2).
11. MISCELLANEOUS PROVISIONS.
11.1 Force Majeure. Except for the obligation to make payments, neither
party will be liable for any failure or delay in its performance under this
Agreement due to any cause beyond its reasonable control, including acts of war,
acts of God, earthquake, flood, embargo, riot, sabotage, labor shortage or
dispute, governmental act or failure of the Internet (not resulting from the
actions or inactions of Exodus), provided that the delayed party: (a) gives the
other party prompt notice of such cause, and (b) uses its reasonable commercial
efforts to promptly correct such failure or delay in performance. If Exodus is
unable to provide Service(s) for a period of thirty (30) consecutive days as a
result of a continuing force majeure event, Customer may cancel the Service(s).
11.2 No Lease; Agreement Subordinate to Master Lease. This Agreement is
a services agreement and is not intended to and will not constitute a lease of
any real property. Customer acknowledges and agrees that (i) it has been granted
only a license to occupy the Customer Area and use the Internet Data Centers and
any equipment provided by Exodus in accordance with this Agreement; (ii)
Customer has not been granted any real property interest in the Customer Area or
Internet Data Centers; (iii) Customer has no rights as a tenant or otherwise
under any real property or landlord/tenant laws, regulations, or ordinances;
(iv) this Agreement, to the extent it involves the use of space leased by
Exodus, shall be subordinate to any lease between Exodus and its landlord(s);
and (v) the expiration or termination of any such lease shall terminate this
Agreement as to such property subject to Customer retaining any rights or claims
it may have against Exodus arising from the expiration or termination of such
lease. Customer hereby waives and releases any claims or rights to make a claim
that it may have against the landlord(s) under any lease by Exodus with respect
to any equipment or property of Customers' located in the premises demised to
Exodus by such landlord(s).
11.3 Marketing. Customer agrees that during the term of this Agreement
Exodus may publicly refer to Customer, orally and in writing, as a Customer of
Exodus. Any other reference to Customer by Exodus requires the written consent
of Customer.
11.4 Government Regulations. Customer will not export, re-export,
transfer, or make available, whether directly or indirectly, any regulated item
or information to anyone outside the U.S. in connection with this Agreement
without first complying with all export control laws and regulations which may
be imposed by the U.S. Government and any country or organization of nations
within whose jurisdiction Customer operates or does business.
11.5. Non-Solicitation. During the Term of this Agreement and continuing
through the first anniversary of the termination of this Agreement, Customer
agrees that it will not, and will ensure that its affiliates do not, directly or
indirectly, solicit or attempt to solicit for employment any persons employed by
Exodus or contracted by Exodus to provide Services to Customer.
11.6. No Third Party Beneficiaries. Exodus and Customer agree that,
except as otherwise expressly provided in this Agreement, there shall be no
third party beneficiaries to this Agreement, including but not limited to the
insurance providers for either party or the customers of Customer.
11.7. Governing Law; Dispute Resolution. This Agreement is made under
and will be governed by and construed in accordance with the laws of the State
of California (except that body of law controlling conflicts of law) and
specifically excluding from application to this Agreement that law known as the
United Nations Convention on the International Sale of Goods. The parties will
endeavor to settle amicably by mutual discussions any disputes, differences, or
claims whatsoever related to this Agreement. Failing such amicable settlement,
any controversy, claim, or dispute arising under or relating to this Agreement,
including the existence, validity, interpretation, performance, termination or
breach thereof, shall finally be settled by arbitration in accordance with the
Arbitration Rules (and if Customer is a non-U.S. entity, the International
Arbitration Rules) of the American Arbitration Association ("AAA"). There will
be three (3) arbitrators (the "Arbitration Tribunal"), the first of which will
be appointed by the claimant in its notice of arbitration, the second of which
will be appointed by the respondent within thirty (30) days of the appointment
of the first arbitrator and the third of which will be jointly appointed by the
party-appointed arbitrators within thirty (30) days thereafter. The language of
the arbitration shall be English. The Arbitration Tribunal will not have the
authority to award punitive damages to either party. Each party shall bear its
own expenses, but the parties will share equally the expenses of the Arbitration
Tribunal and the AAA. This Agreement will be enforceable, and any arbitration
award will be final, and judgment thereon may be entered in any court of
competent jurisdiction. The arbitration will be held in San Francisco,
California USA. Notwithstanding the foregoing, claims for preliminary injunctive
relief, other pre-judgment remedies, and claims for Customer's failure to pay
for Services in accordance with this Agreement may be brought in a state or
federal court in the United States with jurisdiction over the subject matter and
parties.
11.8. Severability; Waiver. In the event any provision of this Agreement
is held by a tribunal of competent jurisdiction to be
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contrary to the law, the remaining provisions of this Agreement will remain in
full force and effect. The waiver of any breach or default of this Agreement
will not constitute a waiver of any subsequent breach or default, and will not
act to amend or negate the rights of the waiving party.
11.9 Assignment. Customer may assign this Agreement in whole as part of a
corporate reorganization, consolidation, merger, or sale of substantially all of
its assets. Customer may not otherwise assign its rights or delegate its duties
under this Agreement either in whole or in part without the prior written
consent of Exodus, and any attempted assignment or delegation without such
consent will be void. Exodus may assign this Agreement in whole or in part.
Exodus may also delegate the performance of certain Services to third parties,
including Exodus' wholly owned subsidiaries, provided Exodus controls the
delivery of such Services to Customer and remains responsible to Customer for
the delivery of such Services. This Agreement will bind and inure to the benefit
of each party's successors and permitted assigns.
11.10 Notice. Any notice or communication required or permitted to be given
hereunder may be delivered by hand, deposited with an overnight courier, sent by
email, confirmed facsimile, or mailed by registered or certified mail, return
receipt requested, postage prepaid, in each case to the address of the receiving
party as listed on the Order Form or at such address as may hereafter be
furnished in writing by either party to the other party. Such notice will be
deemed to have been given as of the date it is delivered, mailed, emailed, faxed
or sent, whichever is earlier.
11.11 Relationship of Parties. Exodus and Customer are independent
contractors and this Agreement will not establish any relationship of
partnership, joint venture, employment, franchise or agency between Exodus and
Customer. Neither Exodus nor Customer will have the power to bind the other or
incur obligations on the other's behalf without the other's prior written
consent, except as otherwise expressly provided herein.
11.12 Entire Agreement: Counterparts; Originals. This Agreement, including
all documents incorporated herein by reference, constitutes the complete and
exclusive agreement between the parties with respect to the subject matter
hereof, and supersedes and replaces any and all prior or contemporaneous
discussions, negotiations, understandings and agreements, written and oral,
regarding such subject matter. Any additional or different terms in any purchase
order or other response by Customer shall be deemed objected to by Exodus
without need of further notice of objection and shall be of no effect or in any
way binding upon Exodus. This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together shall constitute one and the same instrument. Once signed, any
reproduction of this Agreement made by reliable means (e.g., photocopy,
facsimile) is considered an original. This Agreement may be changed only by a
written document signed by authorized representatives of Exodus and Customer in
accordance with this Section 11.12. For purposes of this Agreement, the term
"written" means anything reduced to a tangible form by a party, including a
printed or hand written document, e-mail or other electronic format.
11.13 Interpretation of Conflicting Terms. In the event of a conflict
between or among the terms in this Agreement, the Order Form(s), the
Specification Sheet(s), the Statement(s) of Work; and any other document made a
part hereof, the documents shall control in the following order; the Order Form
with the latest date, the Statement of Work, Specification Sheets, the Agreement
and other documents.
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Authorized representatives of Customer and Exodus have read the foregoing and
all documents incorporated therein and agree and accept such terms effective as
of the date first above written.
CUSTOMER EXODUS COMMUNICATIONS, INC.
Signature: Signature:
-------------------------- ---------------------------
Print Name: Print Name:
------------------------- --------------------------
Title: Title:
------------------------- --------------------------
Date: ------------------------- Date: --------------------------
This Agreement incorporates the following documents:
. Order Form(s)
Specification Sheet(s)
Statement(s) Of Work (if applicable)
. Registration Form
. Addendum A - Equipment Purchase Terms and Conditions (if applicable)
<PAGE>
EXODUS COMMUNICATIONS, INC.
INTERNET DATA CENTER SERVICES
ORDER FORM
<TABLE>
<CAPTION>
<S> <C>
Customer Name: FreeRealTime
From Date: July 7, 1999
Form No: 0707-CMtr
Installation Site(s): New Jersey & Irvine IDCs
Type of Service(s): Upgrade
Bandwidth Services: Aggregated between New Jersey & Irvine IDCs
- --------------------------------------------------------------------------------------------------------------
Internet Data Brief Description Qty Unit Extended Extended
Center Services (Detailed description attached) Price Non- Monthly
Recurring Fees
Fees
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
EXO-FAST- 80 Mbps Fast Ethernet with 100 Mbps 1 $56,000 $56,000
LINESUM-U80 burstability
EXO-FAST-UV80 Variable Usage Cost per Megabit 1 $950
Above Base Amount ($/megabit)
- ---------------------------------------------------------------------------------------------------------------
Total: N/A $56,000
- ---------------------------------------------------------------------------------------------------------------
Note: Customer is upgrading from EXO-FAST-U10
</TABLE>
PLEASE INITIAL EACH PAGE AND
COMPLETE THE FOLLOWING PAGE BEFORE SUBMITTING
CUSTOMER'S INITIALS BJ
_____________
EXODUS COMMUNICATIONS, INC. PROPRIETARY AND CONFIDENTIAL (rev 6/98)
<PAGE>
EXODUS COMMUNICATIONS, INC.
INTERNET DATE CENTER SERVICES
ORDER FORM
<TABLE>
<CAPTION>
<S> <C>
Customer Name: FreeRealTime
Form Date: July 7, 1999
Form No: 0707-CMtr
</TABLE>
IMPORTANT INFORMATION:
- ----------------------
(1) By Submitting this Internet Data Center Services Order From (Form) to
Exodus Communications, Inc. (Exodus), Customer hereby places an order for
the Internet Data Center Services described herein pursuant to the terms
and conditions of the Internet Data Center Services Agreement between
Customer and Exodus (IDC Agreement).
(2) Billing, with exception of Setup Fees, will commence on the earlier of the
Installation Date Indicated Below or the date Customer actually installs
its equipment or Exodus begins providing Internet Data Center Services. All
Setup Fees will be billed upon receipt of a Customer signed IDC Services
Order Form.
(3) Exodus will provide the Internet Data Center Services pursuant to the terms
and conditions of the IDC Agreement, which incorporates this Form. The
terms of this Form supersede, and by accepting this Form Exodus hereby
rejects, any conflicting or additional terms provided by Customer in
connection with Exodus' provision of Internet Data Center Services. If
there is a conflict between this Form and any other Form provided by
Customer and accepted by Exodus, the Form with the latest date will
control.
(4) Exodus will not be bound by or required to provide Internet Data Center
Services Pursuant to this Form or the IDC Agreement until each is signed by
an authorized representative of Exodus.
Customer to complete:
- --------------------
CUSTOMER HAS READ, UNDERSTANDS AND HEREBY SUBMITS THIS ORDER.
<TABLE>
<CAPTION>
<S> <C> <C>
Installation Date: July 1, 1999
-------------
Submitted by: /s/ Brad Gunn Submission Date: July 1, 1999
--------------------- ------------
(Authorized signature) (Effective Date of IDC Agreement)
Print Name: Brad Gunn
---------------------
Title: President
---------------------
Exodus Communication, Inc. Acceptance
- -------------------------------------
- -------------------------------------- Date: --------------------------------------
(Authorized Signature)
CUSTOMER'S INITIALS BG
--------------
</TABLE>
EXODUS COMMUNICATIONS, INC. PROPRIETARY AND CONFIDENTIAL (rev 6/98)
